Admission Document - JoulesThis document comprises an admission document prepared in accordance with the AIM Rules for Companies. It does not constitute a prospectus It does not constitute

Admission Document

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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of thisdocument, you should consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorisedunder the Financial Services and Markets Act 2000 immediately.This document comprises an admission document prepared in accordance with the AIM Rules for Companies. It does not constitute a prospectusfor the purposes of the Financial Services and Markets Act 2000 and has not been approved by, or filed with, the UK Financial Conduct Authority(‘‘FCA’’).The Company and the Directors, whose names and functions are set out in Part 1 of this document, accept responsibility for the informationcontained in this document. To the best of the knowledge and belief of the Directors and the Company (who have taken all reasonable care toensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affectthe import of such information.Application has been made for the whole of the ordinary share capital of Joules Group plc in issue immediately following the Placing to beadmitted to trading on AIM, the market operated by the London Stock Exchange.AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than tolarger or more established companies. AIM securities are not admitted to the Official List of the United Kingdom Listing Authority.A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only aftercareful consideration and, if appropriate, consultation with an independent financial adviser.Each AIM company is required pursuant to the AIM Rules for Companies to have a nominated adviser. The Nominated Adviser is requiredto make a declaration to the London Stock Exchange on admission in the form set out in Schedule two to the AIM Rules for NominatedAdvisers.The London Stock Exchange has not itself examined or approved the contents of this document.It is expected that dealings in the Ordinary Shares will commence on AIM on 26 May 2016. The Ordinary Shares are not dealt in on anyother recognised investment exchange and no other such application has been made.

JOULES GROUP PLC(Incorporated in England and Wales under the Companies Act 2006 with registered number 10164829)

Placing of 48,437,500 Ordinary Shares at 160 pence per shareand

Admission to trading on AIMFinancial Adviser

Nominated Adviser, Joint Bookrunner and Corporate Broker Joint Bookrunner and Corporate Broker

Share capital following Admission

Issued and fully paid Number Nominal value

£874,997.96 87,499,796 £0.01

Upon Admission, the Ordinary Shares being issued pursuant to the Placing will rank pari passu in all respects with the existing issued OrdinaryShares of the Company and will rank in full for all dividends or other distributions hereafter declared, made or paid on the ordinary share capital ofthe Company.N M Rothschild & Sons Limited, which is authorised by the Prudential Regulation Authority (‘‘PRA’’) and regulated by the FCA and PRA in theUnited Kingdom, is acting exclusively for the Company and no-one else in connection with the Placing and Admission. It will not regard any otherperson (whether or not a recipient of this document) as a client in relation to the Placing and Admission and will not be responsible to anyone otherthan the Company for providing the protections afforded to clients of N M Rothschild & Sons Limited or for the Placing and Admission or anytransaction or arrangement referred to in this document. N M Rothschild & Sons Limited has not authorised the contents of any part of thisdocument for the purposes of the Prospectus Rules.Peel Hunt LLP, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for the Company and no-one else inconnection with the Placing and Admission. It will not regard any other person (whether or not a recipient of this document) as a client in relation tothe Placing and Admission and will not be responsible to anyone other than the Company for providing the protections afforded to clients of PeelHunt LLP or for the Placing and Admission or any transaction or arrangement referred to in this document. Peel Hunt LLP has not authorised thecontents of any part of this document for the purposes of the Prospectus Rules.Liberum Capital Limited, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for the Company and no-oneelse in connection with the Placing and Admission. It will not regard any other person (whether or not a recipient of this document) as a client inrelation to the Placing and Admission and will not be responsible to anyone other than the Company for providing the protections afforded toclients of Liberum Capital Limited or for the Placing and Admission or any transaction or arrangement referred to in this document. Liberum CapitalLimited has not authorised the contents of any part of this document for the purposes of the Prospectus Rules.Peel Hunt LLP’s responsibilities as the Company’s nominated adviser under the AIM Rules for Nominated Advisers are owed solely to the LondonStock Exchange and are not owed to the Company or to any Director or to any other person. No representation or warranty, express or implied, ismade by Peel Hunt LLP as to, and no liability whatsoever is accepted by Peel Hunt LLP in respect of, any of the contents of this document (withoutlimiting the statutory rights of any person to whom this document is issued).An investment in the Company involves a significant degree of risk and may not be suitable for all recipients of this document. Aprospective investor should consider carefully whether an investment in the Company is suitable for him in the light of his personalcircumstances and the financial resources available to him. Your attention is drawn to the section entitled ‘Risk Factors’ in Part 4 of thisdocument.Prospective investors should rely only on the information contained in this document. No person has been authorised to give any information or tomake any representations other than as contained in this document and, if given or made, such information or representations must not be reliedupon as having been authorised by the Company, the Directors, Rothschild, Peel Hunt or Liberum. Recipients of this document are authorised touse it solely for the purpose of considering the acquisition of Placing Shares and may not reproduce or distribute this document or use anyinformation herein for any purpose other than considering an investment in Placing Shares. Such recipients of this document agree to theforegoing by accepting delivery of this document.

Information not contained in this documentNo person has been authorised to give any information or make any representation other than those contained in this document and, if given ormade, such information or representation must not be relied upon as having been so authorised. Neither the delivery of this document nor anysubscription or sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of theCompany since the date of this document or that the information in this document is correct as of any time subsequent to the date hereof.

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EXECUTIVE SUMMARY

The following information is derived from, and should be read in conjunction with, the whole of thisdocument including, in particular, the section headed Risk Factors relating to the Company inPart 4 of this document. Shareholders should read the whole of this document and not rely on thisExecutive Summary section.

INTRODUCTION

Joules is a British premium lifestyle brand which designs and sells Joules branded lifestyle clothing,accessories and homeware. Joules has 98 UK and RoI stores (including five concessions and fourfranchises)1, a customer database of approximately two million customers, an established e-commerceplatform and a fast growing international presence. Joules is also a top selling wholesale brand in majorUK retailers such as John Lewis and Next Label and in 2015 won the ‘‘Fashion Retail Business of theYear’’ at the Drapers Awards2.

The Joules brand is at the heart of the business and encompasses values of time-off, heritage,countryside, Britishness, family and fun, which the Directors believe resonate strongly with its large,growing and loyal customer base. The Group’s brand values are reflected in the product designs, whichare recognisable for their distinctive colours, prints, detail and quality. These designs have successfullystretched across a broad range of product categories, from womenswear to homeware, demonstratingthe brand’s relevance to multiple aspects of Joules’ customers’ lives.

The Group operates a balanced multi-channel proposition which encompasses retail (stores ande-commerce), wholesale and other smaller channels such as the country shows and events circuit andlicensing. In FY15, store, e-commerce and wholesale revenues represented 46 per cent., 22 per cent.and 27 per cent. of total revenue respectively.

The business has grown rapidly in the UK and internationally. In the UK, revenues have grown 44 percent. to £105.8 million from FY13 to FY15, driven primarily by store roll-out, increased sales withinexisting wholesale accounts and expansion of e-commerce. In the same period, international revenueshave grown 198 per cent. to £10.6 million. The growth of the business has been underpinned bysignificant investments made in the Group’s infrastructure, including supply chain, IT, international salessupport offices and people.

The Directors believe that the Group’s key strengths can be summarised as follows:

• distinctive brand with an authentic heritage;

• unique product designs reflecting the strengths of the brand;

• large, growing and loyal customer base;

• well positioned in the large and growing premium lifestyle market;

• well balanced, multi-channel proposition;

• growing international presence;

• clear growth strategy;

• well invested infrastructure to support growth; and

• attractive financial model and metrics.

1 Store numbers as at 28 February 2016.

2 In the £30 million to £100 million turnover category.

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STRATEGY

The Group’s strategy is to:

1. increase customer value;

2. continue to roll-out stores in the UK and RoI;

3. grow the international business; and

4. expand the product range available to its customers.

THE PLACING

The Placing comprises the placing by Peel Hunt and Liberum, as agents for the Company and SellingShareholders, of 48,437,500 Placing Shares at the Placing Price with institutional and other investors.The Placing will raise approximately £9.4 million (net of expenses) for the Company and approximately£62.9 million (net of expenses) for the Selling Shareholders. The Placing Shares will representapproximately 55.4 per cent. of the Enlarged Share Capital. The Placing is being underwritten by PeelHunt and Liberum.

Marc Simon Dench, David Anthony Stead and Jill Caroline Little have each agreed to subscribe for62,500, 31,250 and 15,625 Placing Shares at the Placing Price in the Placing respectively.

Members of the Board and the Group’s Senior Managers will, at Admission, hold approximately 37.7 percent. of the Company’s Enlarged Share Capital. Further details of the Directors’ and Senior Managers’interests are set out in paragraph 7 of Part 7 of this document.

DIRECTORS

On Admission, the members of the Board and their positions will be:

• Tom Simon Lee Joule, Founder and Chief Brand Officer

• Colin Nigel Porter, Chief Executive Officer

• Marc Simon Dench, Chief Financial Officer

• Neil William McCausland, Non-executive Chairman

• David Anthony Stead, Senior Non-executive Director

• Jill Caroline Little, Independent Non-executive Director

DIVIDEND POLICY

The Directors intend to pursue a progressive dividend policy, subject to the availability of sufficientdistributable profits and the need to retain sufficient earnings for the future growth of the Group. It iscurrently intended that, in the absence of unforeseen circumstances, the first dividend followingAdmission will be paid in respect of FY17.

RISK FACTORS

Investors should note the risks associated with an investment in the Company as set out in Part 4 of thisdocument.

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IMPORTANT INFORMATION

No legal, business, tax or other advice is provided in this document. Prospective investors shouldconsult their professional advisers as needed on the potential consequences of subscribing for,purchasing, holding or selling Ordinary Shares under the laws of their country and/or state of citizenship,domicile or residence.

Prospective investors must inform themselves as to: (a) the legal requirements within their own countriesfor the purchase, holding, transfer, redemption or other disposal of the Ordinary Shares; (b) any foreignexchange restrictions applicable to the purchase, holding, transfer, redemption or other disposal of theOrdinary Shares which they might encounter; and (c) the income and other tax consequences whichmay apply in their own countries as a result of the purchase, holding, transfer, redemption or otherdisposal of the Ordinary Shares. This document does not constitute an offer to sell, or the solicitation ofan offer to acquire or subscribe for, Ordinary Shares in any jurisdiction where such offer or solicitation isunlawful or would impose any unfulfilled registration, qualification, publication or approval requirementson the Company, the Selling Shareholders, Rothschild, Peel Hunt or Liberum. The offer and sale ofOrdinary Shares has not been and will not be registered under the applicable securities laws of Canada,Australia, Japan, New Zealand or the Republic of South Africa. Subject to certain exemptions, theOrdinary Shares may not be offered to or sold within Canada, Australia, Japan, New Zealand or theRepublic of South Africa or to any national, resident or citizen of Canada, Australia, Japan, New Zealandor the Republic of South Africa.

The Ordinary Shares have not been, and will not be, registered under the United States Securities Act of1933, as amended (the ‘‘US Securities Act’’), or the securities laws of any other jurisdiction of the UnitedStates. The Ordinary Shares may not be offered or sold, directly or indirectly, in or into the United States(except pursuant to an exemption from, or a transaction not subject to, the registration requirements ofthe US Securities Act). No public offering of the Ordinary Shares is being made in the United States. TheOrdinary Shares are being offered and sold only outside the United States in ‘‘offshore transactions’’within the meaning of, and in reliance on, Regulation S under the US Securities Act (‘‘Regulation S’’).The Ordinary Shares have not been approved or disapproved by the United States Securities andExchange Commission, any state securities commission in the United States or any other regulatoryauthority in the United States, nor have any of the foregoing authorities passed on or endorsed the meritsof the Placing or the accuracy or adequacy of the information contained in this document. Anyrepresentation to the contrary is a criminal offence in the United States.

The distribution of this document outside the UK may be restricted by law. No action has been taken bythe Company, the Selling Shareholders, Rothschild, Peel Hunt or Liberum that would permit a publicoffer of Ordinary Shares in any jurisdiction outside the UK or possession of this document where actionfor that purpose is required. Persons outside the UK who come into possession of this document shouldinform themselves about the distribution of this document in their particular jurisdiction. Failure tocomply with those restrictions may constitute a violation of the securities laws of such jurisdiction.

Investment in the Company carries risk. There can be no assurance that the Company’s strategy will beachieved and investment results may vary substantially over time. Investment in the Company is notintended to be a complete investment programme for any investor. The price of the Ordinary Shares andany income from the Ordinary Shares can go down as well as up and investors may not realise the valueof their initial investment. Prospective Shareholders should carefully consider whether an investment inthe Ordinary Shares is suitable for them in light of their circumstances and financial resources andshould be able and willing to withstand the loss of their entire investment (see further under ‘‘RiskFactors’’ in Part 4 of this document).

Potential investors contemplating an investment in the Ordinary Shares should recognise that theirmarket value can fluctuate and may not always reflect their underlying value. Returns achieved arereliant upon the performance of the Group. No assurance is given, express or implied, that Shareholderswill receive back the amount of their investment in the Ordinary Shares.

Notice to prospective investors in the European Economic Area

In the United Kingdom this document is being distributed to, and is directed only at qualified investors(as defined in the Prospectus Directive (as defined below)) who are (i) persons having professionalexperience in matters relating to investments who fall within the definition of ‘‘investment professionals’’in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as

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amended (the ‘‘Order’’), or (ii) high net worth bodies corporate, unincorporated associations andpartnerships and trustees of high value trusts as described in Article 49(2) of the Order and personswithin the United Kingdom who receive this document (other than persons falling within (i) and (ii) above)should not rely on or act upon this document.

In relation to each member state of the European Economic Area which has implemented theProspectus Directive (each, a ‘‘Relevant Member State’’), no Ordinary Shares have been offered, or willbe offered, pursuant to the Placing to the public in that Relevant Member State prior to the publication ofa prospectus in relation to the Ordinary Shares which has been approved by the competent authority inthat Relevant Member State, all in accordance with the Prospectus Directive, except that offers ofOrdinary Shares to the public may be made at any time under the following exemptions under theProspectus Directive, if they are implemented in that Relevant Member State:

A. to any legal entity which is a qualified investor as defined in the Prospectus Directive;

B. to fewer than 150, or, if the Relevant Member State has not implemented the relevant provision of theProspectus Directive, 100 natural or legal persons (other than ‘‘qualified investors’’ as defined in theProspectus Directive) in such Relevant Member State; or

C. in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Ordinary Shares shall result in a requirement for the publication of aprospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing theProspectus Directive in a Relevant Member State and each person who initially acquires any OrdinaryShares or to whom any offer is made under the Placing will be deemed to have represented,acknowledged and agreed that it is a ‘‘qualified investor’’ within the meaning of Article 2(1)(e) of theProspectus Directive. For the purposes of this provision, the expression ‘‘an offer to the public’’ inrelation to any offer of Ordinary Shares in any Relevant Member State means a communication in anyform and by any means presenting sufficient information on the terms of the offer and any OrdinaryShares to be offered so as to enable an investor to decide to purchase or subscribe for the OrdinaryShares, as the same may be varied in that Relevant Member State by any measure implementing theProspectus Directive in that Relevant Member State and the expression the ‘‘Prospectus Directive’’means Directive 2003/71/EC (as amended), to the extent implemented in the Relevant Member Stateand includes any relevant implementing measure in each Relevant Member State.

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CONTENTS

Page

Part 1 Directors, Secretary and Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Part 2 Information relating to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Part 3 Directors and corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Part 4 Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Part 5 Financial information relating to the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Section A—Accountant’s report on the historical financial information . . . . . . . . . . . . . 34

Section B—Historical financial information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Section C—Unaudited pro forma statement of net assets . . . . . . . . . . . . . . . . . . . . . . . 80

Part 6 Terms and conditions of the Placing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Part 7 Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

Part 8 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

1. General

Prospective investors should rely only on the information in this document when deciding whether toinvest in the Ordinary Shares. No person has been authorised to give any information or to make anyrepresentation in connection with the Placing other than those contained in this document and, if givenor made, such information or representation must not be relied upon as having been authorised by or onbehalf of the Company, the Directors, the Selling Shareholders, Peel Hunt, Rothschild or Liberum. Norepresentation or warranty, express or implied, is made by Peel Hunt, Rothschild, Liberum or any sellingagent as to the accuracy or completeness of such information, and nothing contained in this documentis, or shall be relied upon as, a promise or representation by Peel Hunt, Rothschild, Liberum or anyselling agent as to the past, present or future. Neither the delivery of this document nor any issue or saleof the Placing Shares pursuant to the Placing made under this document shall, under anycircumstances, create any implication that there has been no change in the business or affairs of theCompany or of the Group, taken as a whole, since the date hereof or that the information containedherein is correct as of any time subsequent to the earlier of the date hereof and any earlier specified datewith respect to such information.

The Company will update the information provided in this document by means of a supplement hereto ifa material new factor, material mistake or inaccuracy relating to this document occurs or arises prior toAdmission that may affect the ability of prospective investors to make an informed assessment of thePlacing.

The contents of this document are not to be construed as legal, financial, business or tax advice. Eachprospective investor should consult their own lawyer, financial adviser or tax adviser for legal, financial ortax advice in relation to any subscription or purchase, or proposed subscription or purchase, of anyPlacing Shares. Each prospective investor should consult with such advisers as needed to make itsinvestment decision and to determine whether it is legally permitted to hold Ordinary Shares underapplicable legal, investment or similar laws or regulations. Investors should be aware that they may berequired to bear the financial risks of any investment in Ordinary Shares for an indefinite period of time.

This document is not intended to provide the basis of any credit or other evaluation and should not beconsidered as a recommendation by any of the Company, the Directors, the Selling Shareholders, PeelHunt, Rothschild or Liberum or any of their respective representatives that any recipient of this documentshould subscribe for or purchase any Placing Shares.

Prior to making any decision whether to subscribe for or purchase any Placing Shares, prospectiveinvestors should ensure that they have read this document in its entirety and, in particular, the sectionentitled ‘‘Risk Factors’’, and not just rely on key information or information summarised in it. In making aninvestment decision, prospective investors must rely upon their own examination of the Company andthe terms of this document, including the merits and risks involved. Any decision to subscribe for or topurchase Placing Shares should be based solely on this document.

Investors who subscribe for or purchase Placing Shares in the Placing will be deemed to haveacknowledged that: (i) they have not relied on Peel Hunt, Rothschild or Liberum or any person affiliatedwith them in connection with any investigation of the accuracy of any information contained in thisdocument or their investment decision; (ii) they have relied solely on the information contained in thisdocument; and (iii) no person has been authorised to give any information or to make any representationconcerning the Group or the Ordinary Shares (other than as contained in this document) and, if given ormade, any such other information or representation should not be relied upon as having beenauthorised by the Company, the Directors, the Selling Shareholders, Peel Hunt, Rothschild or Liberum.

None of the Company, the Directors, the Selling Shareholders, Peel Hunt, Rothschild or Liberum nor anyof their representatives is making any representation to any offeree, subscriber or purchaser of thePlacing Shares regarding the legality of an investment by such offeree or purchaser.

In connection with the Placing, Peel Hunt, Liberum and any of their affiliates, acting as an investor for itsor their own account(s), may acquire Ordinary Shares and, in that capacity may retain, purchase, sell,offer to sell or otherwise deal for its or their own account(s) in Ordinary Shares and other securities of theCompany or related investments in connection with the Placing or otherwise. Accordingly, references inthis document to the Ordinary Shares being offered, acquired, placed or otherwise dealt in should beread as including any issue or offer to, or subscription, acquisition, dealing or placing by Peel Hunt,

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Liberum and any of their affiliates acting as an investor for its or their own account(s). Peel Hunt andLiberum do not intend to disclose the extent of any such investment or transactions otherwise than inaccordance with any legal or regulatory obligations to do so.

2. Interpretation

Certain terms used in this document, including capitalised terms and certain technical and other items,are defined in the sections entitled ‘‘Definitions’’ in Part 8.

References to the singular in this document shall include the plural and vice versa where the contextrequires. Any references to time in this document are to London times unless otherwise stated.

3. Presentation of financial information

The financial information in this document has been prepared in accordance with the basis ofpreparation set out in note 1 of Section B of Part 5. The significant IFRS accounting policies applied in thefinancial information of the Group are applied consistently in the audited financial information in thisdocument.

The Company’s financial ‘‘year’’ runs to the last Sunday in May in each year. In common with otherretailers, a day (rather than a date) is used each year to enable more effective year-end procedures andreporting. The financial information included in Part 5 has been prepared in accordance with theInternational Financial Reporting Standards as adopted by the European Union and is covered by theAccountant’s Report included therein.

4. Presentation of operational data

The Group presents certain operational data in this document. Such data as presented in this documentmay not be comparable to similarly titled data presented by other companies in the Group’s industriesand, while the method of calculation may differ across the Group’s industries, the Company believes thatsuch data is important to understanding the Group’s performance from period to period and that suchdata facilitates comparison with the Group’s peers. This operational data is not intended to be asubstitute for any IFRS measures of performance. The operational data is based on the Company’sestimates and is not part of the Group’s financial statements and has not been audited or otherwisereviewed by outside auditors, consultants or experts.

• EBITDA, being earnings before interest, tax, depreciation and amortisation.

• ROCE, being return on capital employed calculated as operating profit after tax divided by averagecapital employed (being fixed assets plus working capital plus non-current assets plusnon-operating assets less excess cash).

Unaudited operational information in relation to the Group is derived from the followingsources: (i) unaudited accounting records for the relevant accounting periods and specified accountingframework presented; (ii) internal financial reporting systems supporting the preparation of financialstatements; and (iii) the Group’s other business operating systems and records.

5. Presentation of market, economic and industry data

Unless the source is otherwise stated, the market, economic and industry data in this documentconstitute the Directors’ estimates, using underlying data from independent third parties. The Groupobtained market data and certain industry forecasts used in this document from internal surveys, reportsand studies, where appropriate, as well as market research, publicly available information, industrypublications and an independent survey undertaken by a third party on behalf of the Company.

The Company confirms that all such data contained in this document has been accurately reproducedand, so far as the Company is aware and able to ascertain, no facts have been omitted that would renderthe reproduced information inaccurate or misleading.

Where third party information has been used in this document, the source of such information has beenidentified.

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6. Rounding

Certain data in this document including percentages and certain amounts relating to financial, statisticaland operating information have been rounded for ease of presentation. Accordingly, figures shown astotals in certain tables may not be the precise sum of the figures that precede them and, accordingly,may not add up to 100 per cent..

7. Currencies

All references in this document to:

• ‘‘Pounds Sterling’’ or ‘‘£’’ are to the lawful currency of the UK;

• ‘‘Euro’’ or ‘‘EUR’’ are to the lawful currency of the member states of the European Union that adoptthe single currency in accordance with the EC Treaty; and

• ‘‘Dollars’’, ‘‘US Dollars’’ or ‘‘$’’ are to the lawful currency of the United States.

Unless otherwise indicated, the financial information contained in this document has been expressed inPounds Sterling.

8. Forward-looking statements

Certain information contained in this document, including any information as to the Group’s strategy,plans or future financial or operating performance, constitutes ‘‘forward-looking statements’’. Theseforward-looking statements may be identified by the use of forward-looking terminology, including theterms ‘‘believes’’, ‘‘estimates’’, ‘‘anticipates’’, ‘‘projects’’, ‘‘expects’’, ‘‘intends’’, ‘‘aims’’, ‘‘plans’’,‘‘predicts’’, ‘‘may’’, ‘‘will’’, ‘‘seeks’’ ‘‘could’’ ‘‘targets’’ ‘‘assumes’’ ‘‘positioned’’ or ‘‘should’’ or, in eachcase, their negative or other variations or comparable terminology, or by discussions of strategy, plans,objectives, goals, future events or intentions. These forward-looking statements include all matters thatare not historical facts. They appear in a number of places throughout this document and includestatements regarding the intentions, beliefs or current expectations of the Directors concerning, amongother things, the Group’s results of operations, financial condition, prospects, growth, strategies and theindustries in which the Group operates.

The important factors set out in the section entitled ‘‘Risk Factors’’ could cause the Group’s actualresults of operations, financial condition and the development of the industries in which the Groupoperates to differ materially from those suggested by the forward-looking statements contained in thisdocument.

By their nature, forward-looking statements involve risks and uncertainties because they relate to eventsand depend on circumstances that may or may not occur in the future or are beyond the Group’s control.Forward-looking statements are not guarantees of future performance. Even if the Group’s actual resultsof operations, financial condition and the development of the industries in which the Group operates areconsistent with the forward-looking statements contained in this document, those results ordevelopments may not be indicative of results or developments in subsequent periods.

Prospective investors are advised to read, in particular, the following parts of this document for a morecomplete discussion of the factors that could affect the Group’s future performance and the industries inwhich the Group operates: Part 2, Part 4 and Part 5. In light of these risks, uncertainties and assumptions,the events described in the forward-looking statements contained in this document may not occur.

The forward-looking statements contained in this document speak only as of the date of this document.The Company, the Directors, the Selling Shareholders, Peel Hunt, Rothschild and Liberum expresslydisclaim any obligation or undertaking to update or revise publicly any forward-looking statements,whether as a result of new information, future events or otherwise, unless required to do so by applicablelaw, the AIM Rules for Companies or the Disclosure and Transparency Rules. Prospective investorsshould specifically consider the factors identified in this document which cause actual results to differfrom those indicated in or suggested by the forward-looking statements in this document before makingan investment decision.

9. No incorporation of website information

The contents of the Company’s or the Group’s websites or any website directly or indirectly linked to theCompany’s or the Group’s websites do not form part of this document and investors should not rely onthem.

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EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of this document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 May 2016Admission effective and commencement of dealings in Ordinary Shares on AIM . . 26 May 2016CREST stock accounts credited for Ordinary Shares in uncertificated form . . . . . . 26 May 2016Despatch of definitive certificates for Ordinary Shares in certificated form . . . . . . . 3 June 2016

If any of the above times or dates should change, the revised times and/or dates will be notified toshareholders by an announcement on a regulatory information service. All times are London times unlessstated otherwise.

PLACING STATISTICS

Placing Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 penceMarket capitalisation of the Company immediately following Admission at the

Placing Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £140 millionNumber of Ordinary Shares in issue prior to the Placing . . . . . . . . . . . . . . . . . . . 80,323,945Number of Placing Shares being issued pursuant to the Placing . . . . . . . . . . . . . 7,175,851Number of Ordinary Shares in issue following the Placing . . . . . . . . . . . . . . . . . . 87,499,796Placing Shares as a percentage of Enlarged Share Capital . . . . . . . . . . . . . . . . . 55.4 per cent.Gross proceeds of the Placing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . £77.5 millionAmount to be raised for the Company in the Placing, before expenses . . . . . . . . £11.5 millionNet Company proceeds of the Placing (after expenses) . . . . . . . . . . . . . . . . . . . £9.4 millionAmount to be raised for the Selling Shareholders in the Placing, before expenses £66.0 millionAmount to be raised for the Selling Shareholders in the Placing (after expenses) . £62.9 millionEPIC/TDIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . JOULISIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GB00BZ059357SEDOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BZ05935DESC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ORD GBP0.01OPOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XLON

4

PART 1

DIRECTORS, SECRETARY AND ADVISERS

Directors: Neil William McCausland, Non-executive ChairmanTom Simon Lee Joule, Founder and Chief Brand OfficerColin Nigel Porter, Chief Executive OfficerMarc Simon Dench, Chief Financial OfficerDavid Anthony Stead, Senior Non-executive DirectorJill Caroline Little, Independent Non-executive Directorall of Joules Building The Point, Rockingham Road, MarketHarborough, Leicestershire, United Kingdom, LE16 7QU

Secretary: Jonathan William Dargie

Registered office: Joules Building, The Point, Rockingham Road, MarketHarborough, Leicestershire, United Kingdom, LE16 7QU

Telephone no: +44 (0) 1858 435 255

Financial Adviser: N M Rothschild & Sons LimitedNew CourtSt Swithin’s LaneLondonEC4N 8AL

Nominated Adviser, Joint Peel Hunt LLPBookrunner and Corporate Broker: Moor House

120 London WallLondonEC2Y 5ET

Joint Bookrunner and Corporate Liberum Capital LimitedBroker: Ropemaker Place

Level 1225 Ropemaker StreetLondonEC2Y 9LY

Solicitors to the Company: Eversheds LLP115 Colmore RowBirminghamB3 3AL

Reporting Accountant to the Deloitte LLPCompany: Four Brindleyplace

BirminghamB1 2HZ

Solicitors to the Joint Ashurst LLPBookrunners: Broadwalk House

5 Appold StreetLondonEC2A 2HA

Registrars: Equiniti LimitedAspect HouseSpencer RoadLancingBN99 6DA

5

PART 2

INFORMATION RELATING TO THE COMPANY

1. Introduction

Joules is a British premium lifestyle brand which designs and sells Joules branded lifestyle clothing,accessories and homeware. Joules has 98 UK and RoI stores (including five concessions and fourfranchises)3, a customer database of approximately two million customers, an established e-commerceplatform and a fast growing international presence. Joules is also a top selling wholesale brand in majorUK retailers such as John Lewis and Next Label and in 2015 won the ‘‘Fashion Retail Business of theYear’’ at the Drapers Awards4.

The Joules brand is at the heart of the business and encompasses values of time-off, heritage,countryside, Britishness, family and fun, which the Directors believe resonate strongly with its large,growing and loyal customer base. The Group’s brand values are reflected in the product designs, whichare recognisable for their distinctive colours, prints, detail and quality. These designs have successfullystretched across a broad range of product categories, from womenswear to homeware, demonstratingthe brand’s relevance to multiple aspects of Joules’ customers’ lives.

The Group operates a balanced multi-channel proposition which encompasses retail (stores ande-commerce), wholesale and other smaller channels such as the British show and event circuit andlicensing. In FY15, store, e-commerce and wholesale revenues represented 46 per cent., 22 per cent.and 27 per cent. of total revenue respectively.

The business has grown rapidly in the UK and internationally. In the UK, revenues have grown 44 percent. to £105.8 million from FY13 to FY15, driven primarily by store roll-out, increased sales withinexisting wholesale accounts and expansion of e-commerce. In the same period, international revenueshave grown 198 per cent. to £10.6 million. The growth of the business has been underpinned bysignificant investments made in the Group’s infrastructure, including supply chain, IT, international salessupport offices and people.

The Group’s strong financial performance since FY13 is illustrated in Figure 1.

Figure 1—Group financial performance

FY15’9mFY13 FY14 FY15 Unaudited FY16’9m

Revenue (£million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77.5 95.6 116.4 89.4 105.7EBITDA (£million)5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 9.1 10.7 9.0 13.4

The Directors believe that the Group’s key strengths can be summarised as follows:

• distinctive brand with authentic heritage;

• unique product designs reflecting the strengths of the brand;

• large, growing and loyal customer base;

• well positioned in the large and growing premium lifestyle market;

• well balanced, multi-channel proposition;

• growing international presence;

• clear growth strategy;

• well invested infrastructure to support growth; and

• attractive financial model and metrics.

3 Store numbers as at 28 February 2016.

4 In the £30 million to £100 million turnover category.

5 EBITDA is stated pre-exceptional costs and (profit)/loss on disposal of fixed assets. These amounts totalled £0.7m in FY13;£1.8m in FY14; £0.6m in FY15; and £nil in FY16’9m.

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2. History and Development

1970s . . . . . . . Ian Joule (Tom Joule’s father) started a clothing business called Joule & Sons

1983 . . . . . . . . Joule & Sons store opened in Market Harborough (in the site of the current Joulesshop)

1989 . . . . . . . . Tom Joule started selling clothing on the country shows and events circuit

1994 . . . . . . . . Tom Joule took over the operation of the Joule & Sons business from his father andamalgamated it with his existing business

1999 . . . . . . . . First Joules branded product was created

2000 . . . . . . . . Market Harborough store officially launched as a ‘‘Joules’’ store, selling Joulesbranded products alongside third party branded products

2001 . . . . . . . . Joules website was launched selling both Joules and third party products

2002 . . . . . . . . Joules wholesale business started

2003 . . . . . . . . Second Joules store opened

2004 . . . . . . . . Joules ‘‘script’’ logo adopted

2005 . . . . . . . . French distributor appointed

2006 . . . . . . . . North American distributor appointed

2008 . . . . . . . . Little Joule brand launched

2010 . . . . . . . . joules.com started selling to international customers with 38 internationaldestinations

2010 . . . . . . . . North America specific website launched

2012 . . . . . . . . German language specific website launched

2012 . . . . . . . . Fiftieth Joules store opened

2013 . . . . . . . . LDC acquired a minority stake in Joules

2014 . . . . . . . . Established physical presence in North America, opened a wholesale showroom andlocal management team

2015 . . . . . . . . Joules won Drapers ‘‘Fashion Retailer of the Year’’ award (in the £30 million to£100 million turnover category)

3. Principal Markets

According to the PwC UK Premium Lifestyle Report (published in February 2016) the premium lifestylesegment of the UK clothing, footwear and accessories market (‘‘UK Clothing Market’’) contains brandscharacterised by strong brand ethos that can be stretched across multiple product categories andchannels, generating customer affinity and loyalty.

PwC sub-divides this premium lifestyle segment into ‘clothing heritage’, ‘single product heritage’ and‘accessories and homeware heritage’. Joules sits within clothing heritage alongside Ted Baker,Superdry, Boden, Crew, Fat Face, White Stuff, Jack Wills, Gant, Tommy Hilfiger and Ralph Lauren. Singleproduct heritage includes brands such as Hunter. Accessories and homeware heritage includes brandssuch as Cath Kidston.

The UK premium lifestyle market was estimated to be worth approximately £2.7 billion in 2014,representing approximately 5.5 per cent. of the UK Clothing Market. From 2009 to 2014, it grew at13.8 per cent. per annum, outperforming the overall UK Clothing Market, which grew at 3.0 per cent. perannum in the same period. PwC estimates the premium lifestyle market will grow at 6.6 per cent. perannum from 2014 to 2020, outperforming the UK Clothing Market, which is expected to grow at 4.4 percent. per annum in the same period. This growth is likely to be driven by a number of factors including:

• ongoing polarisation in the UK clothing market both in terms of price and fashion;

• the shift towards more casual attire, both at work and at more formal events;

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5MAY201614180036

• consumers’ desire for brands to provide a sense of identity and belonging;

• growth of online shopping and social media; and

• new international entrants, as well as smaller UK brands scaling.

Since 2007, Joules has grown its market share of the UK premium lifestyle segment. From 2007 to 2011,Joules grew its market share from 3.3 per cent. to 4.0 per cent. and from 2011 to 2014 Joules has grownits market share from 4.0 per cent. to 5.3 per cent.

4. The Group’s Operations

4.1 Brand

Joules is a premium lifestyle brand which has an authentic heritage and is distinctive for its brand valuesof time-off, heritage, countryside, Britishness, family and fun.

The brand has evolved over recent years and has broadened its appeal whilst maintaining its corevalues. An independent customer survey showed that all customers surveyed recognise the quality ofthe product and the colourful nature of the brand; with newer customers recognising the brand’sassociation with fashion, reflecting the evolution of the brand, whilst maintaining its heritage.

A consumer panel survey showed that brand awareness of Joules has increased from 37 per cent. in2013 to 44 per cent. in 2016, which the Directors believe has been supported by Joules’ store roll-outover the same period. The survey also showed Joules’ conversion from awareness to purchase hasincreased from 24 per cent. to 35 per cent. over the same period. However, relative to other lifestylebrands, brand awareness and conversion is low and therefore the Directors believe there is opportunityto grow awareness further and capitalise on accelerating conversion.

4.2 Products

Joules’ brand and design-led ethos drive its unique and distinctive product designs, which the Directorsbelieve have been vital to the success of the business. Key components of the designs include quality,colour and exclusive prints (e.g. florals, conversationals, ‘‘pops of colour’’ and screen prints) and detail(e.g. detail on buttons, printed linings, fun appliques and sub-brand labelling) that surprise and delightcustomers.

The Joules brand has demonstrated its ability to stretch across multiple categories and as such theGroup has a broad product portfolio, which includes womenswear, menswear, childrenswear, baby,accessories, footwear and homeware. Womenswear is the largest product category, representingapproximately 50 per cent. of FY15 revenues. The FY15 clothing revenue mix by category (all genders) isillustrated in Figure 2.

Figure 2—FY15 clothing revenue mix by category (all genders)6

Womenswear50%

Menswear10%

Kids13%

Baby4%

Accessories12%

Footwear8%

Homeware2%

6 Product mix excludes outlet sales and includes gross franchisee revenue.

8

The Group is not over-reliant on one product style, with the top ten styles representing approximately9 per cent. of FY15 revenues7. Similarly, the Group is not over-reliant on one season, with Spring /Summer and Autumn / Winter representing approximately 47 per cent. and 53 per cent. of FY15revenues8 respectively.

Each product category (e.g. womenswear) is broken down into product types (i.e. outerwear, knitwearand dresses) which in turn offers various styles which are positioned at different price points. Each stylecarries various options (e.g. colour variants, which in turn break down into various SKUs (e.g. sizes)).The Group regularly reviews the number of styles that it offers in each category. In FY14 and FY15, theGroup reduced its number of styles, but increased its number of options, which the Directors believe hasimproved the efficiency of the design process and allowed more time to be re-invested into thedevelopment of new categories.

Product designs and prints are fundamental to the business and as such the Group has investedsignificantly in both the design and print teams across all product categories, with approximately 35employees in the creative team (e.g. print and design). Each product category has its own dedicatedcreative and commercial (e.g. design, buying, merchandising and technical) teams, which aresupported by Joules’ in-house product and channel marketing teams.

There are two primary collections per year: Spring / Summer and Autumn / Winter. Within eachcollection, there are three sub-collections which are released chronologically during the collection’sselling period, keeping the range ‘fresh’ with new products at regular intervals and also typicallyreflecting the changes in the weather climate. A transitional range is also released between eachcollection.

The Directors believe the brand has low fashion risk. Approximately two-thirds of its range each seasoncan be described as ‘core’ designs, which are designs based on, or evolved from, a historicallysuccessful product. The remaining third are new designs which are more aligned to fashion interpretedfor the Joules customer, whilst maintaining the unique colour, print and detail that the brand has becomeknown for. The Directors believe this combination keeps the brand relevant whilst true to its values,attracting new customers whilst maintaining the core loyal customer.

4.3 Product Design

A collection is designed and developed internally over a period of up to 12 months prior to the first sell-inof the collection to wholesale customers (approximately 16 months ahead of sale to end customers).This design and development period includes:

• initial design, print and colour inspiration and overall theme development for the collection includingthe core colour and print themes;

• product designs based on evolution of the core range and addition of new products as describedearlier;

• curation of a capsule of styles across this theme (e.g. a full set of womenswear styles that can beworn together);

• prototype development and refinement;

• sample production; and

• product review and selection.

Following the product selection stage, the Group showcases the collection to wholesale buyers in theUK and internationally and receives orders for the collection. The wholesale order-book closesapproximately four months ahead of the first deliveries of the collection. The wholesale order-book,which in FY13, FY14 and FY15 represented more than 90 per cent. of the total wholesale revenues foreach collection, provides the Group with an early indication of which products are likely to be best sellerswithin the wholesale channel.

Furthermore, early commitment from wholesale buyers also allows the Company to subsequently makean informed decision on the retail range selection. For the Group’s own retail stores and e-commerce

7 Sales include VAT.

8 UK only. Excludes any wholesale mark-downs.

9

channels, it selects an edited product from the range that it offers to its wholesale accounts andcompletes the collections with new products which are designed, developed and sourced on a shortercycle than those for the wholesale channel, which allows delivery of a differentiated offer, capturing latestproduct developments.

4.4 Customers

Joules’ typical customer is female, aged 25-44 years and sits within either the A, B or C1 socio-demographic groups9; however its customer base has evolved in recent years with the Companyattracting more men and younger customers. The majority of these customers are shopping for boththemselves and their family.

The lifestyle imagery of the Joules brand is ideal for social media and as such Joules uses a range ofsocial media (including Facebook, Twitter, Instagram and Pinterest) to generate awareness and traffic,and to inspire customers. Joules outperforms other premium lifestyle brands in terms of social mediaengagement (relative to UK brand sales).

The Directors believe the Group’s large and growing customer database is a key asset to the business.From June 2013 to February 2016, the customer database has doubled in size to approximately 2 millioncustomers. More than 759,000 of these customers are ‘‘Active Customers’’ (being a customer who hastransacted in a Joules retail store or e-commerce channel in the last 12 months), compared toapproximately 529,000 in May 2015.

The Directors believe the growth in the Group’s customer database and loyalty is driven by Joules’effective programme of new customer acquisition, customer retention activities and customerreactivation marketing campaigns. The Group has a data driven and granular view of its customerswhich has enabled it to improve customer metrics including number of Active Customers, orderfrequency, average order value and reactivation rates10.

New additions to the Group’s customer database come from both its retail stores and multiple directmarketing channels (including digital and off-line, pay-per-click, affiliates and e-mail). The cost of newcustomer acquisition is significantly less than the average gross profit contribution from an ActiveCustomer.

4.5 Sales Channels

The Directors believe Joules is truly multi-channel in its operations, and this is reflected by its balancedrevenue mix by channel. The Group has two key channels to market: retail (including retail stores ande-commerce) and wholesale. Other routes to market include the country shows and event circuit andlicensing.

Retail

Retail encompasses the Group’s store and e-commerce channels, as well as smaller channels such asthe British show and event circuit. The financial performance of the Retail channel is illustrated in Figure 3

Figure 3—Retail financial performance


Revenue (£million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.6 68.3 84.4 64.1 73.8EBITDA Contributution11 (£million) . . . . . . . . . . . . . . . . . . 11.1 14.2 17.5 13.3 19.0

9 ONS (UK Office for National Statistics) approximated social grade.

10 For the 12 months to February 2016 compared to the 12 months to February 2011.

11 Segment EBITDA (which excludes central costs).

10

Stores

The Group has a fast growing and diverse store portfolio of 98 UK and RoI stores (including fiveconcessions and four franchises)12. The store portfolio has a broad geographic footprint across the UKand RoI, which the Directors believe reflects the wide appeal of the brand. The financial performance ofthe store channel is illustrated in Figure 4.

Figure 4—Stores financial performance13


Revenue (£million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.7 40.5 53.5 41.4 47.8No. new sites Unaudited . . . . . . . . . . . . . . . . . . . . . . . . . 11 16 13 11 8Net new stores (including closures) Unaudited . . . . . . . . . 10 10 11 9 3No. relocations Unaudited . . . . . . . . . . . . . . . . . . . . . . . . 1 1 3 3 1

Management actively review the portfolio and have closed stores where they believe that there is a betterstore location option or if performance is, or is anticipated to be, below required levels. In FY14, theGroup closed five concessions and one owned store. In FY16 (nine months), the Group closed fivestores, taking advantage of lease break clauses.

The Group has seven store location types, which the Directors believe proves the brand’s accessibility.These location types include:

No. at28 February

Name Description 2016

Metro . . . . . . . . . . . . . Large city shopping destinations with an identified shopper 12population of over 100,000

High Street . . . . . . . . . Busy towns with many high street chains represented 29including department stores. Shopper populations up to100,000

Regional shoppingcentre . . . . . . . . . . . . . Major out of town shopping centres 3Local . . . . . . . . . . . . . Smaller ‘market town’ locations with a mix of high street 20

brands, lifestyle brands and independent storesLifestyle . . . . . . . . . . . Tourist destinations with some established local custom 17

(generally seasonal)Travel . . . . . . . . . . . . . Rail and airport retail 3Outlet . . . . . . . . . . . . . Premium outlet shopping schemes offering discounted 5

product

The Group has established a successful store opening programme, which has delivered consistentlevels of new store openings and attractive store economics. Since FY13, the Group has opened anaverage of 12 new stores per year. In addition to new store openings, the Group has successfullyrelocated stores in locations where the Group considers there to be sufficient demand for a bigger store.From FY13 to FY15, the Group relocated five stores. From June ‘14 to February ‘16 there were 37 newstore openings which cost approximately £7 million and achieved an average payback of approximately12 months. As at 28 February 2016, all stores had positive contribution, a run-rate retail rent cost of£7.5 million per annum and a weighted average lease term of 6 years.

E-commerce

Since 2003, the Group has operated a fully transactional website, www.joules.com, selling its ownbranded products. The Group also operates dedicated websites for the businesses in North Americaand Germany, both of which utilise the UK site infrastructure, but operate in the local currency andlanguage. joules.com offers a ‘Click & Collect’ service for UK customers and supports internationalorders and fulfilment for other countries. The financial performance of the e-commerce channel isillustrated in Figure 5.

12 Store data as at 28 February 2016.

13 Stores excludes franchises and pop-ups.

11

Figure 5—E-commerce financial performance


Revenue (£million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9 23.9 25.8 19.3 22.5

In September 2015, the Group relaunched www.joules.com, improving the richness of the content andthe responsiveness of the site (in particular for mobile platforms). As illustrated in Figure 6, since therelaunch, the traffic and conversion rates have significantly improved, whilst other metrics haveremained fairly constant:

Figure 6—E-commerce metrics (unaudited)

FY13 FY14 FY15 FY15’9m FY16’9m

Traffic (million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.0 15.1 17.4 13.1 15.4Conversion rate (per cent.) . . . . . . . . . . . . . . . . . . . . . 2.4 3.0 2.8 2.8 3.0Average order value (£) . . . . . . . . . . . . . . . . . . . . . . . . 57.04 53.40 54.32 53.66 53.19Units per transaction . . . . . . . . . . . . . . . . . . . . . . . . . . 2.19 2.25 2.21 2.17 2.38

The Group has significantly invested in its e-commerce IT infrastructure, improving the stability,resilience and maximum load capability of the site and further integrating it with the supply chain. Theseinvestments have been further described in paragraph 5.5.

Product return rate was approximately 23 per cent. in the 9 months to February 2016.

Wholesale

The Group has sold to wholesale accounts since 2002. The wholesale channel consists primarily of:

• ‘‘House accounts’’—typically large department stores and high value trade accounts which Joulessells to and manages directly; and

• ‘‘Field accounts’’—generally smaller retailers including independents managed directly by Joulesor by Joules’ sales agents.

In certain international markets Joules will appoint a distributor. The distributor purchases Joules’product on a wholesale basis and then resells to their retailer customers or agents. Currently Joules hastwo non-exclusive distributor relationships, both in North America.

Wholesale is an important channel for the Group and continues to grow, contributing high EBITDAmargin, providing a high degree of revenue visibility (through the order book) and early insight as towhich designs could be successful.

The financial performance of the wholesale channel is illustrated in Figure 7.

Figure 7—Wholesale financial performance


Revenue (£million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.6 26.9 31.6 25.0 31.6EBITDA Contribution14 (£million) . . . . . . . . . . . . . . . . . . . 8.1 7.1 7.5 6.2 7.2

In the UK, the Group has approximately 60 House accounts and 500 Field accounts. Major Houseaccounts include John Lewis and Next Label. In FY15, the top five House accounts contributed 36 percent. of total wholesale revenue.

In Next Label, the Group is consistently ranked the number one brand for womenswear and accessoriesand number two for girlswear (by turnover). Within existing House accounts, the Directors see growthopportunities through expanding both the number of doors and the range of categories sold in eachstore, together with increasing the number of products offered within each category. For example, inJohn Lewis, Joules has expanded from one product category in 2008 to 13 as at 28 February 2016.

Wholesale is the primary model for developing the brand in international markets such as North Americaand Germany. In North America, Joules has 16 House accounts including Von Maur, Nordstrom, Dillardsand Amazon (which are managed by Joules’ New York based team) and approximately 400 Fieldaccounts (which are managed through distributors and agents). In Germany, Joules has 4 Houseaccounts including Otto and Zalando and approximately 275 Field accounts managed through agents.

14 Segment EBITDA (which excludes central costs).

12

4.6 International

The Group has fast growing international businesses in North America and Germany.

The Directors believe the success of Joules in these territories is primarily due to the British brandheritage, product quality and designs resonating strongly with local customers and the Group’sdisciplined, focused and low risk approach to market entry. This approach involves:

• territory selection based on market size, customer demographics, ease of operation and Directorconfidence;

• focusing on selling to wholesale accounts as a low capital intensive method to obtain distributionand raise awareness of the brand;

• leading with Joules’ iconic British Wellington Boots;

• further building the brand and product portfolio through increasing the number of productcategories stocked (with adjacent clothing categories to footwear, such as outerwear) with existingwholesale customers and then introducing these customers to the full range over time;

• increasing distribution with existing House accounts, online and through new doors;

• developing new House accounts; and

• establishing a local website, with minimal marketing spend, to support the brand and be ready toreceive orders as the brand grows.

The North American business started in 2006 with a distributor relationship, which was followed by awebsite launch in 2010 and the establishment of Joules’ own sales office and trade show room in 2014selling directly to House accounts. Orders from wholesale customers and distributors within NorthAmerica are fulfilled from a third party distribution centre in New Jersey.

The development of the Von Maur and Nordstrom House accounts over recent seasons illustrates theGroup’s market development strategy:

• Von Maur: Launched boyswear into a selected number of stores in Autumn/Winter ‘13, thenexpanded into womenswear, girlswear, babywear & footwear in Spring/Summer ‘14. Throughout2014 and 2015 Von Maur placed selected Joules products into all 33 of their stores. Women’snightwear and outerwear are being introduced into selected stores for Autumn/Winter ‘16.

• Nordstrom: Launched with limited range of Wellington Boots (online only in Autumn/Winter ‘14).Expanded to wider range of Wellington boots plus launching accessories in 80 department storesduring Autumn/Winter ‘16.

The Group refocused on Germany in 2012, its historic distribution agreement having been terminatedand wholesale accounts brought in-house. In 2012, Joules established its first wholesale House account(Zalando), followed by the local website launch in the same year. House accounts now also include Ottoand Amazon.de among others. Germany is supported by a country sales manager and a network ofagents. Order fulfilment is from the Group’s UK distribution centre.

International revenues have grown rapidly as illustrated in Figure 8.

Figure 8—International financial performance


Revenue (£million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 5.6 10.6 7.9 10.6Percentage of Total Revenue . . . . . . . . . . . . . . . . . . . . . . 4.6 5.8 9.1 8.8 10.0

5. The Group’s Growth Strategy

The Group’s strategy is to increase customer value, continue to roll-out stores in the UK and RoI, growthe international business and extend its product offering within existing and new categories, leveragingexisting teams and licensing.

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5.1 Increase customer value

The Group intends to continue to grow its customer database, increase the number of Active Customersand develop the value of the average Active Customer through increased frequency of transactionsand/or spend per transaction. Initiatives to help achieve this include:

• customer acquisition campaigns via existing and new channels;

• personalising communications and website content;

• new customer on-boarding campaigns;

• retention and reactivation activities; and

• targeted communications to retain and develop higher value customers.

The Directors believe that the Group’s customer database, combined with enhanced customer insightand personalisation capabilities, provide the opportunity to better understand and present more relevantcommunications and personalised offers to its customers in a consistent way across Retail channels,which will provide Joules with a sustainable competitive advantage.

The Directors believe there is clear opportunity to increase customer spend. A recent independentconsumer survey conducted by PwC showed that Joules’ share of wallet is below the majority of itscompetitors, given its more edited range within product categories. Furthermore, the survey showed thatJoules customers intend to spend more with Joules in coming years, in particular newer customers, andthat longer tenure Joules customers shop across more categories, spend more per year and transactmore frequently.

5.2 UK and RoI store roll-out

The Directors are targeting a net 10 to 12 new store openings per annum over the medium term. Forexisting sites where more space is required, the Directors will consider relocations and extensions.

New store openings follow a rigorous and structured appraisal process. New locations are assessedagainst a number of investment hurdles including being able to deliver a minimum level of contributionand achieve payback (of initial capital expenditure, working capital and opening costs totallingapproximately £250,000 to £300,000) within a 24 month timeframe.

The Group has over 100 target locations, in addition to existing sites, where the Directors believe that itcould successfully open a Joules store, subject to the availability of an appropriate site on appropriateterms. These locations are across a mix of store location types (e.g. Metro, Local, Lifestyle) andgeographies. Target locations have been identified following a detailed profiling exercise includingdemographic data, local total shopper and ‘Joules shopper’ populations overlaid with data from existingJoules e-commerce transactions. Between 10 and 20 of these opportunities are actively under appraisalat any time.

The Directors forecast the business to have 96 stores plus four franchise stores at the end of FY16. TheDirectors are confident of opening 12 stores in FY17.

5.3 International expansion

International expansion is a priority for the Group. The Directors believe that the Joules brand andproducts resonate well in international markets and the new markets provide an opportunity to furtherleverage the investment in the central creative and commercial teams. The Group’s internationalstrategy is to:

• continue to focus on developing North America and Germany in the medium term (no new marketshave been assumed in the medium term business plan, although the Group continues to assesspotential opportunities including the Middle East, Japan and China);

• continue to expand through wholesale accounts and e-commerce channels, with no medium termplans for own retail stores (although the Group will continue to assess the potential for stores);

• deepen relationships with existing House accounts to grow the number of doors and categories (aswas successfully achieved with major UK wholesale House accounts such as John Lewis);

• extend footwear reach through specialist footwear agents;

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• support specialist agents to grow Field accounts;

• continue to invest in trade shows to build brand awareness amongst wholesale customers;

• support wholesale customers with limited additional marketing spend—primarily being throughpublic relations activities and digital or social media marketing; and

• add new accounts for Autumn/Winter ‘16.

The Directors are targeting 20 per cent. of Group revenue from international markets in the medium term,up from approximately 10 per cent. of total Group revenue delivered in the nine months to the end ofFebruary 2016.

5.4 Product extension

Joules is a premium lifestyle brand that delivers a product proposition for the whole family and extendsinto their home. As a lifestyle brand, the product offer naturally extends to meet many of the lifestyleneeds of Joules’ customers. As such, Joules has had success extending its product offer within existingcategories and into new categories. The Group has had particular success in expanding withincategories such as womenswear (with sub-categories such as outerwear, knitwear and nightwear), aswell as with other categories including accessories, baby and homeware. The Group has also hadsuccess licensing products such as toiletries, bed-linen and eyewear. The Group intends to continueexpanding its product offering within its existing categories and enter new categories.

5.5 Supply chain, IT infrastructure and FX policy

Suppliers

Currently, Joules directly sources approximately 90 per cent. of its product SKUs from China. In FY15,the number one supplier by value comprised approximately 16 per cent. of total product purchase value,whilst the top ten suppliers comprised approximately 54 per cent of product purchase value.

In China, Joules manages its supply chain through its own sourcing and quality control team based inShanghai. The Shanghai office sources, manages and implements quality assurance measures inrespect of all Joules’ suppliers in China with approximately 60 per cent. sourced direct from themanufacturer and the remainder through a local sourcing agent that has worked with Joules for morethan 13 years.

The Company has a code of conduct that suppliers are required to sign. Suppliers are evaluated againsta range of pre-defined criteria including ethical and quality. Ongoing supplier audits are carried out by athird party on behalf of the Company.

Distribution

The Group operates its own UK distribution centre located in Corby, Northamptonshire with a capacity ofapproximately 200,000 sq. ft. The warehouse operations are supported through the use of a warehousemanagement system. The Directors believe that this warehouse has the capacity to support thebusiness plan growth anticipated over the medium term. The Group has in place business continuityplans in respect of this distribution centre.

All retail (including e-commerce) and wholesale account orders, except for North America wholesaleorders, are fulfilled from this warehouse. The Group uses a 3rd party distribution centre in New Jersey, USto fulfil North America wholesale account orders.

Information Technology systems

The Group has invested significantly in its IT infrastructure over the last four years, adopting industryleading platforms and software such as Red Prairie (warehouse management) and SAP Hybris (websiteand e-commerce), in addition to upgrading its store EPOS system and implementing a business-widedata-warehouse and reporting suite.

The Group has completed the first phase of migrating its ERP system to Microsoft Dynamics AX, with thesystem fully operational, supporting Joules’ North American wholesale channel. The Directors expectthat the full ERP migration to Microsoft Dynamics AX will occur in FY18 after an appropriate period oftesting and training has been completed.

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Foreign exchange

The majority of Joules’ product purchases are transacted in US Dollars. Joules forecasts its productpurchase requirements for a minimum of two seasons or 12 months in advance. Joules seeks to hedgeagainst movement in its forecast US Dollar requirements that result from changes in the exchange ratebetween the British Pound (Sterling) and the US Dollar. Joules hedges this foreign exchange riskthrough obtaining forward contracts up to 12 months ahead of the requirement.

6. Directors and Employees

Brief biographies of the Directors are set out below. Paragraph 7 of Part 7 of this document containsfurther details of current and past directorships and certain other important information regarding theDirectors.

Founder and Chief Brand Officer—Tom Simon Lee Joule

Tom Joule founded Joules in 1989. Tom learnt his trade selling branded country clothing at shows andevents around Britain. The Joules brand was born after Tom’s entrepreneurial spirit led him to createpractical, stylish high-quality products to reflect the colourful personalities of those who love theoutdoors. Between 2010 and 2015, Tom has featured three times in Drapers 100 Most Influential Peoplein Fashion Retail. In 2015, he was a finalist in the Fashion Entrepreneur of the Year category at the GreatBritish Entrepreneur Awards. In his current role, Tom is focused on developing the Joules brand, productand creative direction.

Chief Executive Officer—Colin Nigel Porter

Colin joined Joules in 2010 from Crombie, having been Joint Managing Director. Prior to this Colin spentover 10 years at House of Fraser, becoming Commercial Director on the main board. Colin has also helda number of senior positions within the retail sector including positions at ETAM, Laura Ashley andArcadia.

Chief Financial Officer—Marc Simon Dench

Marc joined Joules in 2015 from Walgreens Boots Alliance, having been Chief Financial Officer of itsInternational Retail & Global Consumer Brands division. Marc has previously held a number of seniorfinancial and corporate development positions at Alliance Boots, Homeserve, Experian and Freeserve(Wanadoo/Orange). Whilst at Freeserve, he was involved in the successful IPO process and then thesubsequent merger with Wanadoo. Marc is a Chartered Accountant and has an MBA from SauderBusiness School.

Non-Executive Chairman—Neil William McCausland

Neil joined Joules in 2013. He also chairs Karen Millen, Create Fertility and Skin Ltd—which all haveprivate equity backing. For the four years until September 2015, Neil was the Senior IndependentDirector of the Post Office Limited, where he chaired the remuneration committee and served on both theaudit and nominations committee. Before that he was a non-executive Director of Nuffield Health. Overthe last 15 years he has chaired a number of companies, including six years as Chairman of Kurt Geiger.

Senior Non-Executive Director—David Anthony Stead

David joined the Board in April 2016. David is currently on the board of Card Factory plc as anIndependent Non-Executive Director. He has over 15 years’ experience as a director of companies in theUK retail sector. David was the Finance Director of Dunelm Group plc for 12 years from 2003 to 2015.Prior to this, David served as Finance Director for Boots The Chemists and Boots HealthcareInternational between 1991 and 2003. David is a chartered accountant, having spent the early part of hiscareer with KPMG.

Independent Non-Executive Director—Jill Caroline Little

Jill joined the Board in April 2016. Jill is currently a Senior Non-Executive Director of Shaftesbury plc. Jillhas spent the majority of her career in the retail industry, firstly at Simpsons of Piccadilly and then at theJohn Lewis Partnership (1975 to 2012). Jill became Merchandise Director on the board of John Lewis,moving roles to become the Strategy and International Director where she was responsible for

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developing the long term strategy and international expansion of John Lewis. Thereafter Jill becameBusiness and Development Director of the John Lewis Partnership.

The Board is supported by experienced Senior Managers who all have significant retail experience andhave been with Joules for several years. The team includes:

• Kara Groves (Chief Commercial Officer)

Kara joined Joules in 2011 from Blacks Leisure Group, having been Category Director of clothing.Prior to her role at Blacks Leisure Group, Kara held senior commercial and merchandising positionsat a range of retail brands, including Woolworths Group PLC, Etam, River Island and Topshop.

• Chloe Ward (Creative Director)

Chloe joined Joules as Creative Director in 2005 and has built the design team from scratch to itscurrent form. Within her role, Chloe directs and oversees the creative vision for photography and thevisual aspect of the online and retail stores. Prior to joining Joules, Chloe was a Senior Designer atJasper Conran.

• Ronny Helvey (Marketing Director)

Ronny was appointed Marketing Director in 2009. Prior to this he was Marketing and e-CommerceDirector at Virgin Media. Ronny’s career in marketing spans more than 15 years, and he has heldsenior positions at a number of well-known retail brands, including Principles, Harrods and TheBody Shop International.

• Sallie Barnet (HR Director)

Sallie joined Joules in 2012 bringing more than 20 years’ experience in HR. Prior to joining Joules,Sallie was HR Director at Claire’s Europe, and previous to that was Head of HR for Gap Inc.

• Ralph Percival (E-Commerce Director)

Ralph was appointed Joules’ E-Commerce Director in October 2014. Throughout his career, he hasworked for a number of well-known retail brands, including Barbour, Blacks Leisure Group andluxury cycle apparel retailer Rapha.

• Penny Parry (Wholesale (UK & Europe) Director)

Penny was appointed European Wholesale Director in July 2015, having previously held the role ofHead of Wholesale UK. Penny joined Joules in 2010 as a Senior Merchandiser. She previouslyworked at Next Group PLC and Bonmarche.

• Andrea Gray (Retail & Shows Director)

Andrea joined Joules as Retail and Shows Director in 2012, following almost 10 years at MonsoonAccessorize as Senior Retail Controller. She has previously held roles at Etam, Arcadia Group andWarehouse.

Joules has implemented a learning and development programme across its business with a focus ondeveloping the following employee skills:

• Store managers: team motivation and management, customer service and selling skills; and

• Head office managers and team leaders: leadership, personal development and team managementskills.

In addition, Joules encourages and supports the technical training and professional qualifications of itsemployees in specific functional areas and has a successful and established history of graduaterecruitment in the creative, commercial and finance areas.

The culture of Joules largely reflects its brand values. Leadership at Joules embodies attributes of vision,inspiration and courage among others, whilst the broader corporate values emphasise passion,originality, fun and attention to detail.

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7. Summary Financial Information

The financial information set out below has been extracted without material adjustment from thehistorical financial information on the Group for FY13, FY14 and FY15 and the audited nine month interimfinancial information on the Group for the 39 week period ended 28 February 2016, with comparableunaudited financial information for the 39 week period ended 22 February 2015.

Summary P&L

(£m) FY13 FY14 FY15 FY15’9m FY16’9m

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77.5 95.6 116.4 89.4 105.7YoY growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.0% 23.3% 21.8% n/a 18.2%Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . 41.9 52.5 62.0 47.2 56.5% Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.0% 55.0% 53.3% 52.8% 53.5%Operating Expenditure . . . . . . . . . . . . . . . . . . 34.5 43.5 51.3 38.2 43.1% Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.5% 45.5% 44.1% 42.7% 40.8%EBITDA15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 9.1 10.7 9.0 13.4% Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5% 9.5% 9.2% 10.1% 12.7%YoY growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.2% 18.2% n/a 48.4%Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . (2.3) (3.3) (4.8) (3.5) (4.0)Exceptionals . . . . . . . . . . . . . . . . . . . . . . . . . . (0.9) (1.3) (0.1) 0.0 0.0Profit / (loss) on disposal . . . . . . . . . . . . . . . . . 0.2 (0.5) (0.5) 0.0 0.0EBIT16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 4.0 5.3 5.5 9.4

KPIs

(£m) FY13 FY14 FY15 FY15’9m FY16’9m

FINANCIAL

Revenue per channelStores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.7 40.5 53.5 41.4 47.8E-commerce . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9 23.9 25.8 19.3 22.5Wholesale . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.6 26.9 31.6 25.0 31.6

Profitability and returnsGross margin % . . . . . . . . . . . . . . . . . . . . . . . . 54.0% 55.0% 53.3% 52.8% 53.5%EBITDA % . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5% 9.5% 9.2% 10.1% 12.7%ROCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . n/a 23.9% 27.3% 27.7% 36.2%

OtherInternational revenue % Group revenue . . . . . . . 4.6% 5.8% 9.1% 8.8% 10.0%

OPERATIONALActive customers . . . . . . . . . . . . . . . . . . . . . . . n/a 508,149 529,191 520,123 758,902Number of stores17 . . . . . . . . . . . . . . . . . . . . . . 70 80 91 89 94Total selling space—sq. ft. . . . . . . . . . . . . . . . . 69,784 84,840 100,315 98,316 107,315

Working capital and sales seasonality

The Group has a working capital cash conversion cycle of approximately 65 days. The Retail andWholesale channels have different working capital cash conversion cycles. Retail typically has higherinventory days and nil debtor days, whilst Wholesale typically has lower inventory days and higherdebtor days. The working capital cash conversion cycle is also impacted by the Group’s salesseasonality, which has peak trading months in July and December, and lows in May and June. TheGroup has a revolving credit facility to fund seasonal working capital requirements.

15 EBITDA is stated pre-exceptional costs and (profit)/loss on disposal of fixed assets. These amounts totalled £0.7m in FY13;£1.8m in FY14; £0.6m in FY15; and £nil in FY16’9m.

16 EBIT is stated pre-holding company central administrative expenses.

17 Excluding franchises, international concessions and pop-ups.

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Overheads

The Group’s overheads have grown in line with the overall business as the Group has invested in its costbase to support its growth. From FY13 to FY15, overheads grew 49 per cent. from £34.5 million to£51.3 million. Head office salaries, store rent and store wages are the largest overhead costs,comprising 30 per cent., 17 per cent. and 15 per cent. respectively of total overheads in FY15. Marketingspend (including photography) comprised approximately 10 per cent. of total overheads in FY15.

Capex overview

Growth capex is primarily the fit-out of new stores and IT systems developments. Maintenance capex isprimarily repairs and maintenance to the existing store portfolio, head office and distribution centres, aswell as modifications to existing IT systems. Growth capex for FY13, FY14 and FY15 was £4.1 million,£5.3 million and £7.2 million respectively. Maintenance capex for FY13, FY14 and FY15 was £0.9 million,£2.5 million and £1.6 million respectively (including a one-off expenditure of approximately £0.9 million inthe infrastructure of the UK distribution centre in FY14).

8. Current trading and prospects

The business has traded in line with expectations in the period since 28 February 2016.

The Board believes this strong performance is set to continue as the Joules brand continues to growboth in the UK and in international markets.

9. Reasons for the Admission and use of proceeds

The Directors believe that Admission will position the Group for its next stage of development, includingfurther raising the profile of the Group, assisting in attracting and retaining employees throughappropriate incentive arrangements and providing it with a structure for future growth.

Admission will also enable the Selling Shareholders to realise, in part, their investment in the Company.

10. Admission to trading and dealing arrangements

Application has been made for Admission in respect of the Ordinary Shares. It is expected thatAdmission will become effective and dealings in the Ordinary Shares will commence on 26 May 2016.

No application is being made for the Ordinary Shares to be admitted to listing or to be dealt in on anyother exchange.

11. Lock-up arrangements

Immediately following Admission, the Directors will be interested, in aggregate, in 31,011,102 OrdinaryShares representing approximately 35.4 per cent. of the Enlarged Share Capital. Under the terms of thePlacing Agreement, which is described more fully in paragraph 11 of Part 7 of this document, theDirectors and certain Selling Shareholders have undertaken that, subject to certain exceptions, they willnot sell or otherwise dispose of, or agree to dispose of, any of their respective interests in the OrdinaryShares held immediately following Admission at any time prior to 360 days from Admission (in the caseof the Directors) and 180 days from Admission (in the case of Selling Shareholders).

12. Relationship agreement

The Company entered into the Relationship Agreement with Tom Simon Lee Joule (‘‘Tom Joule’’) on20 May 2016, which includes, amongst other things, the provisions intended to ensure that the Companywill, following Admission, be able to operate independently of Tom Joule for as long as he and his relatedparties (as such term is defined in the AIM Rules for Companies) together hold not less than 30% of thevoting rights attaching to the Ordinary Shares. Amongst other things, the Relationship Agreementprovides that Tom Joule, as far as he is able to as a Shareholder shall, conditional upon Admission:

• procure that the Group is managed for the benefit of the Shareholders as a whole andindependently of Tom Joule;

• procure that all arrangements between any member of the Group and Tom Joule be on an arm’slength basis and on normal commercial terms;

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• not take any action that could reasonably be expected to have the effect of preventing the Companyfrom complying with its obligations under the AIM Rules;

• not propose or procure the proposal of a resolution intended to circumvent the proper application ofthe AIM Rules;

• procure that the Remuneration Committee, Nomination Committee and Audit Committee will becomprised of not less than two independent directors and chaired by an independent director; and

• procure that the Company will be managed, so for as is practicable, in accordance with the UKCorporate Governance Code.

Under the Relationship Agreement, Tom Joule will have the power to appoint one Director to theCompany’s Board and will replace that Director as he sees fit (subject to consultation with theCompany’s nominated advisor at that time). Tom Joule will further undertake to the Company that whilsthe holds 10% or more of the voting rights attaching to the Ordinary Shares he will not solicit away fromthe employment of the Group a specified list of restricted employees.

13. Dividend policy

The Directors intend to pursue a progressive dividend policy, subject to the availability of sufficientdistributable profits and the need to retain sufficient earnings for the future growth of the Group. It iscurrently intended that, in the absence of unforeseen circumstances, the first dividend followingAdmission will be paid in respect of FY17.

The ability of the Company to pay dividends is dependent on a number of factors and there is noassurance that the Company will pay dividends or, if a dividend is paid, what the amount of suchdividend would be. See the section headed ‘‘Risk Factors’’ for further details. Consequently,Shareholders may not receive any return on their investment unless they sell their OrdinaryShares for a price greater than that which they paid for them.

14. Details of the Placing and dilution

The Placing comprises the placing by Peel Hunt and Liberum, as agents for the Company and SellingShareholders, of 48,437,500 Placing Shares at the Placing Price with certain institutional and otherinvestors. The Placing will raise approximately £9.4 million (net of expenses) for the Company andapproximately £62.9 million (net of expenses) for the Selling Shareholders. The Placing Shares willrepresent approximately 55.4 per cent. of the Enlarged Share Capital. The Placing is being underwrittenby Peel Hunt and Liberum.

Marc Simon Dench, David Anthony Stead and Jill Caroline Little have each agreed to subscribe for62,500, 31,250 and 15,625 Placing Shares at at the Placing Price in the Placing respectively.

The Board and the Group’s Senior Managers will, at Admission, hold approximately 37.7 per cent. of theCompany’s Enlarged Share Capital. Further details of the Directors’ and Senior Managers’ interests areset out in paragraph 7 of Part 7 of this document.

The Placing is conditional, inter alia, on:

• the Placing Agreement becoming unconditional and not having terminated in accordance with itsterms prior to Admission; and

• Admission occurring by no later than 26 May 2016 (or such later date as Peel Hunt and Liberum andthe Company may agree, being no later than 31 December 2016).

The Placing Shares will be issued fully paid and will, on issue, rank pari passu with the all other issuedOrdinary Shares, including the right to receive, in full, all dividends and other distributions thereafterdeclared, made or paid after the date of Admission.

Further details of the Placing Agreement are set out in paragraph 11 of Part 7 of this document.

15. Applicability of the Code and concert parties

The City Code applies to the Company. Under the City Code, if an acquisition of interests in shares wereto increase the aggregate holding of the acquirer and its concert parties to interests in shares carrying30 per cent. or more of the voting rights in the Company, the acquirer and, depending on circumstances,

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its concert parties would be required (except with the consent of the Panel) to make a cash offer for theoutstanding shares in the Company at a price not less than the highest price paid for interests in sharesby the acquirer or its concert parties during the previous 12 months. This requirement would also betriggered by any acquisition of interests in shares by a person holding (together with its concert parties)shares carrying between 30 per cent. and 50 per cent. of the voting rights in the Company if the effect ofsuch acquisition were to increase that person’s percentage of the total voting rights in the Company.

Any person who, together with its concert parties, holds more than 50 per cent. of a company’s votingrights, is not normally subject to such a requirement as a result of any acquisition by such person or itsconcert parties of any further shares carrying voting rights in the company, save that the Panel will regardas giving rise to an obligation to make an offer the acquisition by a single member of a concert party ofshares sufficient to increase its individual holding to 30 per cent. or more of a company’s voting rights, or,if it already holds more than 30 per cent. but less than 50 per cent., an acquisition which increases itsholding of shares carrying voting rights in that company.

16. CREST

CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by acertificate and transferred otherwise than by a written instrument. The Articles permit the holding ofShares under the CREST system. Accordingly, settlement of transactions in the Ordinary Sharesfollowing Admission may continue to take place within CREST if any Shareholder so wishes. However,CREST is a voluntary system and Shareholders who wish to receive and retain share certificates are ableto do so.

17. Taxation

Your attention is drawn to the information regarding taxation which is set out in paragraph 13 of Part 7 ofthis document. That information is intended only as a general guide to the current tax position under UKtaxation law. If you are in any doubt as to your tax position, you should contact your independentprofessional adviser.

18. Further information

Your attention is also drawn to the remaining parts of this document, which contain further information onthe Group.

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PART 3

DIRECTORS AND CORPORATE GOVERNANCE

1. Directors

The Board comprises the following persons:

• Neil William McCausland, Non-executive Chairman, aged 56;

• Tom Simon Lee Joule, Founder and Chief Brand Officer, aged 48;

• Colin Nigel Porter, Chief Executive Officer, aged 54;

• Marc Simon Dench, Chief Financial Officer, aged 45;

• David Anthony Stead, Senior Non-executive Director, aged 58; and

• Jill Caroline Little, Independent Non-executive Director, aged 62.

2. Corporate governance

The Directors intend to implement appropriate measures (having regard to the current stage ofdevelopment of the Company) to comply, so far as practicable, with the UK Corporate GovernanceCode.

3. Board committees

The Board has established three committees: the Remuneration, Audit and Nomination Committees,each with written terms of reference. If the need should arise, the Board may set up additionalcommittees, as appropriate.

3.1 Remuneration Committee

The Remuneration Committee is required to comprise a minimum of two independent non-executivedirectors. As at Admission, the Remuneration Committee comprises three independent non-executivedirectors of the Company. The members of the Committee are:

• Jill Caroline Little (Chair);

• Neil William McCausland; and

• David Anthony Stead.

The Committee meets at least once per year and agrees further meetings at its discretion. The Chairmanof the Committee has the power to call a meeting.

The Chairman of the Committee is appointed by the Board on the recommendation of the nominationcommittee. The quorum for the Committee is two and in the absence of the Chairman, the othermembers present shall choose one of them to chair the meeting. The Company Secretary is thesecretary of the Committee.

The duties of the Committee are to:

• determine and agree with the Board the framework or broad policy for the remuneration of thechairman, executive directors and any employees that the Board delegates to it;

• within the terms of the agreed policy, determine individual remuneration packages includingbonuses, incentive payments, share options, pension arrangements and any other benefits;

• determine the contractual terms on termination and individual termination payments, ensuring thatthe duty of the individual to mitigate loss is fully recognised;

• in determining individual packages and arrangements, give due regard to the comments andrecommendations of the UK Corporate Governance Code and the AIM Rules for Companies;

• be told of and be given the chance to advise on any major changes in employee benefit structures inthe Company;

• recommend and monitor the level and structure of remuneration for senior managers below Boardlevel as determined;

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• agree the policy for authorising claims for expenses from the Chief Executive Officer and from theChairman of the Board; and

• recommend an annual report for the board to put to shareholders on executive remunerationcompliant with relevant legal and regulatory provisions.

The Committee is authorised by the Board to:

• seek any information it requires from any employee of the Company in order to perform its duties;

• be responsible for establishing the selection criteria and then for selecting, appointing and settingthe terms of reference for any remuneration consultants providing advice to the Committee, atCompany’s expense; and

• obtain, at the Company’s expense, outside legal or other professional advice where necessary inthe course of its activities.

3.2 Audit Committee

The Group employs rigorous procedures to ensure the continued independence of the external auditor.The Audit Committee reviews each year the arrangements for safeguarding auditor objectivity andindependence. The Audit Committee is required to comprise at least two members, all of whom must benon-executive directors.

The members of the Audit Committee are:

• David Anthony Stead (Chair)—Chartered Accountant (ICAEW);

• Neil William McCausland; and

• Jill Caroline Little.

The Audit Committee reviews the scope, results and cost-effectiveness of internal and external audit,and has delegated power from the Board to exercise the power from shareholders to agree fees forexternal auditors. The Audit Committee is responsible for satisfying itself on the independence of internalauditors and on the independence and objectivity of external auditors. The Committee reviews theoperation of internal controls and, from the coming year, will report to the Board on the annual review ofthe internal control and risk management.

3.3 Nomination Committee

The Nomination Committee is required to comprise at least two members, one of which must be anon-executive director. The Nomination Committee comprises the following members:

• Neil William McCausland (Chair);

• David Anthony Stead; and

• Jill Caroline Little.

A majority of Nomination Committee members are independent non-executive directors.

The function of the Nomination Committee is to provide a formal, rigorous and transparent procedure forthe appointment of new directors to the Board. In carrying out its duties, the Nomination Committee isprimarily responsible for:

• identifying and nominating candidates to fill board vacancies;

• evaluating the structure and composition of the board with regard to the balance of skills,knowledge and experience and making recommendations accordingly;

• reviewing the time requirements of non-executive directors;

• giving full consideration to succession planning; and

• reviewing the leadership of the Group.

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4. Share Options

In order to provide suitable employee incentives and to reflect the commitment of certain employees tothe Company’s business to date, the Company has established the Share Option Schemes, furtherdetails of which are set out in paragraph 6 of Part 7 of this document.

5. Share dealing code

The Company has adopted, with effect from Admission, a code on dealings in relation to the securities ofthe Group. The Company shall require the Directors and other relevant employees of the Group tocomply with this code and shall take all reasonable and proper steps to secure their compliance.

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PART 4

RISK FACTORS

Prospective investors should carefully consider all the information in this document including the risksdescribed below. The Directors have identified these risks as the material risks, but additional risks anduncertainties not presently known to the Directors, or that the Board considers immaterial may alsoadversely affect the Group’s business, results of operations or financial condition. If any or acombination of the following risks materialise, the Group’s business, financial condition, operationalperformance and share price could be materially adversely affected. In that case, the trading price of theOrdinary Shares could decline and potential investors could lose all of their investment.

An investment in the Company may not be suitable for all recipients of this document. Accordingly,investors are strongly advised to consult an independent adviser authorised under FSMA whospecialises in advising upon investments.

For the avoidance of doubt none of the risk factors detailed below seeks to qualify the working capitalstatement set out in paragraph 15 of Part 7 of this document.

GENERAL RISKS

An investment in the Company is only suitable for investors capable of evaluating the risks and merits ofsuch investment and who have sufficient resources to bear any loss which may result from theinvestment. A prospective investor should consider with care whether an investment in the Company issuitable for him/her in the light of his/her personal circumstances and the financial resources available tohim/her.

Investment in the Company should not be regarded as short-term in nature. There can be no guaranteethat any appreciation in the value of the Company’s investments will occur or that the investmentobjectives of the Company will be achieved. Investors may not get back the full amount initially invested.

The prices of shares and the income derived from them can go down as well as up. Past performance isnot necessarily a guide to the future.

Changes in economic conditions, such as interest rates and rates of inflation, industry conditions,competition, tax and other laws and regulations, the occurrence of certain political and diplomatic eventsand other factors can substantially and adversely affect equity investments and the Group’s prospects.

RISKS RELATING TO THE ORDINARY SHARES

Liquidity and possible price volatility

Following Admission, the market price of the Ordinary Shares may be subject to significant fluctuationsin response to many factors, including variations in the results of the Group, divergence in financialresults from analysts’ expectations, changes in earnings estimates by analysts, general economicconditions, legislative changes in the Group’s sector and other events and factors outside of the Group’scontrol.

In addition, stock market prices may be volatile and may go down as well as up. The price at whichinvestors may dispose of their Ordinary Shares in the Group may be influenced by a number of factors,some of which may pertain to the Group and others of which are extraneous. These factors could includethe performance of the Group’s business, changes in the values of its investments, changes in theamount of distributions or dividends, changes in the Group’s operating expenses, variations in and thetiming of the recognition of realised and unrealised gains or losses, the degree to which the Groupencounters competition, large purchases or sales of Ordinary Shares, liquidity (or absence of liquidity) inthe Ordinary Shares, legislative or regulatory or taxation changes and general economic conditions.

The value of the Ordinary Shares will therefore fluctuate and may not reflect their underlying value.Investors may realise less than the original amount invested. The Ordinary Shares will not be listed onthe Official List of the UK Listing Authority and although the Ordinary Shares will be traded on AIM, thisshould not be taken as implying that there will always be a liquid market in the Ordinary Shares. Aninvestment in shares quoted on AIM may carry a higher risk than an investment in shares quoted on theOfficial List of the UK Listing Authority. In addition, the market for shares in smaller public companies isless liquid than for larger public companies. Therefore an investment in the Ordinary Shares may be

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difficult to realise and the price of the Ordinary Shares may be subject to greater fluctuations than mightotherwise be the case.

Tom Joule will retain a significant interest in and will continue to be able to exert substantialinfluence over the Group following the Placing and Admission and his interests may differ from orconflict with those of other shareholders

Immediately following Admission, Tom Joule will continue to have an interest in approximately 32.2 percent. of the Enlarged Share Capital. As a result, Tom Joule will possess sufficient voting power to have asignificant influence over all matters requiring shareholder approval. In addition, Tom Joule is a memberof the Board and, under the Relationship Agreement, will be able to appoint himself or another person tothe Board whilst he retains at least a 10 per cent. interest in the Company. The interests of Tom Joule maynot always be aligned with those of other holders of Ordinary Shares. In particular, Tom Joule may holdinterests in, or may make acquisitions of or investments in, other businesses that may be, or maybecome, competitors of the Group. Although applicable law, the terms of the Tom Joule’s serviceagreement and the Relationship Agreement contain provisions seeking to restrict Tom Joule from votingon matters in his capacity as a Shareholder where there are conflicts of interest and from usinginformation gained from Joules for other, unconnected purposes, these and other measures may not besufficient to protect the interests of other Shareholders.

Price risk following sale and expiry of lock-ups

Following Admission, the Directors, Senior Managers and LDC will own beneficially, in aggregate,44.8 per cent. of the Company’s issued ordinary share capital. The Directors, Senior Managers and LDCare subject to restrictions on the sale and/or transfer of their respective holdings in the Company’sissued share capital as described in paragraph 11 of Part 7. The issue or sale of a substantial number ofOrdinary Shares by the Directors, Senior Managers and/or LDC in the public market after the lock-uprestrictions expire, or the perception that these sales may occur, may depress the market price of theOrdinary Shares and could impair the Company’s ability to raise capital through the sale of additionalequity securities.

Shareholders may be diluted on future issues

Although it has no current plans to do so, other than in connection with Admission or under the ShareOption Schemes, the Company may seek to raise financing to fund future acquisitions and other growthopportunities. The Company may, for these and other purposes, such as in connection with shareincentive and share option plans, issue additional equity or convertible equity securities. As a result, theCompany’s existing Shareholders at the time of such an issue may suffer dilution in their percentageownership or the price of the Ordinary Shares may be adversely affected.

The Company’s ability to pay dividends is not guaranteed

As a holding company, the Company’s results of operations and financial condition are entirelydependent on the trading performance of the members of the Group. The Company’s ability to paydividends in the future is affected by a number of factors, principally the Company’s ability to receivesufficient dividends from its subsidiaries. The payment of dividends by subsidiaries is, in turn, subject torestrictions, including the existence of sufficient distributable reserves and cash in those subsidiariesand certain restrictions in the Company’s debt financing arrangements. These restrictions could limit orprohibit the payment of dividends to the Company by its subsidiaries, which could restrict theCompany’s ability to pay dividends to Shareholders.

Risks relating to taxation and change of legislation

This document has been prepared on the basis of current legislation, regulation, rules and practices andthe Directors’ interpretation thereof. Such interpretation may not be correct and legislation, regulation,rules and practice may change, possibly with retrospective effect.

Any change in legislation, regulation, rules, or practice, and in particular in the tax status or tax residenceof the Group or the Company, may have an adverse effect on the returns available on an investment inthe Company.

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RISKS RELATING TO THE GROUP’S BUSINESS AND INDUSTRY

Joules’ performance is influenced by the image and reputation of its brand

Joules’ financial performance is influenced by the image, perception and recognition of the Joulesbrand, which, in turn, depends on many factors such as product design, the distinctive character andquality of its products, the image of its stores, its communication activities including marketing, publicrelations and commercial partnerships and its general corporate and market profile (which is influencedby factors such as sourcing ethics and corporate social responsibility activities). Joules’ ‘‘brand equity’’could decline if it is unable to maintain the strength, image and recognition of the Joules brand.

Joules engages with licensees, suppliers, agents and distributors and believes that they are in materialcompliance with Joules’ business terms, as well as employment, environmental, anti-bribery and otherrelevant laws and regulations generally. However, it can give no assurance that these individuals orentities are or will remain in compliance with such terms, laws or regulations. A violation, or allegations ofa violation, of such laws or regulations, or failure to achieve particular standards, by any of Joules’licensees, suppliers, agents or distributors, could lead to adverse publicity for Joules which may in turndamage its brand.

In addition, Joules licenses its brands to selected third parties for certain products including toiletries,eyewear and bedding and, therefore, Joules relies on its licensing partners to preserve the value of itsbrand. If Joules’ licensees or the manufacturers of these products do not maintain the standards ofquality and exclusivity as Joules would expect, or if such licensees or manufacturers otherwise misusethe Joules brand, there is a risk that Joules’ reputation and the integrity of its brands may be damaged.

Any failure to maintain favourable brand recognition could have a material adverse effect on Joules’business, results of operations and financial condition.

Joules’ business is subject to changes in client preferences and fashion trends

Joules’ continued success depends in part on its ability to originate and define product and to someextent fashion trends, as well as to anticipate and respond promptly to changing customer demands andfashion trends in the design, styling, production, merchandising and pricing of its products. Joules’products must appeal to a customer base whose preferences cannot be predicted with certainty and aresubject to change. If Joules misjudges the market for its products, it may be faced with excessinventories for some products and missed opportunities with others. Conversely, if Joules fails toanticipate increased customer demand for its products, it may experience inventory shortages, whichwould result in lost sales and could negatively impact Joules’ customer goodwill, brand image andprofitability.

In addition, there can be no assurance that Joules will be able to produce, distribute or market newproducts efficiently or that any product category that it may expand or introduce will achieve sales levelssufficient to generate profits. Any of these outcomes could have a material adverse effect on Joules’business, results of operations and financial condition.

Joules’ domestic growth strategy is dependent upon its ability to successfully open new retailstores

As part of its growth strategy, Joules intends to continue increasing the number of its retail stores in theUK. Succesful execution of this roll-out strategy depends upon a number of factors, including: theidentification of suitable available sites in optimal locations; the negotiation of acceptable financial terms;the hiring, training and retention of skilled personnel; the Group’s ability to integrate new sites into itsoperations on an economically acceptable basis; its IT capabilities; and general macroeconomicconditions in the UK. There may continue to be competition for suitable or desirable sites and there canbe no assurance that the Group will be able to open new sites on a timely basis or that it will be able tosecure sites on acceptable terms.

Joules cannot ensure that any expansion into new jurisdictions will be successful

As part of its growth strategy the Group intends to explore opportunities in markets outside the UK. Anyexpansion into new markets would expose the Group to a variety of risks including: different regulatoryrequirements; different customer preferences; managing foreign operations; exchange rate risk; and thepotential for higher rates of fraud. Equally, any expansion into a new territory may not be successful if

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Joules is not able to achieve a sufficiently strong brand image, perception and/or recognition in anyparticular territory. Successful entry into new jurisdictions will also depend on Joules’ ability to identifyand engage appropriately with the right retailers or wholesale partners.

Joules may be unable to identify and engage with the right retailers or wholesale partners to facilitateexpansion in new jurisdictions. Joules and its senior key personnel may expend resource on expansioninto a territory which ultimately either proves to be unsuccessful or takes a much longer period thananticipated to become successful. Failures and/or delays in successfully launching into new territoriesmay have a material adverse effect on Joules’ results of operations and prospects.

Joules depends on key personnel and certain members of its management

Joules’ results and success are dependent on its capacity to attract and retain effective personnel.Joules’ performance depends significantly on the efforts and abilities of its key senior personnel. Theseindividuals have substantial experience and expertise in the retail of branded fashion clothing andaccessories and have made significant contributions to Joules’ continuing growth and success. As aresult, these key senior personnel are one of Joules’ most important assets. If members of Joules’ keysenior personnel depart, Joules may not be able to find effective replacements in a timely manner, or atall, and its business may be disrupted or damaged. In addition, loss of key personnel to competitorscould have a material adverse effect on Joules’ competitive position, operations and prospects.

In addition, there can be no assurance that Joules will continue to be able to retain or attract a sufficientnumber of skilled personnel, including within the design, merchandising and marketing teams, onattractive terms or at all. Any inability to recruit, train or retain such personnel could hinder Joules’ abilityto design and market new products and to operate its business generally, which could have a materialadverse effect on its business, results of operations and financial condition.

Joules may be unable to control its wholesale distribution channel satisfactorily

Joules relies on its ability to control its wholesale distribution channel which, includes a small number offranchise stores, to ensure that its products are sold in environments and in a manner consistent with itsbrand image. This is particularly the case in the US and Germany where Joules has no retail stores and isreliant on selling to third party retailers and via wholesale partners.

During FY15, Joules generated approximately 27 per cent. of its revenue from products sold through itswholesale distribution channel. Joules requires its wholesale customers to sell its products in agreedlocations and to follow its policies on promoting its products and merchandising displays and salespersonnel in order to maintain consistency with the brand image. Actions by significant wholesalecustomers that vary from Joules’ policies, such as presenting Joules’ products in a manner inconsistentwith its preferred positioning or offering its products at unacceptable discounts, could damage its brandimage and/or impact other sales channels. If Joules is unable to control its wholesale distributionchannel, its brand image may suffer, which could have a material adverse effect on its business, resultsof operations and financial condition.

Any material disruption in Joules’ IT systems could have a material adverse effect on its business,financial condition and results of operations

Joules relies to a significant degree on its IT systems to track inventory, manage its supply chain, recordand process transactions, summarise results and manage its business. Joules’ IT systems are alsointegral and critical to its ability to sell online. The failure of Joules’ IT systems to operate effectively couldadversely affect its business. In particular, should it be required as the business expands, theimplementation of new IT systems could take longer than expected, disrupt Joules’ current systemsand/or incur cost overruns.

In addition, Joules’ IT systems may be subject to damage and/or interruption from power outages;computer, network and telecommunications failures; computer viruses; security breaches and usageerrors by its employees. If Joules’ IT systems are damaged or cease to function properly, it may have tomake a significant investment to fix or replace them, and it may suffer loss of critical data andinterruptions or delays in its operations. Any significant disruption in Joules’ IT systems could have amaterial adverse effect on its business, results of operations and financial condition.

Joules relies on third parties, including data centres and bandwidth providers, to host and operate itswebsites and other IT systems. Any failure or interruption in the services provided by these third parties

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could harm its operations and reputation. In addition, Joules may have little or no control over these thirdparties, which increases its vulnerability to service problems. Any disruptions in the network access,co-location or hosting services provided by these parties or any failure of these providers to handlecurrent or higher visitor traffic or transaction volumes could significantly harm Joules’ business. Joulesmay in the future experience disruptions in these services. If these providers were to suffer financial orother difficulties (such as security breaches and computer viruses), their services to Joules could beinterrupted or discontinued and replacement providers may be uneconomical, unavailable or notcapable of being replicated sufficiently quickly. Any of these events could have a material adverse effecton the Joules’ business (including brand reputation), operating profit and overall financial condition.

Damage to the Group’s distribution centre or disruption to its distribution networks may affectJoules’ ability to meet customer demand and have a material impact on performance

The Group retains stocks of clothing and accessories at a central distribution centre in Corby,Northamptonshire and is dependent on the distribution of product from this central distribution centre. Inthe US, the distribution of Joules’ products depends on the efficient operation of an outsourcedwarehousing and distribution provider. As the Joules business expands, it may also need to develop andimplement other distribution solutions to expand its distribution network both for capacity andgeographical reach. A fire, other damage or issue preventing the normal running of the Group’sdistribution centres could significantly hinder and may prevent the Group from distributing its product(both to retail stores and direct to customers).

A material or prolonged disruption to the Group’s distribution systems (including the road systems)could also have the same effect. A disruption to the Group’s distribution systems could arise for anumber of reasons, including a failure to expand logistics and distribution processes, inclement weather,labour unrest and other events which may be outside of the control of the Group.

Dependent on the severity of the issue concerned and regardless of the proceeds of any insurancepolicy which may be available, a material interruption to the ability of the Group to distribute product to itscustomers and retail stores could have a material adverse effect on Joules’ business, results ofoperations and on the Joules brand.

Joules may be unable to protect its trademarks and other intellectual property rights

Joules’ trademarks and other intellectual property rights (including its domain names) are important toits success and competitive position. Therefore, its business is dependent on its ability to protect andpromote its trademarks and other intellectual property rights. Third parties have in the past and may inthe future look to counterfeit Joules’ brands, otherwise infringe Joules’ intellectual property rights or tryto challenge the validity of Joules’ intellectual property. Joules may not always be able to secureprotection for, or stop infringements of, its intellectual property, and may need to resort to litigation toenforce its intellectual property rights. Any litigation or dispute involving the scope or enforceability ofJoules’ intellectual property rights or any allegation that it infringed upon the intellectual property rightsof others could be costly and time-consuming, lead to a diversion of resources and result, if determinedadversely to Joules, in harm to its business, results of operations and financial condition.

Joules is subject to risks associated with leasing retail space

All of Joules’ stores are leased from third parties and, therefore, Joules is subject to risks associated withperiodically negotiating or re-negotiating lease terms. When Joules renews expiring leases, it may haveto compete over desirable property sites with other businesses, some of which are considerably largerthan Joules and have greater economic and financial assets. Joules’ ability to maintain its existing rentalrates or to renew any lease on favourable terms will depend on many factors which are outside of Joules’control, including the local real estate market and relationships with current and prospective landlords.

Any inability to renew existing leases may result in, among other things, significant alterations to rentalterms, the closure of stores in desirable locations or failure to secure suitable alternative locations. Any ofthese events affecting Joules’ stores could have a material adverse effect on its business, results ofoperations or financial condition.

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Joules is subject to risks associated with third-party production

Joules outsources the production of its products to external manufacturers with appropriate expertiseand capacity. A significant majority of Joules’ products are manufactured in China. Joules hasestablished an inspection and quality control process, and requires all third-party manufacturers tocomply with intellectual property protections and confidentiality restrictions in addition to applicablelabour and health and safety laws and regulations. However, the inability of third-party manufacturers toproduce and dispatch orders in a timely and appropriate manner, to the required quality, or to complywith their obligations or other laws and regulations could have a negative impact on Joules’ operationsand business. Similarly, if Joules expands beyond the production capacity of its current suppliers, it maynot be able to find new suppliers with an appropriate level of expertise and capacity in a timely manner. Ifany of these risks were to develop, it could have a material adverse effect on Joules’ business, results ofoperations and financial condition.

Joules is exposed to foreign currency exchange rate fluctuations

Due to the international nature of its business, Joules is exposed to changes in foreign currency rates.Joules’ functional currency used in its financial statements is Pounds Sterling. However, it conducts andwill continue to conduct transactions in currencies other than Pounds Sterling, including Euro and USDollars. In addition, Joules pays its suppliers in US dollars and therefore it incurs its cost of goods soldlargely in US Dollars. Joules sets the sales prices for its products at periodic fixed intervals. If there is asignificant weakening of the exchange rate between the local currency in which the revenue is generatedprior to the sale and subsequent to its fixing of prices, then its expected margins may be reduced.Although Joules seeks to manage its foreign currency risks in order to minimise any negative effectscaused by exchange rate fluctuations, including by engaging in foreign exchange hedging transactions,there can be no assurance it will be able to do so successfully, and its business, results of operations andfinancial condition could be adversely affected by fluctuations in exchange rates.

Changes in input and raw material prices may negatively impact Joules’ ability to deliver qualityproducts, resulting in higher costs or reduced sales

Joules’ manufacturers purchase substantial amounts of raw materials, principally cotton and rubber, foruse in manufacturing Joules’ products. The price of these raw materials has a direct impact on the priceJoules pays its manufacturers for its products. The price and availability of certain raw materials hasfluctuated in the past, and may fluctuate in the future, depending on a variety of factors, including cropyield, weather, supply conditions, government regulation, war, terrorism, labour unrest, the economicclimate, global demand for raw materials and other unpredictable factors. Additionally, costs of thirdparty providers for Joules’ transportation costs may increase. Any increase in the price of raw materialsor Joules’ transportation costs could cause delays in product deliveries, affect the availability of Joules’products and/or increase the cost of Joules’ products, some or all of which Joules may not be able topass on to its customers.

Joules’ business is dependent on a number of suppliers whose under-performance wouldadversely affect Joules

A significant proportion of Joules’ apparel is manufactured in markets outside of the United Kingdom,principally in China. There are a variety of risks generally associated with doing business in foreignmarkets and importing merchandise from the region, including delays associated with customsprocedures, risks related to labour practices, heightened anti-bribery and corruption concerns, qualityassurance concerns, environmental risks, risks of transportation of product by sea and imposition oftaxes. Any of these risks could restrict the availability of product and/or increase the costs of Joules’products and/or change consumers’ perceptions about the quality of its product and could have amaterial and adverse effect on Joules’ results of operations, financial condition and reputation.

A downturn in the economy and/or consumer confidence may affect sales of Joules’ products

Many factors affect the level of consumer spending, including the state of the economy as a whole, stockmarket performance, interest rates, currency exchange rates, recession, inflation or deflation, politicaluncertainty, the availability of consumer credit, taxation, unemployment and other matters that influenceconsumer confidence and/or levels of disposable income. Sales of Joules’ products may in the futuredecline during recessionary periods when the average level of disposable income tends to be lower or

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when consumer confidence is low. Joules distributes its products internationally and may be affected bythe same factors in these markets. A significant decline in the UK and/or global economy and/or inconsumers’ confidence could have a material adverse effect on Joules’ business, results of operationsand financial condition.

Joules operates in a competitive environment

Joules operates in a competitive environment. Joules competes with companies which may havegreater financial resources and negotiation power with suppliers, wholesale accounts and landlordsthan it does. Joules competes on the basis of its strong brand equity built, among other factors, on itsbrand image, product design, product assortment and reputation for quality.

Competition is generally based on product style, quality, brand name recognition and service, togetherwith the number and location of stores and quality of online offering. Joules’ competitors may adoptaggressive pricing policies, expand store portfolios or online offerings, undertake more extensivemarketing and advertising campaigns or sell products which may be more attractive to customers thanJoules’ products.

Any inability to compete successfully could have a material adverse effect on Joules’ business, results ofoperations or financial condition.

Data privacy breaches or any failure to protect confidential information could harm Joules’reputation and expose Joules to litigation or other actions

The Group is subject to a number of laws relating to privacy and data protection, including the UK’s DataProtection Act 1988 and the Privacy and Electronic Communications (EC Directive) Regulations 2003, aswell as relevant non-EEA data protection and privacy laws. Such laws govern the Group’s ability tocollect, use and transfer personal information relating to its customers, including the use of thatinformation for marketing purposes and for its advertisers to focus their advertising campaigns, as wellas its employees. The Group relies on third party contractors and its own employees to collect personaldata and to maintain its databases and, therefore, is exposed to the risk that such data could bewrongfully appropriated, lost or disclosed, damaged or processed in breach of data protectionregulations.

Despite controls to protect the confidentiality and integrity of customer information, Joules may breachrestrictions or may be subject to attack from computer programmes that attempt to penetrate its networksecurity and misappropriate confidential information.

If the Group or any of the third party service providers on which it relies fails to store or transmitinformation and/or payment details online in a secure manner, or if any unauthorised or unlawful loss,disclosure or destruction of personal data were otherwise to occur, the Group may be subject tosanctions by card merchants, claims from third parties relating to the infringement of privacy rightsand/or investigative or enforcement action (including criminal proceedings and significant pecuniarypenalties) by the Information Commissioner’s Office in the UK or similar regulatory authorities in otherjurisdictions in which Joules operates. Whilst the Group strives to comply with all applicable laws,regulations, policies and legal obligations relating to privacy and data protection, it is possible that suchrequirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction toanother and may conflict with other rules or the Group’s practices.

Any perceived or actual failure to protect confidential data could harm Joules’ reputation and credibility,reduce its sales, reduce its ability to attract and retain customers or result in litigation or other actionsbeing brought against it or the imposition of fines and, as a result, could have a material adverse effecton its business, results of operations and financial condition.

Compliance with existing laws and regulations or changes in any such laws and regulations couldaffect Joules’ business, financial condition and results of operations

Joules is subject to a variety of laws and regulations and it routinely incurs costs in complying with theselaws and regulations. New laws or regulations or changes in existing laws and regulations, particularlythose governing property rates or taxes, value added tax and import/export duties, the sale of productsor in other regulatory areas, such as consumer credit, privacy, information security, labour andemployment, competition, anti-bribery, health and safety or environmental protection, may requireextensive system and operating changes, including the establishment of new policies and training

31

programmes that may be difficult to implement and could increase Joules’ cost of doing business. Fromtime to time Joules has in the past been and may in future be unable to update its internal governance,policies, training, reporting and compliance structures to fully comply with new laws and regulations inthe timeframe required as a result of such difficulties. If Joules fails to comply with applicable laws andregulations, it could be subject to legal risks, including government enforcement action and/or fines,which could adversely affect its business, results of operations and financial condition.

Product liability and product recall may adversely affect the Group’s results of operations and maynot be covered by its product liability insurance

Joules requires its manufactures and suppliers to satisfy certain standards regarding the quality andspecification of its products. However, it is possible that one or more of its external suppliers’ productsmay at some point cause or have the risk of causing injury or damage in a way that exposes the Group toliability and/or requires it to undertake a product recall. In the event of a product recall being required incircumstances where the financial consequences are not satisfied by one of the Group’s manufacturersor suppliers, or covered by product liability insurance, it may have a material adverse effect on Joules’financial performance as well as its reputation and brand.

Even if an event causing a product recall proved to be unfounded or if a product liability claim against theGroup were unsuccessful or not fully pursued, the negative publicity surrounding any assertion that theproduct Joules sells caused injury or damage, or any product recall or allegation that the product it sellsare defective, could materially adversely affect its reputation with existing and potential new customersand its corporate and brand image.

Joules relies on its licensees, suppliers, agents and distributors to comply with employment,environmental and other laws and regulations

As an international retail clothing business, Joules acknowledges and takes seriously its role andresponsibilities and aims to ensure that its licensees, suppliers, agents and distributors comply with localand international legislation and adhere to internationally recognised standards of best practice inethical trading. In particular, most of Joules’ product is manufactured by suppliers in China. Joulesbelieves that its licensees, suppliers, agents and distributors are in material compliance with Joules’business terms, as well as employment, environmental, anti-bribery and other relevant laws andregulations generally. However, it can give no assurance that these individuals or entities are or willremain in compliance with such terms, laws or regulations and Joules’ written agreements with suchcounter-parties may not contain specific undertakings to comply. A violation, or allegations of a violation,of such laws or regulations, or failure to achieve particular standards, by any of Joules’ licensees,suppliers, agents or distributors, could lead to financial penalties, adverse publicity or a decline in publicdemand for Joules’ products, or require Joules to incur expenditure or make changes to its supply chainand other business arrangements to ensure compliance.

A breakdown in the relationship with any of Joules’ suppliers or any of them failing to supplysufficient or acceptable quality of products could have a material adverse effect on the financialcondition of Joules

Whilst Joules has in the last three years increased the number of suppliers it uses, spread themanufacturing base for some of its more popular products and sought to ensure that there are properlydocumented agreements in place with these suppliers and manufacturers, Joules has built up a numberof longstanding relationships with certain suppliers. These relationships, could change over time as aresult of many factors, including change of personnel, either by Joules or the suppliers, and change inownership of the suppliers. Any deterioration or change in Joules’ relationships with its suppliers, or anysupplier declining to sell products to Joules for any reason or becoming insolvent or facing materialbusiness disruption, could have an adverse effect on Joules’ business.

Joules may not be able to acquire suitable products of appropriate quality in sufficient quantities and/oron terms acceptable to it in the future. Joules is dependent on suppliers to assure the quality, quantity,price and existence of products used within or sold by Joules. Its inability to acquire suitable products inthe future, or the loss of one or more of its suppliers and its failure to replace any one or more of them,could have an adverse effect on the financial performance of Joules.

Joules’ business could also be adversely affected by significant business disruption at its suppliers’factories or if there were delays in product shipments due to freight difficulties, industrial action

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(including strikes by personnel at ports through which products are transported) or elsewhere in itssupply chain.

Agreements with third parties are not on favourable terms and in some cases are not in writing

The relationships between Joules and third parties, including certain of Joules’ customers andfranchisees, are not in all cases governed by signed written agreements. Where Joules does not havewritten agreements in place, Joules may find it difficult to enforce certain terms of the arrangementsentered into with such third parties, potentially resulting in Joules having to trade on less favourableterms or divert resources in order to resolve disputes or put in place alternative arrangements, each ofwhich could have an adverse effect on the business. It is Joules’ intention that signed written agreementswill be put in place with such third parties in due course. Joules estimates that less than three per cent. ofJoules’ turnover arises from agreements with third parties which are not in writing.

Certain of Joules’ contracts are either on the standard terms and conditions of the third party or haveterms which are favourable to the third party and in some instances contain limited rights of redress forthe Company and/or no limit on liability for the Company whereas the liability of the third party may belimited to the fullest extent possible. In addition, certain contracts may not specify the governing law ofthe contract, which may make enforcement more difficult. The Company also has contracts whichcontain change of control provisions allowing the counterparty to terminate the contract uponAdmission. The Company does not believe there to be a material risk of any such counterpartyexercising its termination right and therefore has not sought to obtain consents to Admission from suchcounterparties. If any material counterparty were to terminate a contract, it may have a material adverseeffect on Joules’ results of operations and/or its financial performance.

Evolution and growth of the Group

The Group has grown and evolved from an owner-managed business through a period of private equityinvestment, and the increased scrutiny and governance this brought, to its current position.

The governance and systems of the business during the earlier stages of its evolution may beconsidered inappropriate for a business of its current status and size and its future plans.

The Company has benefited from the process and period of private equity ownership, the inclusion ofoutside representation on the Board and the process that has led to its current application for Admission.The Company will continue to review and implement appropriate governance procedures and policiesand the Board will actively monitor and respond to maintain and develop systems and practices that areappropriate for the Company.

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6MAY201604474540

PART 5

FINANCIAL INFORMATION RELATING TO THE GROUP

This Part 5 contains in Section A, the accountant’s report on the historical financial information of theCompany’s Group in Section B, the historical financial information for FY13, FY14, FY15 and the39 weeks ended 22 February 2015 and 28 February 2016 and in Section C a pro forma net assetstatement of the Group.

SECTION A—ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION

Four BrindleyplaceBirmingham

B1 2HZ

The Board of Directorson behalf of Joules Group plcJoules BuildingThe PointRockingham RoadMarket HarboroughLeicestershireLE16 7QU

Peel Hunt LLPMoor House120 London WallEC2Y 5ET

23 May 2016

Dear Sirs

Joules Investments Holdings Limited

We report on the financial information for the 52 weeks ended 26 May 2013, the 52 weeks ended 25 May2014, the 53 weeks ended 31 May 2015 and the 39 weeks ended 28 February 2016 of JoulesInvestments Holdings Limited (in this Part 5 only the ‘‘Company’’ and, together with its subsidiaries, the‘‘Group’’) as set out in Section B of Part 5 of the admission document dated 23 May 2016 of JoulesGroup plc (the ‘‘Admission Document’’). This financial information has been prepared for inclusion in theAdmission Document on the basis of the accounting policies set out in note 1 to the financial information.This report is required by Annex I item 20.1 of Commission Regulation (EC) No 809/2004 (the‘‘Prospectus Directive Regulation) as applied by Paragraph (a) of Schedule Two to the AIM Rules forCompanies and is given for the purpose of complying with that requirement and for no other purpose.

We have not audited or reviewed the financial information for the 39 weeks ended 22 February 2015which has been included for comparative purposes only, and accordingly do not express an opinionthereon.

Responsibilities

The Directors of Joules Group plc are responsible for preparing the financial information in accordancewith International Financial Reporting Standards as adopted by the European Union.

It is our responsibility to form an opinion on the financial information and to report our opinion to you.

Save for any responsibility arising under paragraph (a) of Schedule Two to the AIM Rules for Companiesto any person as and to the extent there provided, to the fullest extent permitted by law we do notassume any responsibility and will not accept any liability to any other person for any loss suffered byany such other person as a result of, arising out of, or in connection with this report or our statement,required by and given solely for the purposes of complying with Annex I item 23.1 of the Prospectus

34

Directive Regulation as applied by Paragraph (a) of Schedule Two to the AIM Rules for Companies,consenting to its inclusion in the Admission Document.

Basis of opinion

We conducted our work in accordance with Standards for Investment Reporting issued by the AuditingPractices Board in the United Kingdom. Our work included an assessment of evidence relevant to theamounts and disclosures in the financial information. It also included an assessment of significantestimates and judgments made by those responsible for the preparation of the financial information andwhether the accounting policies are appropriate to the entity’s circumstances, consistently applied andadequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which weconsidered necessary in order to provide us with sufficient evidence to give reasonable assurance thatthe financial information is free from material misstatement whether caused by fraud or other irregularityor error.

Our work has not been carried out in accordance with auditing or other standards and practicesgenerally accepted in jurisdictions outside the United Kingdom, including the United States of America,and accordingly should not be relied upon as if it had been carried out in accordance with thosestandards and practices.

Opinion on financial information

In our opinion, the financial information gives, for the purposes of the Admission Document, a true andfair view of the state of affairs of the Group as at 26 May 2013, 25 May 2014, 31 May 2015 and28 February 2016 and of its profits, cash flows and changes in equity for the periods ended 26 May 2013,25 May 2014, 31 May 2015 and 28 February 2016 in accordance with International Financial ReportingStandards as adopted by the European Union.

Declaration

For the purposes of Paragraph (a) of Schedule Two of the AIM Rules for Companies, we are responsiblefor this report as part of the Admission Document and declare that we have taken all reasonable care toensure that the information contained in this report is, to the best of our knowledge, in accordance withthe facts and contains no omission likely to affect its import. This declaration is included in the AdmissionDocument in compliance with Schedule Two to the AIM Rules for Companies.

Yours faithfully

Deloitte LLPChartered Accountants

Deloitte LLP is a limited liability partnership registered in England and Wales with registered numberOC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom.Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (‘‘DTTL’’), a UKprivate company limited by guarantee, whose member firms are legally separate and independententities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL andits member firms.

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SECTION B—HISTORICAL FINANCIAL INFORMATION

Consolidated Income Statement

52 weeks 52 weeks 53 weeks 39 weeks 39 weeksended ended ended ended ended26 May 25 May 31 May 22 Feb 28 Feb

Note 2013 2014 2015 2015 2016£’000 £’000 £’000 £’000 £’000

(unaudited)REVENUE . . . . . . . . . . . . . . . . . . . . 2 77,524 95,608 116,421 89,441 105,705

Cost of sales . . . . . . . . . . . . . . . . . . . (35,636) (43,082) (54,386) (42,195) (49,203)

GROSS PROFIT . . . . . . . . . . . . . . . . 41,888 52,526 62,035 47,246 56,502Administrative expenses . . . . . . . . . . . (37,607) (47,321) (56,458) (41,948) (47,386)Exceptional administrative expenses . . 4 (411) (2,650) (500) — —

Total administrative expenses . . . . . (38,018) (49,971) (56,958) (41,948) (47,386)

OPERATING PROFIT . . . . . . . . . . . . 5 3,870 2,555 5,077 5,298 9,116

Finance income and similar incomes . 7 84 190 40 15Finance costs and similar charges . . . 6 (190) (2,799) (5,178) (3,772) (4,118)

PROFIT/(LOSS) BEFORE TAX . . . . . . 3,687 (160) 89 1,566 5,013

Income tax expense . . . . . . . . . . . . . 7 (1,086) (469) (529) (396) (713)

PROFIT/(LOSS) FOR THE PERIOD . . 2,601 (629) (440) 1,170 4,300

Earnings/(loss) per share . . . . . . . . . . 28

Basic (£ per share) . . . . . . . . . . . . . . 22.8 (4.7) (3.3) 8.7 31.8

Diluted (£ per share) . . . . . . . . . . . . . 22.8 (4.7) (3.3) 8.7 31.8

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Consolidated Statement of Comprehensive Income


Note 2013 2014 2015 2015 2016£’000 £’000 £’000 £’000 £’000

(unaudited)Profit/(loss) for the period . . . . . . . . 2,601 (629) (440) 1,170 4,300

Items that may be reclassifiedsubsequently to profit or loss:

Net gain/(loss) arising on changes infair value of hedging instrumentsentered into for cash flow hedges . . 21 1,029 (2,921) 2,221 1,062 2,259

Exchange difference on translation offoreign operations . . . . . . . . . . . . . . 21 3 4 (31) (58) (143)

Income tax relating to items that willbe reclassified subsequently to profitor loss . . . . . . . . . . . . . . . . . . . . . . 7 (235) 620 (444) (212) (398)

TOTAL COMPREHENSIVE INCOMEFOR THE PERIOD . . . . . . . . . . . . . 3,398 (2,926) 1,306 1,962 6,018

37

Consolidated Statement of Financial Position

26 May 25 May 31 May 28 FebNote 2013 2014 2015 2016

£’000 £’000 £’000 £’000NON-CURRENT ASSETSProperty, plant and equipment . . . . . . . . . . . . . . . . . 9 6,704 10,793 11,458 11,492Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 1,643 1,585 4,416 5,543Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 — 1,233 803 325

TOTAL NON-CURRENT ASSETS . . . . . . . . . . . . . . 8,347 13,611 16,677 17,360

CURRENT ASSETSInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 11,518 13,367 17,652 17,588Trade and other receivables . . . . . . . . . . . . . . . . . . 13 6,745 8,082 10,156 14,905Current corporation tax receivable . . . . . . . . . . . . . . — — 179 —Cash and cash equivalents . . . . . . . . . . . . . . . . . . . 23 4,290 4,247 2,121 5,606Derivative financial instruments . . . . . . . . . . . . . . . . 12 1,200 — 500 2,760

TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . 23,753 25,696 30,608 40,859

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,100 39,307 47,285 58,219

CURRENT LIABILITIESTrade and other payables . . . . . . . . . . . . . . . . . . . . 14 12,517 15,071 18,716 22,328Current tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . 483 355 — 678Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 83 — — —Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 5,700 373 561 444Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 236 902 587 780Derivative financial instruments . . . . . . . . . . . . . . . . 12 — 1,721 — —

TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . 19,019 18,422 19,864 24,230

NON-CURRENT LIABILITIESBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 167 45,665 50,895 51,475

TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . 19,186 64,087 70,759 75,705

NET ASSETS/(LIABILITIES) . . . . . . . . . . . . . . . . . . 12,914 (24,780) (23,474) (17,486)

EQUITYShare capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 128 12 12 12Hedging reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 924 (1,377) 400 2,261Translation reserve . . . . . . . . . . . . . . . . . . . . . . . . . 21 3 7 (24) (167)Merger reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 — (35,835) (35,835) (35,835)Other reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 20 — — —Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . 11,371 10,742 10,302 14,602Share premium . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 468 1,671 1,671 1,641

TOTAL EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,914 (24,780) (23,474) (17,486)

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Consolidated Statement of Changes in Equity

Merger Hedging Translation Share Share Retained Other Totalreserve reserve reserve capital premium earnings reserve equity£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 27 May 2012(as previously shown) . . — — — 114 63 8,770 20 8,967

Adjusted for:Recognition of derivative

financial instruments . . . . — 130 — — — — — 130

Balance at 27 May 2012(restated under IFRS) . . — 130 — 114 63 8,770 20 9,097

New share capital issued . . — — — 14 405 — — 419Profit for the period . . . . . . — — — — — 2,601 — 2,601Other comprehensive

income for the period . . . — 794 3 — — — — 797

Balance at 26 May 2013 . . — 924 3 128 468 11,371 20 12,914

Loss for the period . . . . . . — — — — — (629) — (629)Other comprehensive

income for the period . . . — (2,301) 4 — — — — (2,297)Effect of Group

restructuring . . . . . . . . . . (35,835) — — (116) 1,203 — (20) (34,768)

Balance at 25 May 2014 . . (35,835) (1,377) 7 12 1,671 10,742 — (24,780)

Loss for the period . . . . . . — — — — — (440) — (440)Other comprehensive

income for the period . . . — 1,777 (31) — — — — 1,746

Balance at 31 May 2015 . . (35,835) 400 (24) 12 1,671 10,302 — (23,474)

As at 1 June 2015 . . . . . . (35,835) 400 (24) 12 1,671 10,302 — (23,474)Profit for the period . . . . . . — — — — 4,300 — 4,300Other comprehensive

income for the period . . . — 1,861 (143) — 1,718Redemption of shares . . . . — — — — (30) — — (30)

Balance at 28 February2016 . . . . . . . . . . . . . . . (35,835) 2,261 (167) 12 1,641 14,602 — (17,486)

39

Consolidated Cash Flow Statement


Note 2013 2014 2015 2015 2016£’000 £’000 £’000 £’000 £’000

(unaudited)Net cash inflow from operating activitiesProfit before interest and income taxes . . . . 3,870 2,555 5,077 5,298 9,116Adjustments for:Depreciation . . . . . . . . . . . . . . . . . . . . . . . 9 2,304 2,982 4,242 2,945 3,298Amortisation . . . . . . . . . . . . . . . . . . . . . . . 10 66 303 554 571 683Impairment of fixed assets . . . . . . . . . . . . . — 498 500 — —(Profit)/loss on sale of fixed assets . . . . . . . (216) — — (25) 36Finance income . . . . . . . . . . . . . . . . . . . . . 7 84 190 40 15Finance expense . . . . . . . . . . . . . . . . . . . . (190) (323) (416) (317) (272)Tax (paid)/received . . . . . . . . . . . . . . . . . . . (1,141) (1,293) (1,069) (760) 224(Increase)/decrease in inventory . . . . . . . . . (2,016) (1,849) (4,285) (6,305) 64Decrease/(increase) in receivables . . . . . . . 834 (1,337) (2,082) (1,930) (4,749)Increase in payables . . . . . . . . . . . . . . . . . 4,378 3,220 3,330 6,993 3,805

Net cash from operating activities . . . . . . 7,896 4,840 6,041 6,510 12,219

Cash flow from investing activitiesPurchase of property, plant and equipment . 9 (5,020) (7,814) (8,792) (6,425) (5,179)Sale of property, plant and equipment . . . . . 661 — — — —

Net cash used in investing activities . . . . (4,359) (7,814) (8,792) (6,425) (5,179)

Cash flow from financing activitiesProceeds from new share capital

subscribed . . . . . . . . . . . . . . . . . . . . . . . 19 419 1,071 — — —Redemption of shares . . . . . . . . . . . . . . . . — — — — (30)Repayment of borrowings . . . . . . . . . . . . . . 24 (1,791) (5,006) (393) (96) (3,382)Proceeds from borrowings . . . . . . . . . . . . . 24 100 6,866 1,049 555 —

Net cash (used in)/generated fromfinancing activities . . . . . . . . . . . . . . . . (1,272) 2,931 656 459 (3,412)

Net (decrease)/increase in cash and cashequivalents . . . . . . . . . . . . . . . . . . . . . . 24 2,265 (43) (2,095) 544 3,628

Cash and cash equivalents at beginning ofperiod . . . . . . . . . . . . . . . . . . . . . . . . . . 2,025 4,290 4,247 4,247 2,121

Effect of foreign exchange rate changes . . . — — (31) — (143)

Cash and cash equivalents at end ofperiod . . . . . . . . . . . . . . . . . . . . . . . . . . 24 4,290 4,247 2,121 4,791 5,606

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Notes to The Financial Information

1. SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

The financial information has been prepared in accordance with International Financial ReportingStandards (IFRSs) as adopted by the European Union. The particular accounting policies adopted andapplied are described below.

The Group financial statements comprise the financial information of the parent undertaking and itssubsidiary undertakings.

The principal activity of the group is that of design and sale of lifestyle clothing, related accessories and ahomeware range, through the multi-channel business structure embracing retail stores, wholesale andonline. The company’s registered office is Joules Building, The Point, Rockingham Road, MarketHarborough, Leicestershire, LE16 7QU.

Application of new and revised International Financial Reporting Standards (IFRSs)

New and revised IFRSs in issue but not yet effective

The Group has not applied the following new and revised IFRSs that have been issued but are not yeteffective:

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (Sept 2014 amendments)

IFRS 7 Financial Instruments: Disclosures (December 2011 and September 2014 amendments)

IFRS 9 Financial Instruments (December 2011 and July 2014 amendments)

IFRS 10 Consolidated Financial Statements (December 2014 amendment

IFRS 11 Joint Arrangements (May 2014 amendments)

IFRS 12 Disclosure of Interests in Other Entities (December 2014 amendments

IFRS 14 Regulatory Deferral Accounts (January 2014)

IFRS 15 Revenue from Contracts with Customers (May 2014 and September 2015 amendments)

IFRS 16 Leases (January 2016 amendments)

IAS 1 Presentation of Financial Statements (December 2014 amendments)

IAS 7 Statement of Cash Flows (January 2016 amendments)

IAS 12 Income Taxes January 2016 amendments)

IAS 16 Property, Plant and Equipment (May and June 2014 amendments)

IAS 19 Employee Benefits (September 2014 amendments)

IAS 27 Separate Financial Statements (as amended in 2011) (August 2014 amendments)

IAS 28 Investments in Associates and Joint Ventures (December 2014 amendments)

IAS 34 Interim Financial Reporting (September 2014)

IAS 38 Intangible Assets (May 2014 amendments)

IAS 41 Agriculture (June 2014 amendments)

The effect of these standards is not expected to be material to the financial statements, however it is notpracticable to provide an estimate of the effect of these standards until a detailed review has beencompleted.

41

Notes to The Financial Information (Continued)

1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of Preparation

The historical financial information incorporates the financial statements of the group and entitiescontrolled by the group (its subsidiaries) for the 52 weeks to 26 May 2013, 25 May 2014; the 53 weeks to31 May 2015 and 39 weeks to the 22 February 2015 (Unaudited) and 28 February 2016.

The historical financial information has been prepared in accordance with International FinancialReporting Standards as adopted by the European Union. These are presented in pounds sterlingbecause that is the currency of the primary economic environment in which the group operates. Foreignoperations are included in accordance with the policies set out below.

The annual financial statements have been prepared on the historical cost basis, except for certainfinancial assets and liabilities which are carried at fair value or amortised cost as appropriate.

The preparation of financial statements in conformity with International Financial Reporting Standardsadopted by the European Union requires the use of estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenses during the reported period.Although these estimates are based on management’s best knowledge of current events and actions,actual results ultimately may differ from those estimates.

The principal accounting policies adopted are set out below.

Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities(including structured entities) controlled by the Company and its subsidiaries. Control is achieved whenthe Company:

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate thatthere are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over theinvestee when the voting rights are sufficient to give it the practical ability to direct the relevant activitiesof the investee unilaterally.

The Company considers all relevant facts and circumstances in assessing whether or not theCompany’s voting rights in an investee are sufficient to give it power, including:

• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

• potential voting rights held by the Company, other vote holders or other parties;

• rights arising from other contractual arrangements; and

• any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders’ meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceaseswhen the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiaryacquired or disposed of during the year are included in the consolidated statement of profit or loss andother comprehensive income from the date the Company gains control until the date when the Companyceases to control the subsidiary.

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Profit or loss and each component of other comprehensive income are attributed to the owners of theCompany and to the non-controlling interests. Total comprehensive income of subsidiaries is attributedto the owners of the Company and to the non-controlling interests even if this results in thenon-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring theiraccounting policies into line with the Group’s accounting policies.

All intraGroup assets and liabilities, equity, income, expenses and cash flows relating to transactionsbetween members of the Group are eliminated in full on consolidation.

Merger reserve

Business combinations are dealt with under IFRS 3. IFRS 3 however does not apply to a combinationbetween entities of businesses under common control. Joules Investment Holdings Limited, a companyincorporated in England and Wales, entered into an agreement to acquire the entire issued share capitalof Joules Limited however as the majority of shareholders before and after the transaction remained thesame the transaction is therefore a combination of entities or business under common control, being abusiness combination in which all of the combining entities are ultimately controlled by the same partybefore and after the combination.

There is currently no specific guidance on accounting for common control transactions under IFRSs. Inthe absence of specific guidance, entities involved in common control transactions should select anappropriate accounting policy and IFRS permits the consideration of pronouncements of otherstandard-setting bodies. A common control transaction as scoped out of IFRS 3 has thereforeaccounted for using merger accounting principles in accordance with FRS 6. Merger accounting is atechnique used in preparing consolidated accounts resulting in the following practical effects;

• The net assets of the two companies are combined using existing book values, with adjustmentsmade as necessary to ensure that the same accounting policies are applied to the calculation of thenet assets of both companies;

• No amount is recognised as consideration for goodwill or negative goodwill; and

• The consolidated profit and loss account includes the profits of each company for the entire period,regardless of the date of the merger, and the comparative amounts in the consolidated financialstatements are restated to the aggregate of the amounts recorded by the two companies.

• The retained earnings reserves includes the cumulative results of each company, regardless of thedate of the merger, and the comparative amounts in the statement of finance position are restated tothe aggregate of the retained earnings reserves recorded by the two companies.

• A merger reserve is created being the premium on equity consideration used in the acquisition ofsubsidiary Joules Limited, by Joules Investment Holdings in 2013 plus cumulative retained earningsof each company as at the combination date.

Going concern

The directors have prepared a detailed forecast with a supporting business plan for the foreseeablefuture. The forecast indicates that the group will remain in compliance with covenants throughout theforecast period. As such, the directors have a reasonable expectation the company and Group will haveadequate resources to continue in operational existence for the foreseeable future. As such, theycontinue to prepare the financial statements on the basis of going concern.

Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reducedfor estimated customer returns, rebates and other similar allowances.

43



Sale of goods

Wholesale revenue from the sale of goods is recognised when the goods are delivered and titles havepassed, at which time all the following conditions are satisfied:

• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• the Group retains neither continuing managerial involvement to the degree usually associated withownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the Group; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Retail revenue is recognised when the Group sells a product to the customer

Property, plant and equipment

Land and buildings held for use in the production or supply of goods or services, or for administrativepurposes, are stated in the statement of financial position at their historical cost, being the deemed costat the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulatedimpairment losses.

Certain items of property, plant and equipment are stated at deemed cost less accumulated depreciationand accumulated impairment losses. Other items are stated at historical cost less accumulateddepreciation and accumulated impairment losses. All assets are depreciated on the straight-line basisover their estimated useful lives.

Depreciation is provided at the following annual rates in order to write off each asset over its estimateduseful life or, if held under a finance lease term, whichever is the shorter.

Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . —straight line over the lease period

Fixtures and fittings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —straight line over 3–5 years

Motor vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —straight line over 4 years

Intangible Assets

IT Systems

Software and IT represent computer systems and processes used by the Group in order to generatefuture economic value through normal business operations. The underlying assets are amortised overthe period from which the Group expects to benefit, which is typically between three to eight years.

Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulatedamortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basisover their estimated useful lives. The estimated useful life and amortisation method are reviewed at theend of each reporting period, with the effect of any changes in estimate being accounted for on aprospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried atcost less accumulated impairment losses.

Internally-generated intangible assets—research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

44



An internally-generated intangible asset arising from development (or from the development phase of aninternal project) is recognised if, and only if, all of the following have been demonstrated:

• the technical feasibility of completing the intangible asset so that it will be available for use or sale;

• the intention to complete the intangible asset and use or sell it;

• the ability to use or sell the intangible asset;

• how the intangible asset will generate probable future economic benefits;

• the availability of adequate technical, financial and other resources to complete the developmentand to use or sell the intangible asset; and

• the ability to measure reliably the expenditure attributable to the intangible asset during itsdevelopment.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditureincurred from the date when the intangible asset first meets the recognition criteria listed above. Whereno internally-generated intangible asset can be recognised, development expenditure is recognised inprofit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost lessaccumulated amortisation and accumulated impairment losses, on the same basis as intangible assetsthat are acquired separately.

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognised separately from goodwill areinitially recognised at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported atcost less accumulated amortisation and accumulated impairment losses, on the same basis asintangible assets that are acquired separately.

Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected fromuse or disposal.

Gains or losses arising from derecognition of an intangible asset, measured as the difference betweenthe net disposal proceeds and the carrying amount of the asset, and are recognised in profit or losswhen the asset is derecognised.

Impairment of tangible and intangible assets other than goodwill

At each statement of financial position date, the Group reviews the carrying amounts of its tangible andintangible assets to determine whether there is any indication that those assets have suffered animpairment loss. If any such indication exists, the recoverable amount of the asset is estimated in orderto determine the extent of the impairment loss (if any). Where it is not possible to estimate therecoverable amount of an individual asset, the Group estimates the recoverable amount of thecash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value inuse, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at arevalued amount, in which case the impairment loss is treated as a revaluation decrease.

45



Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, inwhich case the reversal of the impairment loss is treated as a revaluation increase.

Inventories

Inventories are valued at the lower of cost and net realisable value, after making due allowance for anyobsolete or slow moving items. The cost of inventory includes appropriate transport and carriage costs.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit beforetax’ as reported in the consolidated statement of profit or loss and other comprehensive income becauseof items of income or expense that are taxable or deductible in other years and items that are nevertaxable or deductible.

The Group’s current tax is calculated using tax rates that have been enacted or substantively enacted bythe end of the reporting period.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the consolidated financial statements and the corresponding tax bases used in thecomputation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporarydifferences. Deferred tax assets are generally recognised for all deductible temporary differences to theextent that it is probable that taxable profits will be available against which those deductible temporarydifferences can be utilised.

Such deferred tax assets and liabilities are not recognised if the temporary difference arises from theinitial recognition (other than in a business combination) of assets and liabilities in a transaction thataffects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are notrecognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments insubsidiaries and associates, and interests in joint ventures, except where the Group is able to control thereversal of the temporary difference and it is probable that the temporary difference will not reverse in theforeseeable future. Deferred tax assets arising from deductible temporary differences associated withsuch investments and interests are only recognised to the extent that it is probable that there will besufficient taxable profits against which to utilise the benefits of the temporary differences and they areexpected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reducedto the extent that it is no longer probable that sufficient taxable profits will be available to allow all or partof the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period inwhich the liability is settled or the asset realised, based on tax rates (and tax laws) that have beenenacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would followfrom the manner in which the Group expects, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

46



Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that arerecognised in other comprehensive income or directly in equity, in which case, the current and deferredtax are also recognised in other comprehensive income or directly in equity respectively. Where currenttax or deferred tax arises from the initial accounting for a business combination, the tax effect is includedin the accounting for the business combination.

Foreign currencies

In preparing the financial statements of each individual Group entity, transactions in currencies otherthan the entity’s functional currency (foreign currencies) are recognised at the rates of exchangeprevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslatedat the rates prevailing at that date. Non-monetary items carried at fair value that are denominated inforeign currencies are retranslated at the rates prevailing at the date when the fair value was determined.Non-monetary items that are measured in terms of historical cost in a foreign currency are notretranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they ariseexcept for:

• exchange differences on foreign currency borrowings relating to assets under construction forfuture productive use, which are included in the cost of those assets when they are regarded as anadjustment to interest costs on those foreign currency borrowings;

• exchange differences on transactions entered into in order to hedge certain foreign currency risks(see below for hedging accounting policies); and

• exchange differences on monetary items receivable from or payable to a foreign operation for whichsettlement is neither planned nor likely to occur (therefore forming part of the net investment in theforeign operation), which are recognised initially in other comprehensive income and reclassifiedfrom equity to profit or loss on repayment of the monetary items.

For the purposes of presenting these consolidated financial statements, the assets and liabilities of theGroup’s foreign operations are translated into GBP using exchange rates prevailing at the end of eachreporting period. Income and expense items are translated at the average exchange rates for the period,unless exchange rates fluctuate significantly during that period, in which case the exchange rates at thedates of the transactions are used. Exchange differences arising, if any, are recognised in othercomprehensive income and accumulated in equity (and attributed to non-controlling interests asappropriate).

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation,a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partialdisposal of an interest in a joint arrangement or an associate that includes a foreign operation of whichthe retained interest becomes a financial asset), all of the exchange differences accumulated in equity inrespect of that operation attributable to the owners of the Company are reclassified to profit or loss.

In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does notresult in the Group losing control over the subsidiary, the proportionate share of accumulated exchangedifferences are re-attributed to non-controlling interests and are not recognised in profit or loss. For allother partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in theGroup losing significant influence or joint control), the proportionate share of the accumulated exchangedifferences is reclassified to profit or loss.

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed throughacquisition of a foreign operation are treated as assets and liabilities of the foreign operation andtranslated at the rate of exchange prevailing at the end of each reporting period. Exchange differencesarising are recognised in other comprehensive income.

47



Hire purchase and leasing commitments (Leasing)

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risksand rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessee

Assets held under finance leases are initially recognised as assets of the Group at their fair value at theinception of the lease or, if lower, at the present value of the minimum lease payments. Thecorresponding liability to the lessor is included in the consolidated statement of financial position as afinance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so asto achieve a constant rate of interest on the remaining balance of the liability. Finance expenses arerecognised immediately in profit or loss, unless they are directly attributable to qualifying assets, inwhich case they are capitalised in accordance with the Group’s general policy on borrowing costs.Contingent rentals are recognised as expenses in the periods in which they are incurred.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term,except where another systematic basis is more representative of the time pattern in which economicbenefits from the leased asset are consumed. Contingent rentals arising under operating leases arerecognised as an expense in the period in which they are incurred.

Pensions

The Group operates a defined contribution pension scheme. Contributions payable for the period arerecognised as an expense when employees have rendered service entitling them to the contributions.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that the Group will be required to settle the obligation, and a reliable estimatecan be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle thepresent obligation at the end of the reporting period, taking into account the risks and uncertaintiessurrounding the obligation. When a provision is measured using the cash flows estimated to settle thepresent obligation, its carrying amount is the present value of those cash flows (when the effect of thetime value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recoveredfrom a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will bereceived and the amount of the receivable can be measured reliably.

Returns provision

Present obligations arising under sales returns are recognised and measured as provisions when it isprobable that the Group will be required to settle the obligation under sales contracts.

Lease dilapidation

The Group recognises present obligations arising from lease contracts where it is required to restore thestores to their pre lease condition upon the expiry of leases.

Financial instruments

Financial assets and financial liabilities are recognised when a Group entity becomes a party to thecontractual provisions of the instruments.

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Financial assets and financial liabilities are initially measured at fair value. Transaction costs that aredirectly attributable to the acquisition or issue of financial assets and financial liabilities (other thanfinancial assets and financial liabilities at fair value through profit or loss) are added to or deducted fromthe fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fairvalue through profit or loss are recognised immediately in profit or loss.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3based on the degree to which the inputs to the fair value measurements are observable and thesignificance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities thatthe entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable forthe asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability

Financial Assets

Trade and other receivables

Trade and other receivables originated by the company are stated at amortised cost as reduced byappropriate allowances for doubtful debts.

Cash and cash equivalents

Cash and cash equivalents are measured at fair value, based on the relevant exchange rates at thestatement of financial position and include overdrafts where these are used on a day to day basis tomanage cash.

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are notquoted in an active market are classified as ‘loans and receivables’. Loans and receivables aremeasured at amortised cost using the effective interest method, less any impairment. Interest income isrecognised by applying the effective interest rate, except for short-term receivables when the recognitionof interest would be immaterial.

Financial Liabilities and Equity instruments

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractualarrangements entered into and are classified as either financial liabilities ‘at FVTPL’ or ‘other financialliabilities’.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the company afterdeducting all of its liabilities. Equity instruments issued by the company are recorded at the proceedsreceived, net of direct issue costs.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL where the financial liability is either held for trading or it isdesignated as at FVTPL.

49



Other financial liabilities

Other financial liabilities, including loans payable, are initially measured at fair value, net of transactioncosts. Other financial liabilities are subsequently measured at amortised cost.

Loans payable

Interest-bearing loans are initially recorded on the day that the loans are advanced at the net proceedsreceived.

At subsequent reporting dates, interest-bearing borrowings are measured at amortised cost. Financecharges, including premiums payable on settlement or redemption and direct issue costs, areaccounted for on the accrual basis in the statement of comprehensive income using the effective interestrate method and are added to the carrying amount of the instrument to the extent that they are not settledin the period in which they arise.

Trade payables

Trade payables are stated at amortised cost.

Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to foreignexchange rate risks, through the use of foreign exchange forward contracts.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into andare subsequently remeasured to their fair value at the end of each reporting period. The resulting gain orloss is recognised in profit or loss immediately unless the derivative is designated and effective as ahedging instrument, in which event the timing of the recognition in profit or loss depends on the nature ofthe hedge relationship.

Hedge Accounting

The Group designates certain hedging instruments, which include derivatives, embedded derivativesand non-derivatives in respect of foreign currency risk, as either fair value hedges, cash flow hedges, orhedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitmentsare accounted for as cash flow hedges.

At the inception of the hedge relationship, the entity documents the relationship between the hedginginstrument and the hedged item, along with its risk management objectives and its strategy forundertaking various hedge transactions.

Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether thehedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged itemattributable to the hedged risk.

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cashflow hedges is recognised in other comprehensive income and accumulated under the heading of cashflow hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately inprofit or loss, and is included in the ‘other gains and losses’ line item.

Amounts previously recognised in other comprehensive income and accumulated in equity arereclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line asthe recognised hedged item. However, when the hedged forecast transaction results in the recognitionof a non-financial asset or a non-financial liability, the gains and losses previously recognised in othercomprehensive income and accumulated in equity are transferred from equity and included in the initialmeasurement of the cost of the non-financial asset or non-financial liability.

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Hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedginginstrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedgeaccounting. Any gain or loss recognised in other comprehensive income and accumulated in equity atthat time remains in equity and is recognised when the forecast transaction is ultimately recognised inprofit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated inequity is recognised immediately in profit or loss.

Share-based payments

Equity-settled share-based payments are measured at fair value at the date of the grant. The fair valuedetermined at the grant date of the equity-settled share-based payments is expensed on a straight-linebasis over the vesting period, based on the parent company’s estimate of shares that will eventually vest.The company has applied the requirements of IFRS 2 Share-based payment.

Critical accounting judgements and key sources of estimation uncertainty

The directors have made significant accounting estimates and judgements in applying the Group’saccounting policies in the following areas:

Impairment: Stores are identified for further impairment testing primarily on the basis of currentperformance, with growth assumptions based on directors’ knowledge and experience. The directorshave used forecast models and an appropriate pre-tax weighted average cost of capital in its property,plant and equipment impairment calculations.

Inventory valuation: The directors have used their knowledge and experience of the fashion industryand homeware industry in determining the level and rates of provisioning required to calculate theappropriate inventory carrying values. Inventory is carried in the financial statements at the lower of costand net realisable value. Sales in the fashion industry can be extremely volatile with consumer demandchanging significantly based on current trends. As a result there is a risk that the cost of inventoryexceeds its net realisable value. Management calculate the inventory provision on the basis of theageing profile of what is in stock. Adjustments are made where appropriate based on directors’knowledge and experience to calculate the appropriate inventory carrying values.

2. REVENUE

The turnover and profit before taxation are attributable to the one principal activity of the Group.


2013 2014 2015 2015 2016£’000 £’000 £’000 £’000 £’000

(unaudited)Sale of goods . . . . . . . . . . . . . . . . . . . . . . . 77,524 95,608 116,421 89,441 105,705

77,524 96,608 116,421 89,441 105,705

Finance income and similar incomes . . . . . . 7 84 190 40 15

7 84 190 40 15

77,531 95,692 116,611 89,481 105,720

3. SEGMENT REPORTING

The Group has two reportable segments; retail and wholesale. For each of the segments, the Group’schief operating decision maker (the ‘‘Board’’) reviews internal management reports on a monthly basis.The segments can be summarised as follows:

Retail: Retail includes sales and costs relevant to Stores, E-commerce, Shows and Franchises.

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3. SEGMENT REPORTING (Continued)

Wholesale: Wholesale includes sales and costs relevant to the sale of products to other retailbusinesses or distributors for onward sale to their customer.

The accounting policies of the reportable segments are the same as described in note 1. Informationregarding the results of each reportable segment is included below. Segment results before exceptionalitems are used to measure performance as management believes that such information is the mostrelevant in evaluating the performance of certain segments relative to other entities that operate withinthese industries.

SEGMENT REVENUES AND RESULTS

39 WEEKS ENDED 28 FEB 2016 Retail Wholesale Central Total£’000 £’000 £’000 £’000

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,780 31,636 289 105,705Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,060) (19,864) (279) (49,203)

GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,720 11,772 10 56,502Administration expenses . . . . . . . . . . . . . . . . . . . . . . . . (25,696) (4,561) (12,869) (43,126)

SEGMENT RESULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,024 7,211 (12,859) 13,376

RECONCILIATION OF SEGMENT RESULT TO PROFITBEFORE TAX

Segment result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,024 7,211 (12,859) 13,376Depreciation and amortisation . . . . . . . . . . . . . . . . . . . . (2,377) (185) (1,419) (3,981)Central administrative expenses . . . . . . . . . . . . . . . . . . . (279)Exceptional costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Net finance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,118)Interest receivable and similar income . . . . . . . . . . . . . . . 15

PROFIT BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . 5,013

39 WEEKS ENDED 22 FEB 2015(unaudited) Retail Wholesale Central Total

£’000 £’000 £’000 £’000Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,090 25,047 304 89,441Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,959) (15,236) — (42,195)

GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,131 9,811 304 47,246Administration expenses . . . . . . . . . . . . . . . . . . . . . . . . . (23,817) (3,572) (10,835) (38,224)

SEGMENT RESULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,314 6,239 (10,531) 9,022


Segment result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,314 6,239 (10,531) 9,022Depreciation and amortisation . . . . . . . . . . . . . . . . . . . . . (2,228) (107) (1,182) (3,516)Central administrative expenses . . . . . . . . . . . . . . . . . . . (208)Exceptional costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Net finance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,772)Interest receivable and similar income . . . . . . . . . . . . . . . 40


52



53 WEEKS ENDED 31 MAY 2015 Retail Wholesale Central Total£’000 £’000 £’000 £’000

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,413 31,633 375 116,421Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (35,009) (19,377) — (54,386)

GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,404 12,256 375 62,035Administration expenses . . . . . . . . . . . . . . . . . . . . . . . . (31,865) (4,762) (14,698) (51,325)

SEGMENT RESULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,539 7,494 (14,323) 10,710


SEGMENT RESULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,539 7,494 (14,323) 10,710Depreciation and amortisation . . . . . . . . . . . . . . . . . . . . (2,956) (161) (1,679) (4,796)Central administrative expenses . . . . . . . . . . . . . . . . . . . (337)Exceptional costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (500)Net finance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,178)Interest receivable and similar income . . . . . . . . . . . . . . . 190

PROFIT BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . 89

52 WEEKS ENDED 25 MAY 2014 Retail Wholesale Other Total£’000 £’000 £’000 £’000



SEGMENT RESULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,242 7,147 (12,326) 9,063


Segment result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,242 7,147 (12,326) 9,063Depreciation and amortisation . . . . . . . . . . . . . . . . . . . . . (2,285) (60) (940) (3,285)Central administrative expenses . . . . . . . . . . . . . . . . . . . (573)Exceptional costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,650)Net finance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,799)Interest receivable and similar income . . . . . . . . . . . . . . . 84

LOSS BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . (160)

52 WEEKS ENDED 26 MAY 2013 Retail Wholesale Central Total£’000 £’000 £’000 £’000



SEGMENT RESULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,067 8,137 (11,847) 7,357


Segment result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,067 8,137 (11,847) 7,357Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,299) (13) (958) (2,270)Central administrative expenses . . . . . . . . . . . . . . . . . . . (567)Results from discontinued operations . . . . . . . . . . . . . . . (239)Exceptional costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (411)Net finance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . (190)Interest receivable and similar income . . . . . . . . . . . . . . . 7


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Results from discontinued operations relate to the Rampant Sporting business which in the 52 weekperiod ended May 2013 had sales of £1,401,000, cost of sales of £1,068,000 and administrativeexpenses of £572,000. The entire results of the discontinued business, being a loss of £239,000, areshown within administrative expenses on the face of the consolidated income statement.

Segmental assets and/or liabilities are not presented as this information is not regularly provided to thechief operating decision maker.

GEOGRAPHICAL INFORMATION

The Group’s revenue from external customers by geographical location are as detailed below.Predominantly all non-current assets (excluding financial instruments, deferred tax assets and otherfinancial assets) are situated in the UK, therefore separate geographical disclosure of non-current assetsis not considered necessary.

SupportUK International (UK) Total

£’000 £’000 £’000 £’00039 Weeks ended 28 February 2016 . . . . . . . . . . . . . . . . 95,144 10,560 — 105,70539 Weeks ended 22 February 2015 (unaudited) . . . . . . . 81,588 7,853 — 89,44153 Weeks ended 31 May 2015 . . . . . . . . . . . . . . . . . . . 105,819 10,602 — 116,42152 Weeks ended 25 May 2014 . . . . . . . . . . . . . . . . . . . 89,592 5,579 437 95,60852 Weeks ended 26 May 2013 . . . . . . . . . . . . . . . . . . . 73,648 3,563 313 77,524

4. EXPENSES BY NATURE

52 weeks 52 weeks 53 weeks 39 weeks 39 weeksended ended ended ended ended

26 May 2013 25 May 2014 31 May 2015 22 Feb 2015 28 Feb 2016£’000 £’000 £’000 £’000 £’000

(unaudited)Cost of inventories . . . . . . . . . . . 31,720 37,250 46,842 36,424 41,976Transportation, carriage and

packing . . . . . . . . . . . . . . . . . . 2,597 4,437 5,450 4,035 4,394Employees remuneration and

benefits . . . . . . . . . . . . . . . . . . 16,249 19,487 22,984 17,289 19,587Depreciation, amortisation and

impairment expenses . . . . . . . . 2,270 3,783 5,296 3,516 3,981Other expenses . . . . . . . . . . . . . 20,816 28,096 30,772 22,879 26,651

73,654 93,053 111,344 84,143 96,589

Other expenses include £Nil for February 2016 (February 2015: £Nil, May 2015: £500,000, May2014: £2,650,000, May 2013: £411,000) of exceptional items which have been disclosed separately onthe face of the income statement in order to disclose underlying results. Neither ‘underlying profit or loss’nor ‘exceptional items’ are defined by IFRS however the directors believe that the disclosures presentedin this manner provide clear presentation of the financial performance of the company.

The May 2015 period exceptional items relate to the impairment of assets at stores that are due to closeshortly after the year end.

The May 2014 exceptional items relate to fair value adjustments and include £0.4m relating to the writeoff of obsolete stock, £0.2m of redundancy costs, £0.5m increase in stock provision and £1.55m ofexceptional costs relating to the transaction with LDC.

The May 2013 exceptional items relate to a vendor due diligence project to prepare a VDD report forpotential investors into the business.

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5. OPERATING PROFIT

Operating profit is 52 weeks 52 weeks 53 weeks 39 weeks 39 weeksstated after ended ended ended ended endedcharging/(crediting): 26 May 2013 25 May 2014 31 May 2015 22 Feb 2015 28 Feb 2016

£’000 £’000 £’000 £’000 £’000(unaudited)

Hire of plant and machinery . . . . . 257 571 597 451 365Other operating leases . . . . . . . . 4,453 6,209 7,928 5,815 6,990Depreciation, amortisation and

impairment of fixed assets . . . . 2,370 3,783 5,296 3,516 3,981(Profit)/loss on disposal of fixed

assets . . . . . . . . . . . . . . . . . . . (216) — — (25) 36

6. INTEREST PAYABLE AND SIMILAR CHARGES



(unaudited)Bank loan interest . . . . . . . . . . . . 190 323 416 317 273Loan note interest . . . . . . . . . . . . — 2,264 4,399 3,183 3,573Amortisation of debt costs . . . . . . — 212 363 272 272

190 2,799 5,178 3,772 4,118

7. INCOME TAX

a) Analysis of charge in the period



(unaudited)Current taxUK corporation tax based on the

profit/(loss) for the period . . . . . 1,068 1,133 1,083 812 987Adjustment in respect of prior

periods . . . . . . . . . . . . . . . . . . (64) 32 (561) (421) (354)Overseas tax . . . . . . . . . . . . . . . 17 — 21 16 —

Total current tax charge . . . . . . . 1,021 1,165 543 407 633

Deferred taxation (note 18)Adjustment in respect of prior

periods . . . . . . . . . . . . . . . . . . (39) (199) 330 248 —Origination and reversal of timing

differences . . . . . . . . . . . . . . . 94 (548) (358) (269) —Effect of adjustment in tax rate . . . 10 51 14 10 80

Total deferred taxation charge/(credit) . . . . . . . . . . . . . . . . . . 65 (696) (14) (11) 80

Tax charge for the period(note 7b) . . . . . . . . . . . . . . . . 1,086 469 529 396 713

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7. INCOME TAX (Continued)

In addition to the amount charged to the income statement, the following amounts relating to tax havebeen recognised in other comprehensive income.



(unaudited)Deferred taxation (note 18)Cash flow hedges Gains/(Losses)

arising during the period . . . . . 235 (620) 444 212 398

Total income tax recognised inother comprehensive income . 235 (620) 444 212 398

7. TAX ON LOSS ON ORDINARY ACTIVITIES

b) Factors affecting the tax charge for the period

There are reconciling items between the expected tax charge and the actual which are shown below:



(unaudited)Profit (loss) on ordinary activities

before taxation . . . . . . . . . . . . 3,687 (160) 89 1,566 5,013

UK corporation tax at thestandard rate . . . . . . . . . . . . . . 24% 23% 21% 21% 20%

878 (36) 19 329 1,003Effects of:Expenses/(credits) not deductible

for tax purposes and otherpermanent differences . . . . . . . 310 610 553 100 (16)

Difference in overseas tax rate . . . (9) (12) 11 8 —Effect of adjustment in tax rate . . . 10 51 14 11 80Losses not recognised due to

uncertainty . . . . . . . . . . . . . . . — 23 163 121 —Adjustment in respect of prior

period . . . . . . . . . . . . . . . . . . . (103) (167) (231) (173) (354)

Tax expense for the period(note 7a) . . . . . . . . . . . . . . . . . 1,086 469 529 396 713

On 23 March 2011 the UK Government announced that the main rate of corporation tax would reduce to26% from 1 April 2011 with subsequent reductions per annum to reach 23% with effect from 1 April 2014.The reduction to 23% was substantive enacted on 3 July 2012 and has been reflected in the calculationof deferred tax in the May 2013 numbers.

The 2013 budget issued on 20 March announced that the main rate of corporation tax would be reducedto 21% from 1 April 2014 and to 20% from 1 April 2015. The reduction to 20% was substantively enactedon 2nd July 2013 and has been reflected in the calculation of deferred tax reflected in the May 2014, May2015 and February 2015 numbers.

In July 2015 the UK government announced its intention to reduce the standard corporation tax rate to18% by 2020. The measure to reduce the rate to 19% for the financial year beginning 1 April 2017 and to18% for the financial year beginning 1 April 2020 were substantively enacted on 26 October 2015 andhave been reflected in the calculation of deferred tax in the February 2016 numbers.

56


8. INVESTMENTS

As at the period-end the company has the following subsidiaries, those marked with * being indirectholdings:

Place of Proportion of ProportionNature of incorporation and ownership of voting

Subsidiary name business operation interest power held

Joules Limited . . . . . . . . . Retailer England and Wales 100% 100%Joules Hong Kong

Limited* . . . . . . . . . . . . Overseas trading entity Hong Kong 100% 100%Wickmere No 1 Limited* . Holding company England and Wales 100% 80%Wickmere No 2 Limited* . Non trading England and Wales 100% 100%Joules Clothing Shanghai

Company Limited* . . . . Overseas office China 100% 100%Joules USA Inc.* . . . . . . . Overseas trading entity USA 100% 100%Joules Clothing Limited* . Dormant company England and Wales 100% 100%Joules (Market

Harborough) Limited* . . Dormant company England and Wales 100% 100%

On 1 November 2013, the company acquired 100% of the issued share capital of Joules Limited for aconsideration of £36m in the form of cash and multiple classes of loan notes and shares. All the otherentities detailed above have been in existence for the whole of the reporting period.

57


9. PROPERTY, PLANT AND EQUIPMENT

FixturesFreehold Leasehold and Motorproperty improvements fittings vehicles Total

£’000 £’000 £’000 £’000 £’000CostAt 31 May 2012 . . . . . . . . . . . . . . . . . . . . . . . 513 155 10,630 504 11,802Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 3,679 — 3,679Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . (513) — — — (513)

At 26 May 2013 . . . . . . . . . . . . . . . . . . . . . . . — 155 14,309 504 14,968Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 7,061 10 7,071

At 25 May 2014 . . . . . . . . . . . . . . . . . . . . . . . — 155 21,370 514 22,039Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 5,391 16 5,407

At 31 May 2015 . . . . . . . . . . . . . . . . . . . . . . . — 155 26,761 530 27,446Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 3,369 — 3,369Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (659) — (659)

At 28 February 2016 . . . . . . . . . . . . . . . . . . . — 155 29,471 530 30,156

Accumulated depreciationAt 31 May 2012 . . . . . . . . . . . . . . . . . . . . . . . 58 91 5,556 323 6,028Charge for the period . . . . . . . . . . . . . . . . . . . 10 6 2,208 80 2,304Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . (68) — — — (68)

At 26 May 2013 . . . . . . . . . . . . . . . . . . . . . . . — 97 7,764 403 8,264Charge for the period . . . . . . . . . . . . . . . . . . . — 14 2,894 74 2,982

At 25 May 2014 . . . . . . . . . . . . . . . . . . . . . . . — 111 10,658 477 11,246Charge for the period . . . . . . . . . . . . . . . . . . . — 8 4,203 31 4,242Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . — — 500 — 500

At 31 May 2015 . . . . . . . . . . . . . . . . . . . . . . . — 119 15,361 508 15,988Charge for the period . . . . . . . . . . . . . . . . . . . — 6 3,287 5 3,298Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (622) — (622)

At 28 February 2016 . . . . . . . . . . . . . . . . . . . — 125 18,026 513 18,664

Net book valueAt 26 May 2013 . . . . . . . . . . . . . . . . . . . . . . . — 58 6,545 101 6,704At 25 May 2014 . . . . . . . . . . . . . . . . . . . . . . . — 44 10,712 37 10,793At 31 May 2015 . . . . . . . . . . . . . . . . . . . . . . . — 36 11,400 22 11,458

At 28 February 2016 . . . . . . . . . . . . . . . . . . . — 30 11,445 17 11,492

58


10. INTANGIBLE ASSETS

ITSystems Total

£’000 £’000CostAt 31 May 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460 460Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,341 1,341

At 26 May 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,801 1,801Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 743 743

At 25 May 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,544 2,544Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,385 3,385

At 31 May 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,929 5,929Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,810 1,810

At 28 February 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,739 7,739

Accumulated amortisationAt 31 May 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 92Charge for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 66

At 26 May 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 158Charge for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303 303Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498 498

At 25 May 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 959 959Charge for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554 554

At 31 May 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,513 1,513Charge for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 683 683

At 28 February 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,196 2,196

Net book valueAt 26 May 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,643 1,643At 25 May 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,585 1,585At 31 May 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,416 4,416

At 28 February 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,543 5,543

11. INVENTORIES

26 May 2013 25 May 2014 31 May 2015 28 Feb 2016£’000 £’000 £’000 £’000

Goods for resale . . . . . . . . . . . . . . . . . . . . . . 9,080 12,106 15,767 16,347Goods in transit . . . . . . . . . . . . . . . . . . . . . . . 2,438 1,261 1,885 1,241

11,518 13,367 17,652 17,588

There is no material difference between the balance sheet value of stocks and their replacement cost.

The cost of inventories recognised as an expense during the year in respect of continuing operationswas £41,976,000 for 28 February 2016 (22 Feb 2015: £36,424,000, 31 May 2015: £46,842,000 25 May2014: £37,250,000 26 May 2013: £31,720,000).

The cost of inventories recognised as an expense includes £362,000 for 28 February 2016 (22 February2015: £353,000, 31 May 2015: 342,000, 25 May 2014: £277,000, 26 May 2013: £434,000) in respect ofwrite-downs of inventory to net realisable value, and has been reduced by £25,000 for 28 February 2016(22 February 2015: £262,000, 31 May 2015: £349,000, 25 May 2014: £nil, 26 May 2013: £nil) in respect ofthe reversal of such write-downs.

Product is purchased on a seasonal basis with the intention of selling that stock within 12 months of thebalance sheet date. Any aged stock is appropriately provided.

59


12. OTHER FINANCIAL ASSETS/(LIABILITIES)

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Derivatives designated and effective as hedging instrumentscarried at fair value:

Forward foreign currency contracts . . . . . . . . . . . . . . . . . . . . . . 1,200 (1,721) 500 2,760

1,200 (1,721) 500 2,760

Forward contracts and options

The Group enters into forward foreign exchange contracts and options to manage the risk associatedwith anticipated sales and purchase transactions which are denominated in foreign currencies.

As at 28 February 2016, the Group has 49 (May 2015: 35, Feb 2015: 37, 2014: 72, 2013: 38) forwardforeign exchange contracts outstanding. Derivative financial instruments are carried at fair value.

(a) Average exchange £/$ rate

26 May 25 May 31 May 28 Feb2013 2014 2015 2016

3 months or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5744 1.5313 1.5597 1.49473 to 6 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5784 1.5835 1.5281 1.54586 to 12 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6043 1.5945 1.5354 1.4677Over 12 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5294 1.6091 — —

(b) Contract value

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

3 months or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,082 5,568 3,751 6,7243 to 6 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,520 10,552 8,837 6,7936 to 12 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,345 14,161 18,466 22,455Over 12 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,193 1,247 — —

31,140 31,528 31,054 35,972

(c) Foreign currency

26 May 25 May 31 May 28 Feb2013 2014 2015 2016$’000 $’000 $’000 $’000

3 months or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,500 9,307 5,731 10,0003 to 6 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,500 8,507 13,478 10,5006 to 12 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,200 8,833 28,216 33,400Over 12 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000 2,077 — —

49,200 28,724 47,425 53,900

60


12. OTHER FINANCIAL ASSETS/(LIABILITIES) (Continued)

(d) Fair value

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

3 months or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 (478) 180 4713 to 6 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 (593) 63 6766 to 12 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 647 (604) 257 1,613Over 12 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 (46) — —

1,200 (1,721) 500 2,760

13. TRADE AND OTHER RECEIVABLES

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Trade receivables—gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,883 1,773 2,601 8,374Allowance for doubtful debts . . . . . . . . . . . . . . . . . . . . . . . . . . (49) (38) (149) (156)

Trade receivables—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,834 1,735 2,452 8,218Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 493 706 232Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,911 5,854 6,998 6,455

Total trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . 6,745 8,082 10,156 14,905

All of the other receivables and prepayment balances above are deemed to be current; the disclosuresbelow relate only to the trade receivables balance.

The directors review the recoverability of trade receivables on a regular basis and calculate theallowance for doubtful debts on both a specific, customer by customer basis and on a general basis.

The Group has no significant concentration of credit risk, with exposure spread over a large number ofcounterparties and customers. Accordingly the directors believe that there is no further credit provisionrisk required in excess of the allowance for doubtful debts.

Included within the Group’s trade receivables (gross) balance are debtors with a carrying value of£1,687,000 (2015: £766,000, 2014: £494,000, 2013: £583,000) which are past due at the reporting datefor which the Group has not provided as there has not been a significant change in credit quality and theamounts are still considered recoverable.

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Ageing of past due trade receivablesGroup

1–30 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 417 534 1,75531–60 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 71 295 3061–90 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 35 86 5690+ days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 9 — 2

Total past due trade receivables . . . . . . . . . . . . . . . . . . . . . . . 632 532 915 1,843Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,251 1,241 1,686 6,531

Total trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,883 1,773 2,601 8,374

Movement in the allowance for doubtful debts . . . . . . . . . . .Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . 97 49 38 149Bad debt write (back)/off . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12) 67 276 122Movement in doubtful debt estimate . . . . . . . . . . . . . . . . . . . . (36) (78) (165) (115)

Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 38 149 156

61


14. TRADE AND OTHER PAYABLES

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,082 6,735 9,337 7,364Other taxation and social security . . . . . . . . . . . . . . . . . . . . . 409 966 792 1,358Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 1,057 1,717 1,012Accruals and deferred income . . . . . . . . . . . . . . . . . . . . . . . . 4,681 6,313 6,870 12,594

12,517 15,071 18,716 22,328

The asset loans are secured against a debenture comprising fixed and floating charges over the assetsto which it relates.

Trade creditors and accruals principally comprise amounts outstanding for trade purchases andongoing costs. The average creditor days are 33 days for February 2016 (February 2015: 45 days, May2015: 45 days, 2014: 41 days and 2013: 40 days).

The directors consider that the carrying amount of trade payables approximates their fair value.

15. PROVISIONS

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Returns provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 418 172 513Dilapidations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 484 415 267

236 902 587 780

ReturnsDilapidations provision Total

£’000 £’000 £’000At 26 May 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 156 236Additional provision during the period . . . . . . . . . . . . . . . . . . . . . . 424 637 1,061Utilisation of provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20) (375) (395)

At 25 May 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484 418 902Additional provision during the period . . . . . . . . . . . . . . . . . . . . . . — 167 167Reversal of provision during the period . . . . . . . . . . . . . . . . . . . . . (69) — (69)Utilisation of provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (413) (413)

At 31 May 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 172 587Additional provision during the period . . . . . . . . . . . . . . . . . . . . . . — 341 341Reversal of provision during the period . . . . . . . . . . . . . . . . . . . . . (52) — (52)Utilisation of provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96) — (96)

At 28 February 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 513 780

Returns provision

Present obligations arising under sales returns are recognised and measured as provisions when it isprobable that the Group will be required to settle the obligation under sales contracts. Returnsprovisions in existence at the balance sheet date are expected to be utilised within 12 months, theprovision is recalculated at each balance sheet date taking into account recent sales and anticipatedlevels of returns.

Lease dilapidation

The Group recognise present obligations arising from lease contracts where it is required to restore thestores to their pre lease condition upon the expiry of leases. Lease dilapidations provisions are expectedto be utilised between 0–3 years in line with the expiry of the leases.

62


16. BORROWINGS

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Asset loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 861 890 1,566 1,187Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 39,300 43,699 47,272Import loan facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,006 — — —Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 7,088 7,068 4,065Financing costs capitalised . . . . . . . . . . . . . . . . . . . . . . . . . . . — (1,240) (877) (605)

5,867 46,038 51,456 51,919

Borrowings are repayable as follows:Bank loansBetween two and five years . . . . . . . . . . . . . . . . . . . . . . . . . . — 7,088 7,068 4,065

Asset loansBetween one and two years . . . . . . . . . . . . . . . . . . . . . . . . . . 126 267 490 364Between two and five years . . . . . . . . . . . . . . . . . . . . . . . . . . 41 250 515 379

On demand or within one year . . . . . . . . . . . . . . . . . . . . . . . . 694 373 561 444

861 890 1,566 1,187

Import loan facilityWithin one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,006 — — —

Loan notesBetween two and five years . . . . . . . . . . . . . . . . . . . . . . . . . . — 7,860 17,480 28,363After five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 31,440 26,219 18,909

— 39,300 43,699 47,272

Financing costs capitalised . . . . . . . . . . . . . . . . . . . . . . . . . . . — (1,240) (877) (605)

— 38,060 42,822 46,667

Total borrowingsBetween one and two years . . . . . . . . . . . . . . . . . . . . . . . . . . 126 267 490 364Between two and five years . . . . . . . . . . . . . . . . . . . . . . . . . . 41 15,198 25,063 32,807After five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 31,440 26,219 18,909Financing costs capitalised . . . . . . . . . . . . . . . . . . . . . . . . . . . — (1,240) (877) (605)

167 45,665 50,895 51,475On demand or within one year . . . . . . . . . . . . . . . . . . . . . . . . 5,700 373 561 444

5,867 46,038 51,456 51,919

Summary of borrowing arrangements

The bank loan is a revolving facility repayable in November 2017 and is secured by a fixed and floatingcharge against the assets of the Group. The asset loans are secured against the assets to which theyrelate. Interest is paid at varying rates above base rate.

The loan notes were issued in November 2013 and are repayable in equal amounts representing 20% ofthe outstanding balance annually from 31 October 2018 for a period of 5 years. Interest accrues annuallyat 11% and is added to the principal amount outstanding. From 31 October 2018 the interest rateincreases to 13%. Financing costs of £1.45m have been capitalised and are being amortised over4 years. The loan notes are secured by a fixed charge against the Group.

63


16. BORROWINGS (Continued)

The weighted average interest rates paid during the period were as follows

26 May 25 May 31 May 28 Feb2013 2014 2015 2016

% % % %Asset loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 7.3 8.9 7.0Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 11.0 11.0 11.0Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 3.0 3.0 3.0

17. FINANCIAL COMMITMENTS

Operating Lease Commitments

At the balance sheet date, the Group had outstanding commitments for future minimum lease paymentsunder non-cancellable operating leases, which fall due as follows:

Land & Buildings26 May 25 May 31 May 28 Feb

2013 2014 2015 2016£’000 £’000 £’000 £’000

Leases expiring:Not later than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,883 6,164 7,996 8,129

Later than 1 year and not later than 5 years . . . . . . . . . . . . . . 15,390 20,575 26,497 27,970Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,910 14,465 16,975 18,435

32,183 41,204 51,468 54,534

Other26 May 25 May 31 May 28 Feb

2013 2014 2015 2016£’000 £’000 £’000 £’000

Leases expiring:Not later than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 324 299 317

Later than 1 year and not later than 5 years . . . . . . . . . . . . . . . . 227 673 495 422Later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —

413 997 794 739

64


18. DEFERRED TAXATION

The following is the analysis of deferred tax assets/(liabilities) presented in the consolidated statement offinancial position:

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Difference between depreciation and capital allowancesBalance brought forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258 191 572 535Effect of change in tax rates—In Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11) (25) — (54)(Charge)/Credit to income statement . . . . . . . . . . . . . . . . . . . . . (56) 406 (37) —

Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 572 535 481

Other short term timing differencesBalance brought forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (41) (274) 661 268Effect of change in tax rates—In Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — (37)—In Other Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . — 36 — 10Credit to income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 315 51 11(Charge)/Credit to other comprehensive income . . . . . . . . . . . . . (235) 584 (444) (408)

Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (274) 661 268 (156)

Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (83) 1,233 803 325

MovementBalance brought forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 (83) 1,233 803(Charge)/credit to income statement (note 7) . . . . . . . . . . . . . . . (65) 696 14 (80)(Charge)/credit to other comprehensive income (note 7) . . . . . . . (235) 620 (444) (398)

Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (83) 1,233 803 325

There is no unprovided deferred tax in either the current or prior period for the Group (May 2015: nil,2014: nil, 2013: nil). The deferred tax asset recognised in the current period is expected to be utilisedagainst future taxable profits.

There is an unprovided deferred tax asset in the Joules Investments Holdings Limited of £287,000 (May2015: £319,000, 2014: £182,000, 2013 nil). The deferred tax asset has not been recognised as there isuncertainty over the future taxable profits of the company.

19. CALLED UP SHARE CAPITAL

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Allotted and issued30,380 A Ordinary shares of £0.10 each . . . . . . . . . . . . . . . . . 4 3 3 351,000 B Ordinary shares of £0.10 each . . . . . . . . . . . . . . . . . 10 5 5 514,863 C Ordinary shares of £0.10 each . . . . . . . . . . . . . . . . . — 2 2 21,900 C2 Ordinary shares of £0.10 each . . . . . . . . . . . . . . . . . — — — —9,808 D Ordinary shares of £0.01 each . . . . . . . . . . . . . . . . . . — — — —9,732 E Ordinary shares of £0.01 each . . . . . . . . . . . . . . . . . . — — — —19,650 F Ordinary shares of £0.10 each . . . . . . . . . . . . . . . . . — 2 2 2114,118 Ordinary shares of £1 each . . . . . . . . . . . . . . . . . . . . 114 — — —

128 12 12 12

The company was incorporated on 29 October 2013 with 1 Ordinary share of nominal value £1. On4 November 2013 the 1 Ordinary share was subdivided into 10 A Ordinary shares each with nominal

65


19. CALLED UP SHARE CAPITAL (Continued)

value of £0.10. On the same date the companies Authorised Share Capital was increased to £11,957comprising of 30,380 A ordinary shares, 51,000 B Ordinary shares, 18,620 C Ordinary shares, and17,580 E Ordinary shares each with a nominal value of £0.10 and 10,000 D Ordinary shares and 10,000E Ordinary shares each of nominal value of £0.01. 134,410 of these Ordinary shares were issued at atotal value of £1 each on the same date.

The movement in share capital between May 2013 and May 2014 arises as the share capital aspreviously reported in Joules Limited is shown as at May 2013 and the share capital of JoulesInvestments Holdings Limited is shown as at May 2014 and beyond. The acquisition of Joules Limited byJoules Investments Holdings Limited has been accounted for under merger accounting.

The subsequent movements in the share classes were: A buyback of 3,920 C shares in FY13/14, abuyback of 79 E shares in FY14/15, and in FY15/16 issue of 820 F shares, 1,413 ESS C shares, 1,900 C2shares and buyback of 1,250 C shares, 192 D shares and 189 E shares. The introduction of an ESSshare scheme in December 2015 in which 4 employees were issued 1,413 C Ordinary shares in total isreflected in the above table.

The different classes of ordinary shares do not rank pari passu as they carry different voting and dividendrights.

Voting rights

The holders of the A Ordinary shares, B Ordinary shares, C Ordinary shares (together the ‘‘EquityShares’’) and F Ordinary shares shall be entitled to receive notice of and to attend, speak and vote at allgeneral meetings of the Company and to vote on written resolutions and on a poll or written resolution toexercise one vote per Share provided that. (a) for so long as an LDC Entity (as defined in the Articles)shall be the legal and/or beneficial owner of the A Ordinary Shares, such A Ordinary Shares shall nottogether confer more than 49.9% of the total voting rights of all Shares at any time (b) the holders of theB Ordinary Shares shalt be entitled to 51% of the total votes attributable to all the Equity Shares in issue,and (c) each holder of an F Ordinary Share shall be entitled to exercise one vote per F Ordinary Share. Allclasses of shares are not redeemable.

Dividends rights

Following Investor Approval and B Shares Approval (as defined in the Articles of Association), theholders of the A Ordinary, B Ordinary and C Ordinary Shares shall be entitled to receive a distribution inthe profits of the Company in respect of any financial year (pari passu as if the same constituted oneclass of share).

20. OTHER RESERVES

Share premium account

£’000

Balance at 1 June 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Premium arising on new share capital issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405

Balance at 26 May 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468

Effect of Group restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,203

Balance at 25 May 2014 and 31 May 2015 and as at 28 Feb 2016 . . . . . . . . . . . . . . . . . 1,671

Redemption of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Balance at 28 February 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,641

66


20. OTHER RESERVES (Continued)

As detailed in the share capital note above the company was incorporated on 29 October 2013. Theeffect of Group restructuring is the difference between the share premium as previous reported in JoulesLimited and that within Joules Investments Holdings Limited. The acquisition of Joules Limited by JoulesInvestments Holdings Limited has been accounted for under merger accounting.

The share premium reserve contains the premium arising on the issue of equity shares, net of issueexpenses.

Retained earnings

The movement on retained earnings is as set out in the consolidated statement of changes in equity.Retained earnings represent cumulative profits or losses, net of dividends and other adjustments.

Merger Reserve

The movement on the merger reserve is as set out in the consolidated statement of changes in equity.The merger reserve represents the premium on equity consideration used in the acquisition ofsubsidiary Joules Limited, by Joules Investment Holdings in 2013 plus cumulative retained earnings ofeach company as at the combination date. The accounting policy for merger accounting is set out innote 1.

21. HEDGING AND RETRANSLATION RESERVE

Hedging TranslationGroup reserve reserve

£’000 £’000Balance as at 27 May 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 —Gains/(losses) recognised in other comprehensive income . . . . . . . . . . . . . . . 1,029 3Income tax relating to gains(losses) recognised in other comprehensive

income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (235) —

Balance as at 26 May 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 924 3Gains/(losses) recognised in other comprehensive income . . . . . . . . . . . . . . . (2,921) 4Income tax relating to gains(losses) recognised in other comprehensive

income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 —

Balance as at 25 May 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,377) 7Gains/(losses) recognised in other comprehensive income . . . . . . . . . . . . . . . 2,221 (31)Income tax relating to gains(losses) recognised in other comprehensive

income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (444) —

Balance as at 31 May 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400 (24)Gains/(losses) recognised in other comprehensive income . . . . . . . . . . . . . . . 2,259 (143)Income tax relating to gains(losses) recognised in other comprehensive

income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (398) —

Balance as at 28 February 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,261 (167)

Hedging reserve

The reserve represents the cumulative gains and losses on hedging instruments in cash flow hedges.The cumulative deferred gain or loss on the hedging instrument is recognised in profit or loss only whenthe hedge transaction impacts the profit or loss or is included as a basis adjustment to the non-financialhedged item, consistent with the applicable accounting policy.

67


21. HEDGING AND RETRANSLATION RESERVE (Continued)

Translation reserve

Exchange differences relating to the translation of the net asset of the Group’s foreign operations whichrelate to subsidiaries only, from their functional currency into the parent’s functional currency beingSterling, are recognised directly to the retranslation reserve.

22. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Increase(decrease) in cash in the period . . . . . . . . . . . . . . . 2,265 (43) (2,126) 3,485Cash flow from movement in debt . . . . . . . . . . . . . . . . . . . . 1,691 (1,860) (656) 3,382

Change in net debt resulting from cash flows . . . . . . . . . . . . 3,956 (1,903) (2,782) 6,867Non cash movement on loan notes . . . . . . . . . . . . . . . . . . . — (38,311) (4,762) (3,845)Net debt at start of the year . . . . . . . . . . . . . . . . . . . . . . . (5,533) (1,577) (41,791) (49,335)

Net debt at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,577) (41,791) (49,335) (46,313)

23. CASH AND CASH EQUIVALENTS

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Cash and cash at bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,290 4,247 2,121 5,606

4,290 4,247 2,121 5,606

24. ANALYSIS OF NET DEBT

At Non- At Non- At31 May Cash Cash 26 May Cash Cash 25 May

2012 changes flow 2013 changes flow 2014£’000 £’000 £’000 £’000 £’000 £’000 £’000

Cash at bank and in hand . . . . . . . . . . . . . . 2,025 — 2,265 4,290 — (43) 4,247Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . — — — — (7,088) (7,088)Asset loan . . . . . . . . . . . . . . . . . . . . . . . . . (2,585) — 1,724 (861) — (29) (890)Loan notes . . . . . . . . . . . . . . . . . . . . . . . . . — — — — (38,311) 251 (38,060)Import Line Facility . . . . . . . . . . . . . . . . . . . (4,973) — (33) (5,006) — 5,006 —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,533) — 3,956 (1,577) (38,311) (1,903) (41,791)

At Non- At Non- At25 May Cash Cash 31 May Cash Cash 28 February

2014 changes flow 2015 changes flow 2016£’000 £’000 £’000 £’000 £’000 £’000 £’000

Cash at bank and in hand . . . . . . . . . . 4,247 — (2,126) 2,121 — 3,485 5,606Bank loans . . . . . . . . . . . . . . . . . . . . . (7,088) — 20 (7,068) — 3,003 (4,065)Asset loan . . . . . . . . . . . . . . . . . . . . . . (890) — (676) (1,566) — 379 (1,187)Loan notes . . . . . . . . . . . . . . . . . . . . . (38,060) (4,762) — (42,822) (3,845) — (46,667)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . (41,791) (4,762) (2,782) (49,335) (3,845) 6,867 (46,313)

68


25. FINANCIAL INSTRUMENTS

26 May 25 May 31 May 28 Feb2013 2014 2015 2016£’000 £’000 £’000 £’000

Categories of financial instrumentsCarrying value of financial assets:Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . 4,290 4,247 2,120 5,606Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . 6,745 8,082 10,156 14,905

11,035 12,329 12,276 20,511Loans and receivables at amortised cost . . . . . . . . . . . . . . — — — —Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . 1,200 — 500 2,760

12,235 12,329 12,776 23,271Financial assets at fair value through profit and loss . . . . . . — — — —Total financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,235 12,329 12,776 23,271

Carrying value of financial liabilities:Trade creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,082) (6,735) (9,337) (7,364)Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,930) (16,667) (19,800) (16,422)Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (167) (45,665) (50,895) (51,919)

(26,179) (69,067) (80,032) (75,705)Financial liabilities at fair value through profit and loss . . . . . — — — —

(26,179) (69,067) (80,032) (75,705)Derivative instruments in designated hedge accounting

relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (2,700) — —Total financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,179) (71,767) (80,032) (75,705)

Interest rate sensitivity analysis

If interest rates on all borrowings had been 1% higher/lower and all other variables were held constant,the Group’s profit for the period ended 26 February 2016 would decrease/increase by £52,000 (February2015: £61,000, May 2015: £82,000, May 2014: £63,000 and May 2013 £nil).

This has been calculated by applying the amended interest rate to the weighted average rate ofborrowings for the period to February 2016, other than borrowings which are held at a fixed interest rateas those borrowings are not sensitive to external variables, such as movement in interest rates.

Foreign currency sensitivity analysis

The Group is mainly exposed to fluctuations in the US $, which is used for stock purchases. If the US $exchange rate, on average through the period, weakened/strengthened by 10 percent and all othervariables were held constant, the Group’s profit for the period ended 28 Feb 2016 would increase/decrease by £96,000 and £79,000 respectively. This has been calculated by applying the amendedcurrency rate to the $ value of purchases in the period. (2015: £244,000 and 200,000, 2014: £64,000 and£53,000, 2013: £265,000 and £217,000).

Maturity of financial liabilities

The maturity of borrowings is included in note 16. All other financial liabilities are expected to maturewithin six months of the year-end.

Carrying value of financial assets

The directors have assessed that, on the basis of the net assets of the owing companies, theintercompany receivables are fully recoverable. As noted in note 13 the directors do not believe any ofthe trade receivables to be impaired. A significant decrease in the net assets and trade of the owingcompany or a decline in the financial position of customers would trigger an impairment review.

69


25. FINANCIAL INSTRUMENTS (Continued)

Credit risk

In the opinion of the directors, the only financial instrument that is subject to credit risk is the tradereceivables. The directors believe that the bad debt provision as disclosed in note 13 represents thedirectors’ best estimate of the maximum exposure to credit risk at period-end.

Fair value of financial instruments

Financial Instruments are measured in accordance with the accounting policy set out in note 1. AllFinancial Instruments are considered to be Level 3 with the exception of foreign currency forwardcontracts and options which are considered Level 2. In the opinion of the directors, the fair value of thefinancial assets and liabilities are equal to their book values.

Liquidity risk management

The directors believe that the receivables are not impaired and that the owing companies have sufficientnet assets to repay the balances. Therefore the directors believe that liquidity risk is minimal.

Capital risk management

The directors maintain detailed cash forecasts which are frequently revised to actuals to ensure that theGroup has sufficient liquid resources to meet its requirements.

Foreign currency financial assets and liabilities

Included within the above table are £1,221,000 (2015: £1,507,000, 2014: £575,000 and 2013: £400,000)of assets and £3,054,000 (2015: £588,000, 2014: £434,000 and 2013: £148,000) of liabilities relating tothe overseas subsidiaries which have been translated in the consolidation at the period-end rate. Thesebalances are subject to movements in exchange rates, as shown in the statement of changes in equity.The directors do not believe the risk is significant enough to warrant hedging against the investments inoverseas companies.

Also included within the above table are foreign currency denominated external trade payables andreceivables of £4,225,000 (2015: £3,339,000, 2014: £1,354,000, 2013: £2,788,000) and £424,000 (2015:£496,000, 2014: £271,000 and 2013: £416,000) respectively. The Group mitigates a significant amountof the exchange rate risk via purchases of forward foreign currency contracts.

26. RELATED PARTY TRANSACTIONS

During the year, the Group entered into following transaction with related parties who are not membersof the Group.

26 May 25 May 31 May 22 Feb 28 Feb2013 2014 2015 2015 2016£’000 £’000 £’000 £’000 £’000

(unaudited)Transaction with related partiesRental paid to Mr MIM Joule . . . . . . . . . . . . . . . . . . 45 28 — — —Purchases from Beolydale Associates Limited . . . . . 45 9 — — —Asset purchase from 3 T’s . . . . . . . . . . . . . . . . . . . — 101 — — —

Commission received from 3 T’s . . . . . . . . . . . . . 23 — — — —Balances owed to and by the GroupLoan notes issue to Shareholders . . . . . . . . . . . . — 39,000 — — —

Mr MIM Joule is the father of Mr TSL Joule, a director and a member of 3 T’s. Beolydale AssociatesLimited shared a common director with Joules, Mr J Pearson.

There are two subleases in place (at 53-54 High Street, Market Harborough) between Joules Limited andMR MIM Joule. The subleases were put in place in November 2013 to formalise historical informalarrangements between Joules Limited and Mr MIM Joule. Before these subleases were completed,

70


26. RELATED PARTY TRANSACTIONS (Continued)

Joules Limited occupied part of these premises, however the lease of the entire premises was held byMr MIM Joule. The subleases expire in 2019, have rents of £1.00 per annum and have rolling 6 monthtenant breaks. The Company estimates the market rent for these subleases to be £20,000 per annum.

Remuneration of key management personnel (being the Board of Directors)


2013 2014 2015 2015 2016£’000 £’000 £’000 £’000 £’000

(unaudited)Short-term employee benefits . . . . . . . . . . . . 1,691 1,369 1,029 737 935Post-employment benefits . . . . . . . . . . . . . . 38 40 42 32 36

1,729 1,409 1,071 769 971

27. CONTROLLING PARTY

The Group is under the control of Mr TSL Joule, who is the beneficial owner of the majority shareholdingof the ordinary share capital of the company.

28. EARNINGS PER SHARE

The calculation of basic and diluted earnings per share is based on the following data:

Earnings


2013 2014 2015 2015 2016£’000 £’000 £’000 £’000 £’000

(unaudited)Earnings for the purpose of basic earnings

per share being the net profit . . . . . . . . . . 2,601 (629) (440) 1,170 4,300Effect on dilutive potential on ordinary shares — — — — —

Earnings for the purpose of basic earningsper share . . . . . . . . . . . . . . . . . . . . . . . . . 2,601 (629) (440) 1,170 4,300

Number of shares


2013 2014 2015 2015 2016(unaudited)

Weighted number of ordinary shares for thepurpose of basic earnings per share . . . . . 114,118 134,410 134,410 134,410 135,060

Effect on dilutive potential on ordinary shares — — — — —Share options . . . . . . . . . . . . . . . . . . . . . . . — — — — —

Weighted number of ordinary shares for thepurpose of basic earnings per share . . . . . 114,118 134,410 134,410 134,410 135,060

71


29. SHARE BASED PAYMENTS

Equity-settled share option scheme

The Group operated a share option scheme for certain employees via share options in its subsidiarycompany, Joules Limited. All the options vested immediately and were only exercisable when there is atransaction involving a change in the shareholding of the company. On 5 November 2013 JoulesInvestments Holdings Limited acquired 100% of the issued share capital of Joules Limited. Thetransaction facilitated the minority investment of Lloyds Development Capital; the change ofshareholding enabled the share options to be exercised in the period ended May 2014 as set out below.

The directors consider the fair value of the share options at the date of the grant to be immaterial andtherefore no charge has been reflected in respect of IFRS 2.

Details of the share options outstanding as at the balance sheet dates as are follows:

25 May 2014 26 May 2013Weighted Weightedaverage average

Number of exercise Number of exerciseshare price share price

options (£) options (£)

Outstanding at the beginning of the period . . . . . . . . . . 6,383 23.38 13,520 19.82Granted during the period . . . . . . . . . . . . . . . . . . . . . . — — 4,383 25.00Lapsed during the period . . . . . . . . . . . . . . . . . . . . . . — — (11,520) 18.26Exercised during the period . . . . . . . . . . . . . . . . . . . . . (6,383) (23.38) — —

Outstanding at the end of the period . . . . . . . . . . . . . . — — 6,383 23.38

Exercisable at the end of the period . . . . . . . . . . . . . . . — — — —

There were no share options in the 2015 and 2016 financial periods.

30. TRANSITION NOTE

First-time adoption of IFRS

This financial information is the first the Group has prepared in accordance with IFRS. For periods up toand including the year ended 31 May 2015, the Group prepared its financial statements in accordancewith UK generally accepted accounting principles (UK GAAP).

Accordingly, the Group has prepared financial information that complies with IFRS applicable togetherwith comparative period data, as described in the summary of significant accounting policies. Inpreparing the financial information, the Group’s opening statement of financial position was prepared asat 27 May 2012, the Group’s date of transition to IFRS. This note explains the principal adjustments madeby the Group in restating its UK GAAP financial statements.

Exemptions applied

IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certainrequirements under IFRS.

The Group has applied the following exemptions:

• Cumulative currency translation differences for all foreign operations are deemed to be zero as at27 May 2012.

• At date of transition, the Group has not reflected in its opening IFRS statement of financial position ahedging relationship of a type that does not qualify for hedge accounting in accordance with IAS 39.Transactions entered into before the date of transition to IFRSs shall not be retrospectivelydesignated as hedges.

• The estimates at 27 May 2012, 26 May 2013, 25 May 2014 and at 31 May 2015 are consistent withthose made for the same dates in accordance with UK GAAP. The estimates used by the Group to

72


30. TRANSITION NOTE (Continued)

present these amounts in accordance with IFRS reflect conditions at 27 May 2012, the date oftransition to IFRS and as at 31 May 2015.

Reconciliation of consolidated income statement for 52 weeks ended 26 May 2013

UK GAAPfor IFRS for

52 weeks 52 weeksended Adjustments ended

Notes 26 May 2013 on transition 26 May 2013£’000 £’000

REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,424 (1,900) 77,524Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37,210) 1,574 (35,636)

GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . . . . . 42,214 (326) 41,888Administrative expenses . . . . . . . . . . . . . . . . . . . . . (37,925) 318 (37,607)Exceptional administrative expenses . . . . . . . . . . . . (411) — (411)Total administrative expenses . . . . . . . . . . . . . . . . (38,336) 318 (38,018)

OPERATING PROFIT . . . . . . . . . . . . . . . . . . . . . . 3,878 (8) 3,870Finance income & similar incomes . . . . . . . . . . . . . 7 — 7Finance costs and similar charges . . . . . . . . . . . . . (190) — (190)

PROFIT/(LOSS) BEFORE TAX . . . . . . . . . . . . . . . . 3,695 (8) 3,687Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . e (1,087) 1 (1,086)

PROFIT/(LOSS) FOR THE PERIOD . . . . . . . . . . . . 2,608 (7) 2,601

Reconciliation of consolidated statement of comprehensive income for 52 weeks ended 26 May2013

PROFIT/(LOSS) FOR THE PERIOD . . . . . . . . . . . . 2,608 (7) 2,601Items that may be reclassified subsequently to

profit or loss:Net gain/(loss) arising on changes in fair value of

hedging instruments entered into for cash flowhedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c — 1,029 1,029

Exchange difference on translation of foreignoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f — 3 3

Income tax relating to items that will be reclassifiedsubsequently to profit and loss . . . . . . . . . . . . . . c, e — (235) (235)

TOTAL COMPREHENSIVE INCOME FOR THEPERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,608 790 3,398

73




UK GAAPfor IFRS for



REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b 56,896 38,712 95,608Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b (25,684) (17,398) (43,082)GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . . . . . 31,212 21,314 52,526

Administrative expenses . . . . . . . . . . . . . . . . . . . . . a, b (29,197) (18,124) (47,321)Exceptional administrative expenses . . . . . . . . . . . . b — (2,650) (2,650)Total administrative expenses . . . . . . . . . . . . . . . . (29,197) (20,774) (49,971)

OPERATING PROFIT . . . . . . . . . . . . . . . . . . . . . . 2,015 540 2,555Finance income & similar incomes . . . . . . . . . . . . . b 84 — 84Finance costs and similar charges . . . . . . . . . . . . . b (2,696) (103) (2,799)

PROFIT/(LOSS) BEFORE TAX . . . . . . . . . . . . . . . . (597) 437 (160)Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . b, e (333) (136) (469)

PROFIT/(LOSS) FOR THE PERIOD . . . . . . . . . . . . (930) 301 (629)


PROFIT/(LOSS) FOR THE PERIOD . . . . . . . . . . . . (930) 301 (629)Items that may be reclassified subsequently to


hedging instruments entered into for cash flowhedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c — (2,921) (2,921)

Exchange difference on translation of foreignoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f — 4 4

Income tax relating to items that will be reclassifiedsubsequently to profit and loss . . . . . . . . . . . . . . c, e — 620 620

TOTAL COMPREHENSIVE INCOME FOR THEPERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (930) (1,996) (2,926)

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UK GAAPfor IFRS for



REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,070 (649) 116,421Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (54,982) 596 (54,386)

GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . . . . . 62,088 (53) 62,035Administrative expenses . . . . . . . . . . . . . . . . . . . . . b (57,755) 1,297 (56,458)Exceptional administrative expenses . . . . . . . . . . . . (500) — (500)Total administrative expenses . . . . . . . . . . . . . . . . (58,255) 1,297 (56,958)

OPERATING PROFIT . . . . . . . . . . . . . . . . . . . . . . 3,833 1,244 5,077Finance income & similar incomes . . . . . . . . . . . . . 190 — 190Finance costs and similar charges . . . . . . . . . . . . . (5,178) — (5,178)

PROFIT/(LOSS) BEFORE TAX . . . . . . . . . . . . . . . . (1,155) 1,244 89Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . e (535) 6 (529)

PROFIT/(LOSS) FOR THE PERIOD . . . . . . . . . . . . (1,690) 1,250 (440)


PROFIT/(LOSS) FOR THE PERIOD . . . . . . . . . . . . (1,690) 1,250 (440)Items that may be reclassified subsequently to


hedging instruments entered into for cash flowhedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c — 2,221 2,221

Exchange difference on translation of foreignoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f — (31) (31)

Income tax relating to items that will be reclassifiedsubsequently to profit and loss . . . . . . . . . . . . . . c, e — (444) (444)

TOTAL COMPREHENSIVE INCOME FOR THEPERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,690) 2,996 1,306

75



Group reconciliation of equity as at 26 May 2013

IFRS as atUK GAAP as at Adjustments 26 May

Notes 26 May 2013 on transition 2013£’000 £’000 £’000

ASSETSNon-Current AssetsProperty, Plant and Equipment . . . . . . . . . . . . . . 8,347 (1,643) 6,704Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . d — 1,643 1,643

Total Non-Current Assets . . . . . . . . . . . . . . . . . . 8,347 — 8,347Current AssetsInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,518 — 11,518Trade and Other Receivables (including deferred

tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e 6,936 (191) 6,745Cash and Cash equivalents . . . . . . . . . . . . . . . . . 4,290 — 4,290Other Financial Assets . . . . . . . . . . . . . . . . . . . . c — 1,200 1,200

Total Current Assets . . . . . . . . . . . . . . . . . . . . . 22,744 1,009 23,753

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 31,091 1,009 32,100

EQUITY AND LIABILITIESCapital and ReservesCalled up share capital . . . . . . . . . . . . . . . . . . . . 128 — 128Share premium . . . . . . . . . . . . . . . . . . . . . . . . . 468 — 468Translation reserve . . . . . . . . . . . . . . . . . . . . . . . f — 3 3Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . 11,378 (7) 11,371Hedging Reserve . . . . . . . . . . . . . . . . . . . . . . . . c — 924 924Other reserves . . . . . . . . . . . . . . . . . . . . . . . . . . 20 — 20

Total Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,994 920 12,914Non-Current LiabilitiesLong term liabilities . . . . . . . . . . . . . . . . . . . . . . 167 — 167

Total Non-Current Liabilities . . . . . . . . . . . . . . . 167 — 167Current LiabilitiesCurrent portion of long term liabilitiesTrade and other payables . . . . . . . . . . . . . . . . . . 18,930 89 19,019

Total Current Liabilities . . . . . . . . . . . . . . . . . . . 18,930 89 19,019

TOTAL EQUITY AND LIABILITIES . . . . . . . . . . . . . 31,091 1,009 32,100

76






ASSETSNon-Current AssetsGoodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a, b 24,127 (24,127) —Property, Plant and Equipment . . . . . . . . . . . . . . 12,378 (2,228) 10,150Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . d — 2,228 2,228

Total Non-Current Assets . . . . . . . . . . . . . . . . . . 36,505 (24,127) 12,378Current AssetsInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,367 13,367Trade and Other Receivables (including deferred

tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e 8,966 349 9,315Cash and Cash equivalents . . . . . . . . . . . . . . . . . 4,247 — 4,247

Total Current Assets . . . . . . . . . . . . . . . . . . . . . 26,580 349 26,929

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 63,085 (23,778) 39,307

EQUITY AND LIABILITIESCapital and ReservesCalled up share capital . . . . . . . . . . . . . . . . . . . . 12 — 12Share premium . . . . . . . . . . . . . . . . . . . . . . . . . 1,671 — 1,671Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . a (930) 11,672 10,742Retranslation reserve . . . . . . . . . . . . . . . . . . . . . f — 7 7Merger Reserve . . . . . . . . . . . . . . . . . . . . . . . . . b — (35,835) (35,835)Hedging Reserve . . . . . . . . . . . . . . . . . . . . . . . . c — (1,377) (1,377)

Total Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753 (25,533) (24,780)Non-Current LiabilitiesLong term liabilities . . . . . . . . . . . . . . . . . . . . . . 45,665 — 45,665

Total Non-Current Liabilities . . . . . . . . . . . . . . . 45,665 — 45,665Current LiabilitiesTrade and other payables . . . . . . . . . . . . . . . . . . 16,667 34 16,701Other financial liabilities . . . . . . . . . . . . . . . . . . . — 1,721 1,721

Total Current Liabilities . . . . . . . . . . . . . . . . . . . 16,667 1,755 18,422

TOTAL EQUITY AND LIABILITIES . . . . . . . . . . . . . 63,085 (23,778) 39,307

77






ASSETSNon-Current AssetsGoodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a, b 22,884 (22,884) —Property, Plant and Equipment . . . . . . . . . . . . . . 15,874 (5,059) 10,815Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . d — 5,059 5,059

Total Non-Current Assets . . . . . . . . . . . . . . . . . . 38,758 (22,884) 15,874Current AssetsInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,652 — 17,652Trade and Other Receivables (including deferred

tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e 11,048 (89) 10,959Corporate tax receivable . . . . . . . . . . . . . . . . . . . 179 — 179Cash and Cash equivalents . . . . . . . . . . . . . . . . . 2,121 — 2,121Other Financial Assets . . . . . . . . . . . . . . . . . . . . c 500 500

Total Current Assets . . . . . . . . . . . . . . . . . . . . . 31,000 411 31,411

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 69,758 (22,473) 47,285

EQUITY AND LIABILITIESCapital and ReservesCalled up share capital . . . . . . . . . . . . . . . . . . . . 12 — 12Share premium . . . . . . . . . . . . . . . . . . . . . . . . . 1,671 — 1,671Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . (2,620) 12,922 10,302Retranslation reserve . . . . . . . . . . . . . . . . . . . . . f — (24) (24)Merger Reserve . . . . . . . . . . . . . . . . . . . . . . . . . b — (35,835) (35,835)Hedging Reserve . . . . . . . . . . . . . . . . . . . . . . . . c — 400 400

Total Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . (937) (22,537) (23,474)Non-Current LiabilitiesLong term liabilities . . . . . . . . . . . . . . . . . . . . . . 50,895 — 50,895

Total Non-Current Liabilities . . . . . . . . . . . . . . . 50,895 — 50,895Current LiabilitiesTrade and other payables . . . . . . . . . . . . . . . . . . 19,800 64 19,864Other financial liabilities . . . . . . . . . . . . . . . . . . . — — —

Total Current Liabilities . . . . . . . . . . . . . . . . . . . 19,800 64 19,864

TOTAL EQUITY AND LIABILITIES . . . . . . . . . . . . . 69,758 (22,473) 47,285

78



Notes to the reconciliation of equity as at 26 May 2013, 25 May 2014 and 31 May 2015

a) Business acquisition expenses

• Under UK GAAP, the Group capitalised equity and debt related costs of acquiring subsidiaries.As such, these costs do not qualify for recognition as assets under IFRS this capitalised portionis derecognised against retained earnings.

b) Business combination

• A business combination for entities under common control is not within IFRS 3 scope. TheGroup has thus accounted for the Joules Limited business acquisition using mergeraccounting principles. The net assets of the merged company are combined using existingbook values, with adjustments made as necessary to ensure that the same accounting policiesare applied to the calculation of the net assets of both company and Group accounts. Noamount is recognised as consideration for goodwill.

• The Income Statement for the period to 25 May 2014 therefore includes the full period’s resultsfor the Group, rather than the 30 weeks’ results for the period subsequent to the Joules Limitedbusiness acquisition as was presented under UK GAAP.

• There has been no impact on net book value of tangible fixed assets arising from the transitionfrom UK GAAP to IFRS. Under acquisition accounting used under UK GAAP the book value atdate of acquisition was considered deemed cost, upon transition to IFRS tangible fixed assetsrevert back to their historic cost and the accumulated depreciate arising thereon.

c) Other financial assets and liabilities

• The fair value of forward foreign exchange contracts are recognised under IFRS, and were notrecognised under UK GAAP. The contracts, which were designated as hedging instrumentsunder UK GAAP, have been designated as at the date of transition to IFRS as hedginginstruments in cash flow hedges of either expected future sales, for which the Group has firmcommitments, or expected purchases from suppliers that are highly probable. Thecorresponding adjustment has been recognised as a separate component of equity, in thecash flow hedge reserve.

d) Property, Plant & Equipment

• The IT systems in the business are recognised as Intangible Assets under IFRS and have beenremoved from Property, Plant & Equipment and recognised separately as Intangible Assetsaccordingly.

e) Deferred tax

• The various transitional adjustments lead to different temporary differences. According to theaccounting policies, the Group has to account for such differences. Deferred tax adjustmentsare recognised in correlation to the underlying transaction either in retained earnings or aseparate component of equity. Deferred tax has also been classified as a non-current assetunder IFRS.

f) Foreign currency translation

• Under UK GAAP, the Group recognised translation differences on foreign operations in aseparate component of equity. Cumulative currency translation differences for all foreignoperations are deemed to be zero as at 25 May 2015. The resulting adjustment was recognisedagainst retained earnings.

g) Statement of cash flows

• The transition from UK GAAP to IFRS has not had a material impact on the statement of cashflows.

79

SECTION C—UNAUDITED PRO FORMA STATEMENT OF NET ASSETS

The following unaudited pro forma balance sheet (the ‘‘Pro Forma Financial Information’’) has beenprepared to show the effect on the consolidated net assets of Joules Investments Holdings Limited(‘‘JIHL’’) of certain transactions that are to be completed shortly before or at the time of Admission as ifthey had occurred on 28 February 2016 (assuming that JIHL was the holding company of the Group atthe time of Admission and dis-regarding the acquisition of JIHL by Joules Group plc on 20 May 2016).

The unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and inaccordance with Annex II of the Prospectus Directive, and should be read in conjunction with the notesset out below. Due to its nature, the unaudited Pro Forma Financial Information addresses a hypotheticalsituation and, therefore, does not represent the actual financial position of JIHL or Joules Group plc.

28 Feb 2016 IPO Repayment 28 Feb 2016as reported fundraising of debt Pro-forma

£’000 £’000 £’000 £’000Note 1 Note 2 Note 3 Note 4

NON-CURRENT ASSETSProperty, plant and equipment . . . . . . . . . . . . . . . . . 11,492 11,492Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,543 5,543Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325 325

TOTAL NON-CURRENT ASSETS . . . . . . . . . . . . . . 17,360 17,360

CURRENT ASSETSInventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,588 17,588Trade and other receivables . . . . . . . . . . . . . . . . . . 14,905 14,905Cash and cash equivalents . . . . . . . . . . . . . . . . . . . 5,606 9,421 (11,481) 3,546Derivative financial instruments . . . . . . . . . . . . . . . . 2,760 2,760

TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . 40,859 9,421 (11,481) 38,799

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . 58,219 9,421 (11,481) 56,159

CURRENT LIABILITIESTrade and other payables . . . . . . . . . . . . . . . . . . . . 22,328 22,328Current tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . 678 678Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444 444Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 780 780

TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . 24,230 24,230

NON-CURRENT LIABILITIESBorrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,475 (11,481) 39,994

TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . 75,705 (11,481) (64,224)

NET LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . (17,486) 9,421 — (8,065)

(1) The consolidated net assets of JIHL have been extracted, without material adjustment, from the historical financialinformation at 28 February 2016 set out in Part 5, Section B.

(2) As set out in paragraph 14 of Part 2, the net Placing proceeds receivable by the Company are estimated to be approximately£9.4 million, after deduction of commissions and other estimated fees and expenses incurred by the Group in connectionwith Admission of approximately £2.1 million.

(3) The Group will repay approximately £11.5 million of debt upon Admission.

(4) The unaudited pro forma balance sheet does not reflect any trading results or other transactions undertaken by the Groupsince 28 February 2016.

80

PART 6

TERMS AND CONDITIONS OF THE PLACING

For invited placees only—Important Information

The information contained in this Part 6 is restricted and is not for publication, release or distribution in orinto the United States, any province of Canada, Australia, Japan, the Republic of South Africa or NewZealand.

Each Placee should consult with its own advisers as to legal, tax, business and related aspects inrelation to any acquisition of Placing Shares.

Joules Group plc

Proposed Placing of Sale Shares and New Shares at the Placing Price of 160 pence perPlacing Share

The terms and conditions set out in this Part 6 (the ‘‘Terms and Conditions’’) do not constitute an offeror invitation to acquire, underwrite or dispose of, or any solicitation of any offer or invitation to acquire,underwrite or dispose of, any Ordinary Shares or other securities of the Company to any person in anyjurisdiction to whom it is unlawful to make such offer, invitation or solicitation in such jurisdiction. Personswho seek to participate in the Placing must inform themselves about and observe any such restrictionsand must be persons who are able to lawfully receive this document in their jurisdiction (all such personsbeing ‘‘Relevant Persons’’). In particular, neither this document (the ‘‘Admission Document’’) northese Terms and Conditions constitutes an offer or invitation (or a solicitation of any offer or invitation) toacquire, underwrite or dispose of or otherwise deal in any Ordinary Shares or other securities of theCompany in the United States, Canada, Australia, the Republic of South Africa, Japan or New Zealand,or in any other jurisdiction in which any such offer, invitation or solicitation is or would be unlawful.

Members of the public are not eligible to take part in the Placing. Prospective investors must informthemselves as to: (a) the legal requirements within their own countries for the purchase, holding,transfer, redemption or other disposal of the Ordinary Shares; (b) any foreign exchange restrictionsapplicable to the purchase, holding, transfer, redemption or other disposal of the Ordinary Shares whichthey might encounter; and (c) the income and other tax consequences which may apply in their owncountries as a result of the purchase, holding, transfer, redemption or other disposal of the OrdinaryShares. The Admission Document (including these Terms and Conditions) does not constitute an offer tosell, or the solicitation of an offer to acquire or subscribe for, Ordinary Shares in any jurisdiction wheresuch offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publicationor approval requirements on the Company, the Selling Shareholders, Rothschild, Peel Hunt or Liberum.The offer and sale of Ordinary Shares has not been and will not be registered under the applicablesecurities laws of Canada, Australia, Japan, New Zealand or the Republic of South Africa. Subject tocertain exemptions, the Ordinary Shares may not be offered to or sold within Canada, Australia, Japan,New Zealand or the Republic of South Africa or to any national, resident or citizen of Canada, Australia,Japan, New Zealand or the Republic of South Africa.

The Ordinary Shares have not been, and will not be, registered under the US Securities Act, or thesecurities laws of any other jurisdiction of the United States. The Ordinary Shares may not be offered orsold, directly or indirectly, in or into the United States (except pursuant to an exemption from, or atransaction not subject to, the registration requirements of the US Securities Act). No public offering ofthe Ordinary Shares is being made in the United States. The Ordinary Shares are being offered and soldonly outside the United States in ‘‘offshore transactions’’ within the meaning of, and in reliance on,Regulation S. The Ordinary Shares have not been approved or disapproved by the United StatesSecurities and Exchange Commission, any state securities commission in the United States or any otherregulatory authority in the United States, nor have any of the foregoing authorities passed on orendorsed the merits of the Placing or the accuracy or adequacy of the information contained in thisAdmission Document (including these Terms and Conditions). Any representation to the contrary is acriminal offence in the United States.

In the United Kingdom this Admission Document (including these Terms and Conditions) is beingdistributed to, and is directed only at qualified investors (as defined in the Prospectus Directive (asdefined below)) who are (i) persons having professional experience in matters relating to investmentswho fall within the definition of ‘‘investment professionals’’ in Article 19(5) of the Financial Services and

81

Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ‘‘Order’’), or (ii) high net worthbodies corporate, unincorporated associations and partnerships and trustees of high value trusts asdescribed in Article 49(2) of the Order and persons within the United Kingdom who receive thisdocument (other than persons falling within (i) and (ii) above) should not rely on or act upon thisAdmission Document.

In relation to each member state of the European Economic Area which has implemented theProspectus Directive (each, a ‘‘Relevant Member State’’), no Ordinary Shares have been offered, or willbe offered, pursuant to the Placing to the public in that Relevant Member State prior to the publication ofa prospectus in relation to the Ordinary Shares which has been approved by the competent authority inthat Relevant Member State, all in accordance with the Prospectus Directive, except that offers ofOrdinary Shares to the public may be made at any time under the following exemptions under theProspectus Directive, if they are implemented in that Relevant Member State:

A. to any legal entity which is a qualified investor as defined in the Prospectus Directive;

B. to fewer than 150, or, if the Relevant Member State has not implemented the relevant provision of theProspectus Directive, 100 natural or legal persons (other than ‘‘qualified investors’’ as defined in theProspectus Directive) in such Relevant Member State; or

C. in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Ordinary Shares shall result in a requirement for the publication of aprospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing theProspectus Directive in a Relevant Member State and each person who initially acquires any OrdinaryShares or to whom any offer is made under the Placing will be deemed to have represented,acknowledged and agreed that it is a ‘‘qualified investor’’ within the meaning of Article 2(1)(e) of theProspectus Directive. For the purposes of this provision, the expression ‘‘an offer to the public’’ inrelation to any offer of Ordinary Shares in any Relevant Member State means a communication in anyform and by any means presenting sufficient information on the terms of the offer and any OrdinaryShares to be offered so as to enable an investor to decide to purchase or subscribe for the OrdinaryShares, as the same may be varied in that Relevant Member State by any measure implementing theProspectus Directive in that Relevant Member State and the expression the ‘‘Prospectus Directive’’means Directive 2003/71/EC (as amended), to the extent implemented in the Relevant Member Stateand includes any relevant implementing measure in each Relevant Member State.

These Terms and Conditions apply to persons who are invited to and who choose to purchase PlacingShares in the Placing (each a ‘‘Placee’’). Each Placee hereby agrees with the Underwriters to be legallyand irrevocably bound by these Terms and Conditions which will be the Terms and Conditions on whichthe Placing Shares will be acquired in the Placing.

The Terms and Conditions must not be acted on or relied on by persons who are not Relevant Persons.Any investment or investment activity to which the Terms and Conditions set out herein relates isavailable only to Relevant Persons and will be engaged in only with Relevant Persons.

Acceptance of any offer incorporating the Terms and Conditions (whether orally or in writing orevidenced by way of a contract note) will constitute a binding irrevocable commitment by a Placee,subject to the Terms and Conditions set out below, to subscribe and pay for the relevant number ofPlacing Shares (the ‘‘Placing Participation’’). Such commitment is not capable of termination orrescission by the Placee in any circumstances except fraud. All such obligations are entered into by thePlacee with the Underwriters in their capacity as agents for the Company and the Selling Shareholdersand are therefore directly enforceable by the Company and the Selling Shareholders.

In the event that the Underwriters have procured acceptances from Placees in connection with thePlacing prior to the date of the despatch of the Admission Document to a Placee, the Underwriters will,prior to Admission, request confirmation from any such Placee that its Placing Participation as agreed inany earlier commitment remains firm and binding upon the Terms and Conditions of this document andreferable to the contents of the Admission Document of which these terms form part. Upon suchconfirmation being given (whether orally, in writing or by conduct (including without limitation by receiptof the relevant placing proceeds by the Underwriters)) any agreement made in respect of the PlacingShares shall be varied, amended and/or ratified in accordance with the Terms and Conditions and basedupon this Admission Document and no reliance may be placed by a Placee on any earlier version of thisdocument.

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Terms of the Placing

Application has been made to the London Stock Exchange for the admission of the Placing Shares to beissued pursuant to the Placing to trading on AIM. Except as otherwise set forth herein, it is anticipatedthat dealings in the Placing Shares will commence on AIM at 8:00a.m. on 26 May 2016 for normalaccount settlement and that Admission will become effective on that date. The Placing Shares will not beadmitted to trading on any stock exchange other than AIM. Each Placee will be deemed to have readthese Terms and Conditions in their entirety. Each of the Underwriters is acting for the Company and theSelling Shareholders and no one else in connection with the Placing and will not regard any other person(whether or not a recipient of these Terms and Conditions) as a client in relation to the Placing and to thefullest extent permitted by law and applicable FCA rules, none of the Underwriters nor any of theiraffiliates will have any liability to Placees or to any person other than the Company and the SellingShareholders in respect of the Placing.

The Placing Shares will rank equally in all respects with the existing Ordinary Shares of the Company onAdmission, including the right to receive dividends or other distributions, if any.

Conditions

Your Placing Participation is in all respects conditional upon:

(i) the Placing Agreement becoming unconditional in all respects and not having been terminated inaccordance with its terms; and

(ii) Admission having become effective,

in each case by 26 May 2016 or such later time and/or date as the Company and the Underwriters agree,but in any event being no later than 31 December 2016.

Pursuant to the Placing Agreement, each of the Underwriters has agreed, severally and not jointly, onbehalf of and as agent for the Company and the Selling Shareholders, to use its reasonable endeavoursto procure subscribers or purchasers for the Placing Shares at the Placing Price and, failing which, itselfto subscribe for or purchase the Placing Shares at the Placing Price, subject to these Terms andConditions.

The Placing Agreement contains certain warranties and indemnities from the Company, the Directorsand the Selling Shareholders who are party thereto for the benefit of the Underwriters. The Underwritersmay, in their absolute discretion, terminate the Placing Agreement if prior to, Admission, inter alia, a forcemajeure event occurs, there is a material breach of any of the undertakings or any fact or circumstancearises which causes a warranty to become untrue or inaccurate in any respect. The exercise by theUnderwriters of any right of termination or any right of waiver exercisable by the Underwriters containedin the Placing Agreement or under the Terms and Conditions set out herein is within the absolutediscretion of the Underwriters and they will not have any liability to you whatsoever in connection withany decision to exercise or not exercise any such rights.

If (i) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived) or (ii) thePlacing Agreement is terminated or (iii) the Placing Agreement does not otherwise becomeunconditional in all respects, the Placing will not proceed and all funds delivered by you to theUnderwriters will be returned to you at your risk without interest, and your rights and obligationshereunder shall cease and determine at such time and no claim shall be made by you in respect thereof.

None of the Company, the Directors, any Selling Shareholder or either Underwriter owes any fiduciaryduty to any Placee in respect of the representations, warranties, undertakings or indemnities in thePlacing Agreement.

Settlement

The Company has applied for the Ordinary Shares to be held in CREST and settlement of the PlacingShares will take place in CREST.

Placing Shares will be delivered direct into your CREST account, provided payment has been made interms satisfactory to the Underwriters and the details provided by you have provided sufficientinformation to allow the CREST system to match to the CREST account specified. Placing Sharescomprised in your Placing Participation are expected to be delivered to the CREST account which youspecify by telephone to your usual sales contact at the relevant Underwriter.

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If you do not provide any CREST details or if you provide insufficient CREST details to match within theCREST system to your details, the Underwriters may at their discretion deliver your Placing Participationin certificated form provided payment has been made in terms satisfactory to the Underwriters and allconditions in relation to the Placing have been satisfied or waived.

Subject to the conditions set out above, payment in respect of your Placing Participation is due as set outbelow. You should provide your settlement details in order to enable instructions to he successfullymatched in CREST. The relevant settlement details are as follows:

CREST participant ID of Peel Hunt: . . . . . . . . . . . . . . . . . . . 871Expected Trade date: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 May 2016Settlement date: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 May 2016ISIN code for the Placing Shares: . . . . . . . . . . . . . . . . . . . . GB00BZ059357Deadline for you to input instructions into CREST: . . . . . . . . 12.00p.m. (UK time) on 24 May 2016

In the event that the Placing Agreement does not become unconditional in all respects or is terminated,the Placing will not proceed. Once the Placing Shares are allotted and issued, such Placing Shares willbe admitted to CREST with effect from Admission. It is expected that dealings on AIM in the PlacingShares will commence at 8:00a.m. on 26 May 2016.

Further Terms, Confirmations and Warranties

In accepting the Placing Participation, you make the following confirmations, acknowledgements,warranties and/or undertakings to the Underwriters and the Company and their respective directors/agents and advisers and the Selling Shareholders:

1. You represent and warrant that you have read these Terms and Conditions in its entirety andacknowledge that your participation in the Placing will be governed by the terms, conditions,representations, warranties, acknowledgements, agreements and undertakings of these Termsand Conditions.

2. You acknowledge and agree that your acceptance of your Placing Participation on the terms set outin the Admission Document and these Terms and Conditions is legally binding, irrevocable and isnot capable of termination or rescission by you in any circumstances.

3. You confirm, represent and warrant that you have not relied on, received nor requested nor do youhave any need to receive, any prospectus, offering memorandum, listing particulars or any otherdocument, other than the Admission Document describing the business and affairs of theCompany which has been prepared for delivery to prospective investors in order to assist them inmaking an investment decision in respect of the Placing Shares, any information given or anyrepresentations, warranties agreements or undertakings (express or implied), written or oral, orstatements made at any time by the Company, any Selling Shareholder or the Underwriters or byany subsidiary, holding company, branch or associate of the Company or the Underwriters, or anyof their respective officers, directors, agents, employees or advisers, or any other person inconnection with the Placing, the Company and its subsidiaries or the Placing Shares and that inmaking your application under the Placing you will be relying solely on the information contained inthe Admission Document and these Terms and Conditions and you will not be relying on anyagreements by the Company and its subsidiaries or the Underwriters or any director, employee oragent of the Company or the Underwriters other than as expressly set out in the AdmissionDocument and these Terms and Conditions for which none of the Underwriters, the Company orany of their directors and/or employees and/or person(s) acting on behalf of any of them shall to themaximum extent permitted under law have any liability except in the case of fraud. You furtherconfirm, represent and warrant that you have reviewed the Admission Document, including thediscussion of the conditions of the Placing Agreement, commissions to the Underwriters, and risksrelated to the Company, its operations and the Ordinary Shares.

4. You confirm, represent and warrant that you are sufficiently knowledgeable to understand and beaware of the risks associated with, and other characteristics of, the Placing Shares and, amongothers, of the fact that you may not be able to resell the Placing Shares except in accordance withcertain limited exemptions under applicable securities legislation and regulatory instruments.

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5. You confirm, represent and warrant, if a company, that you are a valid and subsisting company andhave all the necessary corporate capacity and authority to execute your obligations in connectionwith your Placing Participation.

6. You agree that the exercise by the Underwriters of any right of termination or any right of waiverexercisable by the Underwriters contained in the Placing Agreement or the exercise of anydiscretion thereunder is within the absolute discretion of the Underwriters and the Underwriters willnot have any liability to you whatsoever in connection with any decision to exercise or not exerciseany such rights. You acknowledge that if (i) any of the conditions in the Placing Agreement are notsatisfied (or, where relevant, waived) or (ii) the Placing Agreement is terminated or (iii) the PlacingAgreement does not otherwise become unconditional in all respects, the Placing will lapse andyour rights and obligations hereunder shall cease and determine at such time and no claim shall bemade by you in respect thereof.

7. You acknowledge and agree that neither of the Underwriters is acting for, and that you do notexpect either Underwriter to have any duties or responsibilities towards, you for providingprotections afforded to its customers or clients under the Financial Conduct Authority Conduct ofBusiness Source Book or advising you with regard to your Placing Participation and that you arenot, and will not be, a customer or client of such Underwriter as defined by the Financial ConductAuthority Conduct of Business Source Book. Likewise, the Underwriters will not treat any paymentby you pursuant to these Terms and Conditions as client money governed by the Financial ConductAuthority Conduct of Business Source Book.

8. You confirm, represent and warrant that you may lawfully acquire the Placing Shares comprisingyour Placing Participation and that you have complied with and will comply with all applicableprovisions of FSMA with respect to anything done by you in relation to the Placing Shares in, fromor otherwise involving, the United Kingdom.

9. You acknowledge and agree that your agreement with the Underwriters to acquire Placing Shares,whether by telephone or otherwise is a legally binding contract and the Terms and Conditions ofyour Placing Participation and any non-contractual obligation therefrom will be governed by andconstrued in accordance with, the laws of England and Wales to the exclusive jurisdiction of whosecourts you irrevocably agree to submit.

10. You acknowledge and agree that time shall be of the essence as regards obligations pursuant tothese Terms and Conditions.

11. You acknowledge and agree that it is the responsibility of any person outside of the UnitedKingdom wishing to subscribe for or purchase Placing Shares to satisfy himself that, in doing so, hecomplies with the laws of any relevant territory in connection with such subscription or purchaseand that he obtains any requisite governmental or other consents and observes any otherapplicable formalities.

12. You acknowledge and agree that the Placing Shares have not been and will not be registered underthe laws, or with any securities regulatory authority, of any province of Canada, Australia, Japan,the Republic of South Africa or New Zealand and, subject to limited exceptions, the Placing Sharesmay not be offered, sold, transferred or delivered, directly or indirectly into any province of Canada,Japan, Australia, the Republic of South Africa or New Zealand or their respective territories andpossessions.

13. You warrant that you have complied with all relevant laws of all relevant territories, obtained allrequisite governmental or other consents which may be required in connection with your PlacingParticipation, complied with all requisite formalities and that you have not taken any action oromitted to take any action which will or may result in the Underwriters, the Company, the SellingShareholders or any of their respective directors, officers, agents, employees, affiliates or advisersacting in breach of the legal or regulatory requirements of any territory in connection with thePlacing or your application.

14. You acknowledge and agree that your acquisition of Placing Shares does not trigger, in thejurisdiction in which you are resident or located: (i) any obligation to prepare or file a prospectus orsimilar document or any other report with respect to such purchase; (ii) any disclosure or reportingobligation of the Company; or (iii) any registration or other obligation on the part of the Company.

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15. You are acting as principal and for no other person and that your acceptance of the PlacingParticipation will not give any other person a contractual right to require the issue by the Companyof any Placing Shares.

16. You warrant that in accepting your Placing Participation you are not applying for registration as, oras a nominee or agent for, a person who is or may be a person mentioned in sections 67 to 72inclusive and sections 93 to 97 inclusive of the Finance Act 1986.

17. You confirm that, to the extent applicable to you, you are aware of your obligations in connectionwith the Criminal Justice Act 1993, the Terrorism Act 2006, the UK Anti Terrorism Crime and SecurityAct 2001, the Money Laundering Regulations 2007, the Proceeds of Crime Act 2002 and Part VIII ofthe Financial Services and Markets Act 2000 (as amended), you have identified your clients inaccordance with the Money Laundering Regulations 2007 and you have complied fully with yourobligations pursuant to those Regulations.

18. You acknowledge and agree that all times and dates in this Admission Document and these Termsand Conditions may be subject to amendment and the Underwriters shall notify you of any suchamendments.

19. You acknowledge and agree that your agreement with the Underwriters to acquire Placing Sharesshall be enforceable under the Contracts (Rights of Third Parties) Act 1999 by any person otherthan the Company, the Selling Shareholders or any affiliate of the Underwriters.

20. You acknowledge that any of your monies held or received by the Underwriters will not be subjectto the protections conferred by the FCA’s Client Money Rules.

21. You acknowledge and agree that the Placing Shares have not been and will not be registered underthe US Securities Act or with any securities regulatory authority of any state or other jurisdiction ofthe United States, and are being offered and sold only outside the United States in ‘‘offshoretransactions’’ (as defined in Regulation S). Accordingly, the Placing Shares may not be offered,sold, transferred or delivered directly or indirectly in or into the United States, except pursuant to aneffective registration statement under the US Securities Act or an exemption from the registrationrequirements of the US Securities Act, and, in connection with any such transfer, the Company willhave the right to obtain, as a condition to transfer, a legal opinion of counsel, in form and by counselreasonably satisfactory to the Company, that no such US Securities Act registration is or will berequired along with appropriate certifications by the transferee as to appropriate matters. Norepresentation has been made as to the availability of any exemption under the US Securities Actfor the reoffer, resale, transfer or delivery of the Placing Shares.

22. You represent and warrant that you have not distributed, forwarded, transferred or otherwisetransmitted this Admission Document or any other presentation or offering materials concerningthe Placing Shares within the United States, nor will you do any of the foregoing. You understandthat the information in this Admission Document, including financial information, may be materiallydifferent from any disclosure that would be provided in a registered offering in the United States.

23. You agree, represent and warrant as follows:

23.1 You are, acquiring the Placing Shares in an ‘‘offshore transaction’’ (as defined in Regulation S);

23.2 You will not offer or sell the Placing Shares in the United States absent registration or an exemptionfrom registration under the US Securities Act;

23.3 You are not acquiring the Placing Shares as a result of any form of directed selling efforts (asdefined in Rule 902 under the US Securities Act); and

23.4 if you are in the United Kingdom, you are a person falling within the exemption contained inSection 86(1)(a) of the Financial Services and Markets Act 2000 (as amended) or falling within oneor more of the categories of persons set out in Article 19 (Investment Professionals) or Article 49(High net worth companies, unincorporated associations etc.) of the Order.

24. In making an investment decision with respect to the Placing Shares, for yourself and on behalf ofany person for whose account you are acquiring the Placing Shares, you represent and warrantthat you have:

24.1 not relied on any representation, warranty or statement made by the Company, any SellingShareholder, any Underwriter or any of their respective affiliates;

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24.2 the ability to bear the economic risk of your investment in the Placing Shares and have no need forliquidity with respect to your investment in the Placing Shares;

24.3 such knowledge and experience in financial and business matters that you are capable ofevaluating the merits, risks and suitability of investing in the Placing Shares, and are able to sustaina complete loss of any investment in the Placing Shares;

24.4 had access to such financial and other information concerning the Company and the PlacingShares as you deem necessary in connection with your decision to purchase the Placing Shares;and

24.5 investigated independently and made your own assessment and satisfied yourself concerning therelevant tax, legal, currency and other economic considerations relevant to your investment in thePlacing Shares, including any federal, state and local tax consequences, affecting you inconnection with your purchase and any subsequent disposal of the Placing Shares.

You acknowledge that the Company, the Underwriters, the Selling Shareholders, any transferagent, any distributors or dealers and their respective affiliates and others will rely on the truth andaccuracy of the foregoing warranties, acknowledgements, representations, undertakings andagreements, and you agree to indemnify and hold harmless the Company, the Underwriters, theSelling Shareholders and any of their respective officers, directors, agents, employees or advisers(the ‘‘Indemnified Persons’’) from and against any and all costs, claims losses, damages,liabilities or expenses, including legal fees and expenses (including any VAT thereon), which anIndemnified Person may incur by reason of, or in connection with, any representation, warranty,acknowledgement, agreement or undertaking made herein not having been true when made, anybreach thereof or any misrepresentation.

You further agree that these Terms and Conditions shall survive after completion of the Placing.

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PART 7

ADDITIONAL INFORMATION

1. Responsibility

1.1 The Company and the Directors, whose names and functions are set out in Part 3 of thisdocument, accept responsibility for the information contained in this document. To the best ofthe knowledge and belief of the Directors and the Company (who have taken all reasonable careto ensure that such is the case), the information contained in this document is in accordancewith the facts and does not omit anything likely to affect the import of such information.

2. Incorporation and general

2.1 The Company was incorporated in England on 5 May 2016 under the name of Joules GroupLimited with registered number 10164829 as a private company with limited liability under theAct. The Company was re-registered as a public company on 20 May 2016. Its registered officeis at Joules Building, The Point, Rockingham Road, Market Harborough, Leicestershire, UnitedKingdom, LE16 7QU. It is domiciled in England and Wales.

2.2 The Company is the ultimate holding company of the Group, and has the following significantsubsidiary undertakings, being those considered by the Company to be likely to have asignificant effect on the assessment of the assets and liabilities, financial position and/or profitsand losses of the Group.

Issued share capitalName Registered Office Status (fully paid)

Joules InvestmentsHoldings Limited . . . . . . . Joules Building, Active £4,833,880.87 divided into

The Point, Rockingham Road, 483,388,087 ordinary sharesMarket Harborough, of £0.01 eachLeicestershire,United Kingdom,LE16 7QU

Joules Limited . . . . . . . . . . Joules Building, Active £134,273 (134,273 shares)The Point, Rockingham Road, divided into:Market Harborough,

120,501 Ordinary shares ofLeicestershire,

£1 eachUnited Kingdom,LE16 7QU 4,139 A Ordinary shares of

£1 each

9,633 B Ordinary shares of£1 each

Joules USA Inc. . . . . . . . . 2711 Centerville Road, Active 3,000 shares with a par valueSuite 400, Wilmington, of $0.01 per shareNew Castle, 19808, DE

Joules Hong Kong Limited . 18th Floor, Active 1 share of HK$1.00United Centre,95 Queensway,Hong Kong

Joules Clothing ShanghaiCompany Limited . . . . . . Room 1401-1404, Active Registered capital of

432 West Huaihai Road, 101,500 USDChangning District,Shanghai, China

2.3 The entire issued share capital of Joules Investments Holdings Limited was acquired by theCompany pursuant to the share exchange agreement dated 20 May 2016 described inparagraph 12.4 below, in consideration for the issue, fully paid, of the shares listed in

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paragraph 3.3 below. On the same date, the shareholders of Joules Investments HoldingsLimited also entered into a declaration of trust in favour of the Company which assigned all of thebeneficial interests in the entire issued share capital of Joules Investments Holdings Limited tothe Company. Application will be made to HM Revenue and Customs for relief from stamp dutyon the declaration of trust.

3. Share capital and loan capital

3.1 As at 5 May 2016 being the date of incorporation of the Company, the issued share capital of theCompany, all of which was fully paid up, was as follows:

IssuedClass of share Number Amount (£)

Ordinary shares of £0.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 £0.10

3.2 On 20 May 2016, the Company subdivided the existing ordinary share of £0.10 into ten ordinaryshares of £0.01 each. On the same date, a further 82,712 ordinary shares of £0.01 each wereissued fully paid and all such issued shares were then consolidated into one ordinary share of£827.22 and subsequently re-designated as one B ordinary share of £827.22.

3.3 On 20 May 2016, the Company issued 30,380 A ordinary shares of £827.22 each, 50,999 Bordinary shares of £827.22 each, 15,542 C ordinary shares of £827.09 each, 1,900 C2 ordinaryshares of £0.09 each, 9,808 D ordinary shares of £1,147.47 each, 9,732 E ordinary shares of£6.40 each and 19,650 F ordinary shares of £0.97 each fully paid pursuant to the share for shareexchange agreement referred to at paragraph 2.3 above. Following this allotment the sharecapital of the Company, all of which was fully paid was:


A ordinary shares of £827.22 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,380 £25,130,943.60B ordinary shares of £827.22 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,000 £42,188,220.00C ordinary shares of £827.09 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,542 £12,854,632.78C2 ordinary shares of £0.09 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,900 £171.00D ordinary shares of £1,147.47 each . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,808 £11,254,385.76E ordinary shares of £6.40 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,732 £62,284.80F ordinary shares of £0.97 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,650 £19,060.50

3.4 On 20 May 2016 the Company subdivided and re-designated each share referred to inparagraph 3.3 into ordinary shares of £0.01 amount such that the issued share capital of theCompany, all of which was fully paid was:


Ordinary shares of £0.01 each . . . . . . . . . . . . . . . . . . . . . . . . . . 9,150,969,844 £91,509,698.44

3.5 On 20 May 2016, each 160 ordinary shares of £0.01 each held by each Shareholder wasconsolidated into one ordinary share of £1.60. Any fractions of ordinary shares of £0.01 eacharising on consolidation were re-designated as deferred shares of £0.01 each, having no votingor dividends rights and very limited economic rights on a winding-up of the Company.

3.6 On 20 May 2016, the Company was released from its obligation to repay loan notes in theaggregate nominal amount of £37,008,644 by the issue of new ordinary shares of £1.60 eachfully paid to the holders of the loan notes following which the Company had 80,323,945 ordinaryshares of £1.60 each in issue, each of which was fully paid.

3.7 On 20 May 2016, the Company reduced its share capital by reducing the amount paid up oneach of its ordinary shares of £1.60 each by the sum of £1.59 per ordinary share and bycancellation of the deferred shares referred to in paragraph 3.5 above following which theCompany had 80,323,945 Ordinary Shares in issue, each of which was fully paid.

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3.8 Set out below are details of the issued share capital of the Company (i) as at the date of thisdocument and (ii) as it will be immediately following the Placing and Admission:

Immediately followingPresent Admission

Aggregate AggregateNominal Nominal

Number Value (£) Number Value (£)

Ordinary Shares . . . . . . . . . . . . . . . . . . . . . . 80,323,945 803,239.45 87,499,796 874,997.96

3.9 Save as disclosed in paragraphs 3.1–3.7 above, no share or loan capital of the Company or anyof its subsidiaries is under option or agreed conditionally or unconditionally to be put underoption.

3.10 In addition to shareholder resolutions to authorise the allotment of shares referred to inparagraphs 3.2–3.7 above:

3.10.1 Pursuant to an ordinary resolution of the Company passed on 20 May 2016 theDirectors were generally and unconditionally authorised in accordance with section 551of the 2006 Act to exercise all the powers of the Company to allot shares in the Companyand to grant rights to subscribe for or to convert securities into such shares up to anaggregate nominal amount of (a) £71,758.51 pursuant to the Placing; and(b) £291,665.00 (representing approximately 33 per cent. of the issued share capital)such authority to expire at the conclusion of the Company’s Annual General Meeting in2017; and

3.10.2 Pursuant to an ordinary resolution of the Company passed on 20 May 2016 theDirectors were empowered (pursuant to section 570 of the 2006 Act) to allot equitysecurities (as defined in section 560 of the 2006 Act) for cash pursuant to the authoritydescribed in paragraph 3.10.1 above as if section 561(1) of the 2006 Act did not apply tosuch allotment, such power being limited to (a) the allotment of equity securities by wayof rights in proportion to the respective number of shares held by or deemed to be heldby the holders of equity securities or other persons entitled to participate in the issue onthe relevant record date, (b) the allotment of 7,175,851 Ordinary Shares in connectionwith the Placing, and (c) in respect of any other issue up to an aggregate nominalamount of £43,749.00, such power being expressed to expire on the date of the nextannual general meeting of the Company or on 19 August 2017 whichever is the earlier.

3.11 Conditional on Admission, the Company was authorised in accordance with section 701 of theAct to make market purchases (within the meaning of section 693(4) of the Act) of up to8,749,979 Ordinary Shares (being approximately 10 per cent. of the Enlarged Share Capital) onsuch terms and in such manner as the Directors of the Company may from time to timedetermine provided that:

3.11.1 the maximum price which may be paid for each share (exclusive of expenses) shall benot more than: (1) five per cent. above the average mid-market price of the OrdinaryShares for the five business days before the date on which the contract for the purchaseis made; and (2) an amount equal to the higher of the price of the last independent tradeand the highest current independent bid as derived from the trading venue where thepurchase was carried out; and

3.11.2 the minimum price which may be paid for each share shall not be less than £0.01, beingthe nominal value of the Ordinary Shares,

such authority to expire on the earlier of the conclusion of the annual general meeting ofthe Company to be held in 2017 or 15 months from Admission, save that the Companymay, before such expiry, make a contract to purchase its own shares which would ormight be executed wholly or partly after such expiry and the Company may make apurchase of its own shares in pursuance of such contract as if the authority had notexpired.

3.12 The unissued share capital of the Company following the Placing, will be £291,655.00,representing approximately 33 per cent of the Company’s share capital, which the Directors willbe authorised to allot pursuant to the authority referred to in paragraph 3.10 above.

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3.13 Save for the allotments referred to in paragraphs 3.1–3.7 above, since incorporation no capital ofthe Company has been allotted for cash or for a consideration other than cash.

3.14 Save for the issue of the Placing Shares and the grant of options under the Share OptionSchemes, no capital of the Company is proposed to be issued or is under option or is agreedconditionally or unconditionally to be put under option.

3.15 The Ordinary Shares will, on Admission, rank pari passu in all respects and will rank in full for alldividends and other distributions thereafter declared, made or paid on the ordinary share capitalof the Company.

3.16 The Ordinary Shares are in registered form and capable of being held in uncertificated form.None of the Ordinary Shares are being marketed or made available in whole or in part to thepublic in conjunction with the applications for Admission other than pursuant to the Placing. TheOrdinary Shares to be issued pursuant to the Placing are being issued at a price of 160 penceper share, representing a premium of 159 pence over the nominal value of £0.01 each. Theexpected issue date is 26 May 2016.

3.17 The currency of the issue is pounds sterling.

4. Articles of Association

The Articles of Association of the Company contain, inter alia, provisions to the following effect:

4.1 Objects

Section 31 of the Companies Act 2006 provides that the objects of a company are unrestrictedunless any restrictions are set out in its articles. The Articles do not contain any restrictions onthe objects of the Company.

4.2 Voting rights

Subject to paragraph 4.7 below, and to any special terms as to voting upon which any sharesmay for the time being, be held, on a show of hands every member who (being an individual) ispresent in person or by proxy (being a corporation) is present by a duly appointedrepresentative shall have one vote and on a poll every member present in person or by arepresentative or proxy shall have one vote for every ordinary share in the capital of theCompany held by him. A proxy need not be a member of the Company.

4.3 Variation of rights

If at any time the capital of the Company is divided into different classes of shares all or any of therights or privileges attached to any class of shares in the Company may be varied or abrogatedwith the consent in writing of the holders of three-fourths in nominal value of the issued shares(excluding any shares of that class held as treasury shares) of that class or with the sanction of aspecial resolution passed at a separate general meeting of the holders of the shares of thatclass. At every such separate general meeting (except an adjourned meeting), the quorum shallbe two persons holding or representing by proxy one-third in nominal value of the issued sharesof that class.

4.4 Alteration of capital

The Company may by ordinary resolution increase its share capital, consolidate and divide all orany of its share capital into shares of a larger nominal value, sub-divide all or any of its sharesinto shares of a smaller nominal value and cancel any shares not taken, or agreed to be taken,by any person.

The Company may, subject to the 2006 Act, by special resolution reduce or cancel its sharecapital or any capital redemption reserve or share premium account.

Subject to and in accordance with the provisions of the 2006 Act, the Company may purchaseits own shares (including any redeemable shares), provided that the Company shall notpurchase any of its shares unless such purchase has been sanctioned by a special resolutionpassed at a separate meeting of the holders of any class of shares convertible into equity sharecapital of the Company.

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4.5 Transfer of shares

A member may transfer all or any of his shares (1) in the case of certificated shares by instrumentin writing in any usual or common form or in such other form as may be approved by theDirectors and (2) in the case of uncertificated shares, through CREST in accordance with andsubject to the CREST Regulations and the facilities and requirements of the relevant systemconcerned. The instrument of transfer of a certificated share shall be executed by or on behalf ofthe transferor and, if the share is not fully paid, by or behalf of the transferee. The Directors mayin their absolute discretion refuse to register a transfer of any share held in certificated formwhich is not fully paid, provided that dealings in the shares are not prevented from taking placeon an open and proper basis. In the case of uncertificated shares, the Directors may only refuseto register a transfer in accordance with the Uncertificated Societies Regulations. The Directorsmay also refuse to register a transfer of shares (whether fully paid or not) if the transfer is infavour of more than four persons jointly. Subject to that and to paragraph 4.7 below, the Articlescontain no restrictions on the free transferability of fully paid shares provided that the transfer isin respect of only one class of share and is accompanied by the share certificate and any otherevidence of title required by the Directors and that the provisions in the Articles relating to thedeposit of instruments for transfer have been complied with. The registration of transfers inrespect of certificated shares may be suspended by the Directors for any period not exceeding30 days in a year.

4.6 Dividends

4.6.1 The Company may by ordinary resolution in general meeting declare dividendsprovided that no dividend shall be paid otherwise than out of profits and no dividendshall exceed the amount recommended by the Directors. The Directors may from timeto time pay such interim dividends as appear to the Directors to be justified.

4.6.2 Subject to the rights of persons, if any, holding shares with special dividend rights, andsubject to paragraph 4.7 below, all dividends shall be apportioned and paid pro rataaccording to the amounts paid or credited as paid on the shares during any portion orportions of the period in respect of which the dividend is paid. No amount paid orcredited as paid in advance of calls shall be regarded as paid on shares for thispurpose.

4.6.3 All dividends unclaimed for a period of 12 years after the payment date for suchdividend shall if the Directors so resolve be forfeited and shall revert to the Company.

4.6.4 The Directors may, if authorised by an Ordinary Resolution of the Company, offer theholders of shares the right to elect to receive additional shares, credited as fully paid,instead of cash in respect of any dividend or any part of any dividend. The Directors mayat their discretion make the right to participate in any such elections subject torestrictions necessary or expedient to deal with legal, regulatory or other difficulties inrespect of overseas shareholders.

4.7 Suspension of rights

If a member or any other person appearing to be interested in shares held by such shareholderhas been duly served with notice under section 793 of the 2006 Act and is in default in supplyingto the Company within 14 days (or such longer period as may be specified in such notice) theinformation thereby, required, then (if the Directors so resolve) such member shall not beentitled to vote or to exercise any right conferred by membership in relation to meetings of theCompany in respect of the shares which are the subject of such notice. Where the holdingrepresents more than 0.25 per cent. of the issued shares of that class (calculated exclusive ofany treasury shares of that class) the payment of dividends may be withheld, and such membershall not be entitled to transfer such shares otherwise than by an arms length sale.

4.8 Return of capital

Subject to any preferred, deferred or other special rights, or subject to such conditions orrestrictions to which any shares in the capital of the Company may be issued, on a winding-up orother return of capital, the holders of ordinary shares are entitled to share in any surplus assetspro rata to the amount paid up on their ordinary shares. A liquidator may, with the sanction of aspecial resolution of the Company and any other sanction required by the 2006 Act, divide

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amongst the members in specie or in kind the whole or any part of the assets of the Company,those assets to be set at such value as he deems fair. A liquidator with the sanction of a specialresolution may also vest the whole or any part of the assets of the Company in trustees on trustsfor the benefit of the members.

4.9 Pre-emption rights

There are no rights of pre-emption under the articles of association of the Company in respect oftransfers of issued Ordinary Shares.

In certain circumstances, the Company’s shareholders may have statutory pre-emption rightsunder the 2006 Act in respect of the allotment of new shares in the Company. These statutorypre-emption rights would require the Company to offer new shares for allotment by existingshareholders on a pro rata basis before allotting them to other persons. In such circumstances,the procedure for the exercise of such statutory pre-emption rights would be set out in thedocumentation by which such shares would be offered to the Company’s shareholders.

4.10 Shareholder Meetings

Annual general meetings should be held within the time periods specified by the 2006 Act. Othergeneral meetings may be called whenever the directors think fit or when one has beenrequisitioned in accordance with the 2006 Act. Two members present in person or by proxy (or,being a corporation, present by a duly appointed representative) at the meeting and entitled tovote shall be a quorum for all purposes.

Annual general meetings or a meeting at which it is proposed to pass a resolution requiringspecial notice are called on at least 21 days notice in writing, exclusive of the day of which thenotice is served or deemed to be served and of the day on which the meeting is to be held. Othergeneral meetings are to be called on 14 days notice in writing exclusive of the day on which thenotice is served or deemed to be served and the day on which the meeting is to be held. Theannual general meeting may be called on shorter notice providing all members entitled to attendand vote agree and a general meeting can be called on shorter notice if a majority in number ofthe members having a right to attend and vote at the general meeting, being a majority togetherholding not less than 95% in nominal value of the shares giving that right, consent. Notice is tobe given to all members on the register at the close of business on a day determined by theCompany, such day being not more than 21 days before the day that the notice of meeting issent.

The Company may specify in the notice of meeting a time, not more than 48 hours before thetime fixed for the meeting, by which a person must be entered into the register in order to havethe right to attend or vote at the meeting. In every notice calling a meeting of the Company thereshall appear with reasonable prominence a statement that a member entitled to attend and voteis entitled to appoint one or more proxies to attend and, on a poll vote instead of him/her, andthat a proxy need not be a member.

4.11 Directors

Save as provided in the Articles or by the terms of any authorisation given by the Directors, adirector shall not vote as a director in respect of any contract, transaction or arrangement orproposed contract, transaction or arrangement or any other proposal whatsoever in which he(or any person connected with him) has any interest (otherwise than by virtue of an interest inshares or debentures or other securities of or otherwise in or through the Company) and whichconflicts or may conflict with the interests of the Company and if he shall do so his vote shall notbe counted, nor in relation thereto shall he be counted in the quorum present at the meeting.

The Directors may authorise a director to be involved in a situation in which the director has ormay have a direct or indirect interest which conflicts or may conflict with the interests of theCompany and may impose such terms or conditions on the grant of such authorisation as theythink fit and in doing so will act in such a way, in good faith, as they consider will be most likely topromote the success of the Company.

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A director shall (in the absence of some other interest than is indicated below) be entitled to vote(and be counted in the quorum) in respect of any resolution relating to any of the followingmatters namely:

4.11.1 the giving of any security, guarantee or indemnity in respect of money lent or obligationsincurred by him or by any other person at the request of or for the benefit of theCompany or any of its subsidiary undertakings; or

4.11.2 the giving of any security, guarantee or indemnity in respect of a debt or obligation of theCompany or any of its subsidiary undertakings for which the director himself hasassumed responsibility in whole or in part under a guarantee or indemnity or by thegiving of security; or

4.11.3 the granting of any indemnity or provision of funding pursuant to the Company’s articlesof association unless the terms of such arrangement confer upon such director a benefitnot generally available to any other director; or

4.11.4 an offer of shares or debentures or other securities of or by the Company or any of itssubsidiary undertakings for subscription or purchase in which offer he is or is to be ormay be entitled to participate as a holder of securities or as an underwriter orsub-underwriter; or

4.11.5 any other company in which he or any person connected with him has a direct orindirect interest, (whether as an officer or shareholder or otherwise) provided that heand any persons connected with him are not to his knowledge the holder (otherwisethan as a nominee for the Company or any of its subsidiary undertakings) of orbeneficially interested in one per cent, or more of any class of the equity share capital ofsuch company (or of any third company through which his interest is derived) or of thevoting rights available to members of the relevant company (any such interest beingdeemed for the purpose of the relevant Article to be a material interest in allcircumstances); or

4.11.6 an arrangement for the benefit of the employees of the Company or any of its subsidiaryundertakings which does not award him any privilege or benefit not generally awardedto the employees to whom the arrangement relates; or

4.11.7 the purchase and/or maintenance of any insurance policy for the benefit of directors orfor the benefit of persons including directors.

Fees may be paid out of the funds of the Company to directors who are not managing orexecutive directors at such rates as the Directors may from time to time determine provided thatsuch fees do not in the aggregate exceed the sum of £300,000 per annum (exclusive of valueadded tax if applicable) or such other figure as the Company may by ordinary resolution fromtime to time determine.

Any director who devotes special attention to the business of the Company, or otherwiseperforms services which in the opinion of the Directors are outside the scope of the ordinaryduties of a director, may be paid such additional remuneration as the Directors or any committeeauthorised by the Directors may determine.

The Directors (including alternate Directors) are entitled to be paid out of the funds of theCompany all their travelling, hotel and other expenses properly incurred by them in connectionwith the business of the Company, including their expenses of travelling to and from meetings ofthe Directors, committee meetings or general meetings.

A director may hold any other office or employment with the Company (other than the office ofauditor) in conjunction with his office of director for such period and on such terms (as toremuneration and otherwise) as the Directors may determine. No director or intending directorshall be disqualified by his office from entering into any contract, arrangement, transaction orproposal with the Company either with regard to his tenure of any other such office or place ofprofit, nor shall any such contract, arrangement, transaction or proposal or any contract,arrangement, transaction or proposal entered into by or on behalf of the Company in which anydirector or any person connected with him is in any way interested (whether directly or indirectly)be liable to be avoided, nor shall any director who enters into any such contract, arrangement,

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transaction or proposal or who is so interested be liable to account to the Company for any profitrealised from any such contract, arrangement, transaction or proposal by reason of suchdirector holding that office or of the fiduciary relationship thereby established, if the director hasdisclosed his interest in accordance with the 2006 Act.

Save as provided by the Articles or by the terms of authorisation given by the Directors, adirector shall not vote as a director or be counted in the quorum in respect of any contract,transaction or arrangement or proposed contract, transaction or arrangement in which he hasany interest which conflicts or may conflict with the interests of the Company. If he does vote, hisvote shall not be counted.

The remuneration and other terms and conditions of appointment of a director appointed asmanaging director or to any other executive office or employment under the Company shall fromtime to time (without prejudice to the provisions of any agreement between him and theCompany) be fixed by the Directors or by any committee appointed by the directors, and may(without limitation) be by way of fixed salary, lump sum, commission on the dividends or profitsof the Company (or of any other company in which the Company is interested) or otherparticipation in any such profits or otherwise or by any or all or partly by one and partly byanother or others of those modes.

Any statutory provision which, subject to the provisions of the Articles, would have the effect ofrendering any person ineligible for appointment as a director or liable to vacate office as adirector on account of his having reached any specified age or of requiring special notice or anyother special formality in connection with the appointment of any director over a specified ageshall not apply to the Company.

5. Mandatory bids, compulsory acquisition rules related to the Ordinary Shares andnotification of major interests in Ordinary Shares

Other than as provided by the City Code and Chapter 28 of the Act, there are no rules or provisionsrelating to mandatory bids and/or squeeze-out and sell-out rules that apply to the Ordinary Shares or theCompany.

5.1 Mandatory bids

The City Code applies to the Company. Under Rule 9 of the City Code, if an acquisition ofinterests in shares were to increase the aggregate holding of the acquirer and its concert partiesto interests in shares carrying 30 per cent. or more of the voting rights in the Company, theacquirer and, depending on the circumstances, its concert parties would be required (exceptwith the consent of the Takeover Panel) to make a cash offer for the outstanding shares in theCompany at a price not less than the highest price paid for interests in shares by the acquirer orits concert parties during the previous 12 months. This requirement would also be triggered byany acquisition of interests in shares by a person holding (together with its concert parties)shares carrying between 30 per cent. and 50 per cent. of the voting rights in the Company if theeffect of such acquisition were to increase that person’s percentage of the total voting rights inthe Company.

‘‘Interests in shares’’ is defined broadly in the City Code. A person who has long economicexposure, whether absolute or conditional, to changes in the price of shares will be treated asinterested in those shares. A person who only has a short position in shares will not be treated asinterested in those shares.

‘‘Voting rights’’ for these purposes means all the voting rights attributable to the share capital ofa company which are currently exercisable at a general meeting.

Persons acting in concert (and concert parties) comprise persons who, pursuant to anagreement or understanding (whether formal or informal), co-operate to obtain or consolidatecontrol of a company or to frustrate the successful outcome of an offer for a company. Certaincategories of people are deemed under the City Code to be acting in concert with each otherunless the contrary is established.

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5.2 Squeeze-out rules

Under the Act, if a ‘‘takeover offer’’ (as defined in section 974 of the Act) is made by an offeror toacquire all of the shares in the Company not already owned by it and the offeror were to acquire,or unconditionally contract to acquire, not less than 90 per cent. in value of the shares to whichsuch offer relates, the offeror could then compulsorily acquire the remaining shares. The offerorwould do so by sending a notice to the outstanding members informing them that it willcompulsorily acquire their shares and, six weeks later, it would deliver a transfer of theoutstanding shares in its favour to the Company which would execute the transfers on behalf ofthe relevant members, and pay the consideration for the outstanding shares to the Companywhich would hold the consideration on trust for the relevant members. The consideration offeredto the members whose shares are compulsorily acquired under this procedure must, in general,be the same as the consideration that was available under the original offer unless a membercan show that the offer value is unfair.

5.3 Sell-out rules

The Act also gives minority members a right to be bought out in certain circumstances by anofferor who has made a takeover offer. If a takeover offer related to all the shares in the Companyand, at any time before the end of the period within which the offer could be accepted, the offerorheld or had agreed to acquire not less than 90 per cent. in value of the shares and not less than90 per cent. of the voting rights carried by the shares in the Company, any holder of shares towhich the offer related who had not accepted the offer could by a written communication to theofferor require it to acquire those shares. The offeror would be required to give any membernotice of his or her right to be bought out within one month of that right arising. The offeror mayimpose a time limit on the rights of minority members to be bought out, but that period cannotend less than three months after the end of the acceptance period or, if later, three-months fromthe date on which notice is served on members notifying them of their sell-out rights. If amember exercises his or her rights, the offeror is entitled and bound to acquire those shares onthe terms of the offer or on such other terms as may be agreed.

5.4 Notification of major interests in Ordinary Shares

Chapter 5 of the Disclosure and Transparency Rules makes provisions regarding notification ofcertain shareholdings and holdings of financial instruments.

Where a person holds voting rights in the Company as a Shareholder through direct or indirectholdings of financial instruments, then that person has an obligation to make a notification to theFCA and the Company of the percentage of voting rights held where that percentage reaches,exceeds or falls below three per cent. or any whole percentage point above three per cent..

The requirement to notify also applies where a person is an indirect Shareholder and canacquire, dispose of or exercise voting rights in certain cases.

Shareholders are encouraged to consider their notification and disclosure obligations carefullyas a failure to make any required notification to the Company may result in disenfranchisementpursuant to the Articles (see paragraph 4.7 above).

6. Employee share plans

The Company has adopted four share plans, the principal provisions of which are summarised below.

Employee Share Plans

On 9 May 2016, the Board adopted the following employee share plans, conditional on Admission:

• the Joules 2016 Long Term Incentive Plan (the ‘‘LTIP’’);

• the Joules 2016 Executive Share Option Plan (the ‘‘ESOP’’);

• the Joules 2016 Deferred Bonus Plan (the ‘‘DBP’’); and

• the Joules 2016 Save As You Earn Scheme (the ‘‘SAYE Scheme’’)

The LTIP, the ESOP and the DBP are, together, referred to as the ‘‘Executive Plans’’ and the ExecutivePlans and the SAYE Scheme are together referred to as the ‘‘Share Plans’’.

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The principal features of the Share Plans are summarised in this paragraph 6. Certain provisions whichare common to the Executive Plans and certain provisions which are common to all of the Share Plansare summarised following the plan specific summaries.

Awards under the ESOP (the ‘‘Admission Options’’) will be granted on or as soon as reasonablypracticable after Admission, and are referred to in paragraph 9 of this Part 7.

Each Share Plan will be administered and operated by the Board or a duly authorised committee. Alldecisions in relation to the participation in the LTIP by executive Directors will be taken by the Company’sRemuneration Committee.

Any employee (including an executive Director) of the Company or any of its subsidiaries will be eligibleto participate in the Share Plans. Participation in the Executive Plans will be at the discretion of theRemuneration Committee. All employees of the Company and designated subsidiaries (includingexecutive Directors) will be eligible to participate in the SAYE Scheme, although a minimum qualifyingperiod of service may be set.

Other than to permit the grant of Qualifying LTIP Awards (as referred to in paragraph 6.1.7) and asregards the Admission Options, the Remuneration Committee does not intend that executive Directorswill participate in the ESOP.

6.1 The Joules 2016 Long Term Incentive Plan

6.1.1 Timing of first grant

The Remuneration Committee intends to grant awards under the LTIP to executiveDirectors and other senior executives in respect of FY17 shortly after Admission.

6.1.2 Form of Awards

Awards under the LTIP may be in the form of:

• a conditional right to acquire Ordinary Shares at no cost to the participant(‘‘Conditional Award’’);

• an option to acquire Ordinary Shares at no cost to the participant or for the paymentof an exercise price per ordinary Share equal to the nominal value of an OrdinaryShare(‘‘Nil-Cost Option’’); or

• a right to receive a cash amount which relates to the value of a certain number ofnotional Ordinary Shares (‘‘Cash Award’’).

Conditional Awards, Nil-Cost Options and Cash Awards granted under the LTIP aretogether referred to as ‘‘LTIP Awards’’.

References in this paragraph 6 to Ordinary Shares include notional Ordinary Shares towhich a Cash Award relates, where appropriate. As described in paragraph 6.1.7, anaward under the LTIP may be granted in conjunction with a Qualifying Option under theESOP (a ‘‘Qualifying LTIP Award’’).

6.1.3 Performance conditions

Unless the Remuneration Committee determines otherwise, LTIP Awards will be subjectto the satisfaction of a performance condition which will determine the proportion (ifany) of the LTIP Award which will vest; performance conditions will normally beassessed at the end of a period of at least three years.

It is proposed that the first LTIP Awards will be subject to a performance condition basedon growth in earnings per share over the three year period FY17 to FY19. TheRemuneration Committee will review the performance conditions and targets beforeany grants are made to ensure that they reflect the business’s strategic priorities at therelevant time.

Any performance condition may be amended or substituted if one or more events occurwhich cause the Remuneration Committee to consider that an amended or substitutedperformance condition would be more appropriate. Any amended or substitutedperformance condition would not be materially less difficult to satisfy.

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6.1.4 Individual limits

LTIP Awards will not be granted to a participant over Ordinary Shares with a marketvalue (as determined by the Remuneration Committee) in excess of 100 per cent. ofsalary in respect of any financial year. However, the Remuneration Committee may, incircumstances which it considers appropriate, grant LTIP Awards above this level,subject to an overall limit of 150% per cent. of salary. Where a ‘‘Qualifying LTIP Award’’is granted, the Shares subject to the Qualifying Option granted under the ESOP will notcount towards these limits for the reason referred to in paragraph 6.1.7.

6.1.5 Grant of LTIP Awards

LTIP Awards may only be granted within the six week period following Admission, theannouncement of the Company’s results for any period, any day on which a restrictionon the grant of LTIP Awards is lifted, or on any day on which the RemunerationCommittee determines that exceptional circumstances exist.

6.1.6 Vesting and exercise

LTIP Awards subject to a performance condition will normally vest as soon aspracticable after the end of the performance period to the extent that the performancecondition has been satisfied. Where LTIP Awards are granted without a performancecondition, they will usually vest on the third anniversary of the grant date (or on suchother date as the Remuneration Committee determines).

LTIP Awards may be subject to a ‘‘Holding Period’’ of up to two years following vesting.Where an LTIP Award is subject to a Holding Period, it will ordinarily only be released tothe participant (so that he is entitled to acquire the vested Ordinary Shares) following theend of that Holding Period. Where an LTIP Award is granted without a Holding Period, itwill ordinarily be released to the participant at vesting.

Nil-Cost Options will normally be exercisable from the date of release until the tenthanniversary of the grant date.

6.1.7 Qualifying LTIP Awards

A participant in the LTIP may be granted a Qualifying Option under the ESOP inconjunction with an LTIP Award (together referred to as a ‘‘Qualifying LTIP Award’’).The LTIP Award will be subject to conditions that it:

• can only be exercised at the same time as the Qualifying Option (unless theQualifying Option is given up); and

• will be exercised automatically when the Qualifying Option is exercised.

On the exercise of a Qualifying LTIP Award, the extent to which the LTIP Award isexercised will be scaled back to reflect the gain made on the exercise of the QualifyingOption, so that the pre-tax position is the same as if the Qualifying Option had not beengranted. Because of this scale back provision, the Shares subject to the QualifyingOption do not count towards the individual limit on LTIP participation referred to inparagraph 6.1.4 above, so as to avoid double counting.

6.2 The Joules 2016 Executive Share Option Plan

6.2.1 Timing of first grant

Certain awards under the ESOP (the ‘‘Admission Options’’) will be granted on or assoon as reasonably practicable after Admission, and are referred to in paragraph 9 ofthis Part 7. The Remuneration Committee also intends to grant ‘‘ordinary’’ awards underthe ESOP in respect of FY17 shortly after Admission.

6.2.2 Form of Awards

Awards under the ESOP will be granted as options to acquire Ordinary Shares with a perOrdinary Share exercise price equal to the market value (as determined by theRemuneration Committee) of an Ordinary Share at the date of grant (‘‘ESOP Options’’).

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A schedule to the ESOP permits the grant of ESOP Options which are intended to satisfythe requirements of Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003and which may, subject to the satisfaction of the applicable requirements, be exercisedin a tax efficient manner (‘‘Qualifying Options’’). The ESOP will operate in relation toQualifying Options as referred to in this paragraph 6.2, other than where differenttreatment is required to take account of the applicable tax legislation or HM Revenue &Customs’ practice.

6.2.3 Performance conditions

Although the ESOP will permit the grant of ESOP Options which are subject to thesatisfaction of performance conditions, the Remuneration Committee does not intendordinarily to impose performance conditions. However, where a Qualifying Option isgranted as part of a Qualifying LTIP Award as referred to in paragraph 6.1.7 theQualifying Option will be subject to the same performance condition as applies to theassociated LTIP Award.

Any performance condition may be amended or substituted if one or more events occurwhich cause the Remuneration Committee to consider that an amended or substitutedperformance condition would be more appropriate. Any amended or substitutedperformance condition would not be materially less difficult to satisfy.

6.2.4 Individual limits

The Remuneration Committee proposes that, other than as regards the AdmissionOptions, ESOP Options will initially be granted over Ordinary Shares with a value of upto £40,000.

The Remuneration Committee retains discretion to grant ESOP Options over OrdinaryShares with a greater value provided that (other than as regards the Admission Options)ESOP Options will not be granted to a participant over Ordinary Shares with a marketvalue (as determined by the Remuneration Committee) in excess of 200 per cent. ofsalary in respect of any financial year.

6.2.5 Grant of Options

ESOP Options may only be granted within the six week period following Admission, theannouncement of the Company’s results for any period, any day on which a restrictionon the grant of ESOP Options is lifted, or on any day on which the RemunerationCommittee determines that exceptional circumstances exist.


ESOP Options will usually vest and be released on the third anniversary of the grantdate (or on such other date as the Remuneration Committee determines) and will thennormally be exercisable until the tenth anniversary of the grant date. The AdmissionOptions and the ESOP Options granted shortly after Admission in respect of FY17 willvest and be released on the second anniversary of Admission.

6.3 The Joules 2016 Deferred Bonus Plan

The DBP will operate in conjunction with the Company’s annual bonus plan. The RemunerationCommittee’s current intention is that the first awards under the DBP will be granted in respect ofbonuses earned for FY17 (and following the announcement of the Company’s results for thatyear).

Awards under the DBP (‘‘DBP Awards’’) may be granted in the same form as awards under theLTIP.

6.3.1 Grant of DBP Awards

The number of Ordinary Shares subject to a DBP Award will be such number of Sharesas has a market value (as determined by the Remuneration Committee) equal to thevalue of the annual bonus deferred into a DBP Award.

DBP Awards may only be granted within the six week period following theannouncement of the Company’s results for any period, the determination of aparticipant’s annual bonus, any day on which a restriction on the grant of DBP Awards islifted, or on any day on which the Remuneration Committee determines that exceptionalcircumstances exist.

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DBP Awards they will usually vest and be released on the third anniversary of the dateon which the relevant annual bonus was determined. Nil-Cost Options will then normallybe exercisable until the tenth anniversary of the grant date.

6.4 Common terms of the Executive Plans

6.4.1 Dividends

The Remuneration Committee may provide cash or additional Ordinary Shares to aparticipant in the LTIP or DBP based on the value of dividends paid on vested OrdinaryShares over such period as the Remuneration Committee determines ending no laterthan the date on which the LTIP or DBP Award is released. The RemunerationCommittee has the discretion to determine the basis on which this additional amount iscalculated, which may assume the reinvestment of the dividends into Ordinary Shares.

No such dividend entitlement will be applied to ESOP Options.

6.4.2 Cessation of Employment

DBP Awards, LTIP Awards and ESOP Options will lapse immediately upon a participantceasing to be employed by or holding office with any member of the Group, other thanas set out below.

Good leavers—unvested LTIP Awards and unvested ESOP Options

If a participant ceases to be employed or hold office as a result of his death, ill-health,injury, disability, or the sale of the business or entity that employs him out of the Group orfor any other reason at the Remuneration Committee’s discretion unvested LTIP Awardsand unvested ESOP Options will vest and be released to the extent determined by theRemuneration Committee taking into account, in the case of LTIP Awards and anyESOP Option which forms part of a Qualifying LTIP Award, the extent to which anyapplicable performance condition has been satisfied (at the end of the performanceperiod or the date of cessation as appropriate). In addition, unless the RemunerationCommittee determines otherwise, the extent to which the LTIP Award or ESOP Optionvests will be reduced to take account of the period of time that has elapsed between thegrant date and the date of cessation.

LTIP Awards and ESOP Options will ordinarily be released at the normal release date,but the Remuneration Committee will have discretion to release them at the date ofcessation or at some other date (such as following the end of the performance period inthe case of an LTIP Award subject to a Holding Period).

Good leavers—vested but unreleased LTIP Awards

If an LTIP Award is granted subject to a Holding Period and the participant ceasesemployment during the Holding Period, his LTIP Award will be released, to the extentvested, at the normal release date unless the participant is summarily dismissed (inwhich case his LTIP Award will lapse). The Remuneration Committee will have discretionto release the LTIP Award at the date of cessation.

Good leavers—unvested DBP Awards

If a participant ceases to be employed or hold office for any reason other than grossmisconduct or resignation to join a material competitor (as determined by theRemuneration Committee), his DBP Award will continue and will vest and be releasedon the normal vesting date, although the Remuneration Committee will have discretionto release the DBP Award on the date of cessation. DBP Awards will vest in full unlessthe Remuneration Committee determines that the extent of vesting should be reducedto take account of the period of time that has elapsed between the grant date and thedate of cessation.

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Good leavers—LTIP Awards and DBP Awards in the form of Nil-Cost Options and ESOPOptions

LTIP and DBP Awards granted in the form of Nil-Cost Options and ESOP Options maybe exercised for a period of six months (or 12 months in the case of death) from the laterof the date of cessation (if it was already exercisable) or the date of release. TheRemuneration Committee may permit the exercise of Nil-Cost Options or ESOP Optionsin a longer period.

6.4.3 Corporate events

In the event of a change of control of the Company, unvested DBP Awards, LTIP Awardsand ESOP Options will vest and be released (and vested but unreleased LTIP awardswill be released) as soon as practicable.

Unvested LTIP Awards and any ESOP Option which forms part of a Qualifying LTIPAward will vest taking into account the extent to which any performance condition hasbeen satisfied. Unless the Remuneration Committee determines otherwise, the periodof time which has elapsed between the grant date and the relevant event will be takeninto account in determining the extent to which an LTIP Award or ESOP Option vests.Unvested DBP Awards will vest in full.

Alternatively, the Remuneration Committee may permit participants to exchange DBPAwards, LTIP Awards or ESOP Options for equivalent awards which relate to shares in adifferent company. If the change of control is an ‘‘internal reorganisation’’ of the Group,participants will be required to exchange their DBP Awards, LTIP Awards and ESOPOptions (rather than those Awards and Options vesting).

If other corporate events occur such as a winding-up of the Company, demerger,delisting, special dividend or other event which, in the opinion of the RemunerationCommittee, may affect the current or future value of Ordinary Shares, the RemunerationCommittee may determine that DBP Awards, LTIP Awards and ESOP Options will vestand be released. LTIP Awards will vest subject to satisfaction of any relevantperformance condition. The extent to which an LTIP Award or ESOP Option vests will,unless the Remuneration Committee determines otherwise, be determined taking intoaccount the period of time which has elapsed between the grant date and the relevantevent. DBP Awards will vest in full. The Remuneration Committee will determine in thesecircumstances the length of time during which Awards structured as Nil-Cost Optionsand ESOP Options can then be exercised.

6.4.4 Clawback and malus

Malus

The Remuneration Committee may, in its discretion, determine at any time prior tovesting of a DBP Award, LTIP Award or ESOP Option to reduce (including to zero) thenumber of Ordinary Shares to which the Award or Option relates, or impose furtherconditions on the Award or Option in the event of:

• corporate failure or material errors or misstatement of results;

• information coming to light which, had it been known, would have affected thedecision to grant the Award;

• material failure of risk management; or

• gross misconduct on the part of the participant.

Clawback—LTIP Awards and ESOP Options

The Remuneration Committee may, in its discretion, determine after the vesting of anLTIP Award or ESOP Option and before the second anniversary of its vesting date to:(1) reduce (including to zero) the number of Ordinary Shares to which the Award orOption relates or impose further conditions on the Award or Option (for example if anLTIP Award is subject to a Holding Period or the Award or Option is released butunexercised); or (2) the participant shall make a cash payment to the Company in

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respect of some or all of the Ordinary Shares or cash released to him or shall transfer fornil consideration some or all of those Ordinary Shares in the event of:

• corporate failure or material errors or misstatement of results;

• information coming to light which, had it been known, would have affected thedecision to grant the Award or the extent to which it vested; or

• gross misconduct on the part of the participant.

6.4.5 Alternative method of satisfaction of Awards and Options

At any time before the point at which a DBP Award, an LTIP Award or an ESOP Optionhas been released, or, if relevant, exercised, the Remuneration Committee may decideto pay a participant a cash amount equal to the value of the Ordinary Shares he wouldotherwise have received (less, in the case of an ESOP Option, the exercise pricepayable). The Remuneration Committee may, as an alternative to requiring a participantin the ESOP to pay the exercise price for the Ordinary Shares subject to his Option,deliver to the participant for nil-cost such number of Ordinary Shares as have a value atexercise equal to the gain in the Option.

6.5 The Joules 2016 Save As You Earn Scheme

The SAYE Scheme is an ‘‘all employee’’ share option plan, which is intended to satisfy therequirements of Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003 and which willbe administered and operated by the Company’s Remuneration Committee.

6.5.1 SAYE Contracts and SAYE Options

An eligible employee who applies for an option under the SAYE Scheme (an ‘‘SAYEOption’’) must enter into a contract with a savings institution under which he agrees tosave up to £500 per month (or such other limit as may be permitted under the applicabletax legislation from time to time) over a period of three or five years (an ‘‘SAYEContract’’).

SAYE Options will be granted with a per Ordinary Share exercise price determined bythe Remuneration Committee which will not be less than 80 per cent. (or such otherpercentage as is permitted under the applicable tax legislation from time to time) of themarket value of an Ordinary Share when the invitation is issued. The number of OrdinaryShares subject to each SAYE Option will be such number as can be acquired at theexercise price using the proceeds of the relevant SAYE Contract.

6.5.2 Issue of invitations

Invitations to apply for SAYE Options may only be issued within the six week periodfollowing Admission, the announcement of the Company’s results for any period, theannouncement or coming into effect of changes to the legislation governing taxqualifying share option schemes, any day on which a restriction on the issue ofinvitations is lifted, or on any day on which the Remuneration Committee determinesthat exceptional circumstances exist.

However, it is intended that invitations will first be issued following the announcement ofthe Company’s results for FY16.


Ordinarily, SAYE Options will be exercisable for a period of six months following thematurity of the related SAYE Contract.

However, SAYE Options may be exercised early if the participant ceases employment asa result of: death; injury; disability; redundancy; retirement; the transfer out of the Groupof the company by which or business in which the participant is employed; or, providedthe SAYE Option has been held for at least three years, the termination of hisemployment for any other reason other than where he is summarily dismissed by hisemployer. A participant will have six months within which to exercise his SAYE Option inthese circumstances, or 12 months in the event of death.

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6.5.4 Corporate events

In the event of a change of control or a voluntary winding-up of the Company, SAYEOptions may be exercised within a period of up to six months. Alternatively, SAYEOptions may be exchanged (with the agreement of the acquiring company and theparticipant) for equivalent options over shares in the acquiring company. SAYE Optionswill be exchanged (or will lapse) in the event of an ‘‘internal reorganisation’’ of theGroup.

6.6 Provisions which are common to the Share Plans

6.6.1 Terms of LTIP Awards, ESOP Options, DBP Awards and SAYE Options

LTIP Awards, ESOP Options, DBP Awards and SAYE Options may be granted overnewly issued Ordinary Shares, Ordinary Shares held in treasury or Ordinary Sharespurchased in the market, and are not transferable (other than on death). No paymentwill be required for the grant of an LTIP Award, DBP Award, ESOP Option or SAYEOption, and no such award or option will form part of pensionable earnings.

6.6.2 Overall limit

The Share Plans are subject to the following overall limit.

In any 10 year period, the number of Shares which may be issued under the LTIP, ESOP,DBP, SAYE Scheme and under any other share plan adopted by the Company may notexceed 10 per cent. of the issued ordinary share capital of the Company from time totime.

Awards and options granted before Admission and the Admission Options referred to inparagraph 9 shall not be taken into account when assessing this limit.

Treasury Shares will be treated as newly issued for the purpose of these limits until suchtime as guidelines published by institutional investor representative bodies determineotherwise.

6.6.3 Adjustments

In the event of a variation of the Company’s share capital or a rights issue or, in the caseof the LTIP, ESOP and DBP, a demerger, delisting, special dividend, or other event, whichmay, in the Remuneration Committee’s opinion, affect the current or future value ofShares, the number of Shares subject to an LTIP Award, DBP Award, ESOP Option orSAYE Option and the exercise price applying to any SAYE Option or ESOP Option (and/or, in respect of the LTIP, the performance condition attached to an LTIP Award), may beadjusted.

6.6.4 Amendment and termination

The Remuneration Committee may amend any of the Share Plans or the terms of anyaward or option granted under them at any time, provided that prior approval of theCompany’s shareholders in a general meeting will be required for amendments to theadvantage of eligible employees or participants relating to eligibility, limits, the basis fordetermining a participant’s entitlement to, and the terms of, the Shares or cashcomprised in an award or option and the impact of any variation of capital.

However, any minor amendment to benefit the administration of any Share Plan, to takeinto account legislative changes, or to obtain or maintain favourable tax treatment,exchange control or regulatory treatment may be made by the RemunerationCommittee without shareholder approval.

No amendment may be made to the material disadvantage of participants in a SharePlan unless consent is sought from the affected participants and given by a majority ofthem.

The Share Plans will usually terminate on the tenth anniversary of their adoption but therights of existing participants will not be affected by any termination.

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6.7 Employee Benefit Trust

The Company proposes in the future to establish an employee benefit trust (the ‘‘EBT’’), whichwill operate in connection with the Share Plans. The EBT will be able to provide benefits toemployees and former employees of the Group and certain of their dependents. The Companywill have the power to appoint and remove the trustee of the EBT. The trustee of the EBT will havethe power to acquire Ordinary Shares (with funding provided by way of loans or contributionsfrom the Company or other member of the Group), which may be used to satisfy awards underthe Share Plans and any other employees’ share plans established by the Company or othermember of the Group from time to time. Any Ordinary Shares issued to the EBT will counttowards the limit referred to in paragraph 6.6.2.

7. Directors’, Senior Managers’ and other interests

7.1 The names of the Directors of the Company are set out under ‘‘Directors, Secretary andAdvisers’’ in Part 3 of this document. The following persons are the Senior Managers of theCompany:

Kara Groves, Chief Commercial Officer

Chloe Ward, Creative Director

Ronny Helvey, Marketing Director

Sallie Barnet, HR Director

Ralph Percival, E-Commerce Director

Penny Parry, European Wholesale Director

Andrea Gray, Retail & Shows Director

7.2 The interests of each Director and Senior Manager all of which are beneficial, in the share capitalof the Company are as follows:

Following thePlacing

OrdinaryShares %

Neil William McCausland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625,375 0.7Colin Nigel Porter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,129,142 2.4Tom Simon Lee Joule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,147,210 32.2Marc Simon Dench . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,500 0.1David Anthony Stead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,250 0.0Jill Caroline Little . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,625 0.0Kara Groves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 569,495 0.7Chloe Ward* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 652,969 0.7Ronny Helvey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284,762 0.3Sallie Barnet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . nil nilRalph Percival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . nil nilPenny Parry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,926 0.0Andrea Gray . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441,546 0.5

* This includes 62,500 Ordinary Shares to be acquired by Chloe’s husband, Jolly Ward, in the Placing.

7.3 Save as disclosed above, no Director or Senior Manager has any interest in the share capital orloan capital of the Company or any of its subsidiaries nor does any person connected with theDirectors or Senior Managers (within the meaning of section 252 of the 2006 Act) have any suchinterests, whether beneficial or non-beneficial.

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7.4 The Directors have held the following directorships and/or been a partner in the followingpartnerships within the five years prior to the date of this document:

Name Current directorships and partnerships Previous directorships and partnerships

Tom Simon Lee Joule . . . . Castlegate 748 LimitedCastlegate 730 LimitedJoules Investments HoldingsLimitedWickmere NO.1 LimitedWickmere NO.2 LimitedJoules (Market Harborough)LimitedJoules Clothing LimitedJoules LimitedJoules Hong Kong LimitedJoules Clothing ShanghaiCompany LimitedJoules USA, Inc.

Marc Simon Dench . . . . . Joules Limited B & B Capital Partners (GP) LTDJoules Investments Holdings B & B Capital PartnersLimited (SLP GP) LTDDigichannel Limited Soap & Glory LimitedJoules USA, Inc. Nottingham Enterprise Zone

Development Company LimitedBCM LimitedBCM Specials LimitedThe Boots Company plcWalgreens Boots Alliance ServicesLimitedAlliance Healthcare ManagementServices LimitedBoots International ManagementServices LimitedBoots Management ServicesLimitedBCM Employment & ManagementServices Limited

Colin Nigel Porter . . . . . . . Joules Investments Holdings C.P. Retail Consulting LimitedLimitedJoules LimitedJoules USA, Inc.

Neil William McCausland . Karen Millen Holdco 1 Limited Post Office LimitedKaren Millen Group Limited Dwell Retail Holdings LimitedKaren Millen Holdings Limited Floors-2-Go Card HandlingKaren Millen Retail Limited Services LimitedMosaic Fashions US Limited Snow+Rock Group HoldingsKaren Millen Fashions Limited LimitedJoules Investments Holdings F2G Realisations LimitedLimited KG Group Holdings LimitedCreate Health Holding Limited KG Bidco LimitedPentomax LimitedCause and Effect LimitedSKN Holdings LimitedSKN LimitedHS 524 LimitedAurora Fashion Services Limited

Jill Caroline Little . . . . . . . Shaftesbury plc Restorative Justice CouncilHouseology Design Group Limited LimitedGreen Jade Limited John Lewis FoundationNational Trust (Enterprises)LimitedNational Trust (Renewable Energy)Limited

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Name Current directorships and partnerships Previous directorships and partnerships

David Anthony Stead . . . . Card Factory PLC Dunelm Card Services LimitedMember of the Council of the Dunelm Group PLCUniversity of Birmingham Dunelm (Soft Furnishings) Ltd

Dunelm Estates LimitedDunelm LimitedENSCO 735 LimitedFogarty Holdings LimitedZoncolan Limited

7.5 Colin Porter was a director of C.P. Retail Consulting Limited until it was dissolved on24 September 2013 by voluntary strike-off.

7.6 Marc Dench was a director of Indigenx Limited until it was dissolved on 23 November 2010 byvoluntary strike-off.

7.7 Neil McCausland was:

7.7.1 appointed as a director of Pentomax Limited on 5 December 2011. On 3 November2015 this company went into members’ voluntary liquidation;

7.7.2 appointed as a director of Floors-2-Go Card Handling Services Limited on 14 August2007. On 6 July 2009 this company went into members’ voluntary liquidation;

7.7.3 a director of 2FG Holdings Limited, 2FG Limited, Anglo B Realisations Limited, F2GRealisations Limited when these companies went into administration on 21 July 2008.The companies have now been dissolved;

7.7.4 appointed as a director of Olan Mills Holdings Limited on 22 November 2004 andresigned as a director on 4 October 2006. Olan Mills Holdings Limited went intoadministration 14 December 2006; and

7.7.5 a director of T J Hughes Limited, T J Hughes (Properties) Company Limited, T J Hughes(Holdings) Company Limited and T J Hughes (Investments) Limited. He resigned adirector of these companies on 22 March 2011. The companies went into administrationon 30 June 2011 and have subsequently either been dissolved or placed into creditors’voluntary liquidation.

7.8 Save as disclosed above, no Director:

7.8.1 has any unspent convictions in relation to fraudulent or indictable offences; or

7.8.2 has been bankrupt or the subject of an individual voluntary arrangement, or has had areceiver appointed to any asset of such Director; or

7.8.3 has been a director of any company which, while he was a director or within 12 monthsafter he ceased to be a director, had a receiver appointed or went into compulsoryliquidation, creditors voluntary liquidation, administration or company voluntaryarrangement, or made any composition or arrangement with its creditors generally orwith any class of its creditors; or

7.8.4 has been a partner of any partnership which, while he was a partner or within 12 monthsafter he ceased to be a partner, went into compulsory liquidation, administration orpartnership voluntary arrangement, or had a receiver appointed to any partnershipasset: or

7.8.5 has had any public criticism and/or sanction by statutory or regulatory authorities(including designated professional bodies); or

7.8.6 has been disqualified by a court from acting as a director of a company or from acting inthe management or conduct of the affairs of any company.

7.9 Save as set out in paragraph 7.2 above and paragraph 7.11 below, so far as the Directors areaware, no person, directly or indirectly, jointly or severally, exercises or could exercise controlover the Company.

7.10 So far as the Directors are aware, there are no arrangements the operation of which may at alater date result in a change of control of the Company.

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7.11 Save as disclosed in paragraph 7.2 above, and as set out below, the Company is not aware ofany person who is directly or indirectly interested in 3 per cent. or more of the issued sharecapital or voting rights of the Company:

Ordinary Shares %

BlackRock Investment Management (UK) Limited . . . . . . . . . . . . . . 11,875,000 13.6LDC* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,250,001 7.1Old Mutual Global Investors (UK) Limited . . . . . . . . . . . . . . . . . . . 4,839,026 5.6

Schroder Investment Management Ltd (Dynamic) . . . . . . . . . . . . . . 3,750,000 4.2

Standard Life Investments Limited . . . . . . . . . . . . . . . . . . . . . . . . . 3,750,000 4.2

Henderson Volantis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,396,803 3.9

* Held by LDC (Nominees) Limited and LDC Parallel Nominees Limited as nominees for LDC II LP and LDCParallel II LP respectively. LDC is the manager of LDC II LP and LDC Parallel II LP.

7.12 None of the Company’s major holders of shares listed above has voting rights which aredifferent from other holders of Ordinary Shares.

7.13 There are no loans made or guarantees granted or provided by any member of the Group to orfor the benefit of any Director or Senior Manager.

7.14 Save as disclosed in paragraph 10 below, no Director or Senior Manager is or has beeninterested in any transaction which is or was unusual in its nature or conditions or significant tothe business of the Group and which was effected by the Company or any of its subsidiariesduring the current or immediately preceding financial year or which was effected by theCompany or any of its subsidiaries during any earlier financial year and remains in any respectoutstanding or unperformed.

8. Directors service contracts

8.1 Tom Simon Lee Joule has entered into a service agreement with the Company dated 20 May2016 on a permanent ongoing basis, subject to termination upon 12 months’ notice by eitherparty. The agreement provides for an annual salary of £335,000, an annual car allowance of£20,000 (or a company car based on an equivalent cost to the Company), mobile telephone,membership of a private medical and dental insurance scheme (for Tom Joule, his spouse andall dependent children under the age of 21), pension contributions of 5 per cent. of his salary,35 days holiday (plus bank holidays) and sick pay (6 weeks’ full pay in any period of 12 months).

8.2 Colin Nigel Porter has entered into a service agreement with the Company dated 20 May 2016on a permanent ongoing basis, subject to termination upon 12 months’ notice by either party.The agreement provides for an annual salary of £345,000, an annual car allowance of £15,000(or a company car based on an equivalent cost to the Company), mobile telephone,membership of a private medical and dental insurance scheme (for Colin Porter, his spouse andall dependent children under the age of 21), pension contributions of 5 per cent. of his salary,30 days holiday (plus bank holidays) and sick pay (6 weeks’ full pay in any period of 12 months).

8.3 Marc Simon Dench has entered into a service agreement with the Company dated 20 May 2016on a permanent ongoing basis, subject to termination upon 6 months’ notice by either party. Theagreement provides for an annual salary of £220,000, an annual car allowance of £8,000 (paidmonthly), mobile telephone, membership of a private medical and dental insurance scheme (forMarc Dench, his spouse and all dependent children under the age of 21), pension contributionsof 5 per cent. of his salary, 30 days holiday (plus bank holidays) and sick pay (3 weeks’ full payduring the first three years’ of employment, thereafter 6 weeks’ full pay, in any period of12 months).

8.4 The services of Neil William McCausland as non-executive Director and Chairman are providedunder the terms of an agreement between the Company and Neil dated 20 May 2016 for aninitial period of three years, continuing thereafter subject to termination upon at least onemonths’ notice, at an initial fee of £75,000 per annum together with an additional £5,000 perannum for FY18 and subsequent years in respect of Neil’s appointment as chair of thenomination committee.

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8.5 The services of Jill Caroline Little as non-executive Director are provided under the terms of anagreement between the Company and Jill dated 20 May 2016 for an initial period of three years,continuing thereafter subject to termination upon at least one months’ notice, at an initial fee of£45,000 per annum together with an additional £5,000 per annum in respect of Jill’sappointment as chair of the remuneration committee.

8.6 The services of David Anthony Stead as non-executive Director are provided under the terms ofan agreement between the Company and David dated 20 May 2016 for an initial period of threeyears, continuing thereafter subject to termination upon at least one months’ notice, at an initialfee of £50,000 per annum together with an additional £5,000 per annum in respect of David’sappointment as chair of the audit committee.

8.7 Save as set out in paragraphs 8.1–8.6 above, there are no service agreements in existencebetween any of the Directors and the Company or any of its subsidiaries which cannot bedetermined by the employing company without payment of compensation (other than statutorycompensation) within one year.

9. Remuneration arrangements at and following Admission

In anticipation of Admission, the Company undertook a review of its remuneration policy for Directors inorder to ensure that it is appropriate for the listed company environment.

9.1 Future remuneration policy for executive Directors

The Company’s remuneration package for executive Directors has been designed based on thefollowing key principles:

• to promote the long term success of the Company, with transparent and stretching performanceconditions, which are rigorously applied;

• to provide appropriate alignment between the Company’s strategic goals, shareholder returns andexecutive reward; and

• to have a competitive mix of base salary and short and long term incentives, with an appropriateproportion of the package determined by stretching targets linked to the Company’s performance.

In connection with these key principles, the Board has adopted, the LTIP, the ESOP and the DBPdescribed in paragraph 6 above. Executive Directors are also eligible to participate in theall-employee SAYE Scheme on the same terms as all other employees.

Executive Directors’ fixed and variable remuneration packages applying post-Admission havebeen determined taking into account:

• the role, experience and performance of the executive Director

• remuneration arrangements at UK listed companies of a similar size and complexity; and

• best practice guidelines for UK listed companies set by institutional investor bodies.

9.2 Performance based remuneration

The performance based remuneration for executive Directors and other senior executives willconsist of the elements set out below. Information on the fixed elements of the executiveDirectors’ remuneration is set out in paragraph 8 above.

• An annual bonus opportunity based on the achievement of stretching performance targets. At least50 per cent. of the opportunity will be subject to performance conditions based on financial targetsrelated to the Company’s strategic priorities with the balance of the opportunity based on financialtargets or strategic/individual objectives. For FY17, 100 per cent. of the bonus will be subject to aperformance target based on profit before tax.

Part of a participant’s annual bonus may be deferred into an award under the Joules 2016 DeferredBonus Plan as described in paragraph 6 above. The Remuneration Committee’s current intention isthat for executive Directors, 50 per cent. of any bonus earned will be deferred, unless the amount tobe deferred would, in the Remuneration Committee’s opinion, result in a DBP Award over a smallnumber of Ordinary Shares which would make the grant unduly administratively burdensome.

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• Annual grants of performance related awards under the Joules 2016 Long Term Incentive Plan withvesting subject to the satisfaction of performance conditions. It is intended that the performanceconditions will be based on financial targets related to the Company’s strategic priorities, and theRemuneration Committee will decide what conditions and targets will apply in advance of any grant.LTIP awards granted in respect of FY17 will be subject to a performance target based on earningsper share.

9.3 Malus and clawback

To reflect current best practice, performance based remuneration will be subject to ‘‘malus’’ and‘‘clawback’’ provisions. Any part of an executive Director’s annual bonus paid in cash will besubject to clawback for a period of three years following payment in the event of corporatefailure, material errors or misstatements of results (or information coming to light which, had itbeen known would have affected the award or vesting decisions) or gross misconduct.

As described in paragraph 6.4.4 above, any bonus deferred into an award under the DBP andany unvested award under the Joules 2016 Long Term Incentive Plan will be subject to a malusprovision enabling the Remuneration Committee to reduce or cancel the award in thecircumstances referred to above or in the event of a material failure of risk management.

Awards under the Joules 2016 Long Term Incentive Plan will also be subject to clawbackprovisions for two years following vesting.

9.4 Admission awards

To recognise the work of the Group’s employees in the period to Admission and achieving thisimportant step in the Group’s development, the Company intends to pay a one-off cash award toselected employees with a maximum aggregate value of £500,000.

Similarly to recognise the contribution of senior executives in the lead-up to admission and toalign their interests with those of shareholders going forwards, awards in the form of optionsunder the Joules 2016 Executive Share Option Plan (the ‘‘Admission Options’’) will be grantedto Marc Dench and selected senior executives on or as soon as reasonably practicable afterAdmission.

The Admission Options will be granted over Ordinary Shares with a value of up to £725,000 inaggregate.

• Marc Dench will be granted an Admission Option over Ordinary Shares with a value of up to£500,000; and

• the other senior executives will be granted Admission Options over Ordinary Shares with a value ofup to £225,000 in aggregate.

Subject to the rules of the ESOP, the Admission Options will vest and become exercisable on thesecond anniversary of Admission.

9.5 Shareholding guidelines

The Remuneration Committee intends to adopt shareholding guidelines in accordance withwhich executive Directors will be required to build up and maintain a shareholding with a valueequal to two times’ base salary. Executive Directors will be required to retain half of any shareswhich vest under the DBP and LTIP (after sales to cover tax) until this requirement is met.

10. Related party transactions

10.1 There are two subleases in place (at 53-54 High Street, Market Harborough) between JoulesLimited (‘‘JL’’) and Michael Ian Murray Joule (Tom Joule’s father). The subleases with MichaelJoule were put in place in November 2013 to formalise historic informal arrangements betweenJL and Michael Joule. Before these subleases were completed, JL occupied part of thispremises however the lease of the entire premises was held by Michael Joule. Michael Jouleagreed for JL to take the head lease of 53-54 High Street, Market Harborough and then JLgranted him a sublease on 29 September 2013 of part of the property which he used andcontinues to use for his antiques business, cafe and flat. The two subleases were granted onterms which are not at arms’ length. The decision was taken for expediency to ensure the Grouphad a formal lease arrangement for its store. The subleases expire in 2019, have rents of £1.00

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per annum and have rolling 6 month tenant breaks. The Company estimates the market rent forthese subleases to be £20,000 per annum which means JL will forego £60,000 of potential rentover the next 3 years. However, there is no guarantee the Company could have found a suitabletenant for these premises and, in any event, the arrangement was put in place for expediencyand to improve the position of the Group by obtaining the head lease of its store. The landlordunder the head leases is The Feoffees of the Market Harborough and the Bowdens Charity, anindependent third party. The Group will not renew the subleases when they expire unless it doesso on arms’ length terms.

10.2 The Company has entered into the arrangements described in paragraph 3 pursuant to which itacquired the entire issued share capital of Joules Investments Holdings Limited from theExisting Shareholders and capitalised loan notes held by certain Directors.

10.3 In addition to the above, details of further related party transactions during the period covered bythe historical financial information are contained in note 26 to the historical financial informationin Section B of Part 5.

11. Placing and underwriting arrangements

11.1 The Placing Agreement dated 20 May 2016 among the Company, the Directors, the SellingShareholders that are a party thereto, Peel Hunt and Liberum pursuant to which each of PeelHunt and Liberum has, severally and not jointly, agreed to act as agent for the Company andsuch Selling Shareholders to use its reasonable endeavours to procure placees for the PlacingShares and, failing which, to itself subscribe for or purchase the Placing Shares, in each case atthe Placing Price. The Placing Agreement is conditional, inter alia, upon Admission becomingeffective by not later than 8.00a.m. on 26 May 2016 or such later time and date as Peel Hunt,Liberum and the Company may agree, but in any event not later than 31 December 2016.

11.2 Under the Placing Agreement the Company, each Director and certain Selling Shareholdershave given certain customary representations, warranties and undertakings in favour of PeelHunt and Liberum, including as to the accuracy of the information in this document and as toother matters relating to the Group and its business, and the Company has given an indemnity infavour of Peel Hunt and Liberum in respect of certain liabilities arising out of or in connection withthe Placing. The liabilities of the Company under the Placing Agreement are not limited as toamount or by time. The liabilities of the Directors and the Selling Shareholders under the PlacingAgreement are limited as to time and amount.

11.3 The Placing Agreement may be terminated by Peel Hunt and Liberum, acting together in theirabsolute discretion, after consultation with the Company if reasonably practicable in thecircumstances, if certain customary circumstances occur prior to Admission, including if any ofthe representations and warranties referred to above is untrue or inaccurate is any respect or ifthere is a material breach of any undertaking contained therein.

Lock-up arrangements

11.4 Under the Placing Agreement, save for the fulfilment of legal obligations in existence as at thedate of the Placing Agreement and save for the grant of share options described in paragraph9.4 above and/or pursuant to the share option plans, the Company has undertaken that it willnot, and will procure that none of its subsidiaries will, between the date of the Placing Agreementand 180 days from Admission, without the prior written consent of Peel Hunt and Liberum,(i) issue, allot, offer, pledge, sell, contract to sell, grant any option or contract to purchase,purchase any option or contract to sell, grant any option, right or warrant to purchase, lend orotherwise transfer or dispose of, directly or indirectly, any Ordinary Shares or other shares in thecapital of the Company or any securities convertible into or exchangeable for Ordinary Shares orother shares in the capital of the Company; or (ii) enter into any swap or other arrangement thattransfers to another, in whole or in part, any of the economic consequences of ownership ofOrdinary Shares or other shares in the capital of the Company.

11.5 In addition, under the Placing Agreement, save in connection with the Placing and subject tocertain customary exceptions, each Selling Shareholder that is a party to the Placing Agreement(which includes the Senior Managers) and each Director has severally undertaken that it will notand shall procure that its ‘‘associates’’ (as defined at paragraph (c) of the definition of related

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party in the AIM Rules for Companies) will not, during the period between the date of the PlacingAgreement and a specified lock-up end date, sell, transfer, charge, grant any option over orotherwise dispose of the legal, beneficial or any other interest in any Ordinary Shares or othersecurities held by it, or by any of its associates, in the Company or rights arising from any suchshares or other securities or attached to any such shares or other securities or any shares orsecurities in the Company acquired during the said period. The lock-up end date for eachrelevant Selling Shareholder is the date which is 180 calendar days from Admission and for eachDirector is the date which is 360 calendar days from Admission.

Other Selling Shareholders

11.6 Each of the Selling Shareholders who are not party to the Placing Agreement has entered into aseparate deed of election under which he or she has agreed to sell a portion of his or her existingOrdinary Shares in the Placing.

Selling Shareholders

11.7 The name, business address of each Selling Shareholder and the number of Ordinary Shares tobe sold by each Selling Shareholder pursuant to the Placing is set out below:

Relationship to No. of OrdinaryName Business address the Company (if any) Shares to be sold

Tom Simon Lee Joule c/o Joules Group plc, Director 10,816,631Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Tom Simon Lee Joule, Mowbray House, Castle Connected person 2,155,693Sally Ann Stephenson Meadow Road, of Tom Simon LeeOakley and Mowbray Nottingham, NG2 1BJ JouleTrustees Limited astrustees of the TomJoule DiscretionaryTrust

LDC* One Vine Street, 23,250,349London W1 0AH

Colin Nigel Porter c/o Joules Group plc, Director 1,277,057Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Marc Dench c/o Joules Group plc, Director 310,265Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Neil William McCausland c/o Joules Group plc, Director 242,521Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

* Held by LDC (Nominees) Limited and LDC Parallel Nominees Limited as nominees for LDC II LP and LDC Parallel II LPrespectively.

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Sallie Barnett c/o Joules Group plc, Employee 80,124Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Andrea Gray c/o Joules Group plc, Employee 294,363Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Ronald Helvey c/o Joules Group plc, Employee 637,708Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Marcello Lombardo c/o Joules Group plc, Former Director 860,107Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Penelope Parry c/o Joules Group plc, Employee 97,182Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Chloe Ward c/o Joules Group plc, Employee 535,724Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Kara Eugenie Groves c/o Joules Group plc, Employee 352,937Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Emma Hermann c/o Joules Group plc, Employee 30,498Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

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Anna Grabowska c/o Joules Group plc, Employee 23,778Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Anna Lucas c/o Joules Group plc, Employee 11,889Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Chloe Smith c/o Joules Group plc, Employee 10,338Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Donna Johnson c/o Joules Group plc, Employee 11,372Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Carl Wiezak c/o Joules Group plc, Employee 9,821Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Jon Dargie c/o Joules Group plc, Employee 47,040Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

John Oakes c/o Joules Group plc, Employee 14,474Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

James Taylor c/o Joules Group plc, Employee 14,474Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

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Kate Goddard c/o Joules Group plc, Employee 47,040Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Kellie Hubbard c/o Joules Group plc, Employee 20,160Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Leigh Gosson c/o Joules Group plc, Employee 21,194Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Lucy Lawrance c/o Joules Group plc, Employee 14,991Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Liz Wallace c/o Joules Group plc, Employee 14,474Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Ruth Gair c/o Joules Group plc, Employee 10,338Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

Sarah Connor c/o Joules Group plc, Employee 26,880Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

StJohn Russell c/o Joules Group plc, Employee 7,753Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

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Katie Morris c/o Joules Group plc, Employee 14,474Joules Building, ThePoint, Rockingham Road,Market Harborough,Leicestershire, UnitedKingdom LE16 7QU

12. Material contracts

The following contracts, not being contracts entered into in the ordinary course of business, have beenentered into by the Company and its subsidiaries during the two years preceding the date of thisdocument and are or may be material:

12.1 On 20 May 2016 the Company entered into a revolving credit facility agreement with BarclaysBank plc (‘‘Barclays’’) in respect of a revolving credit facility of £25,000,000 to be madeavailable to the Group under this agreement conditional on Admission. Pursuant to theagreement the Company can drawdown individual loans in order to refinance existing financialindebtedness of the Group pre-Admission, fund any permitted acquisitions and fund thepayment of fees, cost and expenses incurred in connection with Admission. The permission tomake acquisitions without the consent of Barclays is capped at an aggregate of £20,000,000 forall amounts of consideration (including associated costs and expenses) for any acquisitions andany financial indebtedness or other assumed actual or contingent liability, in each caseremaining in the acquired company (or any such business) at the date of acquisition and anyinvestment in joint ventures, in each case in each financial year of the Group.

Interest is payable on amounts drawn at the rate of 1.65–2.65 per cent. above the Londoninterbank offered rate (ratchet dependent on adjusted leverage calculation but it is assumed tobe 1.65% at Admission). In addition, a commitment fee is payable of 35 per cent. of theapplicable margin per annum of the daily amount of any undrawn commitment. The term of theagreement is 4 years from 20 May 2016 but there is an ability to request an additional year beforethe first anniversary should this be required (such extension to be granted at the sole discretionof Barclays).

All amounts become immediately repayable and undrawn amounts cease to be available fordrawdown in the event of a third party acquiring control of more than 50 per cent. of theCompany.

The agreement contains representations and warranties which are usual for an agreement ofthis nature together with certain financial covenants in particular a fixed charge cover andadjusted leverage covenant. An arrangement fee of £187,500 is payable pursuant to theagreement. The facility is unsecured but the Company, Joules Investments Holdings Limitedand Joules Limited have entered into a guarantee in respect of the obligations of the Companyunder the agreement;

12.2 The revolving credit facility referred to in paragraph 12.1 above, contains an on demand multioption facility letter with Barclays in respect of up to £3,000,000 of ancillary facilities (including asterling overdraft facility capped at £2,000,000, a bonds guarantee and indemnities facility, adocumentary letter of credit facility and an avalising facility). These facilities are carved out of theavailability under the revolving credit facility agreement referred to in paragraph 12.1 above. Thefacilities are for general working capital purposes and are repayable on demand. Interestaccrues on amounts outstanding at the same margin as agreed under revolving credit facilityagreement referred to in paragraph 12.1 above.

No separate security or guarantee is granted by the Group in respect of these facilities but theguarantee entered into pursuant to the revolving credit agreement will guarantee amountsoutstanding under this agreement;

12.3 a declaration of trust dated 20 May 2016 in which the holders of the entire issued share capital ofJoules Investments Holdings Limited transferred the entire beneficial interests in the entireissued share capital of Joules Investments Holdings Limited to the Company;

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12.4 a share exchange agreement dated 20 May 2016 between Tom Simon Lee Joule and others(1) and the Company (2), whereby the Company agreed to purchase the entire issued sharecapital of Joules Investments Holdings Limited in consideration for the issue by the Company ofshares in the Company referred to in paragraph 3.3 above, credited as fully paid;

12.5 a nominated adviser and broker agreement dated 20 May 2016 between the Company (1), PeelHunt as nominated adviser and joint bookrunner (2) pursuant to which the Company hasappointed Peel Hunt to act as nominated adviser and joint corporate broker to the Company forthe purposes of AIM. The Company has agreed to pay to an annual fee to Peel Hunt. Theagreement is terminable on one month’s notice by any party;

12.6 a corporate broker agreement dated 20 May 2016 between the Company (1) and Liberum asjoint corporate broker (2) pursuant to which the Company has appointed Liberum to act as jointcorporate broker to the Company. The Company has agreed to pay to an annual fee to Liberum.The agreement is terminable on one month’s notice by any party;

12.7 the Placing Agreement referred to in paragraph 11 above;

12.8 a relationship agreement dated 20 May 2016 with Tom Joule, pursuant to which Tom Jouleprovides certain undertakings to the Company to ensure he and his related parties (as such termis defined in the AIM Rules for Companies) use their voting power as shareholders inter alia that(i) the Group to be managed for the benefit of the Shareholders as a whole and independently ofTom Joule (ii) all arrangements between any member of the Group and Tom Joule be on anarm’s length basis (iii) no action is taken that would have the effect of preventing the Companyfrom complying with its obligations under the AIM Rules (iv) no resolutions are proposed whichare intended to circumvent the proper application of the AIM Rules (v) the Board committeesremain independent (vi) that the Company will be managed, so far as is practicable, inaccordance with UK Corporate Governance Code. Tom Joule has the power to appoint oneDirector to the Company’s Board and who will replace that Director as he sees fit. At the date ofAdmission no Director has been appointed under the agreement.

13. Taxation

The following summary, which is intended as a general guide only, outlines certain aspects of current UKtax legislation, and what is understood to be the current practice of HMRC in the United Kingdomregarding the ownership and disposal of ordinary shares. This summary is not a complete and exhaustiveanalysis of all the potential UK tax consequences for holders of Ordinary Shares. It addresses certainlimited aspects of the UK taxation position of UK resident and domiciled Shareholders who are beneficialowners of their Ordinary Shares and who hold their Ordinary Shares as an investment (and not asemployment related securities or through an ‘‘Individual Saving Account’’ or ‘‘Self Invested PersonalPension’’). Any person who is in any doubt as to his tax position or who is subject to taxation in ajurisdiction other than the UK should consult his professional advisers immediately as to the taxationconsequences of their purchase, ownership and disposition of Ordinary Shares. This summary is basedon current United Kingdom tax legislation. Shareholders should be aware that future legislative,administrative and judicial changes could affect the taxation consequences described below.

13.1 Taxation of dividends

There is no UK withholding tax on dividends, including cases where dividends are paid to aShareholder who is not resident (for tax purposes) in the UK.

Individual Shareholders

As of 6 April 2016, Shareholders who are individuals receive a tax-free dividend allowance of£5,000 per tax year and are liable to UK income tax on the amount of any cash dividendsreceived over this. The rates of income tax on dividend income that exceed the tax freeallowance are 7.5 per cent. for basic rate taxpayers, 32.5 per cent. for higher rate taxpayers and38.1 per cent. for additional rate taxpayers.

Corporate Shareholders

Shareholders within the charge to UK corporation tax which are ‘‘small companies’’ (for thepurposes of UK taxation of dividends) will not generally expect to be subject to tax on dividends

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from the Company. Other Shareholders within the charge to UK corporation tax will not besubject to tax on dividends from the Company in respect of Ordinary Shares held, provided thedividends fall within an exempt class and certain conditions are satisfied. In general,(i) dividends paid on shares that are not redeemable and do not carry any present or futurepreferential rights to dividends or to a company’s assets on its winding-up and (ii) dividends paidto a person holding less than, among other things, 10 per cent. of the issued share capital of thepayer (or any class of that share capital) are examples of dividends that fall within an exemptclass subject to certain anti-avoidance provisions.

Tax credit

The right of a Shareholder who is not resident (for tax purposes) in the UK to a tax credit inrespect of a dividend received from the Company and to claim payment of any part of that taxcredit will depend on the existence and terms of any double taxation convention between the UKand the country in which the holder is resident, although generally no such payment will beavailable.

Persons who are not resident in the UK should consult their own tax advisers on the possibleapplication of such provisions or what relief or credit may be claimed in the jurisdiction in whichthey are resident.

13.2 Taxation of chargeable gains

For the purpose of UK tax on chargeable gains, the acquisition of Ordinary Shares pursuant tothe Placing will be regarded as an acquisition of a new holding in the share capital of theCompany. The Ordinary Shares so allotted will, for the purpose of tax on chargeable gains, betreated as acquired on the date of allotment. The amount paid for the Ordinary Shares willusually constitute the base cost of a shareholder’s holding.

Individual Shareholders

If a UK resident individual Shareholder disposes of all or some of his Ordinary Shares a liability totax on chargeable gains may, depending on their circumstances, arise. The shareholder’sannual exemption (currently £11,100 for individuals) and any capital losses they have mayreduce the chargeable gain. UK resident individuals are generally subject to capital gains tax ata current flat rate of 20 per cent. (reduced to 10 per cent. where a gain falls within an individual’sunused basic rate income tax band). Trustees and personal representatives are generallysubject to capital gains tax at 20 per cent.

A Shareholder who is not resident in the UK for tax purposes, but who carries on a trade,profession or vocation in the UK through a permanent establishment (where the Shareholder isa company) or through a branch or agency (where the Shareholder is not a company) and hasused, held or acquired the Ordinary Shares for the purposes of such trade, profession orvocation or such permanent establishment, branch or agency (as appropriate) will be subject toUK tax on capital gains on the disposal of Ordinary Shares. In addition, any holders of OrdinaryShares who are individuals and who dispose of shares while they are temporarily non-residentmay be treated as disposing of them in the tax year in which they again become resident in theUK.

Corporate Shareholders

Disposals realised by corporate Shareholders within the charge to corporation tax (currently20%) may give rise to a chargeable gain or an allowable loss, subject to the availability of anexemption (e.g. the substantial shareholding exemption) or relief. Indexation allowance mayreduce the chargeable gain for corporate Shareholders.

13.3 Inheritance tax

Individual and trustee Shareholders domiciled or deemed to be domiciled in any part of the UKmay be liable on occasions to inheritance tax (‘‘IHT’’) on the value of any Ordinary Shares heldby them. Under current law, the primary occasions on which IHT is charged are on the death ofthe Shareholder, on any gifts made during the seven years prior to the death of the Shareholder(which will also be brought into account when calculating the IHT on the death of the

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Shareholder), and on certain lifetime transfers, including transfers to trusts or appointments outof trusts to beneficiaries, save in very limited and exceptional circumstances.

However, a relief from IHT known as business property relief (‘‘BPR’’) may apply to ordinaryshares in trading companies once these have been held for two years by the Shareholder. Thisrelief applies notwithstanding that a company’s shares will be admitted to trading on AIM(although it does not apply to companies whose shares are listed on the Official List). BPRoperates by reducing the value of shares by 100 per cent. for IHT purposes which means thatthere will be no IHT to pay.

13.4 AIM

Companies whose shares trade on AIM are deemed unlisted for the purposes of certain areas ofUK taxation. Following Admission, Shares held by individuals for at least two years fromAdmission may qualify for more generous exemptions from inheritance tax on death or inrelation to lifetime transfers of those Shares. Shareholders should consult their own professionaladvisers on whether an investment in an AIM security is suitable for them, or whether the taxbenefit referred to above maybe available to them.

13.5 Stamp duty and stamp duty reserve tax

No UK stamp duty will be payable on the issue by the Company of Ordinary Shares and nostamp duty or stamp duty reserve tax is payable on transactions in shares traded on AIM wherethe shares are not also listed on a recognised stock market.

Any person who is in any doubt as to his tax position or who may be subject to tax in anyother jurisdiction should consult his professional adviser.

14. Investments

There are no investments being made by the Company or to be made in the future in respect of whichfirm commitments have been made.

15. Working capital

In the opinion of the Directors, having made due and careful enquiry, taking into account the bankfacilities available to the Group, the working capital available to the Group is sufficient for its presentrequirements, that is for at least twelve months from the date of Admission.

16. Litigation

No member of the Group is or has been involved in any governmental, legal or arbitration proceedingsand the Company is not aware of any such proceedings pending or threatened by or against the Groupduring the 12 months preceding the date of this document which may have or have had in the recentpast a significant effect on the financial position or profitability of the Group, except as described below:

16.1 The Group is currently engaged in a dispute with Macy’s Merchandising Group, Inc. (‘‘Macy’s’’)regarding Macy’s use of, and attempts to register, the trade mark ‘‘MAISON JULES’’.Registration of the mark MAISON JULES is sought for inter alia a range of clothing, footwear,headgear, fashion and lifestyle products. The Company has filed oppositions against Macy’spublished trade mark applications for MAISON JULES in the US, EU, Singapore, Malaysia,Republic of Korea and Australia, on grounds that there is a likelihood of confusion with theCompany’s JOULES and stylised JOULES trademarks.

To date, the Group is aware of use of the trade mark MAISON JULES by Macy’s in the US only,and only in respect of womenswear products. The Company has issued a claim for trademarkinfringement and unfair competition against Macy’s in the United States District Court for theSouthern District of New York, related to Macy’s use of its MAISON JULES trade mark in the US.It is likely that the matter will proceed to trial in July 2016.

In the event that the Company fails to prevent Macy’s using the ‘‘MAISON JULES’’ mark, or fromusing it in a manner which could cause confusion with its brand, there may be brand damage tothe Company (due to brand dilution and customer confusion) in the territories in which Macy’soperates with its ‘‘MAISON JULES’’ mark.

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17. General

17.1 Save as disclosed in financial information set out in Part 5 of this document, there has been nosignificant change in the financial or trading position of the Group since 28 February 2016, thedate to which the last interim financial information of the Company was prepared.

17.2 Deloitte LLP has given and has not withdrawn its written consent to the issue of this documentwith the inclusion in this document of its report and references thereto in the form and context inwhich it appears.

17.3 Peel Hunt LLP of Moor House, 120 London Wall, London EC2Y 5ET, which is regulated by theFinancial Conduct Authority, has given and has not withdrawn its written consent to the inclusionin this document of its name in the form and context in which it appears.

17.4 Liberum Capital Limited of Ropemaker Place, Level 12, 25 Ropemaker Street, London,EC2Y 9LY, which is regulated by the Financial Conduct Authority, has given and has notwithdrawn its written consent to the inclusion in this document of its name in the form andcontext in which it appears.

17.5 The aggregate expenses of and incidental to the Placing are estimated to amount toapproximately £5.2 million (excluding VAT). Expenses estimated at £2.1 million (excluding VAT)are payable by the Company in connection with the Placing.

17.6 Joules relies on intellectual property laws to protect certain aspects of its business. ‘‘Joules’’,‘‘Tom Joule’’ and other word trademarks and logos associated with Joules’ products are key tothe ability of the Group to protect its brand and maximise the use of the brand in the markets inwhich it operates. Save as disclosed above, there are no patents or other intellectual propertyrights, licences or particular contracts which are of fundamental importance to the Group’sbusiness.

17.7 There are no arrangements under which future dividends are waived or agreed to be waived.

17.8 The financial information set out in this document does not constitute statutory accounts withinthe meaning of section 434 of the 2006 Act. The auditors for the period covered by the financialinformation set out in Part 5 were Deloitte LLP, Chartered Accountants and auditors of1 Woodborough Road, Nottingham NG1 3FG. Deloitte LLP is a member firm of the Institute ofChartered Accountants in England and Wales.

17.9 The Group currently employs a total of 1,424 members of staff18. The average number ofpersons employed by the Group in FY13, FY14 and FY15 was 879, 1,097 and 1,317 respectively.

17.10 The Ordinary Shares will only be traded on AIM.

17.11 The Company’s registrar and paying agent for the payment of dividends is Equiniti Limited,Aspect House, Spencer Road, Lancing BN99 6DA.

17.12 Save as disclosed in this document, the Directors are unaware of any exceptional factors whichhave influenced the Company’s activities.

17.13 Save as disclosed in this document, the Directors are unaware of any environmental issues thatmay affect the Group’s utilisation of its tangible fixed assets.

17.14 Save as disclosed in this document, the Directors are unaware of any trends, uncertainties,demands, commitments or events that are reasonably likely to have a material effect on theCompany’s prospects for the current financial year.

17.15 Except for fees payable to the professional advisers whose names are set out in Part 1 of thisdocument, payments to trade suppliers and except as disclosed in this document, no personhas received any fees, securities in the Company or other benefit to a value of £10,000 or more,whether directly or indirectly, from the Company within the 12 months preceding the applicationfor Admission, or has entered into any contractual arrangement to receive from the Company,directly or indirectly, any such fees, securities or other benefit on or after Admission.

18 Figure correct as at 27 April 2016.

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18. Documents available for inspection

Copies of the following documents may be inspected at the registered office of the Company duringusual business hours on any weekday (excluding Saturdays and public holidays) up for a period of onemonth from the date of this document:

18.1 this document;

18.2 the memorandum and articles of association of the Company; and

18.3 the accountant’s report on the financial information contained in Part 5 of this document.

19. Availability of documents

Copies of this document will be available free of charge to the public on the Company’s websitewww.joulesgroup.com.

Dated: 23 May 2016

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PART 8

DEFINITIONS

The following definitions apply throughout this document, unless the context otherwise requires:

‘‘2006 Act’’ or ‘‘Act’’ . . . . . . . . . . . . the Companies Act 2006, as amended

‘‘Admission’’ . . . . . . . . . . . . . . . . . . the admission of the entire issued ordinary share capital of theCompany, issued and to be issued pursuant to the Placing, totrading on AIM becoming effective in accordance with AIMRules for Companies

‘‘AIM’’ . . . . . . . . . . . . . . . . . . . . . . AIM, a market of the London Stock Exchange plc

‘‘AIM Rules for Companies’’ . . . . . . . the AIM Rules for Companies published by the London StockExchange, as amended

‘‘AIM Rules for Nominated Advisers’’ the AIM Rules for Nominated Advisers published by theLondon Stock Exchange, as amended

‘‘Articles’’ . . . . . . . . . . . . . . . . . . . . the articles of association of the Company which were adoptedby special resolution dated 20 May 2016, conditional upon andimmediately prior to Admission

‘‘Board’’ or ‘‘Directors’’ . . . . . . . . . . the board of directors of the Company

‘‘certificated’’ or ‘‘in certificatedform’’ . . . . . . . . . . . . . . . . . . . . . not in uncertificated form (that is, not in CREST)

‘‘Code’’ or ‘‘City Code’’ . . . . . . . . . . The City Code on Takeovers and Mergers

‘‘Company’’ or ‘‘Joules’’ . . . . . . . . . Joules Group plc

‘‘CREST’’ . . . . . . . . . . . . . . . . . . . . the computerised settlement system operated by EuroclearUK & Ireland Limited which facilitates the transfer of shares

‘‘CREST Regulations’’ . . . . . . . . . . . the Uncertificated Securities Regulations 2001 (SI2001/3755)

‘‘Disclosure and TransparencyRules’’ or ‘‘DTR’’ . . . . . . . . . . . . . the disclosure rules and transparency rules made by the UKLA

under Part VI of FSMA

‘‘Enlarged Share Capital’’ . . . . . . . . the issued share capital of the Company on Admissionfollowing as enlarged by the issue of the Placing Shares

‘‘ERP’’ . . . . . . . . . . . . . . . . . . . . . . enterprise resource planning software

‘‘Existing Shareholders’’ . . . . . . . . . the Shareholders as at the date of this document

‘‘FCA’’ . . . . . . . . . . . . . . . . . . . . . . the Financial Conduct Authority established pursuant to theFinancial Services Act 2012 and responsible form among otherthings, the conduct and regulation of firms authorised andregulated under FSMA and the prudential regulation of firmswhich are not regulated by the PRA

‘‘FCA Handbook’’ . . . . . . . . . . . . . . the FCA’s Handbook of rules and guidance as published bythe FCA from time to time

‘‘FSMA’’ . . . . . . . . . . . . . . . . . . . . . the Financial Services and Markets Act 2000, as amended

‘‘FY’’ . . . . . . . . . . . . . . . . . . . . . . . a financial ‘‘year’’ of the Group ending in the year specified inthe relevant reference to ‘‘FY’’ (it being noted that the Group’sannual accounting periods run to the last Sunday in May ineach calendar year)

‘‘Group’’ . . . . . . . . . . . . . . . . . . . . . the Company and its subsidiary undertakings

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‘‘IFRS’’ . . . . . . . . . . . . . . . . . . . . . . International Financial Reporting Standards, as issued by theInternational Standards Accounting Board, as adopted by theEuropean Commission for use in the European Union

‘‘IT’’ . . . . . . . . . . . . . . . . . . . . . . . . information technology

‘‘LDC’’ . . . . . . . . . . . . . . . . . . . . . . LDC (Managers) Limited as investment manager for LDC II LPand LDC Parallel II LP

‘‘Liberum’’ . . . . . . . . . . . . . . . . . . . Liberum Capital Limited

‘‘London Stock Exchange’’ . . . . . . . London Stock Exchange plc

‘‘New Shares’’ . . . . . . . . . . . . . . . . the 7,175,851 new Ordinary Shares to be issued by theCompany pursuant to the Placing

‘‘Ordinary Shares’’ . . . . . . . . . . . . . ordinary shares of £0.01 each in the capital of the Company,ISIN no. GB00BZ059357

‘‘Panel’’ or ‘‘Takeover Panel’’ . . . . . . the UK Panel on Takeovers and Mergers

‘‘Peel Hunt’’ . . . . . . . . . . . . . . . . . . Peel Hunt LLP

‘‘Placee’’ . . . . . . . . . . . . . . . . . . . . a person who is provided with the opportunity to take part in thePlacing

‘‘Placing’’ . . . . . . . . . . . . . . . . . . . . the placing by Peel Hunt and Liberum of the PlacingShares as described in this document

‘‘Placing Agreement’’ . . . . . . . . . . . the agreement dated 20 May 2016 between the Company, theDirectors, certain Selling Shareholders, Peel Hunt andLiberum, details of which are set out in paragraph 11 of Part 7of this document

‘‘Placing Price’’ . . . . . . . . . . . . . . . . 160p per Ordinary Share

‘‘Placing Shares’’ . . . . . . . . . . . . . . the New Shares and the Sale Shares

‘‘PRA’’ . . . . . . . . . . . . . . . . . . . . . . the Prudential Regulation Authority, established pursuant tothe Financial Services Act 2012

‘‘Prospectus Directive’’ . . . . . . . . . . EU Prospectus Directive (2003/71/EC) (as amended)

‘‘Prospectus Rules’’ . . . . . . . . . . . . the prospectus rules made by the UK Listing Authority underPart VI of FSMA relating to offers of securities to the public andadmission of securities to trading on a regulated market and asset out in the FCA Handbook

‘‘PwC’’ . . . . . . . . . . . . . . . . . . . . . . Pricewaterhouse Coopers LLP

‘‘Regulation S’’ . . . . . . . . . . . . . . . . Regulation S under the US Securities Act

‘‘Relationship Agreement’’ . . . . . . . . the relationship agreement dated 20 May 2016 made betweenthe Company and Tom Simon Lee Joule described inparagraph 12 of Part 2 of this document

‘‘RoI’’ . . . . . . . . . . . . . . . . . . . . . . . the Republic of Ireland

‘‘Rothschild’’ . . . . . . . . . . . . . . . . . . N M Rothschild & Sons Limited

‘‘Sale Shares’’ . . . . . . . . . . . . . . . . the 41,261,649 Ordinary Shares to be sold by SellingShareholders pursuant to the Placing

‘‘Securities Act’’ or ‘‘US SecuritiesAct’’ . . . . . . . . . . . . . . . . . . . . . . the United States Securities Act of 1933, as amended

‘‘Selling Shareholders’’ . . . . . . . . . . those Shareholders selling Ordinary Shares in connection withthe Placing whose names and business addresses are set outin paragraph 11.7 of Part 7 of this document

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‘‘Senior Managers’’ . . . . . . . . . . . . . the senior management team of the Group whose names androles are set out in paragraph 6 of Part 2 of this document

‘‘Shareholder(s)’’ . . . . . . . . . . . . . . holder(s) of Ordinary Shares from time to time

‘‘Share Option Schemes’’ or ‘‘SharePlans’’ . . . . . . . . . . . . . . . . . . . . together, the LTIP, the ESOP, the DBP and the SAYE Scheme

(as such terms are defined in paragraph 6 of Part 7

‘‘SKU’’ . . . . . . . . . . . . . . . . . . . . . . stock keeping unit

‘‘UK Corporate Governance Code’’ . the Principles of Good Governance and Code of Best Practicemaintained by the Financial Reporting Council and formerlyknown as the Combined Code

‘‘UK Listing Authority’’ or ‘‘UKLA’’ . . . the FCA, in its capacity as the UK Listing Authority

‘‘uncertificated’’ or ‘‘in uncertificatedform’’ . . . . . . . . . . . . . . . . . . . . . recorded on the relevant register of Ordinary Shares as being

held in uncertificated form in CREST and title to which, by virtueof the CREST Regulations, may be transferred by means ofCREST

‘‘Underwriters’’ . . . . . . . . . . . . . . . . Peel Hunt and Liberum

‘‘United Kingdom’’ or ‘‘UK’’ . . . . . . . the United Kingdom of Great Britain and Northern Ireland

‘‘United States’’ or ‘‘US’’ . . . . . . . . . the United States of America, its territories and possessions,any state of the United States and the District of Columbia

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Merrill Corporation Ltd, London16ZBG18901