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11 — ANNUAL BUDGETING
The Group’s operations will be run by reference to an annual budget and five year plan
(the budget) comprised of the bottom up budgets of each of the operating Centre SPVs,
prepared by STR during the last four months of each year and approved by the HG&L
Board before the start of the next year. All expenses in the agreed Budget are individually
approved subject to the relevant SPV maintaining its revenue forecast for the year at
greater than 70% of Budget GOP. Other KPI requirements will also be set and agreed.
It will comprise six principal categories of expense:
1. Bay operational costs.
2. F&B operational costs.
3. Senior staff cost.
4. IT hard and software upgrades and maintenance.
5. Centre repairs and decoration as an operating cost.
6. Centre renewals and new additions – a capital cost.
Individual cost categories may not exceed in any year 110% of cost, subject to Centre
total costs not exceeding in total 105% of Budget. The forecast for the year in progress
will be updated monthly, according to results to be available from each SPV, along with
its operating numbers for the prior month, within ten working days of month end.
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