Professional Documents
Culture Documents
Annual Report 2010
Annual Report 2010
www.luminar.co.uk
Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Welcome to Luminar
Our Strategy
Luminar has the best venues and the best operational capability in our sector.
We remain confident that these strengths will continue to serve Luminar well,
and that we can continue to enhance our position as the leading operator.
Luminar venues welcome an average of over 200,000 customers through its doors every week.
Financial Highlights
Loss before tax*
Total Revenue* Sales (per head) pre-exceptional items
* Continuing operations
Stock code: LMR Business Review
Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Operational Highlights
During 2010, we have: Business Review
partnered with Jongleurs to run comedy 02 Chairman’s Statement
04 Business Review
nights across 4 of our clubs with another 8 11 Financial Review
to follow in 2011;
introduced premium brand drinks and
cocktails into our clubs for the first time;
partnered with Ministry of Sound to run
events under their well-known dance Governance
13 Corporate Social Responsibility
brands Hed Kandi and Dance Nation; 18 Board of Directors
launched live entertainment into many of 19 Corporate Governance Statement
25 Remuneration Report
our clubs which delivered tours in 2010 33 Report of the Directors
from Calvin Harris, Example and Katy B; and
opened PROJECT nightclub in Norwich, our
first in 2 and a half years.
Consolidated Financial Statements
39 Independent Auditors’ Report
41 Consolidated Income Statement
41 Consolidated Statement of Comprehensive Income
42 Consolidated Balance Sheet
43 Consolidated Cash Flow Statement
43 Consolidated Net Debt Statement
44 Consolidated Statement of Changes in Shareholders’ Equity
45 Principal Accounting Policies for the Consolidated
Financial Statements
53 Notes to the Consolidated Financial Statements
Shareholder Information
97 Notice of Annual General Meeting
102 Explanatory Notes to the Notice of Annual
General Meeting
104 Shareholder Information
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Chairman’s Statement
John Leach
Chairman
“We would
Overview and Strategy Despite the challenging trading conditions, the
The late night dancing market has continued Group has made progress in catering for the
to be difficult with factors such as the demands of our customers through a number of
challenge of
conditions. As a result, it has been necessary 4 to 12.
to impair certain tangible asset values
and reduce the level of goodwill that is Corporate Social Responsibility
market
prospective waiver of the financial covenants, customers and employees. The Group is also
which would fall to be tested at the end of committed to taking into account the interests
May 2011. In addition, the Banking Group are of the communities in which it operates.
02
Stock code: LMR Business Review
Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Pictured:
1
Oceana Milton Keynes.
2
Oceana Plymouth.
1 2
£12.41
and latterly as CEO of Hermes Focus Asset
Management Limited. Prior to this he was
Chairman of Orbis Plc, Waterhall Group Plc and
Brent Walker Group, where he was CEO from (2010: £12.46)
1994 to 1998 and CFO from 1991 to 1994.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Business Review
Simon Douglas
Chief Executive
prospects are main brands Oceana, Liquid and Lava & Ignite
and we also operate a number of nightclubs
diversifying the music offering by partnering
with Ministry of Sound, introducing quality
outside of these brands. live acts into clubs and launching our first
challenged, Our customers are predominantly in the
ever cocktail range throughout the estate.
We are confident that these initiatives
we look to
new initiatives such as Jongleurs comedy proposition. We are encouraged by early
nights we are attracting a wider audience. indications that these initiatives are driving
footfall and spend per head.
of new
during the year, slightly higher than £2.15 in in March 2010 and, in addition to its unique
the prior year, with broadly steady levels of cutting edge design, this nightclub is fully
consumption. Gross margin was 81.4%, which, equipped to cater for Live entertainment,
as Jongleurs
a number of initiatives to enhance the management team.
customer proposition.
The results for the year, while disappointing,
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Stock code: LMR Business Review
Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
improved the quality of the music offering by the introduction of customer satisfaction
refreshing our DJ’s and introducing a wide surveying to understand more about our Pictured:
variety of quality live acts to perform in our customers’ opinions. 1 PROJECT, Norwich Main Room.
clubs including Calvin Harris and Basshunter. 2 Calvin Harris, performing at
In addition to mainstream dance sessions We continue to review our operational Oceana Brighton.
and speciality nights offered at a local level, template but are reassured that the steps
we have partnered with Ministry of Sound that we have taken are market leading and
to address the diversity of musical tastes. their appropriateness has been reinforced
Ministry of Sound is a world leading dance in recent industry studies [Source: Mintel
brand and, in conjunction with them, we are Report: December 2010].
now able to offer a series of events under
their well-known dance brands such as Hed
Kandi and Dance Nation.
comedy corporate
music
Industry Research* shows that music is one of the top considerations for clubbers when
selecting their night out. Luminar clubs and head office constantly review their music
polices to ensure they meet customer demands and stay relevant in the towns and cities music karaoke
in which they trade.
music
05
comedy corporate
Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
products music
comedy
music
corporate
karaoke
karaoke
To target customers with nights relevant to their age and lifestyle.
Luminar has focused on creating ‘products’ that reflect the changing
demands of our customers. 2010 saw the launch of student brand ‘Fuzzy
Logic’, under 18 brand ‘Love Social’, as well as a partnership with the
world’s leading brand ‘Ministry of Sound’, which effectively became
Luminar’s in-house dance music brand.
comedy corporate
06
music karaoke
Stock code: LMR Business Review
Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Pictured:
1.
Ice Room, Oceana Brighton.
2 PROJECT, Norwich.
1 2
07
Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
“Luminar
Severe adverse weather conditions The Directors have examined all available
experienced in December combined with the evidence and have concluded that,
continued deterioration in market conditions although the trading environment is still
focusing on
and a short-term liquidity problem may arise trade on a going concern basis. As a result,
during the Summer months due to scheduled the Directors continue to adopt the going
amortisation payments falling due under the concern basis in preparing the Group’s and
reasons to
May 2011. In addition, the Banking Group are remains relatively constant notwithstanding
continuing to provide flexibility to maintain changes to the level of revenues and therefore
the Group’s liquidity levels until 31 August any significant changes in the level of the
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Stock code: LMR Business Review
Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Responsibility statement. The risk of non- swaps were terminated on the switch from
compliance with health and safety legislation the old facility to the New Facility on 8 Pictured:
is minimised through comprehensive training December 2010 to ensure the New Facility is 1 PROJECT, Norwich, Live Room.
and an active in-house team who regularly 100% hedged. 2 Oceana, Southampton.
carry out health and safety audits, and review
and develop policies and procedures to
maintain standards. Furthermore, the Group
carries substantial public and employer’s
liability insurance cover, in order to minimise
the financial impact of any claim that might
arise as a consequence of a failure in health
and safety regulatory compliance. music karaoke
music karaoke
music
comedy corporate
comedy
comedy
karaoke corporate
09
Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
premium drinks
music karaoke
To satisfy the changing trends and tastes of our customers base, we have
expanded our drink range to incorporate brands such as Redbull, Budweiser
and Peroni, as well as adding Grey Goose and Belvedere, which combined with
our focus on table service is designed to drive spend per head and enhanced
music karaoke
customer service. Alongside the increased range, a cocktail range was
launched to capitalise on the increasing popularity of this type of drink.
comedy corporate
music karaoke
music karaoke
comedy corporate
comedy corporate
10 comedy corporate
Stock code: LMR Business Review
Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Fluctuations in the commercial This is due to the fact that some clubs which
property market are combined to trade as a multi venue site
At the year end, the Group held 59 of its may have individual title deeds for each unit
properties under short leaseholds, which and the inclusion of units in development and
are subject to regular rent reviews. These sub-let units.
rent reviews could either increase or remain
the same, which could in turn affect the Terrorism
economic viability of any of the Group’s units. In common with many businesses, the Group’s
revenues are vulnerable to disruption from
The Group also held 18 freehold properties acts of terrorism. Current planning assumes
and 5 long leaseholds as at 26 February no change in the existing level of threat. The
2011 and therefore, any changes to the UK Company has issued documentation based
property market could lead to changes in the on Home Office guidance to ensure that
value of the Group’s property portfolio. employees are aware of these issues and
The total number of trading units is lower than what to look out for. In addition, the Company
the total number of leasehold and freehold purchases a specific insurance policy to cover
properties held by the Group. risks from terrorist activities.
Financial review
The total revenue and profitability generated by the Group is detailed below:
Total operations
Revenue† EBITDA*† PBT*†
2011 2010 2011 2010 2011 2010
£m £m £m £m £m £m
Continuing 137.3 169.0 22.9 35.2 (1.1) 5.5
Discontinued‡ 0.4 4.6 (0.1) (1.5) (0.1) (1.8)
Total 137.7 173.6 22.8 33.7 (1.2) 3.7
Earnings before interest, tax, depreciation In addition, increased interest receivable on Exceptional items within continuing
and amortisation (“EBITDA”) from continuing deposits in the current year was offset by an operations totalled a net cost of £184.0m
operations before exceptional items totalled increased interest charge as a result of the after tax for the year ended 26 February
£22.9m in the year ended 26 February 2011, increase in the effective interest rate on the 2011 (2010: £104.3m). This charge followed
(£12.3m or 34.9% below the previous year new facility to 7.8%. a review of balance sheet values, triggered
principally due to lower admissions to our by lower profits, and the majority related to
clubs). Depreciation and amortisation was The loss before tax from continuing impairment of specific asset values. The major
£15.3m (2010: £22.7m) as the investment operations before exceptional items was exceptional items contributing to this charge
programme remained modest and fixed £1.1m (2010: profit of £5.5m) and a taxation are described in note 8 at pages 58 and 59.
asset impairment reduced the asset base. credit of £0.5m (2010: £nil credit) gave rise to The impairment review has also impacted the
Net interest costs increased to £8.7m (2010: a loss for the year from continuing operations accounts of the parent Company, reducing
£7.2m) despite a reduction in debt levels from before exceptional items of £0.6m (2010: distributable reserves to a deficit of £155.8m.
£140.0m to £91.5m. This is in part due to us not profit £5.5m). Loss per share from continuing
recognising interest receivable in respect of operations before exceptional costs was Discontinued operations contributed a post-
the loan note to The 3D Entertainment Group 1.1p (2010: EPS 6.7p). Statutory loss from tax loss of £nil plus exceptional costs of £3.4m.
Limited (“3DE”), which is now in administration continuing operations after exceptional items The main element of the exceptional cost was
(2010: £0.9m). was £184.6m (2010: £98.8m loss), giving rise a loss on disposal of discontinued operations.
to loss per share of 183.9p (2010: 119.9p loss).
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
With the ever increasing focus on Corporate Social Responsibility (“CSR”), we are also aware that companies which operate to a high ethical
standard are becoming more attractive to investors. We also strongly believe that ethically minded companies who care about the future are
likely to be more determined to succeed and prosper. We are, therefore, proud and delighted to announce that last year we were added as a new
member of the FTSE4Good index, which is a clear demonstration that we take our CSR responsibilities extremely seriously.
Ever since Luminar was formed, we have faced challenges from economic, social and legislative changes and we have seen each change as a new
opportunity for our business. Thanks to the efforts of our Directors and employees, who are the most experienced operational management in
our industry, we have been able to maintain our position as the leading operator in our sector.
Our main branded venues are Oceana, Liquid and Lava & Ignite. Our event or session brands include Fuzzy Logic, Vibe and Love Social.
Over the last few years we have invested in rebranding, renovating and maintaining our bars and clubs, which lead their market and, in many
cases, dominate their town or city. As part of this investment, we have taken measures to ensure better accessibility to our venues. For example,
in many cases we have installed low-level bars that allow ease of access for wheelchair users and assist us in complying with the Disability
Discrimination legislation.
We have evaluated the implications for our new developments and adjusted our procedures to focus on energy usage and thermal efficiency. For
example, although we install a high percentage of LED lighting, many areas are also fitted with low energy lighting. Equally, our heating and ventilation
systems are installed with improved controls that will in turn improve the overall efficiency of our clubs. Wherever refurbishments are planned, we
either apply a new approach on energy or introduce a phased replacement of our existing systems. We also continually evaluate the use of cheaper
man-made materials and/or those materials that can be obtained from renewable resources.
Lite Patrol
We are extremely conscious that since our venues can accommodate many customers, incidents or hazards may occur. To monitor these incidents
and ensure that they are reported and resolved or cleared up as soon as possible, we utilise a safety system known as ‘Lite Patrol’. This system enables
reports to be made at each venue and downloaded to a centralised system where software evaluates the data so that accurate ‘Incident Reports’
can be produced. This system is also used to ensure that we can comply with our obligations under the Reporting of Injuries Diseases and Dangerous
Occurrences Regulations 1995 (“RIDDOR”) and are able to submit RIDDOR reports to the Health and Safety Executive and/or the local Environmental
Health Authorities when necessary.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Licensing
In order to be able to sell alcohol and stage certain activities in our venues, we need to obtain the correct permissions or ‘licences’ from the
relevant authorities. Obtaining and keeping these licences is essential for our business and so it is of the utmost importance for us to vigilantly
monitor all relevant licensing legislation.
The licensing of bars and clubs in England and Wales is now governed by the Licensing Act (2003) (the “Licensing Act”), which took effect in
November 2005. The Licensing Act sets out four licensing objectives, which are:
We fully understand the importance of these objectives and so we embrace them in all our operations. We continually seek to enhance these
licences by applying for variations and better conditions under which to trade. We also operate venues in Scotland and are aware of the variations in
their licensing legislation. We continue to monitor the changes to licensing legislation in both England and Wales and Scotland.
Dancesafe
While we make every effort to ensure the safety and welfare of our customers and staff within our premises, we also encourage our customers to
take a level of responsibility for themselves. We display signage about customer and staff welfare that advises them of certain risks to which they
could be exposed. We call this ‘Dancesafe’ and these signs and policies deal with matters such as responsible drinking and getting home safely at
the end of an evening out.
Customer Security
To ensure the safety of our customers, we employ the services of third party door stewarding companies. Their staff look after the welfare of
our customers both inside and outside of our venues. Their staff are trained to be pro-active in: recognising potential incidents; identifying
vulnerable individuals; and providing assistance where necessary. Outside, they are responsible for issues such as preventing weapons or illegal
substances being taken into a venue and they achieve this by a variety of means including the undertaking of random searches on customers.
Inside, the door stewards are responsible for ensuring effective queue management, maintaining order should the need arise and controlling
the dispersal of our customers at the end of an evening’s trading. These measures are designed to control behaviour and minimise disruption to
residents. Getting this right, every night we trade, is a top priority as it limits any negative impact our operations might have on their surrounding
communities.
The provision of door security is now a licensed and regulated industry. The legal responsibility for the licensing of Door Supervisors rests with
the Security Industry Authority. The conduct of Door Supervisors is also regulated by British Standard BS7960 and it is this which we have used
to form the basis of our own ‘Service Level Standards’ and ‘Incident Management Protocols’. We constantly review and develop these Standards
to further improve security in our venues. We believe this approach enables us to continue to drive forward the highest standards of excellence
in the security industry.
In addition to our work with door stewarding companies, we have also engaged with a supplier that provides dogs and their handlers who are
specifically trained in the detection of illegal substances. All our premises receive searches from representatives of this company and the aim is to
ensure that our clubs receive a higher level of protection against the presence of illegal substances than would otherwise be the case.
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Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Customer Relations
Although we recognise that our customers visit us to enjoy themselves within our venues, there may occasionally be times when they do not feel
totally satisfied and wish to make us aware of their concerns. We take all such customer issues extremely seriously and pride ourselves on the
prompt and efficient manner in which they are addressed.
Industry Associations
During 2010, we became a member of our industry body known as NOCTIS (formerly BEDA). In view of the significant political and legislative
challenges facing our industry, we consider that it is essential to work with and through NOCTIS. This is because it deals closely with a number of
Government departments as well as stakeholders (both national and local) and is able to present as strong a business case as possible for the late
night industry. Unfortunately, a number of legislators still hold negative views about our sector and we believe that through NOCTIS we will be
able to develop effective strategies to combat those misconceptions and lobby for better conditions which will benefit both our business and
our customers.
We note the establishment of the ‘Mandatory Conditions’ that were introduced in April 2010 and while we are fully supportive of these, we also
recognise that the interpretation and implementation of them may vary significantly up and down the country. Therefore, in addition to our own work
with local licensing authorities, we will use our membership of NOCTIS to gain greater clarification and understanding of the implementation of these
laws and how they can benefit our customers and society at large.
To respond to this demand we created UK Club Culture (“UKCC”) which provides the opportunity for young people to enjoy music and dancing in
our venues without having access to alcohol or other illegal substances. UKCC has recently undergone a significant rebranding exercise and was
relaunched under the name ‘Love Social’.
Love Social provides a credible clubbing experience for teenagers between the ages of 13 and 17. When staging Love Social events, we work
closely with local Police and Licensing Authorities to ensure a safe and friendly environment. These events help to keep youngsters off the
streets by giving them an opportunity to enjoy themselves sensibly in our venues. Love Social events operate within a well-established
framework that has clearly defined policies and procedures. These include strict policies for admissions and child protection.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
We strongly believe in promotion from within and career progression is available to all who join the Company. We have launched our Crew
Development Programme (“CDP”) which covers all aspects of the late night entertainment sector from operations, management, licensing
legislation and health and safety, all the way through to the marketing, promoting and the staging of an actual event. The CDP demonstrates
Luminar’s continued commitment to investing in our people. It also offers clear benefits in allowing us to present well-trained, competent and
motivated crew that have the skills necessary to carry out their jobs to a consistent high standard.
Diversity
Whilst understanding the need for strong leadership and a strong team ethic, we are also aware that individuality is a key component of a great
workforce. We embrace such diversity and believe that it inspires a versatile and creative thought process throughout the business. At the time
of writing this report our workforce is split equally between men and women.
Noise at Work
It is a legal obligation on all employers to ensure the health, safety and welfare of its employees and this now includes ensuring that they are
not exposed to levels of noise which could damage their hearing. Following the implementation of the Noise at Work Regulations we train all
employees on the impact of this and providing them with Personal Protective Equipment (in the form of ear plugs). In addition, through our
involvement with The Royal National Institute for Deaf People, we have also implemented a health surveillance programme to assess and
monitor the effect of noise on our employees.
Charitable Activities
More recently, during the year a total of £107,000 (2010: £321,000) was donated to Echo by our customers and staff. This money was raised from
collections within venues and donations made at Company organised events.
Since the registration of the Echo Trust with the Charity Commission in 2003, it has not been possible to donate all of the monies collected
during the regular grant awards. Therefore, in February 2011, the Echo Trust staged the ‘Big Giveaway’ whereby the Company invited all clubs to
nominate a local children’s charity to benefit from a grant. Head office staff were also invited to participate in this initiative. A total of £395,000
was given away in this event, which is the largest grant making exercise the Trust has ever carried out.
Business Relationships
Luminar is a significant business within the entertainment industry and we enter into valuable contracts with our suppliers. In running our
business, it is important that we deal ethically with our suppliers and partners and we expect the same in return.
Our Purchasing team endeavours to develop mutually beneficial long-term relationships with reliable suppliers for goods and services who
satisfy our requirements in a timely, efficient and cost-effective manner. We also expect our suppliers to apply a highly ethical approach in their
dealings with Luminar and their own suppliers.
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
The Environment
Luminar strives to minimise any adverse effects its activities may have on the environment and we have taken various measures to ensure this
continues. We have set ourselves stretching targets to ensure that we pro-actively monitor, manage and minimise such effects.
We place our environmental strategy as a high priority in all areas of our business and consider our targets when engaging in new contracts.
These targets reflect our view on ‘green’ issues and our commitment to growing our business in an environmentally friendly manner.
As part of this strategy, we aim to: comply with all environmental legal requirements and regulations; monitor and quantify the environmental
impact of our business; define objectives and set improvement targets; promote awareness of relevant environmental issues amongst
employees, customers, suppliers and other stakeholders; and verify and publish information on environmental performance.
The Future
We appreciate that operating in an ethical and socially responsible way is crucial for our business and we hope that this CSR section sets out a
clear view of the philosophies that underpin our daily activities.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Board of Directors
BOARD COMMITTEES
Nominations Committee
John Leach (Chairman)
Debbie Hewitt
John Jackson
Audit Committee
John Jackson (Chairman)
Debbie Hewitt
Remuneration Committee
Debbie Hewitt (Chairman)
Debbie Hewitt — MBE John Jackson John Jackson
Non-Executive Director — Independent Non-Executive Director — Independent
Debbie was appointed to the Board on John was appointed to the Board on 1 March
14 February 2007 and chairs the 2007 and chairs the Audit Committee. He is
Remuneration Committee. She is also currently the CEO of the Jamie Oliver Group
currently the Non-Executive Chairman of of Companies, Senior Non-Executive Director
Moss Bros Group plc and a Non-Executive of The Restaurant Group plc and Wilkinson
Director of Mouchel plc; Domestic and General Hardware Ltd. Previously, he was Executive
Group Limited; NCC plc; HR Owen plc; and Director of the Virgin Group, Chief Executive
Redrow plc. of Semara Holdings Plc, Managing Director of
The Body Shop Plc, Chairman and Managing
She has previously held a variety of Executive Director of Chesebrough Ponds Limited.
roles, including the role of Managing Director
of RAC plc and was a Non-Executive Director
of De Vere Group Plc, The Alumasc Group plc,
the Office of Government Commerce and HPI
Limited.
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
The Board confirms that the business is a going concern in accordance with the FRC’s ‘Going Concern and Liquidity Risk: Guidance for Directors of
UK Companies 2009’ as referred to in the Report of the Directors.
Directors
At 26 February 2011, the Board consisted of the Chairman, two Non-Executive Directors and two Executive Directors. The Chairman of the
Board is John Leach. John Jackson is the Senior Independent Non-Executive Director. All Non-Executive Directors are considered independent
Directors, according to the terms of the Code.
The structure of the Board provides a balance whereby no individual or small group can dominate the Board’s decision-making.
Simon Douglas was appointed as Chief Executive on 8 March 2010. The Chief Executive is responsible for the executive leadership and co-
ordination of the Group’s business activities.
Including the appointment of Simon Douglas, there have been various changes to the Board of the Company in the last financial year. Robert
McDonald, the Finance Director, stepped down from the Board on 1 June 2010. Philip Bowcock was Robert’s successor and joined the Board from
Barratt Developments plc on the same day.
John Leach joined the Board as a Non-Executive Director on 30 April 2010 and was appointed as Chairman on 13 July 2010 when Alan Jackson
stepped down. Details of the Chairman’s other appointments can be found on page 18, none of which involve a significant contribution on his behalf.
Details of each Director’s other Directorships are disclosed in the Board of Directors information on page 18.
The Board is responsible for setting the Group’s strategic direction, the establishment of Group policies and internal controls and the monitoring of
operational performance. It meets regularly throughout the year and in addition to the routine reporting of financial and operational issues, reviews each of
the trading areas and key functions in detail, including regular departmental functional reviews.
The Board has a schedule of matters specifically reserved to it for decision and delegates certain powers to the Board Committees and to the
Executive Directors collectively and individually. The schedule of reserved matters is reviewed at least annually by the Board and presently
includes management of Shareholder communication, annual budgets, strategic plans, approval of major capital expenditure in excess of £1.0m
and significant financing.
Packs containing relevant commercial and financial details are normally provided to all Board members in the week prior to a Board meeting to
enable the Directors to consider the issues for discussion and to request clarification or additional information. The Board regularly reviews the
type and amount of information provided. The Board plans to meet eight times a year and in addition, has a further meeting for consideration
of strategic issues facing the Group. The Board also holds additional meetings as appropriate, to fulfil the ongoing requirements of the business
during the year.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
On appointment to the Board, every Director is provided with opportunities for appropriate training to enable them to discharge their duties as
a Director. In addition to the training provided on induction, the Board has introduced an enhanced procedure for ensuring that the Directors
receive training on matters that are of particular relevance to the business operations of the Group. In addition, further independent training
may be sought if necessary. The Company creates opportunities for the Senior Independent Director and Non-Executive Directors to meet with
significant Shareholders, should this be requested by those Shareholders.
The Board has concluded a review of its effectiveness. The conclusions of the review have been discussed by the Board as a whole and deemed
satisfactory and will be kept under review during the forthcoming year.
During the year ended 26 February 2011, the Non-Executive Directors evaluated the performance of the Chairman and provided him with
feedback following their discussions. The Chairman has also provided feedback to the Non-Executive Directors.
Board members are appointed by the Board on the recommendation of the Nominations Committee, which is chaired by the Chairman and
consists of the Non-Executive Directors, although the Chief Executive is invited to meetings, as appropriate.
Article 99 of the Articles of Association requires a Director to stand for re-election if they were not appointed or reappointed at either of the last
two Annual General Meetings.
The Board has noted the provision on annual re-election of all Directors introduced by the New Code, which is a requirement for FTSE 350
companies for financial years beginning on or after 29 June 2010. The Company is not formally required by the New Code to comply with this
provision and is required instead to submit Directors to re-election at intervals of no more than three years. All current Directors were submitted
to election at the last Annual General Meeting and it is therefore not necessary to submit any of the Directors for re-election at the forthcoming
Annual General Meeting.
John Jackson and Debbie Hewitt were reappointed at the last Annual General Meeting for a further three year term (which will expire at the
latest on 20 July 2013). Their contracts are terminable on three months’ notice on either side. The appointment of the Chairman is terminable on
six months’ notice on either side. No compensation is payable on the termination of their service contracts.
The Board takes significant measures to ensure that all Board members are kept aware of both the views of major Shareholders and changes in
the major shareholdings of the Group. This is achieved in a variety of ways, including:
n full feedback of Shareholder reviews are communicated by the Chairman, Chief Executive and Finance Director who are primarily charged
with meeting Shareholders;
n the Board receives regular feedback from the Group’s stockbrokers;
n changes in current shareholdings are also presented to the Board on a regular basis prompting discussions on Shareholder issues;
n following interim and full year announcements the Board reports to and receives feedback from analysts and Shareholders on a no-names
basis;
n significant Shareholder movements are notified to the Board by the Company Secretary on an ad hoc basis;
n all Directors are invited to analysts’ briefings and have access, if required, to the Group’s stockbrokers; and
n the Board has procedures in place for full agreement for all significant announcements to the City.
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n Ensuring that the Board operates effectively by ensuring n Developing, reviewing and executing Group objectives and
information flows, and facilitating contributions from Non- strategy;
Executive Directors and monitoring performance;
n Developing, reviewing and maintaining effective organisational
n Liaising with the Chief Executive and providing support, a structure and optimising the use and adequacy of the Group’s
sounding Board, advice and feedback; resources;
n Supporting the strategic process and encouraging and supporting n Developing and maintaining effective performance management;
the Chief Executive with the development of strategy;
n Ensuring effective planning and performance measurement;
n Maintaining relations with Executive Directors and senior
n Maintaining and enforcing effective internal controls, regulatory
managers;
issues and risk management;
n Providing feedback to Non-Executive Directors and encouraging
n Recruiting and managing senior executives and managing their
their development;
contract and performance issues (subject to Remuneration
n Chairing the general meetings and Board meetings and agreeing Committee responsibilities);
Board agendas;
n Ensuring effective staff policies, succession and planning;
n Managing any contract issues that may arise in regard to the
n Implementation and monitoring of compliance with Board policies
Chief Executive, reviewing and appraising his performance,
and ensuring that all Group policies are followed;
making recommendations to the Remuneration Committee on
the remuneration proposals for the Executive Directors and the n Maintaining primary relationships with Shareholders, possible
senior executives; investors and providers of debt capital and other stakeholders of
the Company;
n Ensuring that there are effective processes for maintaining
relations with investors and, from time to time, attending investor n Identifying and executing new business opportunities;
meetings when appropriate or if requested; n External and internal communications (in liaison with the
n Supporting Group communications on major issues and fulfilling Chairman on major issues); and
an “ambassadorial role” when necessary; and n Reliable reporting of the above to the Board.
n Chairing the Nominations Committee and leading the recruitment
of the Chief Executive and Non-Executive Directors.
Board Committees
In accordance with the Code and corporate governance best practice, the Board has established a number of committees. All of the committees
have written terms of reference, approved by the Board.
The Board has eight scheduled meetings per year, with other meetings convened for specific matters, some of which are delegated to other
committees, as appropriate. The attendance of each of the Directors at the scheduled Board and committee meetings (including conference calls
and quorum Board meetings), where appropriate, is shown below:
Number of meetings Audit
Remuneration
Nominations
in the year Board Committee Committee Committee
John Leach* 13 1
Debbie Hewitt 17 3 4 3
John Jackson 18 3 4 3
Simon Douglas† 18
Philip Bowcock‡ 12
Alan Jackson§ 11 2
Robert McDonald¶ 7
* Appointed to the Board on 30 April 2010. † Appointed to the Board on 8 March 2010.
‡ Appointed to the Board on 1 June 2010. § Resigned from the Board on 13 July 2010.
¶ Resigned from the Board on 1 June 2010.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Audit Committee
The Audit Committee is chaired by John Jackson and, during the financial year, also comprised Debbie Hewitt. The terms of reference for the
Audit Committee provide that the Chairman is invited to attend all meetings and the Chief Executive and Finance Director are invited to attend,
as appropriate.
The terms of reference for the Audit Committee are available from the Company Secretary and also appear on the corporate website at
www.luminar.co.uk.
The Committee meets during the year and reports to the Board on all matters relating to the regulatory and accounting requirements that may
affect the Group, together with the financial reporting and internal control procedures including the annual and interim financial statements. In
addition, the Audit Committee ensures that an objective and professional relationship is maintained with the external Auditors, with particular
regard to the nature and extent of any non-audit functions they provide.
The external Auditors may attend all meetings of the Audit Committee and have direct access to the Audit Committee and its Chairman at
all times.
In the prior year ended 25 February 2010, the Group’s external Auditors, PricewaterhouseCoopers LLP (“PwC”), provided advice to the Group,
including advice in relation to the re-financing. The fees paid to PwC for non-audit services were £0.2m excluding VAT. No such services have been
provided in the current year. The Audit Committee carefully evaluates the use of PwC for non-audit work, where appropriate. Non-audit work is led
by separate teams, which are segregated to the degree required to achieve the necessary independence and to maintain the Auditors’ objectivity.
The Audit Committee views the independence and objectivity of the Group’s Auditors as essential and ensures that PwC are not instructed on any
issues, which would prejudice this. To ensure that this occurs, the Group operates a policy under which any non-audit work is subject to competitive
tender and if such work has a value in excess of £50,000, it is also referred to the Audit Committee for approval. The Audit Committee obtains
written confirmation, where appropriate, on at least an annual basis of the independence of the external Auditors.
Following a review by the Audit Committee, the Board agreed to recommend to Shareholders at the Annual General Meeting, the reappointment
of the external auditors. The current overall tenure of the external Auditor dates from 2003. Any decision to open the external Auditor to
tender is taken on the recommendation of the Audit Committee, based on the results of the effectiveness review described below. There are
no contractual obligations that restrict the Company’s current choice of external Auditor.
The Audit Committee assesses the ongoing effectiveness of the external Auditor and audit process on the basis of meetings and an internal
review with finance and other senior executives. In reviewing the independence of the external Auditors, the Audit Committee consider a number
of factors. These include the standing, experience and tenure of the external Auditor, the nature and level of services provided and confirmation
from the external auditor that they have complied with relevant UK independence standards.
The Audit Committee also reviews the possible risks facing the Group, the risk management function and internal controls. The latter are dealt
with in greater detail below. The Company uses an external consultancy firm, Icarus Wyatt Consulting Limited, who reports to the Finance
Director and to the Audit Committee and is responsible for ensuring the management of the risk process across the range of the Group’s
activities. The external consultant reports at least twice a year to the Audit Committee regarding risk and internal control matters and the full
Board reviews risk and internal controls annually.
Steps have been taken to ensure that there is an opportunity for any employee, in confidence, to raise concerns with management about possible
impropriety in financial or other matters. The Group has established an internal hotline, which is independent of line management and intends to
undertake further reviews to increase awareness of the process including training for managers who may have to deal with whistle-blowing issues.
The Company has in place internal control and risk management systems in relation to the Company’s financial reporting process and the
Group’s process for preparation of consolidated accounts which it monitors and evaluates on a regular basis and accords with Turnbull guidance
published on the Internal Control requirements of the Code.
Remuneration Committee
The Remuneration Committee is chaired by Debbie Hewitt and consists of all the Non-Executive Directors, except the Chairman. The Chairman is
invited to attend all meetings. The Remuneration Report is set out on pages 25 to 32.
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
The terms of reference for the Remuneration Committee are available from the Company Secretary and also appear on the corporate website at
www.luminar.co.uk.
Nominations Committee
The Nominations Committee is chaired by the Chairman and also consists of John Jackson and Debbie Hewitt. The Committee monitors and
reviews the membership of and succession to the Board of Directors together with its effectiveness. If the Board requires additional skills, the
Nominations Committee has the ability to appoint new or additional Directors or Non-Executive Directors. It makes recommendations to the
Board on the identification and recruitment of potential Directors. The Nominations Committee met twice in this last financial year to consider
the appointments of Philip Bowcock and John Leach.
The terms of reference for the Nominations Committee are available from the Company Secretary and also appear on the corporate website at
www.luminar.co.uk.
Operational Structure
The SEM considers amongst its standing agenda items: reviewing capital expenditure; revenue expenditure not authorised by the Executive
Directors within their individual authority levels; regular reports from the Directors reviewing the Risk Register and management responses and a
regular review of the strategic aims of the Group.
Internal Control
As stated above, the Board is responsible for the ongoing process of identifying and evaluating the significant risks faced by the Group, both financial and
non-financial for the purpose of maintaining a sound system of internal control to safeguard Shareholders’ investment and the Company’s assets. This
responsibility includes clearly determining the control environment and reviewing its effectiveness. However, such a system can provide only reasonable
and not absolute assurance against material misstatement or loss.
Approximately every quarter, a register of key risks is submitted to the SEM for approval and discussion. The SEM is responsible for the day-
to-day management of risks within the Group. The register of key risks covers material controls including financial, operational and compliance
controls. These discussions are minuted. Areas of concern within the register are highlighted by the Company’s external consultant, Icarus Wyatt
Consulting Limited. The SEM is asked to propose any amendments to the register that it deems appropriate and to confirm that it is content that
the register presents a true and fair view of the key risks facing the business together with the controls that have been implemented to assess
those risks. Actions relating to certain risks are recorded as necessary. Key issues identified as a result of the risk based internal audit process are
also identified within the paper.
The annual risk based internal programme is compiled using the risk register.
One-to-one meetings are held frequently with risk owners to discuss key risk issues and meetings are held with the Auditors on an ad hoc basis
to discuss risk.
The effectiveness of the internal control system has been reviewed by the Board throughout the year. The ongoing process for identification,
evaluation and management of significant risks accords with the Turnbull guidance published on the Internal Control requirements of the Code.
Assurance in relation to the design, operation and effectiveness of internal controls across the Group’s activities and functions is provided
through a mix of mechanisms and processes, which include:
Internal Audit
The Group has an Operational Risk department that carries out audits to assess various operations throughout the business. The Operational Risk
department monitors a variety of issues such as health and safety, financial controls in venues and stock loss. Their work is supported by Icarus
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Loss Prevention
In addition to their other duties, the Operational Risk department also deals with loss prevention, which is achieved by the investigation of
committed and alleged criminal activity. This department further provides and enforces an Anti-Fraud and Anti-Crime culture. There is a zero
tolerance of any such activity in all of the venues and throughout the business. We seek to recover all losses from criminal and negligent acts
through a variety of channels, including the Criminal Courts and through Civil Recovery action. The Operational Risk department aims to raise
awareness of the risks and consequences of fraud and crime. All employees are required at all times to act honestly and with integrity. The
relaunch of the whistle-blowing telephone line supports and reinforces this culture. The line is monitored constantly and all calls are dealt with in
a timely and appropriate manner.
Supporting Health & Safety documentation provided to all venues, including template risk assessments and the Group’s Fire, Food and Health
and Safety Guidance Manuals, is updated and reviewed on a regular basis by the Group H&S Advisor to ensure all venues trade to meet current
legislative and best practice requirements.
The Group has adopted and installed a ‘Lite Patrol’ system in all venues. ‘Lite Patrol’ is a computerised system, which acts as an internal control,
enables monitoring of activity and ensures that operational standards are as high as possible during trading hours within the Group’s venues. The
system ensures the regular inspection of key areas (which is provided by scanning discs mounted in various parts of the venue, usually by floor
supervision) can be proved, monitored and recorded. The Lite Patrol system has proved especially useful in ensuring the effectiveness of the safe
systems of work implemented by the Company.
Legislative reform
The Group carries out reviews to assess the impact of legislative and regulatory change. During the year, the Group continued to review its
compliance with a wide range of new or recently introduced legislation.
Training
Every employee is provided with specific training to ensure high standards of customer service. Included within this training are specific modules
to enable them to understand and manage risk in the Group’s venues. These procedures are all embodied in awards available to employees on
satisfactory completion of the training programme.
Finance
The Finance Director provides regular financial information to the Board, which includes key performance indicators. Regular performance
review meetings are held where management discuss business performance, risks to performance and internal control issues with the Executive
Directors.
Public liability
The Group continues to monitor and pro-actively manage its public liability exposure both by the use of the ‘Lite Patrol’ system mentioned
above and adopting best practice in its venues regarding staff training and use of its external door supervisors. The Group maintains appropriate
insurance cover to address specific and general risks that face the business.
Licensing
To ensure that any issues arising from the operation of its venues are identified, the Group liaises with other stakeholders (including local
residents’ associations and industry bodies). This process is supported by the use of incident reports generated by the venues, which are sent to
appropriate divisional managers, management and executives.
The Group makes extensive use of CCTV and typically keeps records of CCTV coverage for 30 days.
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Remuneration Report
The Remuneration Committee has reviewed the remuneration policy for the Executive Directors in light of the current trading environment.
Reflecting the strategic priorities of the business for 2011/12 (stabilisation of the business and its finances), the Committee determined that it is
not appropriate to grant long-term incentive awards to Executives in 2011 or 2012. Instead the Committee concluded that the variable element
of the remuneration package should concentrate on short-term metrics focused on stabilising the business. In line with prior years, the annual
bonus for 2011/12 (worth up to 100% of salary) will be based on stretching EBITDA targets, with an underpin requiring PBT to be at least break
even before any bonus is paid. In addition, for the 2011/12 financial year (and for 2012/13 if considered appropriate) there will be a further
bonus opportunity (worth up to 50% of salary) based on achievement of the Company’s banking obligations and capital repayment plans. This
additional bonus opportunity will be paid in shares, the receipt of which will be deferred until 2013. In parallel, no salary increases are planned
for the Executive Directors in 2011/12 and the LTIP award granted to the Executive Directors in 2010 has been cancelled. Further details of the
remuneration policy are set out in this Report.
This Report has been prepared by the Remuneration Committee and has been approved by the Board. It complies with Schedule 8 of the
Companies Act 2006, which incorporates the requirements of the Large and Medium Sized Companies and Groups (Accounts and Reports)
Regulations 2008, the reporting requirements of the Listing Rules of the UK Financial Services Authority, and in accordance with the Code. The
Board considers that it has complied with all aspects of the Code for the year ended 26 February 2011. The revised UK Corporate Governance
Code which was published by the Financial Reporting Council in June 2010 will apply to the Company for the financial year due to end in 2012.
This Report will be put to Shareholders for approval at the forthcoming Annual General Meeting. The Act requires the Auditors to report on certain parts
of the Report and to state whether, in their opinion, those parts of the Report have been properly prepared in accordance with the Regulations. The
Report has, therefore, been divided into separate sections for audited and unaudited information.
Hewitt New Bridge Street (“HNBS”), a firm of independent remuneration consultants, advises the Remuneration Committee as required in
relation to senior executive remuneration and employee share schemes. HNBS has no other connection with the Group other than the provision
of advice on executive remuneration. HNBS were appointed by the Remuneration Committee and the terms of their engagement are available
from the Company Secretary on request.
The Remuneration Committee is responsible for setting and reviewing the remuneration of the Chairman, Executive Directors and their direct
reports and the operation of any share-based incentive schemes (including all employee schemes). In determining its policy, the Remuneration
Committee has regard to the principles and provisions of the Code as well as the UKLA Listing Rules and associated guidance on good governance.
The Remuneration Committee operates under the delegated authority of the Board and its terms of reference are available from the Company
Secretary on request, and also appear on the corporate website at www.luminar.co.uk.
The Remuneration Committee is able to consider corporate performance on environmental, social and governance issues when setting
remuneration of Executive Directors. The Remuneration Committee is comfortable that the incentive structure for senior management does not
raise any environmental, social and governance risks by inadvertently motivating irresponsible behaviour.
Remuneration Policy
The Remuneration Committee determines the Group’s policy on the remuneration of the Executive Directors. The principles which underpin the
remuneration policies for the Group both for the last and forthcoming financial year are:
n to ensure that senior executive rewards and incentives are directly aligned with the Group strategy and the interests of the Shareholders, in
order to optimise the performance of the Group and create sustained growth in Shareholder value;
n to provide the level of remuneration required to attract, retain and motivate Executive Directors of an appropriate calibre;
n to ensure a proper balance of fixed and variable performance related components, linked to short and longer-term objectives and to ensure
that executives are not incentivised to take inappropriate risks;
n to reflect market competitiveness, taking account of the total value of all the benefit components; and
n to ensure that there is no scope to reward failure.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
(a) Salary
Salaries for each Executive Director are determined by the Remuneration Committee taking into account the experience and performance of the
individual and comparisons with peer group companies within its sector.
Base salaries are reviewed annually (unless responsibilities change). In setting appropriate salary levels for the Executive Directors, the
Remuneration Committee takes into account pay and employment conditions of employees elsewhere in the Group.
Simon Douglas was appointed as Chief Executive on 8 March 2010, with a base salary of £300,000. Philip Bowcock was appointed Finance
Director on 1 June 2010, with a base salary of £200,000.
The salaries have been reviewed and no increases are planned for the financial year 2011/12.
For 2011/12 and 2012/13 the policy in relation to the annual bonus will be changed, recognising the strategic imperative to stabilise the business in
2011. As part of this policy change, there will be no long-term incentive award during this period (see next section).
In line with prior years’ plans, a bonus opportunity of 100% of an Executive Director’s base salary will be based on a range of stretching EBITDA
targets, with an underpin requiring the PBT to at least break even before any bonus is paid. Any payments under this part of the bonus will be in
cash after the year end.
In addition, for the 2011/12 and 2012/13 financial years, there will be an additional bonus opportunity worth up to 50% of base salary. In 2011/12,
payment of this additional bonus opportunity will be based on the achievement of the Company’s banking obligation and annual bank capital
repayment plans. To the extent that there is not full achievement of these conditions, the amount payable under this additional 50% would be
reduced to zero.
These metrics provide a very sharp and clear incentive, reflecting the Board’s desire to incentivise management to deliver a financial
restructuring package which stabilises the business during 2011/12. The Remuneration Committee will consider whether these, or different,
targets are appropriate in 2012/13.
At the end of each of the bonus years, i.e. 2011/12 and 2012/13, any resulting bonus payable under this additional 50% of salary opportunity
would be delivered in shares and deferred for a further year, subject to conditional employment. The value of dividends paid over the year (if
any) would be rolled up and paid out in the form of an additional share award on vesting. At the time shares are redeemed after a year, they must
continue to be retained until such time as the Executive achieves a shareholding of at least 100% of base salary (the 100% value being calculated
on the share price at the time the award vests).
We believe that this approach is a pragmatic step to ensuring that Executives’ remuneration is competitively pitched in the absence of a formal
long-term incentive plan, whilst reflecting the strategic priorities which are about stabilisation of the business and finances. By delivering the
incentives within an annual target-setting framework, this will ensure that the total incentive opportunity (100% under the current bonus and
50% under this additional bonus) are tailored to business-specific targets, measured over a short enough period to enable target ranges to be
accurately pitched.
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Stock code: LMR Business Review
Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Following Board discussions in relation to the broader strategy of the business, the Remuneration Committee concluded that the LTIP was not providing
the motivational impetus that had been hoped for, as the strategic issues facing the Company are such that management must focus on a series of
short-term metrics to stabilise the business, before being able to plan more for the longer-term. Accordingly, the decision was taken to cancel the LTIP.
There are no costs to the Company of cancelling it, but this does leave the Executives without any kind of long-term, share-based incentive.
In considering the alternative incentive arrangements, the Remuneration Committee recognised the risk that if another LTIP is introduced,
any long-term targets set (e.g. typically three to five years) would be very difficult to calibrate, so as to provide a fair link between reward and
performance and not, for instance, provide an undue windfall if there is a sharper than expected recovery.
Awards can still be made under the Performance Share Plan (the predecessor to last year’s LTIP), under which the Remuneration Committee had
anticipated using a ‘regular grant’ policy once the business situation had stabilised. However, for the reasons set out above, the Committee does
not feel that it is appropriate to grant awards under this plan at the current time.
Accordingly there will be no long-term incentive awards for the 2011/12 and 2012/13 financial years. Full details of outstanding awards can be
found on pages 29 to 32.
Simon Douglas’ service contract (dated 8 March 2010) is terminable on 12 months’ notice by the Company and on six months’ notice by him.
Philip Bowcock’s service contract (dated 13 May 2010) is terminable on six months’ notice by either party.
Stephen Thomas’ service contract (dated 28 January 2008) was terminable on 12 months’ notice by either party. Robert McDonald’s service
contract (dated 16 March 2009) was terminable on six months’ notice by either party.
Upon termination, the Executive Directors are entitled to salary and benefits for the duration of the notice period. It is the policy of the
Remuneration Committee to seek to mitigate termination payments. From the date of termination, Simon Douglas is subject to a 12 month
non-compete clause and Philip Bowcock to a six month non-compete clause. The Executive Directors are employed on rolling contracts with a
retirement age of 65. No compensation is payable on the termination of their service contracts in lieu of the notice period.
Robert McDonald received salary, benefits and pension up until the date of his cessation of employment (30 June 2010). He received no
compensation for loss of office. Since he left shortly after the start of the new financial year, it was determined that he would not be eligible to
participate in the annual bonus plan for the 2010/11 financial year.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
As at 1 March 2010 (being the date on which Stephen Thomas ceased to be a Director of the Company), Stephen Thomas was a Non-Executive
Director of The 3D Entertainment Group Limited and Non-Executive Chairman of Legion Group plc. He was also a Non-Executive Director of
Saracens Limited, Premier Team Holdings Limited and a Trustee of the Royal National Institute for Deaf People.
Neither Simon Douglas nor Philip Bowcock hold any Non-Executive Directorships in other companies.
Non-Executive Directors
All Non-Executive Directors are appointed initially for a three year term and, after review, will normally be proposed for a further three year
term. Having been elected, in the case of John Leach, and re-elected, in the case of John Jackson and Debbie Hewitt, at last year’s Annual
General Meeting, the current three year term expires on or around 20 July 2013.
Non-Executive Directors’ appointments are terminable on three months’ notice on either side save in respect of John Leach whose appointment
as Chairman is terminable on six months’ notice on either side.
Appointment date
Debbie Hewitt 14 February 2007
John Jackson 1 March 2007
John Leach 30 April 2010
Non-Executive Directors are not entitled to bonus payments or pension arrangements, nor do they participate in the Group’s long-term incentive
schemes. Fees for the Non-Executive Directors are determined by the Board in accordance with the Articles of Association and are based on
information on fees paid in similar companies, taking into account the experience of the individuals and the relative time commitments involved.
200
150
Value (£)
100
50
0
2-Mar-06 1-Mar-07 28-Feb-08 26-Feb-09 25-Feb-10 26-Feb-11
The Directors have chosen to compare the Group’s TSR performance with the TSR of companies in the FTSE SmallCap Index. This Index has been
selected because the Company has been a constituent of this index for most of the period.
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
* Notional salary for Simon Douglas includes a 20% salary supplement in lieu of pension, for Philip Bowcock a 15% supplement and for Robert
McDonald (who left the Company on 1 June 2010) a 15% supplement. Notional salary in relation to Stephen Thomas includes a 22% salary
supplement received in lieu of pension contributions for the portion of the year worked. Stephen Thomas left the Company on 31 July 2010.
† Stephen Thomas received £563,000 (being an amount equivalent to 12 months’ salary, benefits and pension in line with his contractual
entitlements on the date of the cessation of his employment (31 July 2010).
Benefits in kind include the provision of a company car or allowance, fuel and private medical insurance.
As described earlier in the report, the LTIP has now been cancelled. Notwithstanding the fact that all individual rights have been cancelled, as the
LTIP was in existence during the Financial Year under review we are required to summarise its key terms, which are set out below.
The total number of shares over which options were granted under the LTIP equated to 7% of the issued share capital as at 8 March 2010 (being
the date of appointment of the Chief Executive). The Chief Executive received options over 40% of this LTIP pool and the Finance Director over
15%. Should the full 7% not have been allocated throughout the period of the scheme, any unallocated options would have lapsed.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Details of the conditional awards held by the Executive Directors under the LTIP during the year are set out below:
There were three performance conditions, based on share price, relative total shareholder return (“TSR”) performance and average annual Return
on Capital Employed (“ROCE”) over the performance period. The share price performance condition (Step 1) required an average share price in the
three months to 8 March 2015 of between £1.50 to £6.51 (for 0% to 100% vesting) and the relative TSR performance condition (Step 2) required
Luminar to be ranked between the second and first quintile against a bespoke comparator (for 0% to 100% vesting). The TSR comparator group
comprised Domino’s Pizza, Enterprise Inns, Fullers, Greene King, JD Wetherspoons, Marstons, M&B, Punch Taverns and Youngs. Notwithstanding the
satisfaction of the performance conditions under Steps 1 and 2 above, exercise of the option required the average annual ROCE to be 8% or more.
Performance was to be measured over five years from 8 March 2010, other than the ROCE performance condition which would be measured over
five financial years commencing with the 2010/11 financial year. There was an early testing opportunity after three years.
At At Share price
25 February Granted Forfeited Lapsed 26 February Date of Vesting Expiry on date
2010 during year during year† during year 2011 award date date of grant (£)
StephenThomas* 140,019 — — (140,019) — 09/11/07 01/08/10 5.745
332,750 — (108,900) — 223,850 22/05/08 22/05/11 3.20
376,824 — (244,973) — 131,851 10/06/09 10/06/12 1.41
Total 849,593 (353,873) (140,019) 355,701
Nick Beighton† 42,884 — — (42,884) — 09/11/07 01/08/10 5.745
44,183 — — — 44,183 22/05/08 22/05/11 3.20
Total 87,067 (42,884) 44,183
Robert
McDonald* 200,972 — (200,972) — — 10/06/09 10/06/12 1.41
Total 200,972 (200,972) —
* Stephen Thomas and Robert McDonald ceased to be Directors of the Company during the last financial year and accordingly certain of their
options were forfeited.
† Nick Beighton ceased to be a Director of the Company on 26 April 2009.
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Nick Beighton and Stephen Thomas have been treated as a ‘good leaver’ under the terms of the Performance Share Plan. Their outstanding long-
term incentive awards will be capable of vesting on the third anniversary of grant subject to achievement of the performance conditions. The
awards, to the extent that they vest, have been scaled back to reflect the proportion of the vesting period for which they were employed.
All the awards granted under the 2007 PSP lapsed during the last financial year due to non-fulfilment of the performance conditions.
The performance conditions for the 2008 awards to the Executive Directors are as follows:
n 50% of the awards will vest based on the relative TSR performance of the Group compared with the constituents of the FTSE SmallCap
Index measured over three years from the date of grant, of which 25% of this part of the award will vest if the Company’s TSR is equal to
the median company’s TSR. Full vesting requires the Company’s TSR to be at or above the upper quintile. There will be incremental vesting
between median and upper quintile.
n The other 50% of the awards are subject to an Earnings per Share (“EPS”) target based on the growth in pre-exceptional EPS over the period
of three financial years. For aggregate awards up to 100% of base salary (i.e. of which half is based on EPS), of which 25% of the award will
vest if EPS growth is equal to RPI + 3% p.a. with full vesting requiring growth at RPI + 7% p.a. For awards in excess of 100% of base salary,
there will be incremental vesting between RPI + 7% p.a. (0% vesting) and RPI + 10% p.a. (100% vesting) for the awards subject to the EPS
performance condition (i.e. 50% of the excess).
The performance conditions for the 2009 awards to the Executive Directors are as follows:
n 50% of the awards will vest based on the relative TSR performance of the Group compared with the constituents of the FTSE SmallCap Index
measured over three years from the date of grant. 25% of this part of the award will vest if the Company’s TSR is equal to the median company’s
TSR. Full vesting requires the Company’s TSR to be at or above the upper quintile. There will be incremental vesting between median and upper
quintile.
n The other 50% of the awards are subject to an Earnings per Share (“EPS”) target based on the growth in pre-exceptional EPS over the period
of three financial years. 25% of the award will vest if EPS growth is equal to RPI + 3% p.a. with full vesting requiring growth at RPI + 7% p.a.
As disclosed in last year’s remuneration report, outstanding options held by Executive Directors (see below) were rolled over into equivalent
options over shares in the Company in connection with the business capital reorganisation in 2007. However, following the technical change of
control of Luminar plc in connection with the reorganisation, the Rules of the 1996 Executive Share Option Scheme prescribed that unapproved
options became immediately exercisable, with performance conditions falling away (this was a standard feature in rules of this vintage).
Therefore, the exercise of the rolled over unapproved options is not subject to any performance conditions. Similarly, rolled over approved
options are not subject to performance conditions, as prescribed by the rules of the 1999 Company Share Option Plan (a common provision in
rules of this vintage).
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Stephen Thomas
At At
Date of Earliest Expiry Exercise 25 February Lapsed Exercised 26 February
Grant Exercise Date Date Price 2010 during year in year 2011
1996 Executive Share Option Scheme (Unapproved)
11/07/00 11/07/03 10/07/10 6.57 543,689 543,689 — —
04/07/01 04/07/04 03/07/11 8.09 28,419 — — 28,419
22/05/03 22/05/06 21/05/13 3.73 214,261 — — 214,261
Total 786,369 242,680
1999 Company Share Option Plan (approved)
04/07/01 04/07/04 03/07/11 8.09 3,706 — — 3,706
Total 3,706 3,706
Under the terms of the option plans, Stephen Thomas will be eligible to exercise outstanding share options within two years following his
cessation of employment.
Sharesave Plan
The Company has introduced the Sharesave Plan 2011. This is an HMRC approved all employee share plan, whereby eligible employees, including
Executive Directors, can enter into a savings contract which gives them the option to buy shares in Luminar Group Holdings plc at the end of a
specified term. The scheme was launched in April 2011, with employees invited to take part in a three and/or five year savings contract with the
opportunity to acquire shares at a 10% discount to the average share price over the three days prior to grant upon completion of the contract.
Directors’ Interests
The beneficial interests of Directors who served at the end of the year, together with those of their families, are shown in the Report of the
Directors on pages 34 and 35.
The mid-market price of the Group’s shares on 26 February 2011 was 12.25 pence and the range for the year was between 8.75 pence and 53.25
pence.
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Principal Activity
The principal activity of the Group during the year was as owner and operator of themed bars and nightclubs.
Business Review
The Report of the Directors and the Corporate Responsibility Statement incorporates the Business Review set out on pages 4 to 12 of this Report
and forms part of the ‘management report’ for the purpose of Rule 4.1.8 of the Disclosure and Transparency Rules and has been incorporated by
reference.
The financial risk management objectives and policies of the Group, including the policy for hedging each major type of forecast transaction for which
hedge accounting is used, and the Group’s exposure to price risk, credit risk, liquidity risk and cash flow risk, are set out in the Principal Accounting
Policies section and also in note 22 to the Financial Statements and has been incorporated by reference.
Directors
The current Board of Directors is shown on page 18 of this Report.
Simon Douglas joined the Board in March 2010 as Chief Executive Officer (“CEO”). Simon has a strong track record in the leisure and
entertainment sector, including various management roles at HMV, Virgin Retail and latterly as CEO in leading the MBO of Zavvi, where he
extracted considerable shareholder value from the business.
John Leach joined the Board as a Non-Executive Director on 30 April 2010 and became Chairman on 13 July 2010. John has wide experience of
both the leisure sector and most recently the City where from 2003 to 2008 he was involved in various roles and latterly as CEO of Hermes UK
Focus Fund. Prior to this he was Chairman of Orbis Plc, Waterhall Group Plc and Brent Walker Group, where he was CEO from 1994 to 1998 and
CFO from 1991 to 1994.
Philip Bowcock joined the Board as Finance Director on 1 June 2010 from Barratt Developments plc, where he was Group Financial Controller.
Prior to this, he held senior finance roles at Tesco and Hilton Group.
Stephen Thomas left the Board on 1 March 2010. He was the CEO and founder of Luminar. Robert McDonald (Finance Director) left the Board on
1 June 2010 and Alan Jackson stepped down as Chairman on 13 July 2010.
Article 99 of the Articles of Association requires a Director to stand for re-election if they were not appointed or reappointed at either of the last
two Annual General Meetings.
The Board has noted the provision on annual re-election of all Directors introduced by the New Code, which is a requirement for FTSE 350
companies for financial years beginning on or after 29 June 2010. The Company is not formally required by the New Code to comply with this
provision and is required instead to submit Directors to re-election at intervals of no more than three years. All current Directors were submitted
to election at the last Annual General Meeting and it is, therefore, not necessary to submit any of the Directors for re-election at the forthcoming
Annual General Meeting.
Appointments to the Board are recommended by the Nominations Committee and are made in accordance with the provisions of the Articles
of Association.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
During the year, the Group maintained liability insurance for its Directors and Officers.
On 2 May 2008, the Board approved the Company entering into Qualifying Third Party Indemnities (“QTPIPs”) in favour of Stephen Thomas and
Nick Beighton and on 29 April 2009 the same in respect of Robert McDonald. Stephen Thomas, Nick Beighton and Robert McDonald have since
ceased to be Directors of the Company but the QTPIP continues to apply to them. Following the appointments of Simon Douglas and Philip
Bowcock, the Company has entered into a QTPIP with each of them on similar terms. These QTPIPs were approved respectively on 30 April 2010
and 14 June 2010.
These QTPIPs provide an indemnity in respect of the Company and several of its subsidiaries. These indemnities were also provided to Tim
O’Gorman, Mark Noonan, Peter Turpin and Trevor Ling in their capacity as Directors of various subsidiaries of the Company.
Following a detailed review of the Company’s circumstances, the size of the indemnity cap was agreed at £5.0m.
Although the Company acknowledges that these indemnities will cover any liabilities already incurred, the Company is not aware of any existing
liabilities or of any circumstances that may be reasonably likely to give rise to any such liabilities.
No Director had a material interest in any contract or arrangement to which the Group or any subsidiary was a party.
In accordance with the Companies Act 2006, a Register of Conflicts has been established and currently no conflicts have been identified.
The interests of the Directors in the ordinary shares of the Group on 26 February 2011 and 25 February 2010 were as follows:
26 February 25 February
2011 2010
No. No.
John Leach (appointed 30 April 2010) 190,700 —
Simon Douglas (appointed 8 March 2010) 85,000 —
Philip Bowcock (appointed 1 June 2010) — —
Debbie Hewitt 76,422 14,072
John Jackson 56,741 11,191
After the year end, Simon Douglas acquired certain shares in the Company as follows:
Total
interests
Number as at
Date shares
of shares 11 May
acquired acquired 2011
Simon Douglas 7 March 2011 40,000 125,000
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
After the year end, the Group acquired further shares for the Non-Executive Directors as part of the contractual remuneration of those Directors.
The shares acquired were as follows:
Total
interests
Number as at
Date shares of shares 11 May
acquired acquired 2011
Debbie Hewitt 28 February 2011 19,415 95,837
John Jackson 1 March 2011 30,975 87,716
John Leach 1 March 2011 79,025 269,725
Other than these acquisitions and the shares listed above, there have been no changes in the interests of the Directors in the share capital of the
Group between 26 February 2011 and the date of signing of this Report on 11 May 2011.
No Director had any interest in the shares of any of the Group’s subsidiaries during the year ended 26 February 2011.
The interests of the Directors in share options and other long-term incentive plans are set out in the Remuneration Report on pages 29 to 32.
Share capital
At the 2010 Annual General Meeting, the Shareholders gave the Company the power to issue and buy back shares. The authority to purchase
and cancel its shares is limited to being up to a maximum of 10% of its own shares. This authority will expire at the conclusion of the forthcoming
Annual General Meeting, at which a Special Resolution will be proposed to renew the authority for a further year.
The Board has not exercised this power during the year ended 26 February 2011. The Board did not exercise this power in the period between then
and the signing of this Report on 11 May 2011. It is the intention of the Company to repeat these powers and the resolution approving it is found in
the Notice of the Annual General Meeting in resolution 7.
As part of its refinancing, on 8 December 2010, the Group issued Lending Banks equity warrants over 5,021,130 Ordinary Shares, representing
5% of the ordinary issued share capital of the Company as at 11 May 2011. If the existing authority given at the last Annual General Meeting and
the authority being sought at this year’s Annual General Meeting were to be used in full, these would represent 6.25% of the Company’s ordinary
issued share capital.
The subscription price per warrant share is equal to the current nominal value of 25 pence per share, exercisable in cash at any time up to the
seventh anniversary of the agreement.
On 30 April 2010, the Company redeemed and cancelled its Deferred Share Capital.
Substantial Shareholders
At 11 May 2011 (the last practical date before the approval of this Report), the Group had been notified of the following significant shareholdings
and interests in the shares of the Group, pursuant to Section 793 of the Companies Act 2006:
Name of Number of %
Shareholder shares shareholding
Schroder Investment Management 27,145,711 27.0
Hermes Pensions Management 15,105,254 15.0
Newton Investment Management 7,108,684 7.1
Morgan Stanley Investment Management 6,745,233 6.7
Gartmore Investment Management 6,108,776 6.1
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
The Company is not aware of any agreements between holders of securities known to the Company which may result in restrictions on the
transfer of securities or voting rights.
No person holds shares with specific rights regarding control of the Company.
There are no agreements between the Company and its Directors or employees which provide for compensation for loss of office or employment
that occurs because of a takeover bid.
Contracts
Although the Company has a few contracts that may be subject to change of control provisions, all of these contracts were recently assigned or
novated as part of an earlier restructure and Scheme of Arrangement and no significant problems have been encountered in regard to changing
the contracting parties.
Employment Policies
Luminar has a strategy of People Excellence achieved through:
We have a number of managers who graduated last year with a foundation degree in Leadership and Management (Late Night Entertainment).
This means that the business has professionally qualified managers in place within its venues. Luminar also runs a training programme, which
forms part of a career path whereby individuals undertake different levels of training to help them progress into management roles within our
venues. As the Group develops new initiatives, we will review our training programmes to ensure that our management population have the
necessary skills to push the business forward.
The Group wholeheartedly supports the principle of Equal Opportunities and does not discriminate between employees or potential employees
on the grounds of colour, race, nationality, ethnic or national origin, sex, sexual orientation, religion or similar belief, marital status, age or
disability. Consideration is given to all applicants for employment from candidates with disabilities where the requirements of the job can be
covered. If employees become disabled, every effort is made to ensure their employment continues with appropriate training and reasonable
adjustments being made.
The Group’s in-house Weekly Activity Bulletin, known as the WAB, staff notice Boards, employee forums and team briefings all illustrate that
employees are both well informed and able to feed back and contribute towards the running of the business.
Finally, reward and recognition is achieved through a variety of different methodologies including, incentives, bonus arrangements and SAYE
schemes. Annual appraisals also provide the opportunity for constructive feedback, recognition and succession planning.
As disclosed in the Remuneration Report, the Company has introduced the Sharesave Plan 2011. This is an HMRC approved all employee share
plan, whereby eligible employees, including Executive Directors, can enter into a savings contract which gives them the option to buy shares in
Luminar Group Holdings plc at the end of a specified term. The scheme was launched in April 2011, with employees invited to take part in a three
and/or five year savings contract with the opportunity to acquire shares at a 10% discount to the average share price over the three days prior to
grant upon completion of the contract.
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Consolidated Financial Statements
Company Financial Statements
Shareholder Information
More recently, during the year a total of £107,400 (2010: £342,000) was donated to Echo by our customers and staff. This money was raised from
collections within venues and donations made at Company organised events.
Since the registration of the Echo Trust with the Charity Commission in 2003, it has not been possible to donate all of the monies collected
during the regular grant awards. Therefore, in February 2011, the Echo Trust staged the ‘Big Giveaway’ whereby the Company invited all clubs to
nominate a local children’s charity to benefit from a grant. Head office staff were also invited to participate in this initiative. A total of £395,000
was given away in this event, which is the largest grant making exercise the Trust has ever carried out.
No direct contributions for charitable purposes were made during the year (2010: £nil). No political donations were made during the year
(2010: £nil).
Statement of Directors’ responsibilities in respect of the Annual Report, the Directors’ Remuneration Report and the
financial statements
The Directors are responsible for preparing the Annual Report, the Directors’ Remuneration Report and the financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the
Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, and the
parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law). Under Company law, the Directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing
these financial statements, the Directors are required to:
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial
statements and the Directors’ Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article
4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the Directors, whose names and functions are listed in the Annual Report confirm that, to the best of their knowledge:
n the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the
assets, liabilities, financial position and loss of the Group; and
n the Business Review includes a fair review of the development and performance of the business and the position of the Group, together with
a description of the principal risks and uncertainties that it faces.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
The New Facility comprises two term loans of £44m and £40m respectively, both repayable over three years and a revolving credit facility (RCF)
of £15m. The weighted average cash interest rate for the New Facility is 7.8%.
The main financial covenants applying to the New Facility are those of leverage (the ratio of Net Debt to EBITDA as defined in the New Facility
Agreement) and fixed interest cover. The leverage covenant ratio was set at 3.8 times, reducing to 2.0 times over the life of the New Facility, and
the fixed interest cover was initially set at 1.35 times rising to 1.75 times.
Severe adverse weather conditions experienced in December combined with the continued deterioration in market conditions since that
time have placed significant stress on the financial covenants. At the February 2011 testing date, the Group continued to operate within the
required parameters. However, trading conditions have remained difficult and operating results have been worse than anticipated, such that it
appears likely that a covenant breach would arise when next tested at the end of May 2011 and a short-term liquidity problem may arise during
the Summer months due to scheduled amortisation payments falling due under the New Facility during that period. Since signing the New
Facility, the Group has maintained its strong relationship with the Banking Group which has throughout remained supportive of the business,
the management and its strategy. This has been demonstrated by the Banking Group granting a prospective waiver in respect of the financial
covenants which would fall to be tested at the end of May 2011. In addition, the Banking Group are continuing to provide flexibility to maintain
the Group’s liquidity levels until 31 August 2011 and agreed to continue dialogue with Luminar and work together with the Group with a view to
agreeing by that date a longer term restructuring of the Group’s debt arrangements.
The Directors are of the opinion that the Banking Group will remain supportive and that the ongoing discussions with the Banking Group will
result in restructured debt arrangements which will allow the Company and the Group to continue to trade as a Going Concern and secure a more
sustainable, longer term debt structure for the Group. Should the discussions with the Banking Group not secure such a longer term solution, the
Group is unlikely to be able to operate within the existing terms of the New Facility and it is likely that a breach of the financial covenants would
occur at the covenant testing point at the end of August 2011 and future liquidity risk would arise thereafter. In those circumstances, the debt
drawn under the New Facility could be required to be repaid immediately which would result in the Company and the Group no longer being a
going concern.
The Directors have examined all available evidence and have concluded that, although the trading environment is still exceptionally challenging,
and there is a risk that discussions with the Banking Group will not result in a successful restructuring of the Group’s debt arrangements, in
light of the supportive nature of the banking relationship to date, the Directors are satisfied that adequate financial resources will continue to
be made available to the Group so as to enable it to continue to trade on a going concern basis. As a result, the Directors continue to adopt the
going concern basis in preparing the Group’s and the Company’s financial statements. The financial statements do not include the adjustments
that would result if the Group and the Company were unable to continue as a going concern.
Auditors
PricewaterhouseCoopers LLP have indicated their willingness to continue in office, and a resolution for their reappointment will be proposed to
the Annual General Meeting.
Philip Bowcock
Company Secretary
11 May 2011
(Registered number: 06239034)
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
We have audited the Group financial statements of Luminar Group Holdings plc for the year ended 26 February 2011 which comprise the Consolidated
Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, Consolidated Cash Flow Statement,
Consolidated Net Debt Statement, the Consolidated Statement of Changes in Equity, the Principal Accounting Policies for the Consolidated Financial
Statements and the Notes to the Consolidated Financial Statements. 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.
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of
the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
n give a true and fair view of the state of the Group’s affairs as at 26 February 2011 and of its loss and cash flows for the year then ended;
n have been properly prepared in accordance with IFRSs as adopted by the European Union; and
n have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the lAS Regulation.
Trading conditions since December have been more difficult and results lower than originally anticipated. The Group has obtained a covenant waiver
at the end of May 2011 and capital repayment waivers from the Banking Group until 31 August 2011.
The Directors are currently in negotiations with the Banking Group to vary the terms of the Existing Facility to provide additional covenant and
liquidity headroom beyond 31 August 2011. Should the Banks not agree to reset covenants and or capital repayment and interest deferrals, the
Group is unlikely to be able to operate within the terms of existing facilities. This is likely to result in a breach of covenants at the next covenant
test point at the end of August 2011 with future liquidity risks thereafter. In these circumstances the debt could be called for immediate repayment
which, in the absence of alternative funding, would result in the Group no longer being a going concern.
These conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group’s ability to continue as a going
concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.
n the information given in the Directors’ Report for the financial year for which the Group financial statements are prepared is consistent with
the Group Financial Statements; and
n the information given in the Corporate Governance Statement set out in the Annual Report with respect to internal control and risk
management systems and about share capital structures is consistent with the financial statements.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Under the Companies Act 2006, we are required to report to you if, in our opinion:
Other matter
We have reported separately on the parent Company financial statements of Luminar Group Holdings plc for the year ended 26 February 2011 and
on the information in the Directors’ Remuneration Report that is described as having been audited.
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Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Continuing operations
Revenue 1,2 137.3 — 137.3 169.0 — 169.0
Cost of sales (25.6) — (25.6) (29.1) — (29.1)
The accompanying accounting policies and notes form an integral part of these financial statements.
26 February 25 February
2011 2010
£m £m
Other comprehensive Income from the period, net of tax (3.7) (0.5)
Total Comprehensive Income for the year attributable to equity shareholders (191.7) (123.6)
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
26 February 25 February
2011 2010
Note £m £m
Non-current assets
Goodwill 10 33.8 130.8
Other intangible assets 11 1.8 2.6
Property, plant and equipment 12 124.6 226.9
Other non-current assets 13 1.5 1.9
161.7 362.2
Current assets
Inventories 15 1.5 1.5
Trade and other receivables 16 4.2 5.6
Cash and cash equivalents 17 9.3 37.3
Monies on deposit 17 — 10.0
15.0 54.4
Assets classified as held for sale 9 4.5 2.1
19.5 56.5
Current liabilities
Trade and other payables 19 (17.7) (14.1)
Borrowings and loans 18 (12.5) —
Current tax liabilities 20 (42.8) (42.8)
Deferred income 21 (0.5) (0.5)
Provisions 24 (1.9) (2.3)
(75.4) (59.7)
Liabilities classified as held for sale 9 (6.1) (0.7)
(81.5) (60.4)
Net current liabilities (62.0) (3.9)
(96.6) (178.5)
Net assets 3.1 179.8
The financial statements were approved by the Board of Directors on 11 May 2011.
Philip Bowcock
Finance Director
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Consolidated Financial Statements
Company Financial Statements
Shareholder Information
7.8 17.3
2.7 (3.6)
(38.5) (4.3)
*The closing Net Debt figure includes the finance leases of £7.9m (2010: £7.9m).
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Carried forward at
25 February 2010 131.8 25.8 42.1 1.7 — (21.6) 179.8
Brought forward at 26 February 2010 131.8 25.8 42.1 1.7 — (21.6) 179.8
Cancellation of deferred shares (106.7) — 106.7 — — — —
Total comprehensive income for the year — — — — — (191.7) (191.7)
Recycle hedging reserve under old facility — — — — — 12.6 12.6
Fair value gains on cash flow hedges in year — — — — 1.9 — 1.9
Share-based payment/share
warrants charge — — — 0.5 — — 0.5
Carried forward at
26 February 2011 25.1 25.8 148.8 2.2 1.9 (200.7) 3.1
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Governance
Consolidated Financial Statements
Company Financial Statements
Shareholder Information
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently
applied to all years presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the
European Union and International Financial Reporting Interpretations Committee (IFRIC) and with those parts of the Companies Act 2006 applicable
to companies reporting under IFRSs. The Group has complied with those IFRSs or IFRIC interpretations where the implementation date is relevant to
the financial year ended 26 February 2011. No IFRSs or IFRIC interpretations have been early adopted.
The financial statements have been prepared on a historical cost basis, except for non-current assets and disposal groups and investments held for
sale measured at their fair value less costs to sell and financial assets and liabilities recorded at fair value.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results
may ultimately differ from those estimates.
During the year the Group signed the New Facility (being a revised three year facility of £99m) with the Banking Group. The New Facility became
effective from 8 December 2010.
The New Facility comprises two term loans of £44m and £40m respectively, both repayable over three years and a revolving credit facility (RCF) of
£15m. The weighted average cash interest rate for the New Facility is 7.8%.
The main financial covenants applying to the New Facility are those of leverage (the ratio of Net Debt to EBITDA as defined in the New Facility
Agreement) and fixed interest cover. The leverage covenant ratio was set at 3.8 times, reducing to 2.0 times over the life of the New Facility, and the
fixed interest cover was initially set at 1.35 times rising to 1.75 times.
Severe adverse weather conditions experienced in December combined with the continued deterioration in market conditions since that time
have placed significant stress on the financial covenants. At the February 2011 testing date, the Group continued to operate within the required
parameters. However, trading conditions have remained difficult and operating results have been worse than anticipated, such that it appears likely
that a covenant breach would arise when next tested at the end of May 2011 and a short-term liquidity problem may arise during the Summer
months due to scheduled amortisation payments falling due under the New Facility during that period. Since signing the New Facility, the Group
has maintained its strong relationship with the Banking Group which has throughout remained supportive of the business, the management and its
strategy. This has been demonstrated by the Banking Group granting a prospective waiver in respect of the financial covenants which would fall to
be tested at the end of May 2011. In addition, the Banking Group are continuing to provide flexibility to maintain the Group’s liquidity levels until
31 August 2011 and agreed to continue dialogue with Luminar and work together with the Group with a view to agreeing by that date a longer term
restructuring of the Group’s debt arrangements.
Should the discussions with the Banking Group not secure such a longer term solution, the Group is unlikely to be able to operate within the existing
terms of the New Facility and it is likely that a breach of the financial covenants would occur at the covenant testing point at the end of August
2011 and future liquidity risk would arise thereafter. In those circumstances, the debt drawn under the New Facility could be required to be repaid
immediately which would result in the Company and the Group no longer being a going concern. The Directors have concluded that the combination
of these circumstances represents a material uncertainty that casts significant doubt upon the Company’s ability to continue as a going concern.
Nevertheless, the Directors are of the opinion that the Banking Group will remain supportive and that the ongoing discussions with the Banking
Group will result in restructured debt arrangements which will allow the Company and the Group to continue to trade as a Going Concern and secure
a more sustainable, longer term debt structure for the Group.
The Directors have examined all available evidence and have concluded that, although the trading environment is still exceptionally challenging,
and there is a risk that discussions with the Banking Group will not result in a successful restructuring of the Group’s debt arrangements, in light
of the supportive nature of the banking relationship to date, the Directors are satisfied that adequate financial resources will continue to be made
available to the Group so as to enable it to continue to trade on a going concern basis. As a result, the Directors continue to adopt the going concern
basis in preparing the Group’s and the Company’s financial statements. The financial statements do not include the adjustments that would result if
the Group and the Company were unable to continue as a going concern.
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Luminar Group Holdings plc www.luminar.co.uk
Annual Report 2011
Amendment to IAS 39, ‘Financial instruments: Recognition and measurement’, on Eligible hedged items. This amended standard requires the Group
to split the fair value of the cap and floor swap between intrinsic and time value, with the time value element no longer eligible to be hedged and
therefore potentially increasing volatility in the Income Statement.
The following standards, amendments and interpretations are mandatory for the first time for the current accounting period but have had no impact
on the Group’s operations:
Amendment to IAS 32, ‘Financial instruments: Presentation’ on classification or rights issues. This amendment addresses the accounting for rights
issues that are denominated in a currency other than the functional currency of the issuer (effective 1 February 2010).
Amendments to IFRS 2, ‘Share-based payments’ on Group cash-settled transactions. This amendment incorporates IFRIC 8 and IFRIC 11 into one
standard and provides clarification over the definitions included within IFRS 2 (effective 1 January 2010).
IFRS 3 (revised), ‘Business combinations’. The main changes to this standard are that directly attributable costs such as advisers’ fees and stamp
duty will be charged to the income statement, revisions to contingent cash consideration in the period following the acquisition will be recorded
in the income statement and any difference between the fair value of the consideration in the buyout of minority interests and the value of their
reported minority interest will be recorded against equity rather than goodwill (effective 1 July 2009).
IAS 27 (revised) ‘Consolidated and separate financial statements’. The revised standard requires the impact of all transactions with non-controlling
interests to be recorded in equity if there is no change in control and also clarifies the accounting for when control is lost (effective 1 July 2009).
IFRIC 17 ‘Distributions of non-cash assets to owners’. This interpretation clarifies the measurements of distributions of non-cash assets in the form
of dividends to owners (effective 1 July 2009).
Amendments to IFRS 7 on derecognition (effective 1 July 2011, therefore impacting financial year from February 2012). This amendment will
improve transparency in the reporting of transfer transactions and improve the understanding of the risk exposures relating to transfers of financial
assets. Management are currently evaluating the expected impact of this accounting standard.
IFRS 9 ‘Financial instruments’ on classification and measurement, replacing IAS 39 (effective 1 January 2013, therefore impacting from financial year
starting February 2013). Management are currently evaluating the expected impact of this accounting standard.
IFRIC 19 ‘Extinguishing financial liabilities with equity instruments’ (effective 1 July 2010, therefore impacting financial year from 26 February 2011).
This interpretation clarifies the accounting when the terms of debt are renegotiated with the result that the liability is extinguished through the
debtor issuing its own equity instruments to the creditor. Management are currently evaluating the expected impact of this interpretation.
Exceptional items
The Group classifies items of income and expense as exceptional items, where the nature of the item, or its size, is likely to be material so as to
assist the user of the financial statements to better understand the results of the operations of the Group.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Group and entities controlled by the Group.
Control is achieved where the Group has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from
its activities. Control is normally evidenced when the Group either directly or indirectly owns more than 50% of the voting rights or potential voting
rights of a Group’s share capital.
Business combinations
Under the requirements of IFRS 3 (revised), Business combinations, all business combinations are accounted for using the purchase method
(“acquisition accounting”). The cost of a business combination is the aggregate of the fair values, at the date of exchange, of assets given, liabilities
incurred or assumed, equity instruments issued by the acquirer and any costs directly attributable to the business combination.
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Consolidated Financial Statements
Company Financial Statements
Shareholder Information
On acquisition of a subsidiary, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair value at that date. Any excess of
the cost of acquisition over the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values
of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the Consolidated Income Statement in the period of acquisition.
The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Income Statement from the effective date of
acquisition or up to the effective date of disposal.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Non-current assets (and disposal groups) classified as held for sale are initially measured at the lower of carrying value and fair value less costs to
sell. At subsequent reporting dates, non-current assets (and disposal groups) are remeasured to the latest estimate of fair value less costs to sell.
As a result of this remeasurement, any impairment is recognised as a charge in the Consolidated Income Statement. Any increase in fair value is
credited to the Consolidated Income Statement to the extent of previous impairment charges.
Discontinued operations
Discontinued operations represent cash generating units or groups of cash generating units that have either been disposed of or classified as held
for sale, and represent a separate major line of business or are part of a single co-ordinated plan to dispose of a separate major line of business.
Cash generating units forming part of a single co-ordinated plan to dispose of a separate major line of business are classified within continuing
operations until they meet the criteria to be held for sale.
The post-tax profit or loss of the discontinued operation is classified as a single line on the face of the Consolidated Income Statement, together
with any post-tax gain or loss recognised on the remeasurement to fair value less costs to sell or on the disposal of the assets or disposal group
constituting the discontinued operation.
On changes to the composition of groups of units comprising discontinued operations, the presentation of discontinued operations within prior
periods is restated to reflect consistent classification of discontinued operations across all periods presented.
Financial instruments
The Group has applied IAS 32, Financial instruments: Disclosure and presentation, IAS 39, Financial instruments: Recognition and measurement,
IFRS 7, Financial instruments: Disclosures, and the complementary amendment to IAS 1, Presentation of financial statements — Capital disclosures.
Financial assets are classified according to the purpose for which the asset was acquired. The Group’s financial assets are classified as either:
— trade and other receivables — these are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They arise when the Group provides goods or services directly to a debtor, or advances money, with no intention of trading the loan or
receivable. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method,
less provision for impairment.
A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy
or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount
of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the
original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is
recognised in the consolidated income statement within ‘administrative expenses’. When a trade receivable is uncollectable, it is written off against
the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against ‘administrative expenses’
in the income statement.
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— cash and cash equivalents — these comprise deposits with an original maturity of three months or less with banks and financial institutions, bank
balances and cash on hand. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
— monies on deposit — these comprise deposits with an original maturity of more than three months, with banks and financial institutions. These
balances are shown within current assets on the Balance Sheet and within cash flows from financing activities in the cash flow statement.
The Group’s financial liabilities are classified as either current liabilities or non-current liabilities. These are non-derivative financial liabilities with
fixed or determinable payments that are not quoted in an active market. They arise when the Group receives goods or services directly from a
creditor or supplier, or borrows money, with no intention of trading the liability. This category includes:
— trade and other payables — these are typically non-interest bearing and following initial recognition at cost, are included in the balance sheet at
amortised cost using the effective interest method.
— bank loans — these are initially recorded at fair value based on proceeds received. Costs incurred as a result of obtaining new finance are
expensed immediately to exceptional finance charges with the income statement. Borrowings are subsequently stated at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the
borrowings using the effective interest method. Finance charges are accounted for on an accruals basis and charged to the Consolidated Income
Statement using the effective interest rate method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date, at which point they are classified as non-current liabilities.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value.
The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature
of the item being hedged. The Group designates certain derivatives as hedges of a particular risk associated with a recognised asset or liability or a
highly probable forecast transaction (cash flow hedge).
The Group documents at the inception of the transaction the relationship between the hedging instrument and hedged items, as well as its risk
management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge
inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair
values or cash flows of hedged items.
The fair values of various derivative instruments used for hedging purposes are disclosed in note 22. Movements on the hedging reserve in
Shareholders’ equity are shown in note 22(d). The full fair value of a hedging derivative is classified as a non-current asset or liability when the
remaining hedged item matures in more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less
than 12 months.
Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profit or loss. The gain or loss
relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in the income statement within ‘finance costs’.
The gain or loss relating to the ineffective portion is recognised in the income statement within ‘finance costs’.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement.
When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity, is immediately transferred to
the income statement within ‘finance costs’.
The Group has no embedded derivatives that are not closely related to the host instrument.
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Company Financial Statements
Shareholder Information
Provisions
Provisions for onerous lease commitments, public liability insurance claims and other provisions are recognised when: the Group has a present legal
or constructive obligation as a result of past events; it is more likely than not that an outflow of economic benefits will be required to settle the
obligation; and the amount can be measured reliably.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets and liabilities of
the acquired business at the date of acquisition. Goodwill is recognised as an asset and is reviewed for impairment at least annually and goodwill
is allocated to cash generating units for the purpose of impairment testing at the level of reportable segment. Any impairment is recognised
immediately in the income statement and is not subsequently reversed. Goodwill is carried at cost less aggregated impairment losses.
Intangibles acquired separately and through business combinations, i.e. licences and other intangible assets, where material, are included at cost or fair
value respectively and amortised over their useful economic lives, being the shorter of the term of the lease to which they are attached or the licence.
Acquired software assets not integral to the operation of the related hardware are included at cost and amortised over their estimated finite useful
economic lives — three years on a straight-line basis.
The Group does not carry out research and development activities that may lead to the recognition of internally generated intangible assets.
The Group’s internally generated brands represent commercially valuable intangibles but are not eligible for recognition as assets under IAS 38,
Intangible Assets.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts recoverable by the Group for goods and
services provided in the normal course of business, net of discounts, VAT and other sales related taxes.
Interest income
Interest income is accrued by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets are added to the cost of those assets, until such time
as the assets are substantially ready for their intended use or sale. All other borrowing costs are dealt within the income statement in the period in
which they are incurred.
Equity dividends
Final dividends are recognised in the Group’s financial statements in the period in which the dividends are approved by shareholders. Interim
dividends are recognised in the period they are paid.
Dividend income
Dividend income from investments is recognised when the Shareholders’ rights to receive payment have been established.
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Depreciation is calculated to write down the cost or valuation, less the estimated residual value of all assets, other than land, by equal annual
instalments over their estimated useful lives.
n Freehold and long leasehold buildings and related structural fixtures and fittings — 50 years
n Short leasehold buildings and related structural fixtures and fittings — over the period of the lease
n Other fixtures and fittings, furniture and equipment — between two years and ten years
n Motor vehicles — three years
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets, or, where shorter, the term of
the relevant lease.
The assets’ residual values and useful economic lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An assessment is made at each reporting date if there is any indication that an asset may be impaired. If any indications are deemed to exist,
the relevant assets are tested for impairment. Any impairment is determined as the difference between the higher of value in use, calculated by
discounting an estimate of future cash flows by the Group’s pre-tax weighted average cost of capital, and fair value less costs to sell, compared to
the carrying value of the relevant asset. Fair value less costs to sell is estimated by qualified surveyors and valuers and by applying the knowledge
and experience of management, together with external market indicators. If the recoverable amount is less than the carrying value of the asset,
then the carrying value is reduced to recoverable amount, and the resulting impairment charge is recognised in the income statement.
Where material, the results and assets and liabilities of associates are incorporated in the financial statements using the equity method of
accounting, except when these associates are classified as held for sale. Investments in associates are carried in the balance sheet at cost adjusted
by any material post-acquisition changes in the net assets of the associates, less any impairment of value in the individual investments.
When the associate is classified as held for sale, the investment is held at the lower of adjusted cost (as described above) and fair value less costs to
sell and is no longer equity accounted for, after the date the investment is classified as held for sale.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the first in, first out method.
Taxation
The tax expense represents the sum of the current tax and deferred tax.
The current tax is based on the taxable profit for the year. Taxable profit differs from profit before taxation as reported in the income statement because
it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Where taxation computations submitted to the taxation authorities are yet to be agreed, the Group’s estimate of tax liabilities reflects the
uncertainty as to the amount of tax that may ultimately be payable.
Deferred tax is the tax accounted for in respect of temporary differences between the carrying amounts of assets and liabilities in the financial
statements, and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability
method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the recognition of goodwill or the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
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Shareholder Information
IAS 12, Income taxes, requires that the measurement of deferred tax should have regard to the tax consequences that would follow from the manner
of expected recovery or settlement, at the balance sheet date, of the carrying amount of its assets and liabilities. In calculating its deferred tax
liability the Group’s policy is to regard the depreciable amount of the carrying value of its property, plant and equipment to be recovered through
continuing use in the business, unless included within assets held for sale where the policy is to regard the carrying amount as being recoverable
through sale.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is
charged or credited to the Consolidated Income Statement, except when it relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease
payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease
obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of
interest on the remaining balance of the liability. Finance charges are recognised in the Consolidated Income Statement within finance costs, unless
they are directly attributable to qualifying assets, in which case they are capitalised.
Rentals payable under operating leases are charged to the income statement on a straight-line basis over the term of the relevant lease.
Benefits received and receivable as an incentive to enter into an operating lease are included within deferred income and recognised in the
Consolidated Income Statement on a straight-line basis over the lease term. Premiums paid on entering into the lease of certain leasehold land and
buildings are classified as other non-current assets and amortised to the Consolidated Income Statement over the life of the relevant lease.
Leased assets that are sub-let to third parties are classified according to their substance as either finance or operating leases. All such
arrangements the Group has entered into as lessor are operating leases. Income received as a lessor is recognised on a straight-line basis over the
lease term and is classified in the Consolidated Income Statement as revenue.
Leases that are entered into following the sale of assets by the Group (i.e. “sale and leaseback transactions”) are classified according to the risk and
rewards of the lease. All such arrangements entered into by the Group are operating leases. Where the proceeds on sale of the asset exceed the
asset’s fair value, and the asset is leased back as an operating lease, any surplus over the fair value is treated as deferred income and recognised in
the income statement over the term of the lease on a straight-line basis.
Segmental reporting
Segment information is presented in accordance with IFRS 8. The management approach required by IFRS 8 stipulates that the internal reporting
organisation used by management for making decisions on operating matters should be used to identify the Company’s reportable segments and
the internal performance measure should be used as the segment result.
Employee benefits
Retirement benefit costs
Payments made to defined contribution retirement benefit schemes are charged as an expense when they fall due. The Group has no defined benefit
or other retirement benefit schemes.
Share-based compensation
The Group has applied the requirements of IFRS 2, Share-based payment. In accordance with the transitional provisions, IFRS 2 has been applied to
all grants of equity instruments after 7 November 2002 that were unvested as of 1 January 2005.
The Group issues some equity instruments where the counter-party has the choice of either cash or equity settlement, and some equity instruments
where the settlement can only be in equity.
Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at grant date is expensed on a
straight-line basis over the vesting period, based on the Group’s estimate of the shares that will actually vest, with a corresponding credit entry
directly to equity reserves. Fair value is measured by means of a Stochastic model.
A liability is recognised at current fair value at each balance sheet date for cash settled share-based payments, with changes in the fair value
recognised in the Consolidated Income Statement.
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Shares held in Employee Share Option Plan (“ESOP”) trusts are presented as a deduction from equity. Transactions between the Group and the ESOP
trust are eliminated on consolidation.
In addition, any reduction in the corporation tax liability as a result of business activities undertaken in a tax efficient manner is provided for in
accordance with the techniques identified by IAS 37, Provisions, contingent liabilities and contingent assets. Where significant progress has been
made towards agreement with the relevant tax authority the total expected value approach is utilised. In all other cases the most likely outcome
approach is used.
Deferred tax
The Group has made provision for deferred tax arising following the requirements of IAS 12, Income taxes, using estimates based on the current
manner of recovery of the assets’ value of property, plant and equipment not eligible for capital allowances, i.e. recovery of the depreciable amount
through continued use in the business unless the assets are held for sale. This method assumes that no tax relief will be available until the value of
the asset is recovered through sale rather than continued use.
Upon any change to the manner of recovery of the assets’ value, the change to the level of deferred tax provided will be recognised through the
income statement during the period in which the change in the method of recovery occurs. Any changes to the expected manner of recovery could
result in a significant change to the deferred tax charge or credit to the income statement.
Fair value less costs of sale is determined using external and internal estimates of the value of the Group’s units. Value in use is calculated using
estimated earnings and cash flows derived by internal management estimates, and a discount applied to these cash flows.
Any changes to the level of forecast earnings or cash flows could impact upon the value-in-use of these cash generating units. Management have
performed the annual impairment review of goodwill as required by IAS 36 (see note 10, ‘Goodwill’).
Where the Group believes the lease is likely to be assigned, provision is made for the Group’s best estimate of the reverse lease premium payable, if
this represents the least cost to the Group from exiting from the obligation.
The estimated timings and amounts of cash flows are determined using the experience of internal and external property experts; however, any
changes to the estimated method of exiting from the property could lead to significant changes to the level of the provision recorded.
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1 Segmental reporting
The Group adopted IFRS 8 ‘Operating segments’ in the year ended 26 February 2009.
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly
reviewed by the Chief Operating Decision Maker (CODM) to allocate resources to the segments and to assess their performance.
We report our segment information on the same basis as our internal management reporting structure, which drives how our Company is
organised and managed.
The Group is principally engaged as owner, developer and operator of nightclubs and themed bars in the UK. The CODM has been identified
as the Senior Executive Management (SEM) that exercises the day-to-day management function of the Group. Operational and financial
information, which is reported at an individual venue level and aggregated on a geographical basis, is received by the CODM on a monthly
basis. As the geographical segments meet the aggregation criteria defined in IFRS 8 and the unit information does not meet the quantitative
thresholds as required by IFRS 8, management have judged it appropriate to aggregate the financial information relating to all units into a
single reportable segment.
Continuing administrative expenses include £187.3m (2010: £114.6m) of exceptional items (see note 8). Discontinued administrative expenses
include £3.4m (2010: £26.5m) of exceptional items (see note 8).
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Consolidated Financial Statements
Company Financial Statements
Shareholder Information
The Group operates defined contribution pension schemes. The assets of these schemes are held separately from those of the Group. The
pension cost is shown above.
The average monthly number of employees (including weekly paid staff) of the Group, for both continuing and discontinued operations,
during the year was:
Remuneration in respect of key management of the Group (including Directors) was as follows:
During the year, key management consisted of 12 managers (including Directors) (2010: 16).
Remuneration in respect of Directors (including Non-Executive Directors) of Luminar Group Holdings plc was as follows:
For details of exceptional remuneration paid to Directors during the year, which is not reflected in the above figures, refer to the Remuneration
Report on pages 25 to 32.
During the year, the Group had eight (2010: six) Directors, including Non-Executive Directors, providing services. During the year, no Directors
(2010: two) participated in a defined contribution pension scheme.
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The amounts set out above include remuneration of the highest paid Director as follows:
More detailed audited information concerning remuneration of Directors is included in the Remuneration Report on pages 25 to 32.
5 Tax on (loss)/profit
(a) Analysis of charge in period
The taxation charge is based on the loss for the year and represents:
Year ended
Year ended 25 February
26 February 2010
2011 (Reclassified*)
£m £m
Current tax credit/(charge)
Continuing operations:
— Current period — (3.3)
— Adjustments from prior periods — 2.1
Discontinued operations:
— Current period 0.1 3.3
— 2.1
Deferred tax credit
— Continuing operations 13.3 11.5
— Discontinued operations — 0.7
13.3 12.2
Total taxation credit/(charge)
— Continuing operations 13.3 10.3
— Discontinued operations 0.1 4.0
13.4 14.3
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Year ended
Year ended 25 February
26 February
2010
2011 (Reclassified*)
£m £m
Loss on ordinary activities from continuing operations before tax (197.9) (109.1)
Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 28% (2010: 28%) 55.4 30.5
Effects of:
Non-deductible exceptional items (41.4) (15.2)
Adjustments in respect of the prior year — 2.1
Remeasured of tax change in UK tax rate 0.3 —
Depreciation on non-qualifying assets (1.0) (7.1)
Total tax credit/(charge) from continuing operations for the year 13.3 10.3
* Reclassified to reflect the composition of discontinued operations at the latest balance sheet date.
6 Dividends
As reported in the Interim Report approved on 20 October 2010, the Board did not recommend an interim dividend for the half year ended
26 August 2010.
An alternative measure of earnings per share has also been presented below, that being earnings per share from continuing operations pre-
exceptional items, as the Directors believe that this measure of pre-exceptional earnings from continuing operations is more reflective of the
ongoing trading of the Group.
Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:
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At 25 February 2010, as the Group is loss-making, any share options in issue are considered to be ‘anti-dilutive’ and as such, the calculation is
the same for both basic and diluted earnings per share.
All amounts included in the column headed ‘(Loss)/Earnings’ are taken from the face of the Consolidated Income Statement on page 41.
8 Exceptional items
(a) Continuing operations
The Group incurred exceptional items on continuing operations as follows:
Year ended Year ended
26 February 25 February
2011 2010
£m £m
Exceptional items
Impairment of property, plant and equipment (77.8) (63.8)
Provision for loss on liquidation of supplier — (0.8)
Costs relating to reorganisation and rationalisation (1.4) (1.5)
Impairment of goodwill (97.0) (41.1)
Impairment of lease premiums (0.3) (1.9)
Realised loss on disposal (2.8) —
Net movement on provision for onerous lease commitments (0.3) (3.5)
Provision against carrying value of memorabilia stock — (0.6)
Provision against receivable due from associate — (0.7)
Refinancing costs (7.7) —
Costs relating to aborted projects — (0.7)
Finance costs (9.5) —
Pre-tax exceptional items relating to continuing operations (196.8) (114.6)
Tax on exceptional items 12.8 10.3
Post-tax exceptional items relating to continuing operations (184.0) (104.3)
The impairment of property, plant and equipment of £77.8m (2010: £63.8m) and impairment of lease premiums of £0.3m (2010: £1.9m) reflects
the difference between the value in use of the units and their carrying value, or in the case of assets held for sale, the difference between fair
value less costs to sell and their carrying value. An impairment review was triggered on these assets due to the tough trading conditions seen
through the year, resulting in reduced profit contributions.
Included within refinancing costs of £7.7m are the following related costs, £3.1m associated with breaking hedges, £2m amendment fee and
£2.3m professional fees.
Costs of reorganisation and rationalisation of £1.4m (2010: £1.5m) primarily relate to redundancy and termination costs incurred in respect of
internal restructures. The prior year costs related mainly to previous restructures.
The impairment of goodwill of £97.0m (2010: £41.1m) has arisen following the annual impairment test, which compared the carrying value of
units to their recoverable value (their value in use).
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The impairment of property, plant and equipment of £0.1m (2010: £0.3m) reflects the difference between the value in use of the units and their
carrying value.
In the prior year, a non-cash impairment of £3.6m was recognised against the carrying value of the Group’s investment in 3DE, reflecting the
fact that the company went into administration on 26 February 2010. A further £23.7m was provided against the carrying value of the vendor
loan note and related accrued interest.
The credit in relation to the disposal of companies in the prior year of £0.5m related to a release of brought forward provisions, for which
the relative amounts are no longer payable, due to the companies disposed of having been placed into liquidation and administration in the
prior year.
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The major classes of assets and liabilities comprising the units classified as held for sale were as follows:
26 February 25 February
2011 2010
£m £m
Property, plant and equipment 3.7 2.0
Deferred tax assets 0.5 —
Inventories 0.1 —
Trade and other receivables 0.2 0.1
Total assets classified as held for sale 4.5 2.1
Trade and other payables — (0.1)
Finance lease creditor (5.2) —
Provisions (0.9) (0.5)
Deferred tax liabilities — (0.1)
Total liabilities classified as held for sale (6.1) (0.7)
Net (liabilities)/assets classified as held for sale (1.6) 1.4
The total loss of £10.5m (2010: £1.6m) incurred in writing these assets down to fair value less costs to sell has been included in continuing
exceptional items within impairment of property, plant and equipment (see note 8).
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10 Goodwill
2011 £m
Cost
Brought forward at 26 February 2010 183.6
At 26 February 2011 183.6
Accumulated impairment losses
Brought forward at 26 February 2010 52.8
Impairment in the year 97.0
At 26 February 2011 149.8
Carrying amount
At 26 February 2011 33.8
2010 £m
Cost
Brought forward at 27 February 2009 183.6
At 25 February 2010 183.6
Accumulated impairment losses
Brought forward at 27 February 2009 11.7
Impairment in the year 41.1
At 25 February 2010 52.8
Carrying amount
At 25 February 2010 130.8
The majority of the Group’s goodwill arose from the acquisition of units from either Allied Leisure plc on 6 December 1999 or from Northern
Leisure Plc on 11 July 2000, excluding the £8.1m of goodwill that arose on the acquisition of 13 units from The Nightclub Company (“TNC”) in
2005, and the £0.6m of goodwill on acquisitions in 2008.
A Cash Generating Unit (“CGU”) is deemed to be an individual operating unit, as each unit generates profits and cash flows that are largely
independent from other units. Where multiple CGUs are acquired as part of a single business combination, the goodwill arising from the
business combination is attributed to individual CGUs, but is grouped together. Accordingly, CGUs have been grouped together for the
purpose of the annual impairment review of goodwill at total operating segment level.
Impairment of goodwill
In assessing whether a write-down of goodwill is required to the carrying value of the related asset, the carrying value of the combined CGUs,
is compared with its recoverable amount. The recoverable amount for each CGU, and collectively for the combined CGUs, has been measured
based on value in use (“VIU”), with the exception of those units that were held for sale at the balance sheet date, where the recoverable
amount for these units has been based on the lower of cost and fair value less costs to sell.
For the purposes of the annual impairment review, the recoverable amount has been estimated on the VIU basis.
The Group estimates the VIU of its CGUs using a discounted cash flow model (“DCF”), which adjusts the cash flows for risks associated with the
assets, and are discounted using a pre-tax rate of 12.9% (2010: 11.4%).
The VIU calculations have not included the benefits arising from any future asset enhancement expenditure, as this is not permitted by IAS 36.
The VIU calculations, therefore, exclude any benefits anticipated from future asset enhancing refurbishments, together with the related capital
expenditure.
Management have performed the annual impairment review of goodwill as required by IAS 36. As a result, an impairment of £97.0m has been
booked in the year to 26 February 2011 (2010: £41.1m). None of this impairment (2010: £nil) of goodwill was in relation to units held for sale.
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10 Goodwill (continued)
Key assumptions
The key assumptions are based upon our own historical experience. The calculation of VIU is most sensitive to the following assumptions:
n Sales and EBITDA — this is based on reasonable forecasts for the first year. These have then been forecast for years two to seven based on
expected sales trends;
n Discount rate — this reflects the Directors estimate of an appropriate rate of return, taking into account the relevant risk factors; and
n Growth rate used to extrapolate beyond the budget period and for terminal values — based upon the long-term average growth rate of
the UK of 2.2%. Management recognise that the leisure market growth rates fluctuate both above and below this rate.
2010
Software
Trademarks
Licences Total
£m £m £m £m
Cost
Brought forward at 27 February 2009 5.1 0.1 0.4 5.6
Additions 0.3 — — 0.3
At 25 February 2010 5.4 0.1 0.4 5.9
Amortisation
Brought forward at 27 February 2009 2.4 — 0.1 2.5
Charge 0.8 — — 0.8
At 25 February 2010 3.2 — 0.1 3.3
Net book amount at 25 February 2010 2.2 0.1 0.3 2.6
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2010
Fixtures,
Long Short fittings,
Freehold land leasehold land leasehold land furniture and Motor
and buildings and buildings and buildings equipment vehicles Total
£m £m £m £m £m £m
Cost
Brought forward at 27 February 2009 54.4 3.7 106.2 319.7 0.9 484.9
Additions — — — 3.8 — 3.8
Disposals — — — (0.6) — (0.6)
Net transfers to assets held for sale — — — (3.9) — (3.9)
At 25 February 2010 54.4 3.7 106.2 319.0 0.9 484.2
Depreciation
Brought forward at 27 February 2009 4.1 1.3 32.5 137.2 0.9 176.0
Depreciation charge 1.7 0.6 3.2 16.4 — 21.9
Impairment 15.0 1.2 10.6 35.6 — 62.4
Disposals — — — (0.3) — (0.3)
Net transfers to assets held for sale — — — (2.7) — (2.7)
At 25 February 2010 20.8 3.1 46.3 186.2 0.9 257.3
Net book amount at 25 February 2010 33.6 0.6 59.9 132.8 — 226.9
The impairment of property, plant and equipment of £67.8m (2010: £62.4m) reflects the difference between the value in use of the units and
their carrying value. An impairment review was triggered on these assets due to the continued tough trading conditions seen through the year,
resulting in reduced profit contributions. Value in use has been calculated using a post-tax discount rate of 12.9% and a long-term growth rate
of 2.2%, and has been calculated on an individual unit basis.
During the year, management have transferred assets within categories to best reflect their nature, with no material impact to the
depreciation charge.
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Assets held under finance leases relate to the building component of properties held under long leases.
Other non-current assets relate to lease premiums paid in relation to property leases.
An impairment of £0.3m (2010: £1.9m) has been charged during the year (see note 8, ‘Exceptional Items’). This impairment arose due to the
tough trading conditions seen during the year, resulting in reduced discounted cash flows being generated by units.
Unless otherwise stated, all subsidiaries are registered in England and Wales. Luminar Group Holdings plc is registered and domiciled in
England and Wales.
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Interests in associates represents the Group’s interest in the issued ordinary share capital of 3DE (49%), which was equity accounted for in
accordance with IAS 28, Investments in associates, up to the date the investment was classified as held for sale, and Eminence Leisure Limited
(20%), which was equity accounted for in accordance with IAS 28, Investments in associates, up to the date the company went into liquidation.
All of the Group’s associated undertakings are registered in England and Wales.
Eminence Leisure Limited went into liquidation on 30 September 2009. As a result, the outstanding receivable balance was fully provided
against in the financial statements for the year ended 25 February 2010.
15 Inventories
26 February 25 February
2011 2010
£m £m
Goods held for resale 1.5 1.5
Receivables from related parties comprise a £19.3m unsecured loan note and £5.3m accrued interest receivable from 3DE. On 26 February 2010,
3DE was placed into administration. The administration process is ongoing. From the date of administration, the Group no longer accrues any
interest on the 3DE loan notes. All debtor balances relating to 3DE were fully provided for in the accounts for the year ended 25 February 2010
and remain fully provided for at 26 February 2011.
The carrying value less the impairment provision of trade receivables approximates their fair values. The carrying value of receivables from
related parties and other debtors approximates their fair values.
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26 February 25 February
2011 2010
£m £m
Not past due:
Within 30 days after invoice date 0.2 0.4
Past due:
31–60 days after invoice date — 0.4
61–90 days after invoice date — 0.3
Over 90 days after invoice date 0.4 0.4
0.4 1.1
TOTAL 0.6 1.5
Included within trade receivables at the year end was a balance of £1.0m (2010: £1.0m) with 3DE relating to recharges for the Group’s services.
This balance has been provided for in full (net of VAT) as the company is in administration.
Trade receivables that have not been provided against at the year end are not considered impaired. There are agreed payment profiles for the
older debtors. Trade receivables are spread over a number of counter-parties and as such overall credit risk is perceived to be low.
Movements on the Group provision for impairment of trade receivables were as follows:
26 February 25 February
2011 2010
£m £m
Brought forward at the start of the year 0.9 —
Charged to income statement — 0.9
Balance carried forward at the end of the year 0.9 0.9
£0.8m of the provision for impairment of trade receivables relates to 3DE (net of VAT), which is in administration. All of this balance was over 90
days past the invoice date.
A further provision of £0.1m exists for other balances due from third parties, all of which were over 90 days past the invoice date.
Of this balance, £0.1m (2010: £0.1m) relates to rental deposits held on behalf of sub-let tenants.
26 February 25 February
2011 2010
£m £m
Monies on deposit — 10.0
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Borrowings mature in December 2013 and bear interest of LIBOR, reset every month, plus a margin of up to 12.0%. The bank loans are secured
via a floating charge over all of the Group’s assets.
The fair value of bank borrowings at 26 February 2011 equalled the bank loan balance of £91.5m (2010: £140.0m) plus accrued interest of
£1.7m (2010: £nil).
The Group’s undrawn floating facilities at the balance sheet date were as follows:
26 February 25 February
2011 2010
£m £m
Expiring after two years 5.0 35.0
Included within the total bank loan facility of £99.0m (2010: £175.0m), the Group also has an overdraft facility of £5.0m (2010: £5.0m) which as
outlined above was undrawn at the year end.
The carrying value of trade payables are not materially different to their fair values.
Current tax liabilities include amounts provided for as a result of business activities undertaken in a tax efficient manner, pending agreement
with the relevant tax authority. The amount provided will be paid or released to the consolidated income statement in accordance with the
techniques identified by IAS 37, Provisions, contingent liabilities and contingent assets.
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21 Deferred income
Deferred income has been analysed between current and non-current as follows:
26 February 25 February
2011 2010
£m £m
Current 0.5 0.5
Non-current 5.3 6.1
5.8 6.6
Deferred income includes the deferred profit represented by the excess of consideration received above the assessed fair value on the sale
and leaseback transactions completed in prior years, together with the deferred lease incentives and rent-free periods received on the Group’s
operating leases.
22 Financial instruments
Financial Risk Management
Financial Risk Factors
The Group’s activities expose it to a variety of financial risks: market risk (predominantly cash flow interest rate risk), credit risk and liquidity
risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.
In addition to the financial instruments described in the measurement basis sections above, the Group also has the following financial
instruments for which additional disclosures are included in the notes to the financial statements:
Due to the predominantly cash-based nature of the Group’s operations, the only financial instruments that materially expose the Group to
any of the financial risks detailed in the notes below are debt financing and related interest rate swaps, and the disclosures that follow relate
principally to these items.
The Group uses derivative financial instruments in order to reduce its exposure to financial risk. The use of such financial instruments
constitutes an integral part of the Group’s funding strategy. The Group manages its derivative financial instrument credit risk by only
undertaking transactions with relationship banks, with good credit ratings. Such transactions are governed by Board policies and procedures.
The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest
rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.
The Group manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Such interest rate swaps have the economic
effect of converting borrowings from floating rates to fixed rates. Generally, the Group raises long-term borrowings at floating rates and swaps
them into fixed rates that are lower than those available if the Group borrowed at fixed rates directly. Under the interest rate swaps, the Group
agrees with other parties to exchange, at specified intervals (primarily monthly), the difference between fixed contract rates and floating rate
interest amounts calculated by reference to the agreed notional amounts.
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Vendor loan notes totalling £19.3m in aggregate (plus accrued interest of £5.3m) with 3DE is receivable on the earlier of a subsequent sale of the
business, refinancing or January 2014. This balance was provided for in full in the year ended 25 February 2010 as 3DE is in administration and
therefore recoverability of the loan is perceived to be a high credit risk.
Management monitor rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow. In addition, the Group’s liquidity
management policy involves monitoring balance sheet liquidity ratios against internal and external regulatory requirements, and maintaining
debt financing plans. Liquidity risk is managed through an assessment of short, medium and long-term cash flow forecasts to ensure the
adequacy of committed debt facilities and monitoring compliance with banking covenants, which are formally assessed twice yearly.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet
to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.
The trade receivables and other debtors balances totalling £1.0m (2010: £2.3m) were non-interest bearing and therefore have been excluded.
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The fixed rate debt included £62.0m (2010: £90.0m) in relation to the fixed rate hedged element of the bank loan, including £5m undrawn
overdraft facility. The floating rate debt includes £34.5m (2010: £50.0m) in relation to the element of the bank loan, which is subject to an
interest rate cap and floor derivative instrument (see note d for more details on derivative financial instruments). The floating rate debt bears
interest of LIBOR, reset every month, plus a margin of up to 12.0%.
Short-term deposits in the prior year relate to monies placed on deposit, which mature in more than three months but less than two years.
Trade and other payables of £4.7m (2010: £5.7m) are payable within one year.
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The fair value of other financial assets and liabilities included in notes 16, 19 and 24 approximate their carrying value.
i) Cash at bank, including deposits made for short durations (less than one month); given the short maturity periods there is no significant
difference between the book value and fair value of these deposits.
ii) Short-term deposits relate to monies placed on deposit which mature in greater than three months but less than two years. Fair value of
the deposits at the prior year end includes effective accrued interest of £0.1m.
iii) The loan note receivable of £24.6m (2010: £24.6m) including accrued interest of £5.3m (2010: £5.3m) was fully provided against in the prior
year. This was due to the counter-party having been placed into administration on 26 February 2010, resulting in a net book value of £nil.
The fair value approximates to book value.
iv) The fair value of trade receivables and other debtors approximates to book value.
v) Drawings made under the Group’s floating rate facility. The fair value excludes the interest accrual reported within accruals and deferred
income of £1.7m (2010: £nil).
vi) Finance lease liabilities at fixed rate; given the length of time to maturity of these liabilities and the length of time since inception of the
lease, the fair value of these liabilities at the balance sheet date is lower than current book value.
vii) The fair value of cash flow hedges has been determined with reference to market rates at the balance sheet date. At 26 February 2011
the book value of these swaps equated to their fair value as these derivatives were stated at their fair value under IAS 39.
Effective from 27 February 2009, the Group adopted the amendment to IFRS 7 for financial instruments that are measured in the Balance
Sheet at fair value. This requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
— Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
— Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (that is as prices) or
indirectly (that is derived from prices) (level 2); and
— Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs) (level 3)
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The table below reconciles the movement in the fair value of the hedges during the year:
Fair value
£m
Brought forward at 26 February 2010 (13.8)
Increase in the mark-to-market value (2.7)
Amount recycled through income statement 8.9
Carried forward at 26 February 2011 (7.6)
All finance lease obligations represent liabilities for the building element of properties used in the Group’s business. The lease agreements
include rent review clauses at periodic intervals of a kind that are usual for property leases.
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24 Provisions
Public
Onerous liability Other
leases
insurance provisions Total
£m £m £m £m
Brought forward at 26 February 2010 4.1 0.7 0.9 5.7
Charge for the year 0.3 0.5 0.2 1.0
Released during the year — — — —
Utilised during the year (1.2) (0.6) (0.2) (2.0)
At 26 February 2011 3.2 0.6 0.9 4.7
At 26 February 2011 classified as:
Held for sale 0.7 — 0.2 0.9
Continuing operations 2.5 0.6 0.7 3.8
At 25 February 2010 classified as:
Held for sale 0.4 — 0.1 0.5
Continuing Operations 3.7 0.7 0.8 5.2
Provisions within continuing operations have been analysed between current and non-current as follows:
26 February 25 February
2011 2010
£m £m
Current 1.9 2.3
Non-current 2.0 2.9
3.9 5.2
Onerous lease provisions have been discounted using a post-tax discount rate of 4.4%. No other provisions have been discounted as the effect
of discounting would not be material.
Onerous leases
Provisions for onerous leases represent onerous commitments on operating leases for properties currently vacant or for closed units, where
assignment of the lease or sub-let of the property is unlikely in the short term.
Provision is made for rent and related property costs for the period management estimate the property would not be sub-let, or until
assignment of the lease is probable, and ranges up to five years.
Where the property is deemed likely to be assigned, provision is made for the best estimate of the reverse lease premium payable on the
assignment, if this represents the least cost to exit from the commitment.
The amount and timing of the cash outflows relating to onerous leases are subject to variations. In estimating the amount and timing of cash
flows, management utilise the skills and experience of both internal and external property specialists, and are satisfied that the resulting
estimated provision is appropriate.
Other provisions
Other provisions represent £0.1m in relation to expected final costs to be incurred in respect of the disposal of five subsidiary companies to
Cavendish Bars Limited, £0.2m in relation to final costs to be incurred in respect of the disposal of certain properties and £0.6m in relation to
costs in respect of Eminence Limited, an associate of the Group, that went into liquidation during the year ended 25 February 2010.
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25 Deferred tax
£m
Brought forward at 26 February 2010 8.0
Credit recognised in income statement (note 5) (13.3)
Charge recognised in equity (note 5) 4.9
At 26 February 2011 (0.4)
The analysis of the year end deferred tax position was as follows:
26 February 25 February
2011 2010
£m £m
On property, plant and equipment (0.4) 10.6
Other temporary differences — (2.6)
(0.4) 8.0
Deferred taxation provided for in the financial statements at the year end represents provision at 27% (2010: 28%) on the temporary
differences between the accounting net book amount of property, plant and equipment, and the tax base of those assets.
The deferred tax liability has been calculated using estimates based on the current manner of recovery of the assets’ value on property, plant
and equipment not eligible for capital allowances, i.e. recovery through continued use in the business unless the asset is held for sale. This
method assumes no tax relief will be available; therefore, no tax base is available for inclusion within the calculation of the deferred tax liability
unless the assets’ value is recovered through sale rather than continued use.
The key assumptions in the calculation of deferred tax are set out below:
— Capital expenditure — The percentage of the Group’s capital expenditure that would qualify for tax relief, incurred by each unit, has been
estimated based on prior periods historical experience of the split between qualifying and non-qualifying expenditure.
— Impairments — The impairments to property, plant and equipment have been apportioned between assets qualifying for tax relief and
those that do not.
— Depreciation — The rate of depreciation for assets that do not qualify for the initial recognition exemption has been estimated based on
actual data for the most recent accounting periods.
A review of the deferred tax liability will be performed at each balance sheet date and adjustments made in the event of a change in any key
assumptions.
At the balance sheet date, the Group has estimated unused capital gains tax losses of £101.0m (2010: £101.0m) available for offset against
future taxable profits from capital disposals and £3.0m estimated unused taxable losses available for offset against future taxable operating
profits. No deferred tax asset has been recognised in respect of these losses due to the unpredictability of future profit streams available to
offset these losses.
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26 Share capital
26 February 25 February
2011 2010
Number £m £m
Authorised
Ordinary shares of 25 pence each (2010: 25 pence each) 513,957,217 128.5 128.5
(2010: 513,957,217)
Deferred shares of £1.75 each (2010: £1.75 each) Nil
(2010: 60,948,969) — 106.7
128.5 235.2
Issued, called up and fully paid
Ordinary shares of 25 pence each (2010: 25 pence each) 100,422,654
(2010: 100,422,654) 25.1 25.1
Deferred shares of £1.75 each (2010: £1.75 each) Nil
(2010: 60,948,969) — 106.7
25.1 131.8
The Deferred Share Capital was redeemed and cancelled on 30 April 2010. This resulted in a reduction in Share Capital of £106.7m with a
corresponding increase in the Capital Redemption Reserve.
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27 Share-based payments
The Group has followed the transitional arrangements within IFRS 2, Share-based payment, and has adopted the exemption from full
retrospective application of all share-based payment awards, and has only applied the measurement requirements of IFRS 2 to awards made
after 7 November 2002. However, the following disclosures include all share-based payment awards, therefore including those equity-settled
awards granted prior to 7 November 2002.
(a) 1996 Executive Share Option Scheme & 1999 Company Share Option Plan
Options granted under the 1996 Scheme (which are unapproved options) and the 1999 Plan (which are HM Revenue & Customs approved
options) are exercisable between three and ten years from the grant date, subject to the employee remaining in the service of the Group. Options
were originally granted subject to performance conditions requiring Earnings Per Share (EPS) growth over a three year period. Outstanding
options were rolled over into equivalent options over shares in Luminar Group Holdings plc in connection with the Reorganisation in 2007.
Following the technical change of control of Luminar plc in connection with the Reorganisation, the Rules of the 1996 Scheme prescribed that
unapproved options became immediately exercisable, with performance conditions falling away, resulting in an exceptional charge during that
year. Therefore, the exercise of the rolled over unapproved options is not subject to any performance conditions. Similarly, rolled over approved
options are not subject to performance conditions, as prescribed by the rules of the 1999 Plan. This is a common provision in rules of this vintage.
During the year, 583,561 options awarded under the 1996 scheme and a further 2,547 awarded under the 1999 scheme lapsed.
The awards granted to Executive Directors and other senior Executives under the plan are subject to performance conditions relating to Total
Shareholder Return (50% of the award) and strategic milestone targets (50% of the award). See pages 30 and 31 of the Remuneration Report for
further details of these targets. The awards granted to other employees are subject to a sliding scale of operating profit targets based on Group
and/or unit/area performance.
In the event of a change of control, awards will vest early subject to performance and time prorating (although the Remuneration Committee
has the discretion not to apply time prorating if it considers it inappropriate to do so).
(c) Luminar Group Holdings plc 2010 Long Term Incentive Plan
At last year’s Annual General Meeting, the Shareholders approved the Luminar Group Holdings plc 2010 Long Term Incentive Plan (“LTIP”),
which in summary, granted options to selected senior management to purchase the Company’s shares in the future, at a price set at the outset.
As described in page 30 of the Remuneration Report, the LTIP has now been cancelled. Notwithstanding the fact that all individual rights have
been cancelled, as the LTIP was in existence during the Financial Year under review we are required to summarise its key terms, which are set
out below.
The total number of shares over which options were granted under the LTIP equated to 7% of the issued share capital as at 8 March 2010
(being the date of appointment of the Chief Executive Officer (“CEO”)). The CEO received options over 40% of this LTIP pool and the Finance
Director over 15%. Should the full 7% not have been allocated throughout the period of the scheme, any unallocated options would have
lapsed.
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The share warrants are akin to share options for accounting purposes and have been accounted for under this basis. The warrants have been
independently valued at £0.4m as at 8 December 2010. This amount has been recognised as a one-time exceptional charge to the income
statement and recorded directly to Equity reserves.
Reconciliations of the number and weighted average exercise price by option scheme are presented below (including grants of options prior
to 7 November 2002):
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The fair value for options granted during the year has been determined using a Stochastic model in the case of the 2010 LTIP and the Black–
Scholes model in the case of the share warrants. The assumptions and inputs to the model for options granted during the year were as follows:
2010 Share
LTIP warrants
Weighted average market value of options at grant date £0.0102 £0.0803
Weighted average exercise price £0.33 £0.25
Expected volatility 74.6% 65.2%
Option life 5 years 7 years
Risk-free interest rate 1.79% 2.71%
Expected dividend growth 0% 0%
The expected volatility is estimated using the historical volatility of the Group’s shares over a period equivalent to the expected life of the
option.
The Group recognised a total charge within administrative expenses of £0.1m (2010: £0.5m charge) related to share-based payment
transactions and exceptional items of £0.4m (2010: £nil) relating to share warrants, all of which were accounted for as equity-settled share-
based payment arrangements with a corresponding credit direct to equity reserves. The cumulative credit to equity reserves in respect of
share-based payments totalled £2.2m (2010: £1.7m).
28 Reserves
The reconciliation of movements in reserves is presented, as a Consolidated Statement of Changes in Shareholders’ Equity, on page 44.
Within this reconciliation the Group has presented the following reserves:
n The share premium which arose on the issue of new share capital during the year ended 25 February 2010, net of £1.2m related issue
costs;
n The capital redemption reserve which arose as a result of the share buy-backs and cancellation of shares carried out during prior years
and the cancellation of deferred shares during the current year; and
n The equity reserve which arises on recognition of share-based payment expenses following the requirements of IFRS 2, Share-based
payment.
The share premium, capital redemption, and equity reserves are all non-distributable reserves.
Of the closing retained earnings reserve of £(200.7)m, £1.8m (2010: £1.8m) related to treasury share adjustments.
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The Group has committed facilities that ensure there is sufficient liquidity to meet ongoing business requirements. The primary objectives of
the Group’s capital management are, therefore, to ensure that it maintains a good credit rating in order to support its business, to maximise
shareholder value and to safeguard the Group’s ability to continue as a going concern.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns
for Shareholders and benefits for the other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to Shareholders, return capital to
Shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided
by total capital. Net debt is calculated as total borrowings including finance leases less cash and cash equivalents. Total capital is calculated as
Shareholders’ equity as shown in the consolidated balance sheet.
The net debt position is shown on page 43. The movement in net debt in the year is analysed as follows:
25 February 26 February
Non-cash
2010 Cash flow flows 2011
£m £m £m £m
Cash and cash equivalents 37.3 (28.0) — 9.3
Cash on deposit 10.0 (10.0) — —
Loans due in 1 year (140.0) 127.5 — (12.5)
Loans due in more than 1 year (79.0) (79.0)
(92.7) 10.5 — (82.2)
Finance leases (7.9) — — (7.9)
Net debt (100.6) 10.5 — (90.1)
With total capital of £3.1m, the gearing ratio was 2,906% at 26 February 2011 (25 February 2010: 56%). This has resulted from the significant
reduction in the Shareholders’ equity during the year.
26 February 25 February
2011 2010
£m £m
Payable in less than one year 12.6 18.0
Payable between one and five years 50.0 61.8
Payable in over five years 139.9 198.1
202.5 277.9
Less total of future minimum sub-lease payments expected to be received (6.3) (6.5)
Total commitment 196.2 271.4
Sub-lease payments recognised as an expense in the year 1.3 1.2
Sub-lease units income recognised during the year (0.7) (0.7)
Net sub-lease payment 0.6 0.5
The Group leases various properties relating to trading units or office and warehouse accommodation; these leases have various terms,
escalation values and renewal rights.
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32 Pensions
The Group operates defined contribution schemes for the benefit of Directors and employees. The schemes are administered by trustees and
the assets are held in a fund independent from those of the Group. The cost to the Group of pension contributions is included in note 4.
34 Capital commitments
The Group had capital commitments relating to property, plant and equipment of £0.2m at 26 February 2011 (2010: £0.3m).
On 19 January 2007 the Group sold certain trade and assets of its units to 3DE. Post-completion on 19 January 2007 a transitional services
agreement (“TSA”) was in place between the Group and 3DE (an associate of the Group) for the provision of certain services. Vendor loan notes
of £19.3m (plus accrued interest totalling £5.3m) remain owed to the Group. On 26 February 2010, 3DE was placed into administration. The
administration process is ongoing. From the date of administration, the Group no longer continues to accrue any interest on the 3DE loan notes
and have provided no further services under the TSA. All debtor balances relating to 3DE were fully provided for in the accounts for the year
ended 25 February 2010 and remain fully provided for at 26 February 2011.
During the period, three properties were sold to No Saints Limited. Stephen Thomas, who resigned from the Board on 1 March 2010, is a
director of that company. The transactions were in the ordinary course of business and at arm’s length. Net sales proceeds of £2.1m were
received and the balance outstanding at 26 February 2011 was £nil.
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Annual Report 2011
We have audited the parent Company financial statements of Luminar Group Holdings plc for the year ended 26 February 2011 which comprises
the Company Balance Sheet, the Principal Accounting Policies for the Company Financial Statements and the Notes to the Company Financial
Statements. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice).
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part 16 of
the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
n give a true and fair view of the state of the Company’s affairs as at 26 February 2011;
n have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
n have been prepared in accordance with the requirements of the Companies Act 2006.
The Company is a named guarantor to the New Facility signed by Luminar Group Holdings plc and its subsidiaries (“the Group”) and therefore the
Company’s ability to continue to trade as a going concern is dependent on the financial position of the Group.
Trading conditions since December have been more difficult and results lower than originally anticipated. The Group has obtained a covenant waiver
at the end of May 2011 and capital repayment waivers from the Banking Group until 31 August 2011.
The Directors are currently in negotiations with the Banking Group to vary the terms of the Existing Facility to provide additional covenant and
liquidity headroom beyond 31 August 2011. Should the Banks not agree to reset covenants and or capital repayment and interest deferrals, the
Group is unlikely to be able to operate within the terms of existing facilities. This is likely to result in a breach of covenants at the next covenant
test point at the end of August 2011 with future liquidity risks thereafter. In these circumstances the debt could be called for immediate repayment
which, in the absence of alternative funding, would result in the Group no longer being a going concern.
These conditions indicate the existence of a material uncertainty for the Group and the Company which may cast significant doubt on the
Company’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company was
unable to continue as a going concern.
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Company Financial Statements
Shareholder Information
n the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and
n the information given in the Directors’ Report for the financial year for which the parent Company financial statements are prepared is
consistent with the parent Company financial statements.
n 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
n the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
n certain disclosures of Directors’ remuneration specified by law are not made; or
n we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the Group financial statements of Luminar Group Holdings plc for the year ended 26 February 2011.
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Annual Report 2011
26 February 25 February
2011 2010
Note £m £m
Fixed assets
Investments 4 — 118.2
Current assets
Debtors 5 56.2 132.3
56.2 132.3
Creditors: amounts falling due within one year 6 (6.3) (16.7)
The financial statements were approved by the Board of Directors on 11 May 2010.
Philip Bowcock
Finance Director
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Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Basis of preparation
These financial statements present financial information for Luminar Group Holdings plc as a separate entity, and are prepared in accordance with
the historical cost convention, the Companies Act 1985 and UK Accounting Standards (UK Generally Accepted Accounting Practice). The Company’s
Consolidated Financial Statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union,
are separately presented. The principal accounting policies adopted in these Company financial statements are set out below and, unless otherwise
indicated, have been consistently applied for the periods presented.
In accordance with FRS 18, Accounting Principles, the Directors have reviewed the accounting policies of the Company as set out below and consider
them to be appropriate.
The financial statements of the Company as an entity are prepared under UK Generally Accepted Accounting Principles and are presented
separately from these consolidated financial statements on pages 41 to 44 within this Annual Report.
The financial statements have been prepared on a historical cost basis, except for non-current assets and disposal Groups and investments held for
sale measured at their fair value less costs to sell and financial assets and liabilities recorded at fair value.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results
may ultimately differ from those estimates.
Luminar Group Holdings plc is the parent company of the Luminar Group Holdings plc. During the year the Group signed the New Facility (being a
revised three year facility of £99m) with the Banking Group. The New Facility became effective from 8 December 2010. Luminar Group Holdings plc
is a named guarantor on the New Facility.
The New Facility comprises two term loans of £44m and £40m respectively, both repayable over three years and a revolving credit facility (RCF) of
£15m. The weighted average cash interest rate for the New Facility is 7.8%.
The main financial covenants applying to the New Facility are those of leverage (the ratio of Net Debt to EBITDA as defined in the New Facility
Agreement) and fixed interest cover. The leverage covenant ratio was set at 3.8 times, reducing to 2.0 times over the life of the New Facility, and the
fixed interest cover was initially set at 1.35 times rising to 1.75 times.
Severe adverse weather conditions experienced in December combined with the continued deterioration in market conditions since that time
have placed significant stress on the financial covenants. At the February 2011 testing date, the Group continued to operate within the required
parameters. However, trading conditions have remained difficult and operating results have been worse than anticipated, such that it appears likely
that a covenant breach would arise when next tested at the end of May 2011 and a short-term liquidity problem may arise during the Summer
months due to scheduled amortisation payments falling due under the New Facility during that period. Since signing the New Facility, the Group
has maintained its strong relationship with the Banking Group which has throughout remained supportive of the business, the management and its
strategy. This has been demonstrated by the Banking Group granting a prospective waiver in respect of the financial covenants which would fall to
be tested at the end of May 2011. In addition, the Banking Group are continuing to provide flexibility to maintain the Group’s liquidity levels until
31 August 2011 and agreed to continue dialogue with Luminar and work together with the Group with a view to agreeing by that date a longer term
restructuring of the Group’s debt arrangements.
Should the discussions with the Banking Group not secure such a longer term solution, the Group is unlikely to be able to operate within the existing
terms of the New Facility and it is likely that a breach of the financial covenants would occur at the covenant testing point at the end of August
2011 and future liquidity risk would arise thereafter. In those circumstances, the debt drawn under the New Facility could be required to be repaid
immediately which would result in the Company and the Group no longer being a going concern. The Directors have concluded that the combination
of these circumstances represents a material uncertainty that casts significant doubt upon the Company’s ability to continue as a going concern.
Nevertheless, the Directors are of the opinion that the Banking Group will remain supportive and that the ongoing discussions with the Banking
Group will result in restructured debt arrangements which will allow the Company and the Group to continue to trade as a Going Concern and secure
a more sustainable, longer term debt structure for the Group.
The Directors have examined all available evidence and have concluded that, although the trading environment is still exceptionally challenging,
and there is a risk that discussions with the Banking Group will not result in a successful restructuring of the Group’s debt arrangements, in light
of the supportive nature of the banking relationship to date, the Directors are satisfied that adequate financial resources will continue to be made
available to the Group so as to enable it to continue to trade on a going concern basis. As a result, the Directors continue to adopt the going concern
basis in preparing the Group’s and the Company’s financial statements. The financial statements do not include the adjustments that would result if
the Group and the Company were unable to continue as a going concern.
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Turnover
Turnover is the total amount receivable by the Company for management and other services, provided to other Group companies, excluding VAT
and is recognised on performance of these services.
Investments
Investments in subsidiary undertakings and associates are stated at cost less amounts written off for impairment. Amounts advanced to subsidiary
undertakings with no intention of being repaid in the foreseeable future are classified as investments.
Basis of impairment
On an annual basis the Company performs a review of its investments to determine whether there have been any impairment trigger events. If such
a trigger event is considered to be a permanent diminution in value, rather than a temporary diminution in value, then the recoverable amount of
the asset, or where appropriate group of assets, in cash generating units that comprise the investment, is estimated and compared to the carrying
amount of the asset. The recoverable amount is the higher of the value in use to the Company of the asset and the net realisable value from disposal
of the asset. Value in use is estimated by calculating the net present value of the estimated future cash flows relating to the cash generating units
that comprise the investment after applying a discount factor. Net realisable value is estimated by applying the knowledge and experience of
management, together with external market indicators. If the recoverable amount is below the carrying value of the asset then the carrying value
of the asset is reduced to its recoverable amount, and the resulting charge is taken to the profit and loss account.
Financial instruments
The Company has applied FRS 25, Financial instruments: Disclosure and presentation, and FRS 26, Financial instruments: Measurement. The Company
has taken advantage of the exemption in paragraph 2d of FRS 29, Financial Instruments: Disclosure, and not presented information required by that
standard as the Group’s consolidated financial statements, in which the Company is included, provide equivalent disclosures for the Group under
IFRS 7, Financial Instruments: Disclosures.
Financial assets are classified according to the purpose for which the asset was acquired. The Company’s financial assets are classified as:
— debtors — these are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise
when the Company provides goods or services directly to a debtor, or advances money, with no intention of trading the loan or receivable.
Subsequent to initial recognition loans and receivables are included in the balance sheet at amortised cost using the effective interest method less
any amounts written off to reflect impairment, with changes in carrying amount recognised in the profit and loss account.
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Company Financial Statements
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The Company’s financial liabilities are classified as either Creditors: amounts falling due within one year or Creditors: amounts falling due after more
than one year. These are non-derivative financial liabilities with fixed or determinable payments that are not quoted in an active market. They arise
when the Company receives goods or services directly from a creditor or supplier, or borrows money, with no intention of trading the liability. This
category includes:
— trade creditors — these are typically non-interest bearing and following initial recognition are included in the balance sheet at amortised cost.
— bank loans — these are initially recorded at fair value based on proceeds received, net of issue costs. Finance charges are accounted for on an
accruals basis and charged to the profit and loss account using the effective interest rate method.
Financial instruments — other disclosures
The Company’s debt financing and other activities expose it to a variety of financial risks that include the effects of changes in the following:
Currency risk
The Company operates within the UK and substantially all transactions are denominated in sterling; therefore, the Company does not suffer from a
significant concentration of currency risk.
Credit risk
The Company does not have a significant concentration of credit risk. All receivables arise from transactions in the ordinary course of business with
trading subsidiaries.
Liquidity risk
Liquidity risk is managed through an assessment of short, medium and long-term cash flow forecasts to ensure the adequacy of committed
debt facilities.
Price risk
The Company is not exposed to equity security price risk or commodity price risk.
Share-based payments
The Company has applied the requirements of FRS 20, Share-based payment. In accordance with the transitional provisions, FRS 20 has been applied
to all grants of equity instruments after 7 November 2002 that were unvested as of 1 January 2005.
Where equity instruments are granted to employees of subsidiary undertakings for the services provided by the employees to those companies,
the fair value at the grant date of the equity instrument represents an additional investment in the subsidiary undertaking by the parent.
The Company issues some equity instruments where the counter-party has a choice of either cash or equity settlement and some equity
instruments, where the settlement can only be in equity.
Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at grant date is expensed on a
straight-line basis over the vesting period, based on the Company’s estimate of the shares that will actually vest. Fair value is measured by means
of a binomial model.
A liability equal to the portion of the goods or services received is recognised at the current fair value at each balance sheet date for cash settled
share-based payments.
Shares held in Employee Share Option Plan (“ESOP”) trusts are presented as a deduction from equity. Transactions between the Group and the
ESOP trust are eliminated on consolidation.
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Taxation
UK corporation tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially
enacted by the balance sheet date.
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where
transactions or events that result in an obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred at the balance
sheet date. Timing differences are differences between the Company’s taxable profits and its results as stated in the financial statements that arise
from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as
more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured at the average tax rates and laws that are expected to apply in the periods in which the timing differences are expected to
reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets and liabilities
recognised have not been discounted.
Equity dividends
Final dividends are recognised in the Company’s financial statements in the period in which the dividends are approved by Shareholders. Interim
dividends are recognised in the period they are paid.
Dividend income
Dividend income from investments is recognised when the Shareholders’ rights to receive payment have been established.
Provisions
Provisions for onerous lease commitments, public liability insurance claims and other provisions are recognised when: the Group has a present legal
or constructive obligation as a result of past events; it is more likely than not that an outflow of economic benefits will be required to settle the
obligation; and the amount can be measured reliably.
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Consolidated Financial Statements
Company Financial Statements
Shareholder Information
Audit fees for the year were £0.1m (2010: £0.1m), with additional fees of £nil (2010: £0.3m) relating to taxation, other assurance and non-audit
services. A breakdown of these fees is shown below:
During the year, the Company had eight Directors (2010: six), including Non-Executive Directors, providing services to the Company. There
were no other employees.
Remuneration in respect of Directors (including Non-Executive Directors) of Luminar Group Holdings plc was as follows:
Aggregate emoluments disclosed above include amounts paid by other Group companies. During the period no (2010: two) Directors
participated in defined contribution pension schemes.
The amounts set out above include remuneration of the highest paid Director as follows:
Year ended Year ended
26 February 25 February
2011 2010
£000 £000
Aggregate emoluments 407 501
Company contributions to money purchase pension schemes — 86
407 587
More detailed audited information concerning remuneration of Directors is set out in the Remuneration Report on pages 25 to 32.
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Annual Report 2011
4 Investments
Shares in Employee
subsidiary share-based
undertakings payments Total
£m £m £m
As at 26 February 2010 117.4 0.8 118.2
Additions during the period — 0.1 0.1
Impairment (117.4) (0.9) (118.3)
At 26 February 2011 — — —
The carrying value of investments has been subjected to an impairment review as at 26 February 2011 on a Value In Use (“VIU”) basis. The VIU
calculations considered forecast future cash flows, discounted at a post-tax WACC of 9.4%, combined with a terminal value at year 7, applying a
2.2% long-term growth.
Subsidiary undertakings
The Company’s direct principal subsidiary undertakings are listed below together with details of their businesses.
All subsidiaries are registered in England and Wales. Other principal subsidiaries, which the Company indirectly owns, are included in note 14
to the Consolidated Financial Statements.
5 Debtors
26 February 25 February
2011 2010
£m £m
Amounts owed by Group undertakings 55.6 131.4
Other debtors 0.6 0.9
56.2 132.3
All amounts owed by Group undertakings are repayable on demand. During the year, an impairment of £64.9m was recognised against amounts
owed by Group undertakings.
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7 Provisions
£m
As at 26 February 2010 0.9
Utilised during the year
(0.2)
At 26 February 2011 0.7
On 16 April 2008 the Luminar Group Holdings plc Group agreed to sell five individual companies to Cavendish Bars Limited. The disposal
companies are responsible for all of the leases of the units being sold and are contingently liable as guarantors for a number of other non-core
units, including all of the leases relating to units that were sold in previous periods.
As part of the transaction, the Company entered into indemnities capped at £4.2m in favour of Cavendish Bars Limited in relation to the
guarantees and made provision for other related costs which were expected to be incurred. At the year end, £0.1m (2010: £0.1m) of these
provisions remain in place in relation to expected legal and similar costs.
During the year ended 25 February 2010, an additional provision of £0.8m was made for amounts owed by Eminence Leisure Limited, an
associate of the Company, due to Eminence Leisure Limited having gone into liquidation. An amount of £0.2m was utilised during the year.
8 Financial Instruments
The Luminar Group Holdings plc Group (“the Group”) uses derivative financial instruments in order to reduce its exposure to financial risk.
The Group’s bank borrowings and financial instruments are transacted between a third party bank and a subsidiary of the Group.
As all the Company’s operations are transacted in the reporting currency, there is no currency exposure.
Short-term debtors and creditors have been excluded from all the following disclosures as their fair value at the year end approximates their
carrying value.
Floating
rate weighted
Fixed rate
Floating rate Total average
£m £m £m %
26 February 2011 — 55.6 55.6 2.03
25 February 2010 — 131.4 131.4 1.00
The floating rate debt includes balances of £2.4m (2010: £37.2m), which were interest free and are included in the weighted average interest
rate calculations.
Other debtors are excluded from the analysis since they are interest free.
The fair value of other financial assets and liabilities included in notes 5, 7 and 8 approximates their carrying value.
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The Deferred Share Capital was redeemed and cancelled on 30 April 2010. This resulted in a reduction of Share Capital of £106.7m with a
corresponding increase in the Capital Redemption Reserve.
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Consolidated Financial Statements
Company Financial Statements
Shareholder Information
10 Share-based payments
The following share-based payment plans (with the exception of the performance share plan) were in existence in Luminar plc. Following the
reorganisation, these plans are now in operation in Luminar Group Holdings plc.
The Group has followed the transitional arrangements within FRS 20, Share-based payment, and has adopted the exemption from full
retrospective application of all share-based payment awards, and has only applied the measurement requirements of FRS 20 to awards made
after 7 November 2002. However, the following disclosures include all share-based payment awards, therefore including those equity-settled
awards granted prior to 7 November 2002.
(a) 1996 Executive Share Option Scheme & 1999 Company Share Option Plan
Options granted under the 1996 Scheme (which are unapproved options) and the 1999 Plan (which are HM Revenue & Customs approved options)
are exercisable between three and ten years from the grant date, subject to the employee remaining in the service of the Group. Options were
originally granted subject to performance conditions requiring Earnings Per Share (EPS) growth over a three year period. Outstanding options
were rolled over into equivalent options over shares in Luminar Group Holdings plc in connection with the Reorganisation in 2007. Following the
technical change of control of Luminar plc in connection with the Reorganisation, the Rules of the 1996 Scheme prescribed that unapproved
options became immediately exercisable, with performance conditions falling away, resulting in an exceptional charge during that year. Therefore,
the exercise of the rolled over unapproved options is not subject to any performance conditions. Similarly, rolled over approved options are not
subject to performance conditions, as prescribed by the rules of the 1999 Plan. This is a common provision in rules of this vintage. During the year,
583,561 options awarded under the 1996 scheme and a further 2,547 awarded under the 1999 scheme lapsed.
The awards granted to Executive Directors and other senior Executives under the plan are subject to performance conditions relating to Total
Shareholder Return (50% of the award) and strategic milestone targets (50% of the award). See pages 30 and 31 of the Remuneration Report for
further details of these targets. The awards granted to other employees are subject to a sliding scale of operating profit targets based on Group
and/or unit/area performance.
In the event of a change of control, awards will vest early subject to performance and time prorating (although the Remuneration Committee
has the discretion not to apply time prorating if it considers it inappropriate to do so).
(c) Luminar Group Holdings plc 2010 Long Term Incentive Plan
At last year’s Annual General Meeting, the Shareholders approved the Luminar Group Holdings plc 2010 Long Term Incentive Plan (“LTIP”),
which in summary, granted options to selected senior management to purchase the Company’s shares in the future, at a price set at the outset.
As described in page 30 of the Remuneration Report, the LTIP has now been cancelled. Notwithstanding the fact that all individual rights have
been cancelled, as the LTIP was in existence during the Financial Year under review we are required to summarise its key terms, which are set
out below.
The total number of shares over which options were granted under the LTIP equated to 7% of the issued share capital as at 8 March 2010 (being
the date of appointment of the Chief Executive Officer (“CEO”)). The CEO received options over 40% of this LTIP pool and the Finance Director over
15%. Should the full 7% not have been allocated throughout the period of the scheme, any unallocated options would have lapsed.
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The share warrants are akin to share options for accounting purposes and have been accounted for under this basis. The warrants have been
independently valued at £0.4m as at 8 December 2010. This amount has been recognised as a one-time exceptional charge to the income
statement and recorded directly to Equity reserves.
Reconciliations of the number and weighted average exercise price by option scheme are presented below:
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Company Financial Statements
Shareholder Information
The fair value for options granted during the year has been determined using a Stochastic model. In the case of the 2010 LTIP and the Black–
Scholes model in the case of the share warrants. The assumptions and inputs to the model for options granted during the year were as follows:
2010 Share
LTIP warrants
Weighted average market value of options at grant date £0.0102 £0.0803
Weighted average exercise price £0.33 £0.25
Expected volatility 74.6% 65.2%
Option life 5 years 7 years
Risk-free interest rate 1.79% 2.71%
Expected dividend growth 0% 0%
The expected volatility is estimated using the historical volatility of the Group’s shares over a period equivalent to the expected life of
the option.
The Company recognised a total charge within administrative expenses of £0.1m (2010: £0.3m) related to share-based payment transactions,
and exceptional items at £0.4m (2010: £nil) relating to the share warrants all of which were accounted for as equity-settled share-based
payment arrangements with a corresponding credit direct to equity reserves. The cumulative credit to equity reserves in respect of share-
based payments totalled £2.2m (2010: £1.7m).
The loss for the year of £184.2m (2010: £132.3m) includes a £118.3m (2010: £132.6m) write-down in the investment value.
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13 Contingent liabilities
The Company is a guarantor of the Group’s New Facility Agreement, which became effective on 8 December 2010.
14 Capital commitments
The Company had no capital commitments at 26 February 2011 (2010: None).
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Shareholder Information
1 To receive and consider the audited accounts for the year ended 26 February 2011 and the reports of the Directors and the Auditors thereon.
2 To approve the Directors’ Remuneration Report for the year ended 26 February 2011.
3 To reappoint PricewaterhouseCoopers LLP as Auditors of the Company to hold office from the conclusion of this meeting until the conclusion of
the next general meeting at which accounts are laid before the Company.
4 To authorise the Directors to determine the Auditors’ remuneration.
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
5 THAT the Directors be generally and unconditionally authorised, in accordance with section 551 of the Companies Act 2006 (the “Act”), to allot
shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company:
(a) up to an aggregate nominal amount of £8,368,554 (such amount to be reduced by the nominal amount allotted or granted under paragraph
(b) below in excess of such sum); and
(b) up to an aggregate nominal amount of £16,737,108 in the form of equity securities (within the meaning of section 560(1) of the Act) (such
amount to be reduced by any allotments or grants made under paragraph (a) above) in connection with an offer by way of a rights issue,
open for acceptance for a period fixed by the Directors:
(i) to holders of ordinary shares in proportion (as nearly as may be practicable) to their existing holdings; and
(ii) to holders of other equity securities as required by the rights of those securities or as the Directors otherwise consider necessary,
and so that the Directors may impose any limits or restrictions and make any arrangements which they deem necessary or expedient to deal
with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems arising in, or under the laws of, any overseas
territory, the requirements of any regulatory body or stock exchange or any other matter whatsoever,
such authorities to expire (unless previously varied, revoked or renewed by the Company in a general meeting) at the conclusion of the Annual
General Meeting of the Company in 2012 or, if earlier, at the close of business on 12 October 2012, except that the Company may at any time
before such expiry make offers and enter into agreements which would or might require shares to be allotted or rights to subscribe for or
convert securities into shares to be granted after the expiry of the authority and the Directors may allot shares or grant rights to subscribe for
or convert securities into shares in pursuance of any such offer or agreement as if the authority conferred by this resolution had not expired.
To consider and, if thought fit, pass the following resolutions as special resolutions:
6 THAT, subject to the passing of resolution 5 above, the Directors be given power to allot equity securities (as defined in the Act) for cash
pursuant to the authority conferred on them by resolution 5 above and/or to sell equity securities held by the Company as treasury shares for
cash, in each case as if section 561 of the Act did not apply to any such allotment or sale, provided that this power shall be limited:
(a) to the allotment of equity securities and sale of treasury shares for cash in connection with an offer of, or invitation to apply for, equity
securities (but in the case of the authority granted under paragraph (b) of resolution 5, by way of a rights issue only):
(i) to holders of ordinary shares in proportion (as nearly as may be practicable) to their existing holdings, and
(ii) to holders of other equity securities as required by the rights of those securities or as the Directors otherwise consider necessary,
and so that the Directors may impose any limits or restrictions and make any arrangements which they deem necessary or expedient to
deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems arising in, or under the laws of, any
overseas territory, the requirements of any regulatory body or stock exchange or any other matter whatsoever; and
(b) in the case of the authority granted under paragraph (a) of resolution 5 and/or in the case of any sale of treasury shares for cash, to the
allotment (otherwise than under paragraph (a) of this resolution) of equity securities or sale of treasury shares up to an aggregate nominal
value of £1,255,283,
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7 THAT the Company be and is hereby authorised for the purposes of section 701 of the Act to make one or more market purchases (within the
meaning of section 693(4) of the Act) of ordinary shares in the capital of the Company (“Ordinary Shares”) on such terms and in such manner as
the Directors shall determine and to cancel or hold in treasury such shares, provided that:
(a) the maximum aggregate number of Ordinary Shares hereby authorised to be purchased is 10,042,265;
(b) the minimum price (excluding expenses) which may be paid for each Ordinary Share is an amount equal to 75% of the average of the closing
mid-market prices for the Ordinary Shares (derived from the Daily Official List of the London Stock Exchange) for the five business days
immediately preceding the date of purchase; and
(c) the maximum price (excluding expenses) which may be paid for each Ordinary Share is an amount equal to the highest of (i) 105% of the
average of the closing mid-market prices for the Ordinary Shares of the Company (derived from the Daily Official List of the London Stock
Exchange) for the five business days immediately preceding the date on which the Ordinary Share is contracted to be purchased; and (ii)
the higher of the price of the last independent trade and the highest current independent bid on the trading venues where the purchase is
carried out at the relevant time,
such authority to expire (unless previously renewed, varied or revoked by the Company in a general meeting) at the conclusion of the Annual
General Meeting of the Company in 2012 or, if earlier, at the close of business on 12 October 2012, except that the Company may before such
expiry enter into a contract to purchase Ordinary Shares which will or may be completed or executed wholly or partly after the power ends and
the Company may purchase Ordinary Shares pursuant to any such contract as if the authority conferred by this resolution had not expired.
8 THAT a general meeting of the Company, other than an Annual General Meeting, may be called on not less than 14 clear days’ notice.
The Directors believe that the proposals in resolutions 1 to 8 are in the best interests of the Company and Shareholders as a whole. The Directors
unanimously recommend that you vote in favour of all the resolutions as they intend to do in respect of their own beneficial holdings.
Philip Bowcock
Company Secretary
11 May 2011
Registered Office:
Luminar House
Deltic Avenue
Milton Keynes
Buckinghamshire
MK13 8LW
(Co. No. 6239034)
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NOTES
Entitlement to Attend and Vote
1 To be entitled to attend and vote at the Annual General Meeting (and for the purpose of the determination by the Company of the votes they
may cast), Shareholders must be registered on the Company’s register of members:
n at 1 pm on 8 July 2011; or
n if the meeting is adjourned, by 1 pm on the day two working days prior to the adjourned meeting.
Changes to the Company’s register of members after the relevant deadline shall be disregarded in determining the rights of any person to
attend and vote at the meeting.
Attending in person
3 If you wish to attend the meeting in person, details of the date, venue and time of the meeting are set out in paragraph 21 below.
Appointment of proxies
4 Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting
(whether by show of hands or on a poll). A Shareholder may appoint more than one proxy in relation to the Annual General Meeting provided
that each proxy is appointed to exercise the rights attached to a different share or shares held by that Shareholder. A proxy need not be a
Shareholder of the Company. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. A Form
of Proxy which may be used to make such appointment and give proxy instructions accompanies this Notice. If you do not have a Form of Proxy
and believe that you should have one, or if you require additional forms, please contact Capita Registrars Limited, the Company’s registrars, on
0871 664 0300 (calls cost 10p per minute plus network extras); or +44 208 639 3399 (if calling from overseas).
5 To be valid, the Form of Proxy and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such
power or authority, must be deposited at the offices of Capita Registrars Limited, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent,
BR3 4TU by no later than 1 pm on 8 July 2011.
6 The return of a completed Form of Proxy or any CREST Proxy Instruction (as described in paragraphs 11 to 14 below) will not prevent a
Shareholder attending the Annual General Meeting and voting in person if he/she wishes to do so.
7 A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for and against the resolution. If no
voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he
or she thinks fit in relation to any other matter that is put before the Annual General Meeting.
Nominated Person
9 Any person to whom this Notice is sent who is a person nominated under section 146 of the Act to enjoy information rights (a “Nominated Person”)
may, under an agreement between him/her and the Shareholder by whom he/she was nominated, have a right to be appointed (or to have
someone else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish
to exercise it, he/she may, under any such agreement, have a right to give instructions to the Shareholder as to the exercise of voting rights.
10 The statement of the rights of Shareholders in relation to the appointment of proxies in paragraphs 4 and 5 above does not apply to Nominated
Persons. The rights described in these notes can only be exercised by Shareholders of the Company.
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Joint Holders
15 In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most
senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of
members in respect of the joint holding (the first-named being the most senior).
Corporate Representatives
16 Any corporation which is a Shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a
Shareholder provided that they do not do so in relation to the same shares.
Answering Questions
19 Any Shareholder attending the meeting has the right to ask questions. The Company must cause to be answered any question relating to the
business being dealt with at the meeting unless:
n answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information;
n the answer has already been given on a website in the form of an answer to a question; or
n it is undesirable in the interests of the Company of the good order of the meeting that the question be answered.
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Paragraph (a) of this resolution would give the Directors the authority to allot shares or grant rights to subscribe for or convert any securities into
shares up to an aggregate nominal amount equal to £8,368,554. This amount represents approximately one-third of the issued ordinary share
capital of the Company as at 11 May 2011, the latest practicable date prior to publication of this Notice.
In line with guidance issued by the Association of British Insurers (“ABI”), paragraph (b) of this resolution would give the Directors authority to
allot shares or grant rights to subscribe for or convert any securities into shares in connection with a rights issue in favour of Shareholders up to
an aggregate nominal amount equal to £16,737,108, as reduced by the nominal amount of any shares issued under paragraph (a) of this resolution.
This amount (before any reduction) represents approximately two-thirds of the issued ordinary share capital of the Company as at 11 May 2011, the
latest practicable date prior to publication of this Notice.
Passing resolution 5 will ensure that the Directors continue to have the flexibility to act in the best interests of Shareholders, when opportunities arise,
by issuing new shares. The Directors have no present intention to exercise either of the authorities sought under this resolution, except as required
to satisfy the exercise of options under the Company’s employee share incentive schemes. However, if they do exercise the authorities, the Directors
intend to follow the ABI recommendations concerning their use (including as regards the Directors standing for re-election in certain cases).
If passed, this authority will expire at the same time as the authority to allot shares given pursuant to resolution 5.
The Directors confirm their intention to follow the provisions of the Pre-Emption Group’s Statement of Principles in that they do not intend to issue
more than 7.5% of the issued share capital on a non-pre-emptive basis in any rolling three-year period without prior consultation with Shareholders.
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The Directors have no present intention of exercising the authority to make market purchases; however, the authority provides the flexibility to
allow them to do so in the future. The Directors would exercise this power only if satisfied that it was in the best interests of the Company, and of its
Shareholders generally, to do so and that it could be expected to result in an increase in earnings per share of the Company. Any shares purchased
in accordance with this authority will subsequently be cancelled. The effect of any cancellation would be to reduce the number of shares in issue.
The buy-back authority would be limited to purchases of up to 10,042,265 ordinary shares, representing 10% of the issued share capital of the
Company as at 11 May 2011, the latest practical date prior to the publication of this Notice. The resolution specifies the maximum price at which the
shares may be bought. The Company is required to state a minimum price at which shares may be purchased by the Company. In order to provide
maximum flexibility, the Directors propose that the authority permits a minimum buy-back price equal to 75% of the average of the closing mid-
market prices for the ordinary shares of the Company (derived from the Daily Official List of the London Stock Exchange) for the five business days
immediately preceding the date of purchase.
As at 11 May 2011, being the latest practicable date prior to the publication of this Notice, exercisable options were outstanding to subscribe for a
total number of 758,698 ordinary shares, or 0.76% of the Company’s issued share capital. If the existing authority given at the last Annual General
Meeting and the authority now being sought were to be used in full, the exercisable options would represent 0.84% of the adjusted, reduced issued
share capital.
The Company has issued warrants over 5,021,130 Ordinary Shares, representing 5% of the Company’s ordinary issued share capital as at 11 May
2011. If the existing authority given at the last Annual General Meeting and the authority now being sought were to be used in full, these would
represent 6.25% of the Company’s ordinary issued share capital.
The authority shall expire on the date of the Annual General Meeting of the Company in 2012 or, if earlier, at the close of business on
12 October 2012.
Note that the Regulations require that, in order to be able to call a general meeting on less than 21 clear days’ notice, the Company must meet
certain requirements for electronic voting to be made available to all Shareholders for that meeting.
If granted, the approval will be effective until the Company’s next Annual General Meeting, when it is intended that a similar resolution will be
proposed.
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Shareholder Information
Annual General Meeting Registrars
12 July 2011, 1.00 pm at the Registered Office of Luminar Group Capita Registrars
Holdings plc located at Luminar House, Deltic Avenue, Rooksley, Milton Northern House
Keynes, Buckinghamshire, MK13 8LW. Woodsome Park
Fenay Bridge
Timetable for Results Huddersfield
For the year ending — 25 February 2012 West Yorskshire
HD8 0GA
Interim Management Statement circulated — 12 July 2011
Stockbrokers
Interim Results announced and Interim Statement Circulated Numis Securities Limited
— 20 October 2011 10 Paternoster Square
London
Interim Management Statement circulated — 12 January 2012* EC4M 7LT
Preliminary announcement of full year results — 10 May 2012* Altium Capital Limited
30 St James’s Square
Annual Report circulated — June 2012* London
EC4M 4AL
Dividend Payments
If any dividends are declared for the year ended 25 February 2012, the Auditors
expected payment dates would be: PricewaterhouseCoopers LLP
10 Bricket Road
Interim Dividend — January 2012* St Albans
Final Dividend — July 2012* Hertfordshire
AL1 3JX
Shareholder Services
On the Group’s behalf, Natwest Stockbrokers Limited operates a low cost Solicitors
share dealing service in Luminar Group Holdings plc shares. Details are Slaughter and May
available on telephone 08700 6002050 or email on contactees@natwest. One Bunhill Row
com quoting reference: Luminar. London
EC1Y 8YY
Private Shareholders
If you have a query about your holdings of Luminar Group Holdings plc
shares or need to change your details, for example, your address, please
contact the Registrars at the address shown below.
Website
Further details of the Group’s activities and products can be found on its
website at www.luminar.co.uk.
Registration
Luminar Group Holdings plc is registered in England and Wales
(no. 6239034).
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Welcome to Luminar
Our Strategy
Luminar has the best venues and the best operational capability in our sector.
We remain confident that these strengths will continue to serve Luminar well,
and that we can continue to enhance our position as the leading operator.
Luminar venues welcome an average of over 200,000 customers through its doors every week.
Financial Highlights
Loss before tax*
Total Revenue* Sales (per head) pre-exceptional items
* Continuing operations
Luminar
www.luminar.co.uk