Accent Group Limited
2021 Annual Report
Accent Group Limited
2021 Annual Report
Annual Report 2020
Accent Group Limited
(AX1) is a market leading
digitally integrated retail
and distribution business
in the performance and
lifestyle market sectors.
With over 600 retail stores and 31 websites across
26 different retail banners, exclusive distribution rights
for 19 international brands, a growing portfolio of owned
brands across Australia and New Zealand, and over
8.4m contactable customers, the Group is
well-positioned for future growth.
Contents
2 Our Brands
8 Chairman and Chief Executive Officers’ Report
11 Sustainability Report
19 Directors’ Report
28 Auditor’s Independence Declaration
29 Remuneration Report
44
Statement of Profit or Loss and Other
Comprehensive Income
45 Statement of Financial Position
46 Statement of Changes in Equity
47 Statement of Cash Flows
48 Notes to the Financial Statements
88 Directors’ Declaration
89
95 Shareholder Information
97 Corporate Directory
Independent Auditor’s Report
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Accent Group Limited Annual Report 2021 Our Brands
Platypus has 148+ stores across
Australia and New Zealand, and is
now the region’s largest multi-branded
sneaker destination across, offering
a wide range of iconic sneakers from
around the world.
Hype DC is the premium destination
for the latest exclusive footwear in
Australia and New Zealand. Opening
our first store in Mosman in June 1998,
Hype DC is the longest-standing,
Australian-owned footwear retailer
with 79 locations and a thriving
e-commerce business.
JOB NAME
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Beth Graham / Beth Graham
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Colors
Cyan,
Magenta,
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Kelly O.
Due Date
01/11/2021
Trim
36" x 18"
Bleed
36.5" x 18.5"
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Dominique W.
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Beth Anna G.
Reviewer
Darren H.
Quantity
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1st Comp Date
01/11/2021
2nd Comp Date
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A/R Date
01/18/2021
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1
Skechers is a global leader in lifestyle
and performance footwear. We operate
131 Skechers stores across Australia
and New Zealand.
Skechers Printer
None
With 145 stores across Australia and
New Zealand, The Athlete’s Foot is
the region’s largest speciality athletic
footwear retailer, known for its
exceptional in-store customer service
experience and fitting technology.
Launched in 2012, Stylerunner is a
cult online destination for women’s
multi-branded activewear and sneakers.
With over 70 brands and a social media
following of over 600k, Stylerunner
opened its first bricks and mortar store
in 2020 and now operates 4 retail
stores.
The Dr Martens range of footwear was
born in 1960 and is a representation
of rebellion and free-thinking youth
culture. With an expanding store
network, we now operate 15 stores.
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Accent Group Limited Annual Report 2021 Our Brands
Glue Store is the original ‘House of
Brands’ premium retailer and has
22 stores in Australia. Curating the
ultimate edit of global street, fashion
and sports culture, it delivers on-trend
clothing, shoes and accessories from
an aspirational brand assortment that
empowers individuals to be fashion
leaders and live their lifestyle.
The Vans brand has been connecting
with youth culture to promote creative
self-expression, authenticity and
progression for over 50 years, while
linking the brand’s deep roots in action
sports with art, music and street
culture. We operate 28 Vans stores.
Merrell is the world’s leading brand of
performance outdoor and adventure
footwear. We operate 15 Merrell
stores.
The Trybe is about making kids
footwear fun. With a collection of
footwear and accessories from Nike,
Vans, adidas and more, The Trybe is a
key kids’ destination for the very best
global brands. The Trybe currently has
10 stores.
PIVOT provides the best international
brands at the best value prices for
families who love sport, lifestyle and
workwear, footwear and apparel. From
opening its first store in 2020, we now
have a network of 10 stores.
Inspired by the company’s New England
heritage, Timberland is a brand true
to the outdoor lifestyle. We operate
8 Timberland stores.
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Accent Group Limited Annual Report 2021 Our Brands
Saucony exists for runners. This focus
and passion drives Saucony to create
the world’s best running shoes and
apparel.
Born in 2010 in Sydney, Australia, Nude
Lucy provides a premium, everyday
wardrobe inspired by an inherently
Australian relaxed way of life. Over a
decade later, it is now firmly established
as a sought-after, trustworthy and
timeless destination for casualwear,
made by women, for women.
SUBTYPE is the future of retail.
SUBTYPE’s unique, conceptual
stores are a cultural hub as well as a
destination for curated sneakers and
contemporary apparel.
Cat Footwear and apparel has been
designed and engineered to live up
to the hard-working reputation of
the Caterpillar brand. Made with
uncompromising toughness and style.
We now operate 4 CAT retail stores in
Australia.
Stance have turned socks into one of
the world’s most exciting accessories.
They have ignited a movement of art
and self-expression that has drawn
athletes, performers, and iconic cultural
influencers to the brand.
Founded in 2012, ARTICLE ONE’s
philosophy is to provide elevated styles
for the modern-day individual which
form the core of every wardrobe.
Every ARTICLE ONE piece aligns with
the distinctively relaxed and effortless
Australian sensibility through fit, fabric,
subtle detailing and timeless colour
palettes.
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Accent Group Limited Annual Report 2021 Our Brands
Sperry Top-Sider is the original and
authentic boat shoe brand, and is for
people drawn to the surf, sun and soul
of the ocean.
Bold and edgy, Beyond Her is an
Australian fashion label known for
its strong 90’s vibe which combines
modern and vintage designs. A mix
of rough streetwear with elegant and
feminine fits takes you from casual and
workwear to off-duty and party outfits.
From humble beginnings in the UK
to worldwide wardrobe staples and
fashionable activewear, Henley’s offers
authentic and elite sportswear basics
and essentials for everyone, for all four
seasons.
Made with the everyday traveller in
mind, Herschel’s collection of bags
and backpacks have been thoughtfully
designed from scratch. Combining
modern functionality with a touch of
nostalgia, Herschel is renowned for
their practical details: laptop sleeves,
hidden compartments and separated
sections for everything you need.
Launched in 2021, 4WORKERS is an
immersive retail experience targeted at
professionals in the workplace across
hospitality, healthcare, industrial or
corporate. With 2 stores and more
to follow, 4WORKERS brings ‘Safety,
Comfort and Style’ into workwear by
offering some of the leading brands in
the industry.
Designed to deliver workout support
and a stunning aesthetic alike, EXIE
is more than versatile sportswear
that’s responsibly produced – it’s a
lifestyle. EXIE features flawless fabrics
constructed into seamless activewear,
boasting flattering contours to create
fully functional and fully shape-
enhancing sportswear.
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Accent Group Limited Annual Report 2021 Our Brands
Established in Dallas, Texas in 1982,
Autry is referred to as ‘the shoe with
the American flag’. Autry Action Shoes
are the ultimate blend of court shoe
and casual sneaker.
FIRST MUSE is, a brand that is bold,
confident and the new must-have
addition to the after-dark wardrobe.
With their range of clothing including
dresses and tops, FIRST MUSE is all
about clean lines and sleek silhouettes.
Kappa has a proud history steeped
in footballing tradition. The industry-
leading sports apparel brand was
founded in Italy in 1967, with the
famous Omini logo symbolizing
“equality and mutual support”.
For over 100 years, Superga has been
known for their wide range of classic
sneakers and tennis shoes. Loved by
fashionistas, bloggers and trend-setters
alike, Superga, labelled as ‘the people’s
shoes of Italy’, has paved the way for
casual streetwear.
Inspired from watching disgruntled
Parisians rushing by in wet clothes
during plummeting rain on a Paris day
in 1965, the ultra-lightweight, fully
packable pac-a-mac with forward
thinking design was born.
IN THE NAME OF aka I–T–N–O is a
brand that’s constantly in the know
of the next footwear trend. Founded
in Melbourne and designed for the
ultimate trend setter, ITNO offers
a diverse range of sandals, boots,
sneakers and heels.
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Accent Group Limited Annual Report 2021 Our Brands
Hailing from France, and French for
“The Athletic Rooster”, Le Coq Sportif
lays claim to being one of the very first
sports clothing companies. Founded
in 1882, today Le Coq is worn by pros,
athletes and streetwear lovers all round
the world. Le Coq brings you a wide
range of staple styles that will keep you
comfy both on and off the court.
Lulu & Rose combines current season
trends with the fun and femininity of
colours and prints. Bringing out the
hottest trends and styles, Lulu & Rose
will keep your outfit on point through
all four seasons.
Mindful Dept. creates effortless
everyday essentials with a positive
twist. It strives to make the world a
happier place by spreading awareness
about mental health and mindfulness,
doing good for the environment, and
producing top-quality products.
With soles made from the same
rubber as aircraft tires, it’s no wonder
Palladium is a go-to sneaker for modern
day explorers. Palladium is known for
combining technological innovation
with their signature ‘light as a feather’
feeling.
Founded in 1946, the first shoe
released was a hand-sewn penny loafer.
It now has a firm foundation in quality
and style, and is classic, iconic, sporty
and renowned worldwide.
Sneaker LAB took its passion for
sneaker culture and matched it with
science, creating a natural cleaning
solution, that works. It is a proudly
South African brand that takes on a
fresh approach to shoe care to more
than 60 countries and counting.
7
Accent Group Limited Annual Report 2021 Chairman and Chief Executive Officers’ Report
David Gordon
Chairman
Daniel Agostinelli
Chief Executive Officer
Another year of record sales
and record profit.
Dear fellow Shareholders,
Many of us had hoped that the year that
was FY20 would not revisit us again, but
regrettably that was not to be the case.
The impact of the COVID-19 pandemic
continued into FY21 and is ongoing still.
Yet, despite the prevailing headwinds
we continued to face, the results that
Accent Group Limited (Accent Group,
Group or Company) has delivered in
FY21 are a testament to the strength,
resilience and talent of the Accent
Group team and culture.
The Board acknowledges the remarkable
efforts and achievements of the
entire Accent team which, along with
the support of our loyal customers,
landlords and supplier partners, enabled
the Group to continue to operate and
deliver another year of record sales and
record profit.
FINANCIAL REVIEW
The Group’s net profit after tax for FY21
was $76.9 million, an increase of 38.6%
over the prior year. Your Board has
declared a final fully franked dividend of
3.25 cents per share, which brings the
total dividends declared during the year
to 11.25 cents per share, representing
an 79% payout ratio for the year.
We also took great pride in creating 300
new permanent roles across our stores
and businesses.
All JobKeeper funds received have now
been fully deployed and, consistent with
our policy, no JobKeeper funds were
used in the calculation or payment of
management bonuses or shareholder
dividends.
COVID-19 UPDATE
With the ongoing impact of COVID-19
over the course of FY21, we maintained
our focus on the safety and wellbeing
of our team and customers. During the
year, we kept all our permanent team
members in full employment, and on
full pay, through the 14 occurrences
of government mandated restrictions/
lockdowns and related store closures
that occurred throughout the year.
OPERATING REVIEW
Digital, VIP, Virtual
The Group continued its strong focus on
driving online sales and achieved total
online sales of $209.9 million in FY21,
an increase of 48.5% on the prior year.
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Accent Group Limited Annual Report 2021 Chairman and Chief Executive Officers’ Report
Online sales represented 20.9% of
total retail sales. This digital growth
continues to be facilitated by the
infrastructure that Accent Group had
built over the last four years, which
ensured that a record number of
customers and deliveries could be
managed from our digital platform,
with significant additional capacity
and scalability still available. Virtual
sales continued to grow strongly,
driving more than $6.3 million in sales
for the year and four new websites
were launched, including Stylerunner,
Pivot, Hype NZ, and Dr Martens NZ.
Contactable customers grew by
1.6 million. Accent Group continues
to believe that there has been a
seismic and enduring shift in consumer
behaviour to shopping online. We
are well placed to capitalise on
this trend with our market leading,
digitally integrated consumer business,
comprising 31 websites, 18 owned
and distributed brands, more than
600 points of distribution and now
8.4 million contactable customers.
The Group is continuing its drive to
deliver customer loyalty programs,
with the new Skechers loyalty program
launched in May already demonstrating
strong early results. VIP loyalty
programs for Platypus and Hype DC
will be launched during FY22.
We continue to invest significantly
to evolve and upgrade our websites,
with 10 new sites to be re-platformed
and upgraded in FY22. The Group is
targeting virtual sales to grow to more
than $10 million in FY22 and online
sales to grow to 30% of total sales
over time.
Financials1
($ millions)
Total Sales (incl. TAF)2
Accent Group Sales (company owned)
EBITDA
EBIT
NPAT
EPS (cents per share)
Dividends (cents per share)
FY21
FY201
Growth
1,138.2
948.9
Up 19.9%
967.8
242.0
124.9
76.9
14.21
11.25
807.1
Up 19.9%
202.9
Up 19.3%
94.5
55.5
Up 32.1%
Up 38.6%
10.28
Up 38.2%
9.25
Up 21.6%
1. FY20 results restated due to IFRIC agenda decisions on Software as a Service (“Saas”) accounting policy. Refer to Note 3 in the statutory financial
statements.
2. Includes The Athlete’s Foot franchise store sales.
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Accent Group Limited Annual Report 2021 Chairman and Chief Executive Officers’ Report
Retail
Accent Group remains committed
to a long-term strategy of delivering
customers a best in class integrated
digital and instore experience. Retail
sales of $835.4 million in FY21 were up
19.6% on the prior year, with standout
performances in Hype DC, Skechers,
Platypus, The Athlete’s Foot, The Trybe
and Subtype. The Group continued
its margin expansion, increasing gross
margin by 30 basis points on the
previous year to 56.1% in FY21.
Despite the challenging trading
conditions in FY21, the Group opened
90 new stores, closing seven where
required rent outcomes could not be
achieved. Our store development team
continues to prove that they are best
in class.
PIVOT, which launched in FY20, showed
encouraging sales, with average weekly
sales growing, and being particularly
strong in outer metro and regional areas.
We expect to have 15 PIVOT stores
open by December. The store rollout
plan will then be paused to optimise
the rollout model prior to accelerating
network expansion.
The Trybe, Accent Group’s children
footwear brand, comprised 11 stores
during FY21, with additional stores
to open in FY22. Sales and brand
awareness continues to grow and
we expect The Trybe to become a
meaningful part of the Group over time.
Accent Group is on track to reach over
700 stores in FY22, with at least 65
new stores expected to open across all
banners. Strong rent deals negotiated
by the business have meant that new
stores have been performing ahead of
expectations. There will be an increased
focus to expand growth in New Zealand
in the coming year.
Stylerunner
The Group sees the Stylerunner business
as a key growth opportunity in the
attractive activewear market. We are
pleased to report that three Stylerunner
stores were opened in FY21, with
trading performance having met or
exceeded expectations.
In addition, new leases for 20 stores
have been agreed and planned to be
trading by the end of 2021. The Group
is targeting a Stylerunner store network
of over 40 stores across Australia
and New Zealand by Christmas 2022.
In addition, as the first stage of its
international strategy, Stylerunner has
commenced shipping to New Zealand,
USA, Singapore and Hong Kong.
Glue Store
In April 2021, Accent Group acquired
the Glue Store retail and wholesale and
distribution brands businesses from
(Glue Store). The acquisition further
supports Accent Group’s focus to
expand its market share in youth and
lifestyle apparel.
In addition to growing the Group’s bricks
and mortar stores portfolio to 638
stores, the acquisition also gives Accent
Group full ownership of exclusive,
vertically owned brands, Nude Lucy,
Beyond Her, Lulu & Rose and Article
One, which have historically driven more
than 25% of total Glue Store sales.
CONCLUSION
We thank the entire Accent Group team
for their resilience and performance
through what has remained a very
challenging period. Accent’s people are
its most important and valuable asset
and we will continue to invest in them
and their wellbeing.
As an investor in Accent Group, you
own part of a market leading digitally
integrated consumer business achieving
compelling shareholders returns, with
EPS growth of 15.8% per annum over
the past 10 years and compound
dividend per share growth of 17.0% per
annum since FY17.
The Company intends to grow the Glue
Store network to more than 60 stores by
December 2023, with a new world class
concept store to launch by Christmas
2021.
The FY21 dividend represents a 21.6%
growth on prior year and signals
the confidence of your Board in the
performance and financial strength of
the Company.
Together with our people, our portfolio
of world class owned and distributed
brands, integrated digital capability and
large store network are core assets of
the Group. These distinguishing factors
position the Company well for strong
growth into the future. With our long-
term objectives and incentives linked to
driving a minimum of 10% compound
annual earnings per share growth,
Accent Group continues to be defined
by its culture of retail innovation, strong
cash conversion and the growing returns
it delivers on shareholders’ funds.
David Gordon
Chairman
Daniel Agostinelli
Chief Executive Officer
Wholesale
We are pleased to report that Accent
Group had a record year in its wholesale
business, with sales growing by 22% for
the year to $132.3 million. In H2 FY21,
the Company signed new distribution
agreements with renowned brands
HOKA and Herschel, with wholesale
orders and sales commencing in January
2022.
The Glue Store acquisition also allows
for the distribution agreements for
Superga, KWAY, Kappa, Sebago and Le
Coq Sportif to be transferred to Accent
Group.
Vertical brands and products
Sales of the Group’s vertical products
and brands enjoyed huge growth, up
103.2% on the prior year to $25.6
million. Following the Glue Store
acquisition, the Group now owns 10
vertical brands, including Stylerunner
the Label, EXIE, Nude Lucy, Article One,
Henley’s, Lulu & Rose, ITNO, Alpha,
Mindful Department and Beyond Her.
Stylerunner the Label and EXIE continue
to grow their product mix within
Stylerunner, with new ranges launching
throughout FY22.
Growing the Group’s vertical brands
portfolio continues to be a key strategic
focus for Accent Group. To support
this growth, a new general manager
of sourcing and vertical product was
appointed in FY21 to drive production
quality, timelines and gross margin
improvement. The Group expects
vertical brand sales to grow to more
than $70m in FY22.
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Accent Group Limited Annual Report 2021 Sustainability Report
OUR COMMITMENT TO BUSINESS SUSTAINABILITY
At Accent Group Limited (Accent Group, Group or Company), we are committed to building and maintaining sustainable business
practices throughout our operations to be an employer of choice for team members, meet our customers’ expectations and deliver
long-term value to our shareholders. Our Environmental and Social Governance (ESG) Framework is a key enabler of our growth and
ensures we create value through our relationships and effective use of resources.
The Accent Group ESG Framework is used to drive the ESG agenda through the business, and focuses our commitment on three key
pillars: our people, our responsibilities and our commitment to the enrivonment.
In FY21, Accent Group created the role of Group Sustainability Manager and established a cross-functional ESG steering group to
govern the sustainability agenda. The role of this group is to drive the Company’s ongoing commitment to the environment, health
and safety, corporate social responsibility, sustainability, and other public policy matters. The ESG steering group is charged with
supporting leaders across the Group to align their respective business strategies with evolving ESG strategies. The ESG steering
group will also provide updates and reports on sustainability initiatives and risks to the Audit and Risk Committee.
OUR PEOPLE COME FIRST
Our team members are our most valuable asset. We
recognise that the performance of Accent Group is
driven through the quality and motivation of our people,
approaching 6,000 team members employed across
Australia and New Zealand. We value and recognise
the importance of respecting individual differences in
the workplace, which supports both the realisation of
an individual’s full potential, as well as the achievement
of Accent Group’s strategic people initiatives. We
therefore have zero tolerance for harassment (including
sexual harassment), bullying, discrimination and any
other act or omission which deviates from our Code
of Conduct. We strive to create a safe, inclusive, and
diverse workplace for our team members.
During the year, Accent Group invested in a number of
employee engagement and support initiatives to ensure
that we continued to attract, develop and retain the
best team members in the industry. Accent Group’s
employee benefits program includes:
– A retail incentive program
– An employee referral program
– An employee assistance program
– Novated leasing
– Affiliation program with BUPA Health insurance
– Corporate gym membership affiliation program
– Paid parental leave scheme
The Company utilises systems of reporting on key
metrics via a ‘People Dashboard’, which is used to
provide regular updates to the Board and senior
management team in relation to headcount, gender
diversity, recruitment and workplace health and
safety. The implementation of a new human resources
information system (Ceridian Dayforce) will also provide
an improved people experience, designed to positively
influence all elements of the employee life cycle.
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Accent Group Limited Annual Report 2021 Sustainability Report
changes, including a decrease in Total
Recordable Injuries (TRI) to 79 in FY21,
down from 110 in FY20. Our Lost Time
Injury Frequency Rate (LTIFR) for FY21
was 3.75, and we have an ongoing
target for continuous improvement of
both TRI and LTIFR year on year. A key
objective of Accent Group’s holistic
end-to-end safety plan is to reduce
ladder-related incidents. The focus
and improved training in this area has
resulted in an improvement in ladder-
safety compliance, and a reduction in
the number of ladder-related incidents
by 40.5% compared to the previous
year. The concerted focus on safety has
also led to a significant improvement in
workers’ compensation and WorkCover
premiums over the last two years.
Accent Group also regards keeping our
customers and suppliers safe (in addition
to our team members), and as such we
also implemented measures relating
to personal hygiene, social distancing,
increased cleaning, mental wellbeing,
remote working, and incident response
procedures. While most of these
measures were introduced during the
COVID-19 pandemic, many will continue
and become a part of the standard health
and safety culture at Accent Group.
We also recognise that a person’s
health extends to both their physical
and mental well-being. Accordingly,
team members are supported through
the Employee Assistance Program and
critical incident support mechanisms
provided by Benestar. This year, mental
health first aid training was delivered to
our key First Aid Representatives, and
we have a plan to extend this training
to our State and National Managers
in FY22. Mental health will continue
to be a key priority for the Group,
with a number of new initiatives being
implemented across the business
throughout the coming year. These
training programs will continue to be
developed and refined to ensure that
our team members are better prepared
to work safely in the workplace.
Diversity and Inclusion
We are committed to creating and
maintaining a culture within the Accent
Group workplace that celebrates
diversity and embraces inclusivity. Our
community is diverse by nature, so it
follows that our workforce should be
representative of our community and
customers.
12
Another initiative implemented this
year was the launch of our first Group-
wide Team Engagement Survey, which
provided the opportunity for all team
members to give feedback about their
experiences working at Accent Group.
Across the Company, approximately
4,500 (75%) of our team members
completed the survey.
The survey highlighted both the areas
in which we are doing well, as well as
the areas in which there is room for
improvement to drive deeper team
engagement. The deep insights gained
will be used to develop an action plan,
which will be implemented to address
the opportunities for improvement
within the next 12 months.
Health and Safety
At Accent Group, we are committed to
providing a safe working environment
and protecting the health and safety of
all our team members, customers, and
visitors. Our objective is to continuously
improve our safety performance across
all aspects of health and wellbeing.
One way in which we do this is through
the regular monitoring of key safety
metrics, and the implementation of risk
mitigation strategies to reduce the risk
of workplace injury and lost time.
To further support our ongoing
commitment to safety, the Accent Safety
Steering Group continues to drive
engagement across the business and
includes members from both operational
and leadership roles. This group acts
as a conduit between site-based safety
teams and management and helps to
increase the visibility and escalation of
issues. A dedicated Group Safety Officer
was also appointed, who is charged
with managing and driving occupational
health and safety risk mitigation
strategies and initiatives, such as general
safety training, ladder safety, physical
and mental first-aid training, and cross-
functional knowledge sharing.
The systematic measurement and
monitoring of safety data, in combination
with the implementation of certain
safety initiatives, has resulted in positive
Accent Group Limited Annual Report 2021 Sustainability Report
It is therefore important that we foster an environment of mutual respect, dignity, learning, openness to other cultures and an
appreciation of differences. Dimensions of diversity at Accent Group include, but are not limited to, age, gender, race, national or
ethnic origin, physical ability, disabilities, religion, language, family/marital status, and sexual orientation.
Our commitment is reflected in the Company’s Diversity and Inclusion Policy and Code of Conduct. To further support this, we also
have a number of key initiatives that encourage diversity and create a fair and inclusive environment across Accent Group:
Recruitment and Selection: With a focus on driving a consistent recruitment process and finding the best talent for any given
role, a recruitment and selection training program is being developed and will be deployed across the Group in FY22. This training
emphasises our commitment to cultural diversity and a non-biased approach to selecting the best person for each role.
Flexible Working: Accent Group provides opportunities for flexible working arrangements that accommodate the diverse needs of
our team members. Our policy allows our team members to request both ad hoc and formal flexible work arrangements.
Parental Leave: Achieving balanced leadership is about creating a workplace that enables career progression. Our paid parental
leave policy extends parental leave to eight weeks for the primary carer and provides two weeks for the secondary carer. In addition
to paid parental leave, Accent Group supports flexibility in transitioning parents back to work with flexible work arrangements.
Speak up: Team members are also encouraged to speak up about conduct that is inconsistent with Accent Group’s way of doing
things. This includes protections afforded under the Whistleblower Policy, which is aimed at ensuring that individuals feel supported
to come forward if they have information about serious misconduct as it relates to Accent Group.
Gender Equality
Accent Group is also focussed on promoting and improving workplace gender equality. Our Diversity and Inclusion Policy includes
a requirement for the People and Remuneration Committee to recommend to the Board measurable objectives for diversity on an
annual basis. It also includes a requirement to assess the Company’s progress towards achieving them. The following table sets out
the Company’s measurable objectives set down on 18 August 2021.
Stated Target
Progress
Measurable objectives
Improve representation
of women in leadership
positions
Board
Senior executives
Improve representation
of women in balance of
workforce
Total employees
Target %
30%
Target date
30 June 2024
To increase the percentage
of female to male senior
executives
To report annually on the
movement in the % of
females to males which
currently sits above 50%
for the balance of the
workforce, with further
objectives set as required to
ensure a broadly community
representative balance of
females and males
Baseline position FY2021
14%
61%
59%
Accent Group also completes the annual Workplace Gender Equality Agency (WGEA) report as part of our sustained commitment
to a diverse and inclusive workforce and confirmation of the progress we are making towards gender equality. As of 31 March
2021, 60% of our total team members are women. The current breakdown of gender representation in the Group, as reported in
accordance with the Workplace Gender Equality Act 2012, is as follows:
FY20
Board
Senior
managers*
Other
managers
Other
employees
Total
Total number
% of women
% of men
FY21
Total number
% of women
% of men
6
71
513
4,609
5,199
17%
61%
64%
53%
55%
83% Board
39% Senior
managers*
36% Other
managers
47% Other
employees
45% Total
7
89
653
4,572
5,321
14%
61%
66%
59%
60%
86%
39%
34%
41%
40%
*
Senior managers are those individuals who collectively participate in determining and implementing major operational and strategic initiatives at the
business unit level and who are responsible for the results of their respective business units.
13
Accent Group Limited Annual Report 2021 Training and Development
A commitment to the ongoing
training and development of our team
members is critical to our success and
sustainability as an organisation. Our
objective is to provide training and
development opportunities which
ensures we support Accent Group’s key
policies, and which improves our ability
to continually attract, grow, retain and
support our team members.
Accent Group also provides
opportunities for advancement through
a succession planning framework and
a culture of preference for internal
promotion.
OUR RESPONSIBILITIES –
WE ACT WITH INTEGRITY
Modern Slavery
Accent Group is committed to operating
responsibly and ensuring that no person
who is involved in our operations
(including employees, customers and
community members) are subject to
any situation of exploitation where
that person cannot refuse or leave
work because of threats, violence,
coercion, abuse of power or deception.
Accent Group Limited
Annual Report 2020
Modern Slavery Statement
Sustainability Report
We recognise that Australia is not
immune from such modern slavery
practices, and we are in the process
of developing and implementing a
framework for engaging with our
suppliers to identify and manage the
risks of such practices in our supply
chain. Further details of this program is
set out in Accent Group’s modern slavery
statement, a copy of which is available
on our website.
Ethical Sourcing
Accent Group has developed an ethical
sourcing framework, as we continue
the work towards ensuring workers
across our supply chains are treated
fairly and equitably, while identifying
opportunities to create positive social
and environmental impacts in the
communities in which we source our
products.
In November 2020, we released our
Modern Slavery Statement. Accent
Group made a commitment to maintain
policies and procedures to operate
responsibility, and to manage modern
slavery risks in our operations and
throughout our supply chain.
In further support of our modern
slavery commitments, we issued the
Accent Group Ethical Sourcing Policy
to our brand partners and vertical
suppliers in April 2021. This policy was
also included in Accent Group’s Terms
of Trade. The Ethical Sourcing Policy
sets the expectations we have of our
suppliers to ensure that our products
are manufactured in an ethical and
responsible manner through greater
transparency and accountability.
The four key pillars of the Policy are:
– Business Integrity and Ethics
– Labour Standards and Human Rights
– Healthy and Safe Working
Conditions
– Environmental Protection
To support our teams, a bespoke training
program covering modern slavery and
ethical sourcing was delivered to our
key buying and sourcing teams across
all Accent Group businesses.
14
A supplier register has also been
developed and continues to be updated
with a list of all suppliers, agents
and tier 1 factories. Supplier audits,
documentation and certification are
being requested, and will be maintained
in a central repository. We have also
joined Sedex to manage supplier
documentation and audit reports. We
recognise that this is a journey, and we
will work to continually improve our
position in this regard. Just as we have
an objective to be an employer of choice,
we have an opportunity to become the
channel of choice for our suppliers and
their products, both of which strengthen
Accent Group’s position in the market.
To further encourage continuous
improvement in this area, we have also
engaged with our key international
brand partners to better understand
their activities, and work to foster
collaboration in key areas of ethical
sourcing and environmental impact.
The learnings from these engagements
will be implemented into our broader
supplier and sourcing activities.
As Accent Group continues to increase
its focus on monitoring and investigating
its environmental impact, new policies
and procedures will be created and
developed to assist in minimising
liabilities, maximising the Group’s use
of resources, and reducing waste. As a
part of this process, we will continue to
refine and enhance our Sustainability
Report in future periods, and, if
appropriate, will also provide an analysis
of and make disclosures aligned with,
the recommendations of the Financial
Stability Board’s Task Force on Climate-
related Financial Disclosures (TCFD).
Community Partnerships
Accent Group values participation
in and supports the communities in
which it operates. In a year where
many communities and businesses
were impacted by COVID-19, we are
incredibly proud to have continued our
support for numerous causes over the
last year.
We know that our stores are based in
geographically and culturally diverse
communities, and that supporting those
communities, especially the under-
privileged, strengthens our brand
commitment in the communities in which
we do business in. This extends but is
not limited to the traditional owners
of the lands, including indigenous
Australians and indigenous New
Zealanders.
Accent Group Limited Annual Report 2021 Sustainability Report
To support Global Pride
Month, Dr Marten’s
partnered with Pride
Foundation Australia.
$10 from the sale of every
pair of the 1461 Pride shoe
was donated to the Pride
Foundation Australia.
Platypus Shoes partnered
with Timberland with the
release of a “Save The
Platypus” boot. In June
2021, the Company ran a
campaign where $10 from
every sale of the Timberland
X Platypus boot was
donated to the Australian
Platypus Conservancy.
The Accent Group Vans
team supported Black
Rainbow, a national
Aboriginal and Torres Strait
Islander LGBQTI+SB non-
profit organisation, with
a donation of $10 from
every sale of a limited-
edition Rainbow collection
shoe sold through Vans
in Australia (both in-store
or online). These iconic
Vans styles with added
rainbow motifs allow our
consumers to express
their own individuality
and creative flair.
SAVE THE
PLATYPUS
The Accent Group Vans team was also privileged to be
involved in a program with “Build-Up Skateboarding”
to facilitate several days of skateboard workshops
and demonstrations in Warruwi and Tiwi Islands. The
level of participation and eagerness to pick up and
ride a skateboard was truly special and much fun was
had in setting up skateboards and building ramps. The
Accent Group Vans team were proud to be involved
and donated skateboards, tools, Vans shoes and ramps
to the two remote communities. The program also
included engagement with several art centres, with
Pass~Port Skateboards donating blank skateboard decks
to various artists in each community area. These boards
will be exhibited in Sydney and made available for sale,
with profits from the sales going back to the artists, art
centres & their communities.
The Athlete’s Foot is a proud partner of parkrun
across both Australia and New Zealand. parkrun
is a series of free, weekly, timed events. There
are runs suitable for adults as well as junior
parkruns suitable for children aged 14 years and
over. As part of the partnership, The Athlete’s
Foot contributes to supporting the community
by encouraging people to keep healthy, fit and
active through the weekly parkrun events that
are easily accessible to all.
The Athlete’s Foot is also a proud partner of
NETFIT Netball, a global Netball community
that provides fitness academies and workshops
to netballers of all ages. To help educate
netballers on the importance of fit, The
Athlete’s Foot attends their NETFIT Clinics
across Australia and works closely with NETFIT
on their yearly national netball campaign.
The Athlete’s Foot also became a new partner
of Athletics Australia in FY21. Athletics
Australia is the national governing body for the
sport of athletics in Australia. It is charged with
ensuring the encouragement and promotion
of athletics in Australia and acting in the best
interests of the sport of athletics. As one of its
partners, The Athlete’s Foot will work closely
with Athletics Australia on its Sporting Schools’
program to educate students on the importance
of living an active lifestyle.
15
Accent Group Limited Annual Report 2021 Environment
Accent Group is committed to managing
and reducing the impact we have on
the environment. We recognise our
corporate responsibility for driving
initiatives that divert waste from landfill
into recycling, or repurposing waste
as part of our genuine commitment
to supporting positive environmental
outcomes and climate action. We have
identified three key areas of focus under
our environmental framework that we
believe have the greatest impact on
our environmental footprint. These
are packaging, recycling, and bringing
sustainable product to market.
Packaging
Accent Group is a member of the
Australian Packaging Covenant (APCO).
Through our association with APCO,
we will implement initiatives that aim to
reduce the impact on the environment,
through recycling, product stewardship
and sustainable packaging design.
Accent Group is developing a set of
packaging guidelines and educating team
members on how they can make a more
positive impact to the environment.
Among the first of our new initiatives
is to move away from single use plastic
Sustainability Report
packaging across all our stores (including
online), and to invest in packaging made
from recyclable materials. We are also
working with our international brand
partners on initiatives to improve the
environmental impact of the packaging
across their products.
Recycle
Accent Group is implementing Group-
wide sustainability practices across our
network of stores, distribution centres
and support centres. Our distribution
centres execute on-site recovery
systems for used packaging. Any
cardboard cartons used for packaging
by Accent Group is made from recycled
material and packaging material that can
no longer be reused is compacted and
collected for recycling.
Our support centres recycle all
cardboard and paper and are also
implementing a co-mingled recycling
program for glass and plastics. FSC
(Forest Stewardship Council) certified
paper is used in our support centres.
Where possible, our weekly retail
reports, forms, and administrative
material are produced in formats which
require no printing and can be stored
and viewed via mobile technology.
Across our network of stores, to reuse is
always our first option. Additionally, as
described above, cardboard cartons are
reused to facilitate movement of stock
between our stores. Our retail outlets
utilise the available shopping centre
recycling facilities.
16
RECYCLE YOUR OLD
FOOTWEAR HERE
AN AUSTRALIAN SOLUTION
TO A GLOBAL PROBLEM
AN INITIATIVE BY
SAVE OUR SOLES
SAVE OUR SOLES
FIND OUT MORE AT
ASGASOSINITIATIVE.COM.AU
*EXCLUDES HEELS, FLATS, BOOTS,
DRESS SHOES & STEEL CAP BOOTS
Accent Group has also teamed up
with the Australian Sporting Goods
Association to support its Save Our
Soles program, an industry-based
initiative to recycle unwanted sports
shoes. Collection bins will be made
available at certain stores for customers
to donate their unwanted sports shoes.
The shoes will then be sent to a recycling
plant to be processed, with reclaimed
product from the shoes used to make
new products, such as flooring for
children’s playgrounds and/or gyms.
Climate
Accent Group also wants to do its part to
assist in reducing carbon emissions over
time. Our predominant use of energy
stems from the electricity used to power
our stores and warehouse network.
While our ability to influence the type
of energy used is somewhat limited
due to the fact that the majority of our
stores are located in shopping centres,
we have taken some measures to reduce
our carbon emissions, such as investing
in more energy efficient lighting for our
new stores. We also intend to review
the key recommendations of the TCFD,
and where appropriate, implement a
meaningful, measurable strategic plan to
adopt those recommendations.
Sustainable Product Ranges
Accent Group is the product distributor
and retailer of a number of global
footwear brands. This year has seen the
expansion of “eco-friendly” ranges across
our product offering as we continue to
work with our key distribution brand
partners to bring these ranges into the
Australian and New Zealand markets
in-store and online. Some examples of
these ranges are:
Accent Group Limited Annual Report 2021 Sustainability Report
Timberland
The GreenStride range from Timberland is made with eco-conscious materials including ReBOTL™ fabric containing at least 50%
recycled plastic, and a GreenStride™ sole made of 75% renewable sugar cane and responsibly sourced rubber.
Veja
With a commitment to support local manufacturing industries, most of VEJA’s products source
their materials from natural sources, such as organic cotton and wild Amazonian rubber. The brand
maintains an emphasis on reducing its impact on the environment through considered design, ethical
production, and less waste.
Nike
The Nike Air Force 1 ‘07 LV8 is made with at least 20% recycled content and a cork-infused outsole.
Its pomegranate plant motif includes real plant-dyed colour.
Adidas
These adidas Superstar Shoes are made with Primegreen, a series of high-performance recycled
materials. They are also made with vegan alternatives to animal-derived ingredients and materials.
Data Security
At Accent Group we believe that digital, cyber and data security is integral to our business operations. We have an obligation to our
customers and stakeholders to ensure the security and privacy of the data collected by us. Our Information Technology Security
Policy states that personal information is to be used fairly, lawfully, and transparently for specified, explicit purposes. As such, we
see data security as paramount and one of the key risks to sustainable business practices. We have therefore made significant
investments in improving data security over the last two years.
A key focus has been to improve and expand the cyber security posture and governance within the organisation on an ongoing
basis. The Digital Strategy Group (DSG) was established by the Board, and is charged with maintaining oversight of risk identification
and management, and provides regular reports and updates to the Audit and Risk Committee and/or the Board. The DSG is also
charged with ensuring that adequate investment and systems are in place to protect the Company against increasingly sophisticated
and frequent cyber-attacks. We take a multi-layered approach to cyber security, utilising multiple components to protect our core
systems and customer data. In addition, we engage the services of third-party cyber security consultants to assist us with guidance,
security testing and vulnerability management to apply additional rigour in this area.
Some of the major initiatives we have implemented include:
– Investment and implementation of new and automated security technology to improve email filtering and detection of
anomalous network traffic to continually improve network and applications security posture
– Regular backing up and encryption of data
– Deployment across the Group of regular cybersecurity awareness training to improve knowledge around cybersecurity
In addition, the security protocols of our card payment processing channels are annually assessed against the Payment Card Industry
Data Security Standard to protect cardholder data wherever it is processed, stored and or transmitted.
The most recent audit undertaken by external advisors showed significant improvements in Accent Group’s data security and
governance since the last audit. We are encouraged by the results and will continue to develop and refine our plans to address
potential issues and improve our processes and governance on an ongoing basis.
17
Accent Group Limited Annual Report 2021
Accent Group
Financial Report
2021
The Directors present their report, together with the financial
statements of the consolidated entity (the ‘Consolidated
Entity’ or ‘Group’) consisting of Accent Group Limited (the
‘Company’ or ‘Accent Group’) and its controlled entities for
the year ended 27 June 2021.
18
Accent Group Limited Annual Report 2021 Directors’ Report
FY21 DIRECTORS’ REPORT
The Directors present their report, together with the financial statements of the consolidated entity (the Consolidated Entity
or Group) consisting of Accent Group Limited (the Company or Accent Group) and its controlled entities for the year ended
27 June 2021.
1. DIRECTORS
The following persons were Directors of Accent Group during the whole of the financial year and up to the date of this report,
unless otherwise stated:
– David Gordon – Chairman
– Daniel Agostinelli – Chief Executive Officer
– Stephen Goddard
– Michael Hapgood
– Donna Player
– Joshua Lowcock
– Brett Blundy (appointed 23 April 2021)
– Timothy Dodd – alternate Director for Brett Blundy (appointed 2 June 2021)
2. PRINCIPAL ACTIVITIES
Accent Group is a leading digitally integrated consumer business in the retail and distribution sectors of branded performance and
lifestyle footwear, apparel and accessories with over 600 stores across 26 different retail banners and exclusive distribution rights
for 18 international brands across Australia and New Zealand.
Following the acquisition of the Glue Store retail business and the wholesale and distribution brands business of Next Athleisure Pty
Ltd earlier this year (Glue Store Acquisition), the combined Group’s banners and brands include The Athlete’s Foot (TAF), Platypus
Shoes, Hype DC, Skechers, Merrell, CAT, Vans, Dr. Martens, Saucony, Timberland, Sperry, Palladium, Stance, Supra, Subtype,
The Trybe, PIVOT, Stylerunner, Glue Store and Autry.
Accent Group’s focus on growing its owned brands and apparel presence continues to be a key strategic initiative for the group, with
the number of vertical owned brands growing to 10 following the Glue Store Acquisition.
3. DIVIDENDS
Dividends paid or declared by the Company during, and since the end of, the financial year are set out in Note 25 to the Financial
Statements and summarised below:
Cents per ordinary share
Total amount ($’000)
3.25
17,611
8.00
43,349
4.00
21,675
5.25
28,464
Payment date
16 September 2021
18 March 2021
24 September 2020
19 March 2020
FY21 final
FY21 interim
FY20 final
FY20 interim
The total dividend for the financial year ended 27 June 2021 of 11.25 cents per share is an increase of 21.6% on the previous year.
4. OPERATING AND FINANCIAL REVIEW
The Operating and Financial Review of the Group for the financial year ended 27 June 2021 is provided in the Chairman and
Chief Executive Officer’s Report on page 8 and forms part of this Directors’ Report.
5. MATERIAL BUSINESS RISKS
The Group’s risk management framework enables it to continuously, systematically and actively monitor the potential risks which
may adversely impact the operational and financial performance of its businesses, which in turn may affect the outcome of an
investment in the Group. There is no guarantee that the stated objectives of the Group will be achieved, or that forward looking
statements will be realised. A variety of factors, both Group specific and of a general nature, may impact upon the Group’s activities
and results, including general economic and business conditions, inflation, interest and exchange rates, consumer confidence,
government policies and the current COVID-19 pandemic.
The Group considers the following to be business risks that are likely to have a material effect on its operational and financial
performance. An overview (and not exhaustive list) of mitigation actions taken by the Group is also set out.
19
for the year ended 27 June 2021Accent Group Limited Annual Report 2021 Type and description of risk
COVID-19 Pandemic
Mitigating Actions
There continues to be uncertainty in relation to the duration and
further impact of the COVID-19 pandemic. The risks related to
this include:
– Unforeseeable fluctuations in consumer demand by state,
and even local suburbs impacting profit and cashflow
– Timing and nature of government containment measures
such as rolling lockdowns and mandated store closures
impacting profit and cashflow
– Risk of team member or customer infection resulting in
office(s) or store(s) closures
– Risk of fines for regulatory breaches of government COVID
safe operating requirements
– Altered consumer behaviour (e.g. long-term shift towards
online shopping or significant reduction in household
spending)
Competition
The markets in which the Group operates remain highly
competitive, and any increased competition from new and
existing competitors may lead to price deflation and a decline
in sales and profitability, in particular:
– Entrance of new international competitors
– Aggressive discounting by local competitors
– Growth in international online footwear sites providing
shipping to Australia and New Zealand
– Growth of new local boutique sneaker stores
– Direct to customer and top retailer distribution strategies
of major shoe brands
– Non-traditional retailers selling lifestyle and performance
footwear
– Global luxury brands expanding in the lifestyle footwear
category
Changes in consumer behaviour
The Group is exposed to both the upside and downside of cycles
in consumer spending and demands, given that the products
offered by the Group are discretionary in nature.
Accordingly, customers' preferences, perception of brands, and
demographics are all considered risks, in particular:
– A reduction in consumer spending and demand may lead to a
decline in the Group’s sales and profitability
– Trends in consumers shifting to online shopping drives a
prolonged decline in stores’ like-for-like sales growth
– An acceleration of the online trend drives inaccurate stock
allocations in the short-term
– Relevant COVID-safe protocols and policies developed and in
place to encourage personal hygiene, physical distancing and
management of mental health
– Required personal protective equipment made available in all
offices and stores
– Increased effectiveness and frequency of office and store
cleaning practices
– Online/digital contingency plans developed and implemented
for rolling shutdowns
– Adjusting marketing plans to support online trading
– Regular monitoring and communication to team members
of government updates and requirements
– Factoring in the potential foreseeable impact of COVID-19
into forward sales, costs, inventory and cashflow plans
– Opening new stores to increase market share in Australia and
New Zealand
– Opening new and larger, or upgrading, existing stores in
locales where there is a heavy competitor presence
– Development and execution of new brand formats including
product offerings not limited to performance and youth
lifestyle footwear and apparel
– Significantly enhancing online digital capability and sales
penetration
– Monitoring international markets to identify opportunities for
growth
– Developing a deeper understanding of our customers,
including through application of technological developments,
CRM, and face-to-face engagement in-store
– Driving store rental reductions at renewal against an
expectation of lower instore sales
– Continued investment in store fit-out with each new store and
refurbished stores including new experiential elements
– Development of a forward-looking store performance/
profitability tool
– Continuing to optimise the incremental digital costs for
marketing and distribution
– Closely monitoring and responding quickly to changes in the
economic environment, consumer demand and new products
20
for the year ended 27 June 2021Directors’ ReportAccent Group Limited Annual Report 2021 Type and description of risk
Health and Safety
Mitigating Actions
The Group is committed to the health and safety of its team
members, customers and contractors and places a strong
emphasis on the implementation of work health and safety
standards. However, risks still remain possible, in particular:
– Injury to a customer or a team member in work locations
– Death of a customer or a team member in work locations
– A natural disaster event impacting on the safety of team
members or customers
– External events involving a team member or a member of
the public (e.g. self-harm, public situations) causing trauma,
distress and psychological harm
– Establishing, regularly updating and implementing a health and
safety management system including resources, training and
procedures
– Investigating every incident to mitigate against reoccurrence
– Implementing learning initiatives and improvements to create
safer work locations
– Creating training modules to ensure that all team are inducted
in safe work practises
– Developing an auditing program to train leaders to regularly
identify safety risks
– Establishing the Safety Steering Group which meets regularly
to discuss and review incidents
– Engaging with government agencies to ensure legal
compliance
– Engaging third party providers to support team members with
issues that may impact their wellbeing
– Provide First Aid/CPR training to nominated representatives in
offices locations, and Mental Health First aid training to State
and National Managers
Cyber Security and Information Technology
While an increased reliance on information technology systems
maximises the efficiency of the Group’s business operations,
any sustained and unplanned downtime due to cybersecurity
attacks, system failures, network disruptions and other malicious
or non-malicious incidents could have a material adverse impact
on the Group’s reputation, and its operating and financial
performance, in particular:
– Corruption of inventory management software
– External attack on websites
– Internal/external unauthorised access to sensitive
commercial data
– Internal/external unauthorised access to customer data
– Fraudulent email phishing attacks resulting in incorrect
external payments being made
– Documented disaster recovery processes (including offsite
information technology back-up infrastructure)
– Implementing improved user access and profiling
– Increasing the frequency of security assessments, penetration
and venerability testing using external expert advisers
– Implementing higher level password security and change
protocols
– Implementing appropriate programs and tools to identify and
formalise the remediation of vulnerabilities
– Reviewing payment card industry compliance
– Exploring and, where appropriate, implementing security tools
based on artificial intelligence
– Increasing sophistication of enterprise password tools and
protocols
Distributed brands and key supplier relationships
The Group enjoys strong partnerships with all major suppliers,
and its regional exclusivity with numerous sought-after brands
is a key distinguishing feature of its product offering. Failing to
maintain good working relationships with key suppliers may lead
to the following risks:
– Loss of a key distributed brand due to poor management,
lack of growth or brand preference to manage the territory
themselves.
– Loss of a key global third party brand due to distribution
pressure from global sneaker retailers
– Substantive change in distribution strategy of a key supplier
resulting in a substantial product ranging change
– Implementing a thorough, methodical and effective renewal
program for distributed brands
– C-suite engagement with distributed brand principals over
regular periods
– Driving the mix and growth of distributed brands
– Rolling out concept stores for distributed brands
– Opening new store formats to increase category reach,
expanding the Group’s relevance as a distributor or brand
partner.
21
Directors’ Reportfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 Type and description of risk
Sustainability
Mitigating Actions
The sustainability of the Group’s business is impacted by a
number of environmental and social factors. Any actual or
perceived failure to adequately address sustainability related
issues may have an adverse effect on the Group’s reputation,
and operational and financial performance, in particular:
– Identifying issues in its supply chain (including modern
slavery practices)
– Sourcing sustainable materials and packaging
– Implementing product compliant systems to improve
product safety
– Responding inadequately to increasing demand from
consumers regarding traceability of products and clearer
and more meaningful labelling may lead to reputational
damage and potentially immediate adverse political or
customer actions
– Promoting gender equality
Legal, Regulatory and Compliance
The Group is required to maintain compliance with all applicable
laws and regulations, including those relating to consumer
protection, product quality, ethical sourcing and corporate
governance. Failure to comply with these laws and regulations
could result in high legal costs, adverse monetary judgments,
regulatory enforcement action and other claims which could
have a material adverse impact on the Group’s reputation, and
operational and financial performance, in particular:
– Aggressive or poorly controlled tax risk management leading
to misstatements of tax payable
– Lack of focus on supply chain management, resulting in an
inability to meet Modern Slavery regulations requirements
– Poor management of PCI compliance, resulting in monetary
fines and regulatory breaches
– Poor understanding of key pieces of legislation impacting
on the Group’s business leading to regulatory breaches,
significant monetary fines and/or litigious action
– Establishing an Environmental, Social and Governance (‘ESG’)
framework, including the establishment of the ESG Steering
Group
– Increasing its focus on sustainability-related issues by
dedicated role of Group Sustainability Manager and General
Manager – Sourcing and Vertical
– Reporting on the Group’s progress of published targets in the
ESG Report annually with regular monitoring throughout the
year
– Reporting annually on the Group’s Modern Slavery Statement
with regular monitoring throughout the year
– Establishing a responsible sourcing framework under which
the Ethical Sourcing Policy was created, to be distributed to
relevant parties in the Group’s vertical products supply chain
– Reviewing the recommendations of the Financial Stability
Board’s Task Force on Climate-related Financial Disclosures
and, if appropriate, provide an analysis of and make disclosures
aligned with, the recommendations
– Commitment for gender equality in leadership roles as
published in the Group’s ESG Report and Corporate
Governance Statement annually
– Establishing policies, procedures and compliance systems
– Establishing a Group-wide Code of Conduct
– Establishing the Whistleblower Policy and dedicated
Whistleblower Protection Officer
– Dedicated in-house legal team
– Regular consultation with professional advisers on key areas
of compliance risk
– Actively monitoring changes to regulations and laws
– Monthly financial and disclosures obligation reporting
– Upweighted focus on tax risk compliance, including the
regular, systematic review of the effectiveness and currency
of the Group’s Tax Risk Management Policy
6. SUSTAINABILITY
A detailed account of our approach to business sustainability, covering people and safety, ethical sourcing, community and the
environment is contained in the Sustainability section of this Annual Report.
22
for the year ended 27 June 2021Directors’ ReportAccent Group Limited Annual Report 2021 7.
INFORMATION ON DIRECTORS
Name
Particulars
David Gordon
Non-Executive Chairman
Daniel Agostinelli
Chief Executive Officer
Stephen Goddard
Non-Executive Director
David has over 20 years’ experience as a director of both public and private companies and has
spent more than 30 years working in corporate advisory roles to Australian and international
organisations. He brings extensive knowledge of mergers and acquisitions, as well as capital
raisings, IPOs and joint ventures.
David also has a proven track record in guiding businesses to harness their digital asset
capability to successfully explore and grow new markets.
David is the Chairman of the Board of nib Holdings Limited (ASX:NHF) and its health fund
subsidiary, nib Health Funds Limited
He is also the Chairman of Ordermentum Pty Ltd, Shippit Pty Limited and General Homecare
Holdings Pty Ltd and a Non-Executive Director of Genesis Capital Manager 1 Pty Ltd, Stilmark
Holdings Pty Ltd and international not-for-profit organisation, High Resolves Pty Ltd.
David has been a Non-Executive Director of Accent Group since October 2006 and was
appointed Non-Executive Chairman in November 2017.
David is also the Chairman of the People and Remuneration Committee and a member of the
Audit and Risk Committee and Digital Strategy Group.
Daniel oversees the day-to-day operations of Accent Group. He has over 30 years of retail
experience and was formerly the CEO of Sanity Music and part owner of the Ghetto Shoes
sneaker business. Daniel has been with Accent Group since 2006 and CEO of Accent Group
since March 2015.
Stephen is currently the Chairman of the Board and the Remuneration and Nomination
Committee of JB Hi-Fi Limited and a Non-Executive Director and Chairman of the Audit and
Risk Committee of both GWA Group Limited and Nick Scali Limited. Stephen was formerly the
Finance Director and Operations Director for David Jones Limited and the founding Managing
Director of Officeworks.
Stephen was appointed a Non-Executive Director of Accent Group in November 2017.
Stephen is the Chairman of the Audit and Risk Committee and a member of the People and
Remuneration Committee with extensive retail, finance, and board experience.
Michael Hapgood
Co-Founder and
Non-Executive Director
A founding Director and shareholder of Accent Group, Michael has extensive knowledge of
the processes required to effectively launch, source and manage global brands within the
Australasian market.
Donna Player
Non-Executive Director
From Accent Group’s inception, Michael has been intimately involved in the development of
all major strategic initiatives for the business initially from 1988 as marketing director before
becoming CEO in 1998 until the sale to RCG Group in May 2015. Michael then became Accent
Group’s Chairman until August 2016 when all ongoing executive roles were relinquished.
He continues as a Non-Executive Director and shareholder of Accent Group, and is a member of
the Digital Strategy Group.
Donna has over 35 years’ experience in retail including senior executive positions in
merchandising, planning and marketing with Big W and David Jones. Donna is currently
a Non-Executive Director of Baby Bunting Group Limited and the Merchandise Director
of Camilla Australia. Donna has a proven track record in developing and delivering retail
strategy and business transformation.
Donna was appointed as a Non-Executive Director in November 2017 and is a member of the
People and Remuneration Committee.
23
Directors’ Reportfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 Name
Particulars
Joshua Lowcock
Non-Executive Director
Brett Blundy
Non-Executive Director
Timothy Dodd
Alternate Director for Brett Blundy
Joshua is a Non-Executive Director and Chair of the Audit and Risk Committee of Cashrewards
Limited, and is a Non-Executive Director of Prime Media Group Limited. He is also the New
York based Chief Digital Officer for Universal McCann, a global media and advertising agency.
Joshua brings Accent Group proven retail expertise in the intersection of digital, data and
privacy. His retail experience includes Woolworths (Australia), Walmart and CVS Health as well
as companies such as P&G, Sony and Coca Cola. In his career, Joshua has lived and worked in
Australia, China and the USA in senior roles and was named as one of the 50 most indispensable
people in media in the US by AdWeek (2018).
Joshua was appointed as a Non-Executive Director of Accent Group in November 2019 and is
the Chair of the Digital Strategy Group and a member of the Audit and Risk Committee.
Brett is one of Australia’s best known and most successful retailers and entrepreneurs. He is
the Chairman and Founder of BBRC, a private investment group with diverse global interests
across retail, capital management, retail property, beef, and other innovative ventures. BBRC’s
Retail presence extends to over 800 stores across more than 15 countries, and its Capital
Management business has offices in Sydney & New York.
Brett was re-appointed as a Non-Executive Director of Accent Group in April 2021.
Tim joined BBRC in September 2020 and serves as the Global CFO, covering all investments
and operations worldwide. Tim has over 30 years’ experience in financial and operational roles
across the banking, funds management, real estate and investment sectors, and has worked
in both publicly listed and private enterprises in Australia. Tim holds a Bachelor of Science
(First Class Honours) from Manchester University and is a Fellow of the Institute of Chartered
Accountants in England and Wales.
Tim was appointed as alternate director for Brett Blundy on 2 June 2021.
8. COMPANY SECRETARIES
The following persons were Company Secretaries of Accent Group during the whole of the financial year and up to the date of this report:
Name
Particulars
Matthew Durbin
Alethea Lee
Matthew is Group Chief Financial and Operations Officer, having had his role expanded during
2021 to have oversight of and responsibility for shared services of the Group. He is also a joint
Company Secretary. Matthew is a qualified accountant (FCPA) with 30 years’ experience in
retail. Prior to joining Accent Group, he was the CFO and COO of The PAS Group and has also
held executive roles with David Jones in strategy, financial services and merchandise planning.
Matthew joined Accent Group in November 2017 and was appointed as the joint Company
Secretary in January 2018.
Alethea is Group General Counsel and joint Company Secretary with over 15 years’ experience
in corporate governance, strategic corporate transactions, corporate advisory, and commercial,
consumer and competition law. Prior to joining Accent Group, Alethea held senior legal and
governance positions with Fairfax Media Limited and David Jones Limited.
Alethea joined Accent Group and was appointed as the joint Company Secretary in June 2021.
24
for the year ended 27 June 2021Directors’ ReportAccent Group Limited Annual Report 2021 9. BOARD COMPOSITION AND INDEPENDENCE
The Board recognises the importance of having Directors who possess the combined skills, expertise and experience to facilitate
constructive decision making and follow good governance processes and procedures.
The table below outlines the mix of skills and experience considered by the Board to be important for its Directors to collectively
possess. The Board considers that collectively it has an effective blend of these skills to enable it to discharge its duties and
effectively govern the business and add value in driving the Group’s strategy.
Skill
Description
Strategy and planning
Ability to think strategically and identify and critically assess opportunities and threats and
develop effective strategies in the context of changing market conditions.
Operations
A broad range of commercial and business experience in business systems, practices,
improvements, risk and compliance, sales, technology and human resources.
Capital markets and M&A
Expertise in considering and implementing efficient capital management including alternative
capital sources and distributions, yields and markets.
Experience in all aspects of the negotiation, structuring, risk management and assessment of
both acquisitions and divestments.
Finance
The ability to analyse financial statements and reporting, critically assess the financial performance
of the group, contribute to budget planning and efficient use of capital and resources.
Sales and marketing
Retail experience
(physical and digital)
People and performance
Clear understanding of retail selling and marketing, developing and implementing sales and
marketing teams and strategies, recruiting, running and incentivising sales teams, and setting
sales budgets and targets.
Experience and broad understanding of the physical and online retail footwear and apparel
industry, including market drivers, risks and trends including policies, competitors, end users,
regulatory policy and framework.
Appreciation for the best practices in HR planning and management with familiarity in
employment legislation and labour relations, recruitment, compensation, performance reviews
and conflict management.
Technology, data and privacy
Expertise in the area of technology that the group should be aware of and utilising, including
keeping abreast of new and emerging technology.
Governance, compliance and risk
management
Ability to identify key risks to the group in a wide range of areas including legal and regulatory
compliance and monitor risk and compliance management frameworks and systems.
Knowledge and experience in best practice ASX and Corporations Act, governance structures,
policies and processes.
Director independence
Daniel Agostinelli is a full-time executive and therefore not considered independent.
Of the remaining five non-executive Directors, four are considered by the Board to be independent – David Gordon, Donna Player,
Stephen Goddard and Joshua Lowcock.
Notwithstanding the tenure of Mr Gordon, the Board considers him to be independent and the Company is well served by
Mr Gordon’s deep understanding of Accent Group and its business as a result of his longer tenure. Given Mr Gordon’s tenure of over
10 years, the Board regularly assesses whether he has become too close to management to be considered independent. The Board
recently conducted such an assessment and reconfirmed Mr Gordon’s independence, on the basis that he is non-executive, not a
substantial shareholder, conducts himself at arm’s length in his engagement with the Company and brings his considerable skills
and knowledge to bear on matters before the Board. Mr Gordon’s approach to matters of the Board is always independent in both
appearance and in fact.
Mr Hapgood is a substantial shareholder in the Company and is therefore not considered to be independent. In addition, he is related
to two of the senior executives of the Company. However, as a non-executive director, Mr Hapgood is completely independent
from the day-to-day operations of the business and therefore able to bring clarity and independent thought to matters before the
Board. Due to his familial links with two executives, Mr Hapgood does not participate in any Board matters relating to management
remuneration other than the CEO.
Mr Blundy is a substantial shareholder and is therefore not considered to be independent. However, as a non-executive director, he
is completely independent from day-to-day operations of the business and therefore able to bring clarity and independent thought
to all matters before the Board. Mr Blundy draws on his considerable skillset to act in the best interests of the Company and its
shareholders.
25
Directors’ Reportfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 10. MEETINGS OF DIRECTORS
The following table sets out the number of Directors' meetings (committee meetings) held during the year ended 27 June 2021
and the number of meetings attended by the members of the Board or the relevant committee. During the financial year, 12 Board
Meetings (with the June 2021 meeting spanning two whole days), four Audit and Risk Committee meetings, five Remuneration and
Nomination Committee1 meetings, and two Digital Strategy Group2 meetings were held.
Directors have a standing invitation to attend meetings of Board committees of which they are not members. All Directors receive
copies of the agendas, papers and minutes of each Board committee meeting.
David Gordon
Daniel Agostinelli
Stephen Goddard
Michael Hapgood
Donna Player
Joshua Lowcock
Brett Blundy
Timothy Dodd
Full Board
Audit and Risk
Committee
Remuneration and
Nomination Committee
Digital Strategy
Group
Held
Attended
Held
Attended
Held
Attended
Held Attended
12
12
12
12
12
12
1
1
12
12
10
10
12
12
1
1
4
–
4
–
–
4
–
–
4
–
4
–
–
4
–
–
5
–
5
–
5
–
–
–
5
–
5
–
5
–
–
–
2
–
–
2
–
2
–
–
2
–
–
2
–
2
–
–
Held: represents the number of meetings held during the time the Director held office.
Given the continuing impact of the COVID-19 pandemic on the Company’s operations, the Board continued its increased level of commitment from FY20 into
FY21 with a number of additional Board meetings scheduled to enable the Board to guide the Company and management with decision-making during the
uncertain period.
11. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the Directors’ opinion, there have been no significant changes in the state of affairs of the Group during the year.
12. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
The lockdowns and government mandated store closures experienced in Victoria, South Australia, New South Wales, Queensland
and the Australian Capital Territory at various times across July and August have impacted sales in more than 350 stores, over 55%
of our store portfolio. Inclusive of this impact, like for like retail sales for the first 7 weeks of FY22 (including digital) were down -16%
to prior year. Digital sales continue to grow and over the last 3 weeks, with New South Wales and Victorian stores largely closed,
were up 66.7%.
The Company estimates that the group EBIT impact due to the COVID related disruption experienced across the months of July
and August will be at least -$15 million compared to management expectations prior to the lockdowns. This is the result of both lost
sales and the impact to gross margin of driving sales and ensuring that inventory levels are appropriately managed. The Company has
however implemented a range of inventory management and cost reduction initiatives.
Whilst the duration of the current lockdowns is unknown and we remain cautious on the near-term outlook, we expect this to have a
temporary impact on the trading environment. The company remains in a strong position with a flexible and resilient business model,
a database of 8.4 million contactable customers, a strong balance sheet and conservative gearing levels. The company continues to
invest for the future in new stores, digital capability and new business formats.
The health and wellbeing of our team and customers remains paramount, and the Company will continue to follow Government
health guidelines over the coming weeks and months. This could involve further restrictions in Australia and New Zealand,
impacting the Group’s operations.
There remains significant ongoing environmental uncertainty due to COVID-19, increasing risk and volatility and making future
outcomes hard to predict.
Additionally, on 28 June 2021, the Group increased its available debt facilities from $188.7 million to $218.7 million which is
associated with the acquisition of the assets of Next Athleisure Pty Ltd.
Apart from the dividend declared as disclosed in Note 25 and the matters described above, no other matters or circumstance has
arisen since 27 June 2021 that have significantly affected, or may significantly affect, the Group's operations, the results of those
operations, or the Group's state of affairs in future financial years.
1. The Board resolved to rename the Committee to the People and Remuneration Committee on 23 February 2021 and established a separate
Nomination Committee.
2. The Digital Strategy Group was established by the Board after the start of FY21, on 26 August 2020.
3. Like for like sales include TAF Franchises and exclude Glue store.
26
for the year ended 27 June 2021Directors’ ReportAccent Group Limited Annual Report 2021 13. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
All relevant future developments are outlined in the Chairman and Chief Executive Officer’s Report, Section 5 - Material Business Risks
of this report and Section 12 - Matters subsequent to the end of the financial year of this report.
14. ENVIRONMENTAL REGULATION
The Group is not involved in any activities that have a significant influence on the environment within which it operates.
The Directors are not aware of any material breaches of any particular or significant environmental regulation affecting the Group’s
operations during the financial year.
15. INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director or
executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of
the nature of the liability and the amount of the premium.
16. PROCEEDINGS ON BEHALF OF THE COMPANY
No proceedings have been brought or intervened in on behalf of the Company with the leave of the court under section 237 of
the Corporations Act 2001. No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party.
17. AUDITOR
Deloitte Touche Tohmatsu continues in office in accordance with section 327 of the Corporations Act 2001.
18. INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company
or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any
related entity.
19. NON-AUDIT SERVICES
As set out in Note 29 to the financial statements, the auditor did not provide any non-audit services to the Company during the
financial year.
20. OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF DELOITTE TOUCHE TOHMATSU
There are no officers of the Company who are former partners of Deloitte Touche Tohmatsu.
21. ROUNDING OF AMOUNTS
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
22. AUDITOR'S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 28.
27
Directors’ Reportfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 Auditor’s Independence Declaration
Deloitte Touche Tohmatsu
ABN 74 490 121 060
477 Collins Street
Melbourne VIC 3000
Tel: +61 3 9671 7000
Fax: +61 3 9671 7001
www.deloitte.com.au
The Board of Directors
Accent Group Limited
2/64 Balmain Street
Richmond, Victoria 3121
18 August 2021
Dear Board Members,
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo AAcccceenntt GGrroouupp LLiimmiitteedd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of
independence to the directors of Accent Group Limited.
As lead audit partner for the audit of the financial report of Accent Group Limited for the year ended 27 June 2021,
I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
David White
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
28
Accent Group Limited Annual Report 2021
Remuneration Report
FY2021 REMUNERATION REPORT
Letter from the Chair of the People and Remuneration Committee
Dear Shareholders,
On behalf of Accent Group, I am pleased to present the FY21 Remuneration Report outlining the Group’s remuneration strategy and
framework and decisions taken by the Board in relation to the remuneration of senior executives. This report sets out how the Board
has approached remuneration in the context of the ongoing challenges of the COVID-19 pandemic in Australia, the strategies and
initiatives taken by management to maintain profitability and growth in those circumstances, and the strong financial results achieved
in the FY21 year.
Over the past five years, Accent Group has achieved significant growth and transformation to become a regional leader in the retailing
and distribution of performance and lifestyle footwear. The Group operates over 600 stores across 26 different retail banners with
exclusive distribution rights for 18 international brands throughout Australia and New Zealand. Over this five-year period, EPS has
grown by 26.5% per annum compounding, and dividends have grown by 87.5% from 6.0 to 11.25 cents per share.
FY17 to FY21 DPS & EPS (Cents)
10.02
10.28
9.25
8.23
8.25
6.00
5.54
6.75
14.21
11.25
16
14
12
10
8
6
4
2
0
FY17
FY18
FY19
FY20
FY21
DPS
EPS
The results achieved in the FY21 year were delivered due to the continued focus and execution of the management team in
challenging circumstances and consistent with the Company’s long term growth strategy.
These efforts resulted in EBIT growing to $124.9 million, up 32.1% on the prior year, along with meaningful progress on our strategic
objectives, including the acquisition of the Glue Store retail business and wholesale and distribution brands business from Next
Athleisure Pty Ltd, opening 90 new stores, digital growth of 48.5% over the prior year, the launch of 4Workers and continued growth in
Stylerunner, The Trybe and Pivot.
Accent Group has continued to drive a people first strategy, and I am proud to report that with the strong trading performance and
the assistance of government wage subsidy funding, the Group continued to support all permanent employees at full employment
and full pay through the 14 separate lockdown/restriction periods that occurred across Australia and New Zealand in FY21.
These results translated into superior shareholder returns, with total dividends for the year increasing by 21.6% to 11.25 cents
per share.
The vesting of STI awards resulting from these results is discussed further in sections 2.4 and 2.5 of this Report.
29
Accent Group Limited Annual Report 202118 August 2021
Continuous improvement in remuneration practices
At the 2020 AGM, 44.93% of the votes received supported the adoption of the remuneration report for the year ended 28 June
2020. This excluded key management personnel, who represented 22.1% of the total issued capital.
The Company received feedback from shareholders and their advisors on a number of issues including the appropriateness of STI
vesting outcomes given the wage subsidies received, disclosure regarding the use of subsidies in the calculation of STI outcomes,
and the single metric approach (EPS only) in the LTI program.
The Board has considered the concerns raised and has taken action to increase the level of detail and transparency provided in the
Remuneration Report for FY21 and going forward. Specifically:
– Excluding the net benefit of all government wage subsidies received in the calculation of vesting outcomes for STI
– Continued enhanced disclosure regarding remuneration, particularly around the STI KPIs and how these are measured
– The introduction of strategic non-financial KPIs (20% of STI award) for FY21
The Board has also taken into consideration the feedback received concerning the single metric approach in the LTI program.
The Company has implemented a multi-metric approach in prior LTI schemes, but found that the complexity detracted from the
effectiveness of the scheme. Participants were unable to determine for themselves how their performance measured up against
the target until the calculation was done by experts after the end of the relevant period. Since implementing a single, EPS-only
methodology, management are able to calculate for themselves and monitor their performance against target regularly during the
period and the outcomes have been demonstrably better. Accordingly, the Board still considers a single metric program using EPS as
the measure to be the best approach for aligning management performance with shareholder value creation.
FY22 Remuneration
In March 2021, the Company completed and implemented a structural review of the executive key management personnel (KMP) and
senior executive team. This review resulted in the updated alignment of all the operating banners under a dedicated senior executive
reporting structure through to the Group Chief Executive Officer (CEO). In addition, the Group Chief Financial Officer role was
expanded to include both the role of Chief Financial and Operating Officer (CFOO), with accountability for all shared services functions.
To ensure appropriate and competitive remuneration for the FY22 year, the People and Remuneration Committee (PARCO) considered
the remuneration levels and structures for the CEO and CFOO, with reference to:
– changes in role
– external listed comparable remuneration benchmarks
– the competency and skillsets of the individuals and their performance over the long-term
– the scarcity of talent and the importance and value of retaining key executives
– changes in the complexity and geographical spread of the Company.
Consideration was also given to the significant growth the Company has experienced over the last two years, the freeze on
executive pay and directors’ fee for the FY21 year, and the 38.6% increase in Group net profit after tax in the FY21 year.
As a result of the review, fixed remuneration in FY22 for the CEO has been increased by 17.2% and by 18.2% for the CFOO,
effective from 1 July 2021. Fixed remuneration for the non-executive directors has been increased by 8%.
The structure of the FY21 STI incentive scheme was substantively modified to reflect feedback received from stakeholders, with
80% of the award linked to financial performance measures with a sliding scale of vesting and the inclusion of 20% of the award
based on the achievement of strategic non-financial KPI’s. The Board determined that given the strong results achieved in FY21
and improved feedback received from stakeholders, that the new STI structure was effective and would continue for FY22. In May
2021, the Company acquired Glue Store as a strategic acquisition to drive future growth. An additional incentive program relating
to the acquisition, successful integration and execution of the first 13-month strategic plan has been put in place for the CEO and
the CFOO. This was approved by the People and Remuneration Committee in August 2021. This program requires the successful
achievement of both financial and non-financial performance measures. If performance measures are met, maximum incentive
payments of $200,000 and $100,000 will be paid in cash to the CEO and CFOO post the release of the FY22 financial results.
In conclusion, I am pleased to present the Company’s FY21 Remuneration Report which includes significant additional disclosure
compared to prior years. The Company has achieved outstanding results in the last 12 months and the executive remuneration
set out in this report is considered by the Board to be reflective of this performance.
Yours faithfully,
David Gordon
Chairman of the People and Remuneration Committee
18 August 2021
30
Accent Group Limited Annual Report 202118 August 2021Remuneration Report
FY2021 REMUNERATION REPORT
1.
REMUNERATION OVERVIEW
1.1. Details of Management personnel (KMP)
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities
of the entire entity, directly or indirectly, including all Directors.
Executive Director
Daniel Agostinelli
Senior Executives
Matthew Durbin
Non-Executive Directors
David Gordon
Michael Hapgood
Stephen Goddard
Donna Player
Joshua Lowcock
Group Chief Executive Officer
Group Chief Financial and Operating Officer
Chairman
Director
Director
Director
Director
Brett Blundy (appointed 23 April 2021)
Director
Timothy Dodd – alternate Director for
Brett Blundy (appointed 2 June 2021)
Alternate Director
People and Remuneration Committee (PARCO) and Nomination Committee
1.2.
The Board has had an established a Remuneration and Nomination Committee (RNC) which operates under the delegated authority
of the Board of Directors. In February 2021, this structure was updated to better reflect the roles of the Committee and changing
needs of the business. This resulted in refocus and change of name of the RNC to the People and Remuneration Committee
(PARCO), and the establishment of a separate Nomination Committee. No change to membership of the renamed Committee was
made. The following Non-Executive Directors are members of PARCO:
Mr D Gordon
Independent Non-Executive Committee Chair
Mr S Goddard
Independent Non-Executive Director
Ms D Player
Independent Non-Executive Director
PARCO is authorised by the Board to obtain external professional advice, and to secure the attendance of advisers with relevant
experience and expertise when it considers this necessary.
The Group’s remuneration strategy is designed and implemented on behalf of the Board by PARCO. PARCO then makes
recommendations to the Board on matters relating to remuneration for the entities within the Group. PARCO considers recruitment,
retention and termination policies and procedures, non-executive Directors’ remuneration, executive Directors and senior
management remuneration and incentive policy and awards, and contractual arrangements with senior managers and executives.
More detail on the Company’s remuneration policy is provided in the Corporate Governance Statement.
The Nomination Committee comprises all of the Non-Executive Directors of the Company.
The Nomination Committee is charged with overseeing, monitoring and evaluating Board performance, ensuring appropriate
induction and professional development programs for directors, and succession planning. In addition to making recommendations to
the Board on the above, it is also responsible for recommending to the Board (once identified) the best-qualified candidates for the
Board of Directors.
Use of Remuneration Consultants
1.3.
Where PARCO determines it may benefit from external advice, it may engage directly with a remuneration consultant, who reports
directly to the Committee. In selecting a suitable consultant, the Committee considers potential conflicts of interest and requires
independence from the Group’s KMP as part of their terms of engagement.
In the FY21 year the Company engaged the services of Morrow Sodali to provide advice on remuneration matters, including the
structure of and disclosures within the Remuneration Report, as well as providing benchmarking of key management personal
remuneration to inform the outcomes on FY22 remuneration.
31
Accent Group Limited Annual Report 202118 August 2021Remuneration Report 1.4. Board Policies for Determining Remuneration
The Board understands that the performance of the Group is driven through the quality and motivation of its people, including
the CEO and executive team and the approximately 6,000 team members of the Group across Australia and New Zealand.
The Group’s remuneration strategy is designed to attract, motivate and retain high quality and high performing employees, while
ensuring that the interests of employees are in line with the interests of shareholders. Our strategy is guided by our vision to
be the leader in the performance and lifestyle footwear market across Australia and New Zealand, by delivering world-class
customer experiences, harnessing the power of our people, brands and products. The Board aims to achieve this by setting market
competitive remuneration packages that consist of a mix of fixed remuneration, short term incentives to reward annual performance
and long-term incentives that align to long term financial performance and shareholder value creation.
Our remuneration framework is guided by the key principles of alignment with:
– Delivery of long-term returns to shareholders through the delivery of sustainable sales and profit growth across the business
– Delivery of sustainable growth in dividends flowing from the strong cash flows from its defensible and desirable business
– Maintaining a strong, conservatively geared balance sheet
– Adherence to the Group’s Code of Conduct and Company values
– Encouraging a culture of equality and diversity
The Group’s remuneration reviews take place within three months of the end of each financial year. Prior to these reviews, the
CEO makes recommendations to PARCO regarding the remuneration of each of his direct reports and the overall remuneration
framework for all employees. PARCO meets to consider those recommendations, and also discusses and determines the
remuneration of the CEO.
2. REMUNERATION COMPONENTS
The key features of the Executive remuneration structure are outlined below:
Type of remuneration
Fixed remuneration
Short term incentive
Long term incentive
Total executive remuneration
Fixed
At risk
How is it set
Fixed remuneration is
set with reference to
market competitive rates
in comparative ASX listed
companies for similar
positions, adjusted to
account for the experience,
ability and productivity of
the individual employee
Senior executives
participate in the Group’s
STI plan which is tied
directly to the achievement
of profit growth, either for
the Group as a whole or a
relevant business unit or
both (as the case may be).
Refer to section 2.4 for
further details
How is it delivered
– Base salary
– Superannuation
– Other benefits
(e.g. motor vehicle)
– 100% cash
What is the objective
– Attract and retain key
– Drive annual
talent
– Be competitive
– Support workplace
equality
profit growth and
shareholder returns
– Reward value creation
over a one-year period
whilst supporting the
long-term strategy
– Incentivise desired
behaviours in line
with the Groups’ risk
appetite
32
The Company has
established a Performance
Rights Plan. There have
been a number of tranches
of performance rights
issued under the plan,
each requiring a target
achievement of 10% (or
greater) compounding
earnings per share
growth over the relevant
performance period.
Refer to section 2.5
for further details.
– Performance rights
that vest at the end
of the performance
period if vesting
conditions are met
– Support delivery of the
business strategy and
growth objectives
– Incentivise long-term
value creation
– Drive alignment
of employee and
shareholder interests
Accent Group Limited Annual Report 202118 August 2021Remuneration Report Link between financial performance, shareholder wealth and remuneration
2.1.
The Group’s executive remuneration is directly related to the performance of the Group, through the linking of incentives to certain
financial measures as detailed previously and shown below.
The financial performance of the Group and shareholder value creation over the last 5 years is also summarised in the table below.
FY17
FY18
FY19
FY20
(pre
AASB 16)
FY20 (post
AASB 16)
restated*
FY21
(post
AASB16)
Growth
YoY
CAGR
Last
5 years
Revenues ($'m)
(inc Franchisees and
Other Income)
EBITDA ($'m)
EBIT ($'m)
Net profit attributable
to the owners of the
Company ($'m)
EPS (cents)
Shareholder value
created:
636.1
703.2
75.9
44.5
29.2
5.54
88.8
64.7
44.0
8.23
796.8
108.9
80.6
830.1
121.7
87.2
53.9
58.0
10.02
10.73
830.1
202.9
94.5
55.5
10.28
993.8
242.0
124.9
76.9
14.21
19.7%
19.3%
32.1%
38.6%
38.2%
11.8%
33.6%
29.4%
27.4%
26.5%
Market capitalisation ($'m)
466.4
Enterprise value ($’m)
524.0
894.8
929.7
749.6
799.1
797.0
828.2
797.0
828.2
1,496.0
1,563.0
87.7%
88.7%
33.8%
31.4%
Movement in enterprise
value during the financial
year ($’m)
Dividends paid during
the financial year ($’m)
Closing Share Price ($)
DPS (cents)
(194.4)
405.7
(130.6)
29.1
–
734.8
–
–
32.6
0.86
6.00
32.6
1.65
6.75
44.7
1.39
8.25
48.8
1.47
9.25
48.8
1.47
9.25
65.0
2.76
11.25
33.4%
87.8%
21.6%
18.9%
33.8%
17.0%
*
FY20 results restated due to IFRIC agenda decisions on Software as a Service (“Saas”) accounting policy. Refer to Note 3 in the statutory financial
statements
33
Accent Group Limited Annual Report 202118 August 2021Remuneration Report
KMP remuneration and EPS over the last
5 financial years
The graph below shows the relationship between total
KMP remuneration and EPS over the past five years and
the relationship between KMP remuneration and Company
performance.
)
m
$
'
(
n
o
ti
a
r
e
n
u
m
e
R
M
P
K
6,500
5,500
4,500
3,500
2,500
1,500
500
-500
)
s
t
n
e
c
(
S
P
E
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
FY17
FY18
FY19
FY20
FY21
Fixed
STI
LTI
EPS
Notes:
–
The graph shows the aggregate total remuneration of the KMP team for
each year from FY17 to FY21, as set out in the Remuneration Report
each year (excluding payments made in FY18 in relation to one-off
retirement payments to a former CEO and CFO Group).
Company financial performance and share price
The effectiveness of the Company’s performance related
remuneration strategy is demonstrated by the strong
compound annual growth delivered in revenue, profit,
EPS and dividends over the last 5 years, and the relative
outperformance of the Company’s share price over the last
10 years, as shown below.
FY17 to FY21 Revenues ($m)
CAGR
11.8%
703
636
993.8
797
830
1,200
1,000
800
600
400
200
0
FY17 to FY21 EBIT ($m)
125
95
87
81
CAGR
29.4%
65
44
FY17
FY18
FY19
FY20
FY20
FY21
(pre
AASB 16)
(post
AASB 16)
(post
AASB 16)
FY17 to FY21 EPS (Cents)
CAGR
26.5%
14.21
10.02
10.73
10.28
8.23
5.54
FY17
FY18
FY19
FY20
FY20
FY21
(pre
AASB 16)
(post
AASB 16)
(post
AASB 16)
FY17 to FY21 DPS (Cents)
11.25
9.25
8.25
CAGR
17.0%
6.75
6.00
140
120
100
80
60
40
20
0
16
14
12
10
8
6
4
2
0
12
10
8
6
4
2
0
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
34
Accent Group Limited Annual Report 202118 August 2021Remuneration Report
The following chart demonstrates the outperformance of the Company’s share price relative to the ASX300.
)
1
X
A
o
t
d
e
s
a
b
e
R
,
A
$
(
e
c
i
r
P
e
r
a
h
S
3.50
3.00
2.50
2.00
1.50
0.50
0
345.2%
58.5%
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
AX1
ASX300
2.2. Remuneration Mix
The total remuneration for the executive KMPs comprises both fixed remuneration and at-risk components in STI and LTI. The mix
shown below indicates the potential remuneration based on the current remuneration as at 27 June 2021 with STI and LTI presented
at maximum or stretch opportunities.
Executive KMP
Daniel Agostinelli
Matthew Durbin
Fixed
Remuneration
33%
36%
STI
33%
28%
LTI
33%
36%
Total
100%
100%
33%
33%
36%
36%
Daniel
Agostinelli
Matthew
Durbin
33%
28%
Fixed
STI
LTI
Fixed
STI
LTI
35
Accent Group Limited Annual Report 202118 August 2021Remuneration Report
2.3. Fixed Remuneration
Fixed remuneration is set with reference to market competitive rates in comparative ASX listed companies for similar positions,
adjusted to account for the experience, ability and productivity of the individual employee. Fixed remuneration includes base salary
along with any fringe benefits to the employee and statutory superannuation contributions.
To ensure appropriate and competitive remuneration for the FY21 year, PARCO considered the remuneration levels and structures
for the CEO and CFOO with reference to:
– changes in role
– external listed comparable remuneration benchmarks
– the competency and skillsets of the individuals and their performance over the long term
– the scarcity of talent and the importance and value of retaining key executives
– changes in the complexity and geographical spread of the Company.
In respect of the FY21 year and as advised in the FY20 Remuneration Report, no increases in fixed remuneration were awarded to
the CEO or the CFOO. Irrespective of the strong performance of the Group in FY20, this was considered appropriate in the context
of the uncertainty surrounding the economic outlook due to the ongoing COVID-19 pandemic.
For the FY22 year, and in addition to the factors outlined above, consideration was given to the significant growth the Company
has experienced over the last two years, the freeze on executive pay and directors’ fee for the FY21 year, and the 38.6% increase in
the Group’s net profit after tax in the FY21 year. As a result of the review, FY22 fixed remuneration for the CEO has been increased
by 17.2% and by 18.2% for the CFOO effective from 1 July 2021. Fixed remuneration for the non-executive directors has been
increased by 8%.
2.4. STI Plan
Purpose and Objectives
The Group’s STI program is designed to drive the Company’s objective of delivering profit growth and shareholder returns, whilst
also ensuring the achievement of strategic objectives that are aligned with current and future profit growth. Senior executives have
a significant proportion of their STI tied directly to the achievement of profit growth, either for the Group as a whole or a relevant
business unit or both (as the case may be). All STI payments are also subject to an assessment by PARCO of individual non-financial
performance measures related to strategy implementation, leadership and behaviours consistent with the Group’s values and
corporate philosophy.
The Group believes that by implementing the STI program, KMP are best positioned to effectively carry out their duties in achieving
the strategic objectives of the company. The Group also expects KMP to continue to drive the values engrained within our culture
and Code of Conduct, acting in the best interests of shareholders and in turn resulting in greater success for the Group and aligning
Group and shareholder value creation moving forward.
36
Accent Group Limited Annual Report 202118 August 2021Remuneration Report Structure
The STI program in FY21 was structured as follows:
FY21 STI Plan Structure
Performance period
12 months
Opportunity
CEO – 100% of fixed remuneration
CFOO – 75% of fixed remuneration
How the STI is paid
Cash
Performance measures/KPIs
1. Underlying EBIT growth – 80%
2. Non-financial strategic objectives – 20%
Performance conditions
How is STI assessed?
What happens when a senior executive
ceases employment?
Malus and Clawback
Is there any STI deferral?
Financial Condition – 80% Weighting
– The Group’s underlying EBIT growth for the year (excluding any net benefit of wage
subsidies) must be 10% or greater for the maximum STI award to vest
– At 6% year on year EBIT growth, 50% of the maximum STI award vests with a linear
sliding scale up to 10% EBIT growth at which the maximum award vests
Strategic Objectives condition – 20% Weighting
– The STI award is also subject to achieving the following quantitative non-financial
strategic objectives.
– Continued digital and customer loyalty program growth
– Agreed milestones achieved for new businesses including Stylerunner, Pivot,
Trybe, 4Workers
– Team engagement milestones achieved
– New store opening budget and sales performance achieved
PARCO reviews the CEO’s performance against the performance targets and objectives
set for that year. The CEO assesses the performance of the senior executive team,
with the CEO having oversight of his direct reports and the day-to-day functions of the
Company.
The performance assessment of the CEO and other senior executives are reviewed by
PARCO and then recommended for Board approval.
If the senior executive’s employment is terminated for cause, no STI will be paid.
If the senior executive resigns or is considered a good leaver prior to the completion
of the performance period, the STI may be granted on a pro rata basis in relation to
the period of service completed, subject to the discretion of the Board and conditional
upon the individual performance of the senior executive.
In the event of serious misconduct or a material misstatement in the Group’s financial
statements, the Board may cancel the STI payment and may also claw back STI
payments paid in previous financial years, to the extent this can be done in accordance
with the law.
The STI awards are currently delivered fully in cash and vest at the end of the one-year
period, subject to the achievement of the performance conditions. The Board reviewed
the appropriateness of a deferral of a portion of the STI into equity during the year. The
Board determined that a deferral is currently not appropriate for the Group in light of
the size of the Group and the KMP team, as well as the CEO’s current equity ownership
in the Company consisting of 17,838,224 shares which represent 3.3% of issued capital
and an interest in a further 7,517,961 performance rights through the Performance
Rights Plan (PRP).
The Board is of the view the that objectives of a deferral (i.e. retention and risk
management) are currently satisfied through the KMPs’ participation in the PRP which
vests progressively between FY22-FY24 and existing share ownership.
37
Accent Group Limited Annual Report 202118 August 2021Remuneration Report STI outcomes FY211
The FY21 year has been a successful year for the Group with management delivering another year of record results, including
revenue2 (up 19.9%), EBIT (up 32.1%) and EPS (up 38.2%).
Financial Condition
The net impact of all government wage subsidies has been excluded from the underlying EBIT used to measure the vesting of the
STI financial condition.
EBIT growth
FY21 EBIT
Less. Wage subsidy received
Add. Subsidy paid directly to team members
(Amounts paid directly to team members not working)
FY21 Underlying EBIT
FY20 Underlying EBIT
Underlying EBIT Growth
32.1%
$124.9m
$24.5m3
$9.1m
$109.5m
$90.0m4
21.6%
Underlying EBIT growth achieved of 21.6% was in excess of the 10% growth required for the payment of 80% of the STI award.
Strategic Objectives
Based on the performance of the Company against the strategic objectives outlined below, the Board has determined that these
strategic objectives have been achieved, meeting the vesting condition for 20% of the FY21 STI award.
Objective
Outcomes
Achieved
Continued digital and customer loyalty program growth
Agreed milestones achieved for new business’s including
Stylerunner, Pivot, Trybe, 4Workers
Team engagement milestones achieved
New store opening budget and sales performance achieved
– Digital sales growth of 48.5%
– Growth in loyalty program members of
1.6m
– Launch of the Skechers loyalty program
– Stylerunner – 4 stores trading
– 4Workers – launched on time
– Trybe – 66.4% sales growth achieved
– Team engagement survey implemented
– 90 new stores opened
– New stores sales budget achieved
Y
Y
Y
Y
The table below sets out the performance of the CEO and CFOO in relation to the STI program:
Financial
Performance
target
CEO – Daniel Agostinelli
Target underlying
Group EBIT
Growth >10%
CFOO – Matthew Durbin Target underlying
Group EBIT
Growth >10%
Performance
outcome
Underlying EBIT
growth of 21.6%
Strategic
objectives
outcome
Achieved
Maximum STI
available
100% of fixed
remuneration
Underlying EBIT
growth of 21.6%
Achieved
75% of fixed
remuneration
Achievement*
FY20
FY21
100%
100%
100%
100%
* Achievement represents the amount achieved as a percentage of the maximum available
In addition, the Group delivered shareholder value in the following areas:
– Growth on every key performance metric, including sales, NPAT and EPS as outlined above.
– Growth in dividends of 21.6% on the previous year for the financial year ended 27 June 2021 with total FY21 dividends
of 11.25 cents per share fully franked.
1. Financial results are presented on a statutory basis and include the Next Athleisure (Glue store) acquisition for the period of ownership 30 May 2021-27
June 2021, unless otherwise noted.
2. Total revenues of $1.14b in FY21 (FY20: $948.9m) include the Athlete’s Foot Franchise sales
3. Refer to Note 7 in the statutory financial statements
4. FY20 underlying EBIT of $90m excludes a $2.8 million one-off non-cash impairment relating to the revaluation of certain assets due to the future
uncertainty arising from COVID-19
38
Accent Group Limited Annual Report 202118 August 2021Remuneration Report 2.5. LTI Plan
Purpose and Objectives
The Company has implemented an LTI program through the Performance Rights Plan (PRP). The objectives of this plan are:
– to drive long term value creation for shareholders
– to attract, motivate and retain key employees, and for them to share in the value created for all shareholders of the Company.
The PRP operates under the rules most recently approved by shareholders at the Company's 2019 Annual General Meeting.
As at 27 June 2021, 31,422,561 rights issued under the PRP were outstanding.
The current Tranches 2-4 of the PRP have a single performance measure and require the achievement of 10% compounding
earnings per share growth over the relevant performance period. The Board periodically evaluates the impact and relevance of this
performance measure and considers it to be effective in achieving the stated objectives since the plan has been successful in driving
outstanding performance since its inception in FY17, with compounding EPS growth p.a. of 26.5% achieved over the last 5 years.
Structure
During FY21, a new issue of Performance Rights was made (Tranche 5) with the structure set out below:
Performance/vesting period
Opportunity
Instrument
Performance metric
Vesting condition
Rationale for the performance metric
and condition
What happens when a KMP ceases
employment?
Malus and clawback
FY21 LTI Plan (Tranche 5) Structure
4 years from FY21-FY24 plus a one-year escrow period to the end of FY25 following
the completion of the performance period
– CEO – 100% of fixed remuneration
– CFOO – 100% of fixed remuneration
Performance Rights
Compound earnings per share (EPS) growth over 4 years
50% of award opportunity vesting at Threshold – 8% EPS growth
100% of award opportunity vesting at Target – 10% EPS growth
150% of award opportunity vesting at Stretch – 15% EPS growth
Straight line vesting occurs between 8% and 15%
No portion of an award will vest if compound EPS growth is less than 8%.
Awards are also subject to a service condition requiring the participant to remain
employed by the Group until the end of the vesting period (four years in total)
In consultation with shareholders, advisors and other market participants, and based on a
benchmark review of relevant ASX listed companies, the Board has determined that EPS
growth is a widely used and well understood indicator of company performance and a
long-term driver of shareholder value creation through the link to share price and dividend
growth.
Earnings per share growth represents a transparent and well understood metric for both
shareholders and management that is not subject to market outcomes but rather is a
direct outcome of the strategic and operational efforts of the management team over
time. EPS also incorporates all the aspects of the Company’s financial performance that
are within management’s control.
The Board has further determined that long-term EPS growth above 10% is in the top quartile
of historic performance for ASX200/300 companies over the last 10 years and is likely to be a
strong proxy for top quartile company performance for comparable companies.
If the KMP’s employment is terminated for cause, or due to resignation, all unvested
Performance Rights will lapse, unless the Board determines otherwise. In all other
circumstances, unless the Board decides otherwise, a pro-rata portion of the KMP’s,
calculated in accordance with the proportion of the performance period that has
elapsed, will remain on foot, subject to the performance condition as set by the Board.
If and when the Performance Rights vest, shares will be allocated in accordance with
the plan rules and any other condition of the grant.
In the event of fraud, dishonesty, gross misconduct, acts of harassment or
discrimination or a material misstatement or omission in the Company’s financial
statements, the Board may deem any unvested Performance Rights and/or any vested
and unexercised Performance Rights of the participant to have lapsed.
Dividends and voting rights
Performance rights do not confer on the holder any entitlement to any dividends or other
distributions by the Group or any right to attend or vote at any general meeting of the Group.
39
Accent Group Limited Annual Report 202118 August 2021Remuneration Report
Re-testing
Change of Control provision
LTI Outcomes FY21
FY21 LTI Plan (Tranche 5) Structure
Awards are tested once, at the end of the performance period of four years. There is no
further retesting of the performance conditions.
In the event of a Change of Control (including a takeover scheme or arrangement or
winding up of the company), Performance Rights automatically and immediately vest
from the date of the event in the proportion that the Group’s share price has increased
since the date of grant of the Performance Rights.
The Board may determine that all or a specified amount of the participant’s remaining
unvested Performance Rights automatically and immediately vest.
CEO & CFOO FY21 Remuneration Packages
PARCO recommended the issuance of Performance Rights under the PRP to the CEO and CFOO with a performance date of
September 2024 (Tranche 5 detailed above). This new issuance of Performance Rights to the CEO was approved by Shareholders
at the Company’s Annual General Meeting on 20 November 2020.
No performance rights vested in the FY21 year. In calculating the share-based payment expense for the year ended 27 June 2021
in respect of the LTI plans, it has been assumed that the stretch KPI targets will be met based on the Group’s performance to date
and its business plan. In calculating the LTI outcomes, the JobKeeper amounts received are not included in the calculations of EPS
growth. In respect of tranche 5 of the LTI plan, which is due to vest in FY24, no Jobkeeper funds are required to achieve the stretch
target of 15% (please refer to page 38 of the Remuneration Report for an underlying EBIT growth calculation in FY21).
CEO and CFOO Long Term Incentive
Employee Share Scheme (ESS)
The PRP replaced the Employee Share Scheme (ESS), which was implemented during the 2013 financial year. As at 27 June 2021,
200,000 shares issued under the ESS were outstanding.
2.6. Other Information
Key terms of executive employment contracts
The remuneration and other terms of employment of the CEO and CFOO are set out in individual employment contracts that are not
fixed term contracts.
Name
Notice period/termination payment
Daniel Agostinelli
Matthew Durbin
12 months’ notice by either party (or payment in lieu)
6 months’ notice by either party (or payment in lieu)
2.7. Non-Executive Directors Remuneration
On an annual basis, PARCO considers the fees payable to Non-Executive Directors. When considering the level of fees, the
Committee undertakes a review of benchmark fees paid by similar organisations and may access independent advice as well as
drawing on the knowledge and experience of its members. PARCO makes recommendations on Non-Executive Director fees to the
Board. Non-Executive Directors can choose, subject to certain restrictions, the amount of their fees allotted to superannuation.
The aggregate fee limit of $1,200,000 was approved by shareholders at the 2019 AGM. There was no increase to Non-Executive
Directors’ remuneration in FY21 and the fees remained at the levels set from 1 December 2019.
Non-executive directors were awarded a 10% pay increase that came into effect on 1 December 2019 in FY20. In addition, for
the period April and May 2020, the directors elected to reduce their fees by 25% for these months. The effect of this is that the
directors did not receive the full benefit of the increase in the FY20 year. The year-on-year increase in FY21 compared to FY20
(refer to Table 3.1) is an outcome of the 10% increase granted from 1 December 2019, and no additional increases were granted
up to and including FY21.
40
Accent Group Limited Annual Report 202118 August 2021Remuneration Report 3.
REMUNERATION OF KEY MANAGEMENT PERSONNEL
3.1.
Table of remuneration to KMP
Short-term benefits
Post
employment
benefits
Share–based
payments
Cash salary
and fees
$
Year
Cash
bonuses*
$
Other
monetary
$
Leave
benefits
$
Super–
annuation
$
Equity–
settled**
$
Total
$
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
250,000
231,164
107,991
99,401
110,399
99,382
100,457
96,802
110,000
59,583
20,778
78,333
–
–
–
40,906
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
25,000
21,961
10,259
9,443
–
–
9,543
4,446
–
–
–
–
–
–
–
3,886
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
275,000
253,125
118,250
108,844
110,399
99,382
110,000
101,248
110,000
59,583
20,778
78,333
–
–
–
44,792
2021
1,175,317 1,280,0004
2020 1,063,322
2021
494,862
1,280,000
412,5005
475,221
412,500
21,297
31,946
79,683
25,000
1,242,359
3,823,656
191,678
25,000
629,237
3,221,183
–
–
30,138
49,779
25,000
25,000
474,240
1,436,740
310,666
1,273,166
2,369,804 1,692,500
21,297
109,821
94,802
1,716,599 6,004,823
2,244,114
1,692,500
31,946
241,457
89,736
939,903
5,239,656
2020
2021
2020
Non-executive Directors
D Gordon
S Goddard
M Hapgood
D Player
J Lowcock
B Blundy
(appointed 23 April 2021)1
T Dodd
(appointed on 2 June 2021)2
S Kulmar (resigned
28 November 2019)
Executive Directors and
other KMP
D Agostinelli
M Durbin
TOTAL
*
Cash bonuses relate to STI bonuses issued on the basis of the achievement of relevant performance measures for the year ended 27 June 2021 and were
approved by PARCO and the Board in August 2021.
** Share based payments represent performance rights. The fair value of performance rights is measured at grant date and progressively allocated to profit
and loss over the vesting period. The amount included in remuneration above may not be indicative of the benefit (if any) that key management personnel
may ultimately realise should the performance rights vest.
1. Mr Blundy resigned from the Board on 12 May 2020 and entered into an agreement to provide advisory services to the Group. He was re-appointed as a
non-executive director to the Board on 23 April 2021.
2. Mr Dodd was appointed as alternate director for Brett Blundy.
3. Mr Kulmar resigned as alternate director for Brett Blundy.
4. Mr Agostinelli’s cash bonus is equal to 100% of his fixed pay, comprising cash salary and fees, superannuation and leave benefits.
5. Mr Durbin’s cash bonus is equal to 75% of his fixed pay, comprising cash salary and fees, superannuation and leave benefits.
41
Accent Group Limited Annual Report 202118 August 2021Remuneration Report 3.2. Performance Rights Plan (PRP)
The table below sets out the details of all Performance Rights for unvested plans issued under the Company’s PRP:
Issue
Number
of Rights
Grant Date Vesting Date
condition % Achieved
Vesting
Number
of rights
exercised
Number
of rights
cancelled
Current
balance
Tranche 2
23,800,000
3 Oct 17 to
20 Jun 18
1 Sep 22
EPS hurdle1
Tranche 3
Tranche 4
1,684,863
30 Nov 19
1 Sep 22
EPS hurdle2
3,577,253
30 Nov 19
1 Jul 24
EPS hurdle1
To be
determined
To be
determined
To be
determined
0 (3,900,000)3
19,900,000
15,000
(102,484)4
1,597,379
107,659
(322,981)4
3,361,931
Tranche 5
0
18 Nov 20
1 Sep 24 EPS hurdle –
sliding scale
To be
determined
6,645,416
(82,165)
6,563,251
Total
29,062,116
6,768,075 (4,407,630)
31,422,561
1 The EPS hurdle for Tranches 2 and 4 is an annual growth in adjusted diluted earnings per share of at least 10% p.a. over the relevant performance period
Tranche 3 was issued in FY20 and did not include any rights issued to KMPs. Tranche 3 participants were not included in Tranche 2, and the EPS hurdles
2
and vesting of these two tranches are aligned.
3 Number of rights cancelled includes unvested portion and rights of departed employees
4 Number of rights cancelled represents rights of departed employees
Performance rights of the CEO and CFOO
The Performance Rights of the CEO and CFOO under the PRP are set below:
CEO – Daniel Agostinelli
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 5
TOTAL
CFOO – Matthew Durbin
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 5
TOTAL
Balance as at
28 June 2020
Granted
during the
year
Vested
during the
year
Forfeited
during the
year
Balance as at
27 June 2021
Value at
grant date
–
5,500,000
–
795,031
–
–
–
–
1,222,930
6,295,031
1,222,930
–
3,000,000
–
341,615
–
3,341,615
–
–
–
–
525,478
525,478
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,500,000
$3,060,156
–
–
795,031
$1,056,119
1,222,930
$1,638,692
7,517,961
$5,754,967
–
–
3,000,000
$1,583,750
–
–
341,615
$453,801
525,478
$704,126
3,867,093
$2,741,677
Refer to section 2.2 above for the proportion of the CEO and CFOO’s remuneration that represents the PRP allocation for the year
ended 27 June 2021.
42
Accent Group Limited Annual Report 202118 August 2021Remuneration Report
3.3. Employee Share Scheme (ESS)
Unvested ordinary shares of Accent Group Limited under the ESS at the date of this report are as follows:
Grant date
02/03/2016
Expiry date
Exercise
price
Number
under option
28/02/2022
$1.49
200,000
200,000
4. SHAREHOLDINGS OF KMP
The number of shares in the Company held during the financial year by each Director and other members of key management
personnel of the Group, including their related parties, is set out below:
Name
Daniel Agostinelli
Matthew Durbin
David Gordon
Stephen Goddard
Donna Player
Michael Hapgood
Joshua Lowcock
Brett Blundy
Timothy Dodd
TOTAL
Additions
Disposals
Balance at
start of year*
17,838,224
90,000
2,599,034
50,000
50,000
10,000,000
–
–
–
–
–
–
Balance at
end of year
17,838,224
90,000
2,599,034
50,000
50,000
–
–
–
–
–
(2,500,000)
7,500,000
3,105
15,000
98,542,751
8,141
–
–
–
–
–
18,105
98,542,751
8,141
129,181,255
15,000
(2,500,000) 126,696,255
*
Balance at the start of the year' is balance as at date of appointment for Directors appointed during the financial year and excludes the balance of Directors
who resigned during the year (see below).
This Directors’ Report and Remuneration Report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a)
of the Corporations Act 2001.
On behalf of the Directors
David Gordon
Chairman
18 August 2021
43
Accent Group Limited Annual Report 202118 August 2021Remuneration Report
Statement of Profit or Loss and Other Comprehensive Income
for the year ended 27 June 2021
Revenue
Interest revenue
Expenses
Cost of sales
Distribution
Marketing
Occupancy
Employee expenses
Other
Depreciation, amortisation and impairment
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity, net of tax
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit for the year is attributable to:
Owners of Accent Group Limited
Total comprehensive income for the year is attributable to:
Owners of Accent Group Limited
Basic earnings per share
Diluted earnings per share
Note
6
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
Restated
992,754
829,805
997
1,251
(425,079)
(356,419)
(37,959)
(31,085)
(44,500)
(32,615)
(11,059)
(13,349)
(186,002)
(153,103)
(46,140)
(40,363)
(117,110)
(108,334)
(14,903)
(15,696)
110,999
80,092
(34,076)
(24,575)
76,923
55,517
(6,480)
6,725
245
2,692
628
3,320
77,168
58,837
76,923
76,923
55,517
55,517
77,168
77,168
Cents
14.21
13.66
58,837
58,837
Cents
10.28
9.90
7
7
7
8
38
38
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
4444
Accent Group Limited Annual Report 2021 Statement of Financial Position
as at 27 June 2021
Consolidated
Note
27 Jun 2021
$'000
28 Jun 2020
$'000
Restated
9
10
11
13
14
15
11
16
12
17
18
19
20
21
22
12
20
19
21
22
12
23
24
34,084
39,732
54,912
33,264
216,881
129,106
9,300
4,808
8,811
4,507
304,805
230,600
115,527
271,348
16,993
90,282
232,998
17,074
372,723
365,038
81
-
30,699
19,546
807,371
724,938
1,112,176
955,538
149,446
8,784
19,218
40,000
106,811
2,622
13,282
93,735
4,228
14,217
15,000
78,461
3,627
25,311
340,163
234,579
659
4,208
61,125
1,575
2,864
71,125
277,015
236,882
26
343,033
683,196
428,980
–
312,446
547,025
408,513
390,616
389,600
26,024
12,340
18,472
441
428,980
408,513
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Lease receivable
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Lease receivable
Intangibles
Derivative financial instruments
Net deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Deferred revenue
Provisions
Borrowings
Lease liabilities
Derivative financial instruments
Provision for income tax
Total current liabilities
Non-current liabilities
Provisions
Deferred revenue
Borrowings
Lease liabilities
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
The above statement of financial position should be read in conjunction with the accompanying notes
45
Accent Group Limited Annual Report 2021 Statement of Changes in Equity
for the year ended 27 June 2021
Consolidated
Foreign
currency
translation
reserve
$'000
Hedging
reserve - cash
flow
hedges
$'000
Share-based
payments
reserve
$'000
Issued
capital
$'000
Retained
earnings
$'000
Total equity
$'000
Balance at 1 July 2019
388,756
2,159
1,991
8,997
1,434
403,337
Transition adjustment on adoption of
AASB 16
Restatement due to change in
Accounting Policy (Note 3)
–
–
–
–
(7,217)
(7,217)
Balance at 1 July 2019 – restated
388,756
2,159
1,991
8,997
Profit after income tax expense for
the year
Other comprehensive income for the
year, net of tax
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Share-based payments
Treasury share payments
Dividends paid (Note 25)
–
–
–
–
844
–
–
628
628
–
–
–
–
2,692
2,692
–
–
–
(532)
(6,315)
(532)
395,588
55,517
55,517
–
55,517
3,320
58,837
–
–
–
2,005
–
–
–
–
2,005
844
(48,761)
(48,761)
Balance at 28 June 2020 - restated
389,600
2,787
4,683
11,002
441
408,513
Consolidated
Foreign
currency
translation
reserve
$'000
Hedging
reserve - cash
flow
hedges
$'000
Share-based
payments
reserve
$'000
Issued
capital
$'000
Retained
earnings
$'000
Total equity
$'000
Balance at 29 June 2020 - restated
389,600
2,787
4,683
11,002
441
408,513
Profit after income tax expense for the
year
Other comprehensive income for the
year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Share-based payments
Treasury share payments
Dividends paid (Note 25)
Balance at 27 June 2021
–
–
–
–
1,016
–
–
–
6,725
6,725
(6,480)
(6,480)
–
–
–
76,923
76,923
–
245
76,923
77,168
–
–
–
–
–
–
7,307
–
–
–
–
(65,024)
12,340
7,307
1,016
(65,024)
428,980
390,616
9,512
(1,797)
18,309
The above statement of changes in equity should be read in conjunction with the accompanying notes
46
Accent Group Limited Annual Report 2021 Statement of Cash Flows
for the year ended 27 June 2021
Cash flows from operating activities
Receipts from customers and franchisees (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other finance costs paid
Interest on lease liabilities
Cash received from settlement of derivative financial instruments
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payment for purchase of businesses, net of cash acquired
Payments for property, plant and equipment
Payments for intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares, net of transaction costs
Proceeds / (Repayments) from borrowings, net
Payment of lease liabilities
Dividends paid
Net cash used in financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
Consolidated
Note
27 Jun 2021
$'000
28 Jun 2020
$'000
Restated
1,102,053
899,704
(876,050)
(711,611)
61
(2,614)
(10,814)
–
258
(4,834)
(9,564)
17,061
(53,227)
(12,323)
159,409
178,691
(12,996)
(26,241)
(5,430)
(44,667)
1,016
15,000
(86,806)
(65,024)
(8,953)
(19,233)
(4,093)
(32,279)
844
–
(79,836)
(48,761)
(135,814)
(127,753)
(21,072)
54,912
244
18,659
36,698
(445)
34,084
54,912
37
34
16
25
The above statement of cash flows should be read in conjunction with the accompanying notes
47
Accent Group Limited Annual Report 2021 Notes to the Financial Statements
NOTE 1. GENERAL INFORMATION
The financial statements cover Accent Group Limited ('Company', 'parent entity' or 'Accent') as a Group consisting of Accent Group
Limited and the entities it controlled at the end of, or during, the year ('Group'). The financial statements are presented in Australian
dollars, which is Accent's functional and presentation currency.
Accent is a listed public company limited by shares, listed on the Australian Securities Exchange (‘ASX’), incorporated and domiciled in
Australia. Its registered office and principal place of business is:
2/64 Balmain Street
Richmond VIC 3121
A description of the nature of the Group's operations and its principal activities are included in the Directors' Report, which is not
part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 18 August 2021. The directors
have the power to amend and reissue the financial statements.
NOTE 2. BASIS OF PREPARATION
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board ('IASB').
The financial statements have been prepared under the historical cost convention, except for, where applicable, derivative financial
instruments which have been fair valued at balance date and share-based payments which have been measured at fair value at grant
date.
Net current liabilities
As at 27 June 2021, the Group has net current liabilities of $35,357,933 (28 June 2020: $3,978,457). This is primarily due to the
adoption of AASB16 Leases from 1 July 2019 onwards which has resulted in the Group reporting $383,826,796 of lease liabilities,
(28 June 2020: $315,343,566) of which $106,811,460 (28 June 2020: $78,461,275) has been classified within current liabilities
based on the timing of future lease payments. Excluding the impact of AASB16, the Group would be in a net current asset position
of $44,568,447 (28 June 2020: $55,439,400). The financial statements have been prepared on the going concern basis, which
contemplates the continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary
course of business. The Group's cash position as at 27 June 2021 is $34,084,239 (28 June 2020: $54,911,914). In addition, the
Group has undrawn finance facilities of $68,950,000 (28 June 2020: $95,700,000) as disclosed in Note 21. The Group generated
net cash from operating activities of $159,409,000 (28 June 2020: $178,691,000) and net profit after taxation of $76,923,000 for
the year ended 27 June 2021 (28 June 2020: $55,517,000). Taking into account all of the above factors, the directors are confident
that the Group will be able meet its liabilities as they fall due.
Critical accounting estimates
The preparation of consolidated financial statements requires the Group to make estimates and judgements that affect the
application of policies and reported amounts. The estimates which could cause a significant risk of causing a material adjustment
to the carrying amount of assets and liabilities within the next 12 months are disclosed in the following notes:
– Note 10
– Note 15
– Note 16
– Note 34
Inventories
Right-of-use-assets
Intangibles
Business combinations
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Accent Group Limited as at
27 June 2021 and the results of all subsidiaries for the year then ended. A list of subsidiaries at year end is contained in Note 35.
Supplementary information about the parent entity is disclosed in Note 33.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profits and
losses resulting from intragroup transactions have been eliminated. Subsidiaries are consolidated from the date on which control is
obtained to the date on which control is disposed. The acquisition of subsidiaries is accounted for using the acquisition method of
accounting.
If the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in
the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the
income statement.
48
for the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 2. BASIS OF PREPARATION (CONTINUED)
Foreign operations
The functional currencies of overseas subsidiaries are listed in Note 35. The assets and liabilities of overseas subsidiaries are
translated into Australian dollars at the rate as at reporting date and the income statements are translated at the average exchange
rates for the year. The exchange differences arising on the retranslation are taken directly to a separate component of equity.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Comparatives have been reclassified where appropriate to ensure consistency and comparability with the current period.
NOTE 3. RESTATEMENT OF COMPARATIVES
Reclassification of Intangible Assets
The Group has re-presented the balance sheet for the reclassification of software development costs previously disclosed
as property, plant and equipment to intangible assets to provide more reliable and relevant information. Refer below for the
restatement of historical financial information as a result of this reclassification. This has no net impact on the statement of financial
position.
Change in accounting policy – Software as a Service arrangements
The IFRS Interpretations Committee (IFRIC) has issued two agenda decisions related to accounting for Software-as-a-Service (SaaS)
arrangements:
– In March 2019, the IFRIC considered the accounting for SaaS arrangements (the first agenda decision) and concluded that for
many such arrangements the substance is that the entity has contracted to receive services rather than the acquisition (or lease)
of software assets. This is because, in a cloud-based environment, the SaaS contract generally only gives the customer the right
to receive access to the cloud provider’s application software, rather than a license over the IP i.e. control over the software code
itself.
– In April 2021, the IFRIC specifically considered how an entity should account for configuration and customisation costs incurred
in implementing these (SaaS) service arrangements. The IFRIC concluded (the second agenda decision) that these costs should be
expensed, unless the criteria for recognising a separate asset are met.
As a result, the Group has revised its accounting policy to reflect the IFRIC agenda decision relating to SaaS. Previously, the Group
capitalised certain upfront configuration and customisation costs incurred in implementing SaaS arrangements. The adoption of the
above agenda decisions has resulted in a reclassification of these intangible assets to an expense in the Statement of Comprehensive
Income, impacting both the current and prior periods presented.
Note 40 describes the Group’s accounting policy in respect of customisation and configuration costs incurred in implementing SaaS
arrangements. In applying the Group’s accounting policy, the directors made the following key judgements that may have the most
significant effect on the amounts recognised in financial statements.
Classification of configuration and customisation costs as SaaS or Platform as a Service (PaaS)
The IFRIC agenda decision above does not address the accounting for other components of cloud technology such as PaaS
arrangements, however the Group applied the same principles in considering the nature of historical costs of implementing
cloud-based technology and identified the costs related to a combination of SaaS and PaaS. The Group have appropriately
applied the new guidance retrospectively where adjustments were required resulting from the change in the Group’s
accounting policy for costs incurred in implementing cloud-based arrangements.
Capitalisation of configuration and customisation costs in SaaS arrangements
Part of the customisation and configuration activities undertaken in implementing SaaS arrangements may entail the development of
software code that enhances or modifies, or creates additional capability to the existing on-premise software to enable it to connect
with the cloud-based software applications (referred to as bridging modules or APIs). Judgement was applied in determining whether
the additional code meets the definition of and recognition criteria for an intangible asset in AASB 138 Intangible Assets.
49
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 3. RESTATEMENT OF COMPARATIVES (CONTINUED)
Historical financial information has been restated to account for the impact of the change in accounting policy and reclassification of
software from property plant and equipment to intangible assets, as follows:
Statement of financial position at the beginning of the earliest comparative period
Assets
Non-current Assets
Property Plant and Equipment
Intangibles
Net deferred tax assets
Total non-current assets
Total assets
Net assets*
Retained Earnings*
Total Equity
Consolidated
1 July 2019
$’000
$’000
$’000
1 July 2019
$’000
Previously
Reported
Intangibles
Reclass
Adjustment
Accounting
Policy
Change
Adjustment
(SaaS)
86,167
352,893
13,236
452,296
656,053
396,120
(5,783)
396,120
(5,049)
5,049
–
–
–
–
–
–
–
(759)
227
(532)
(532)
(532)
(532)
(532)
Restated
81,118
357,183
13,463
451,764
655,521
395,588
(6,315)
395,588
* Reported balance includes the transition adjustment on adoption of AASB 16.
Statement of financial position at the end of the earliest comparative period
Assets
Non-current Assets
Property Plant and Equipment
Intangibles
Net deferred tax assets
Total non-current assets
Total assets
Net assets
Retained Earnings
Total Equity
Consolidated
28 June 2020
$’000
$’000
$’000
28 June 2020
$’000
Previously
Reported
Intangibles
Reclass
Adjustment
Accounting
Policy
Change
Adjustment
(SaaS)
Restated
97,732
358,583
19,248
725,635
956,235
409,210
1,138
409,210
(7,450)
7,450
–
–
–
–
–
–
(995)
298
(697)
(697)
90,282
365,038
19,546
724,938
955,538
(697)
408,513
(697)
(697)
441
408,513
50
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 3. RESTATEMENT OF COMPARATIVES (CONTINUED)
Statement of profit or loss and other comprehensive income
Consolidated
28 June 2020
$’000
$’000
28 June 2020
$’000
Accounting
Policy
Change
Adjustment
(SaaS)
274
(510)
(236)
71
(165)
Previously
Reported
(108,608)
(39,853)
80,328
(24,646)
55,682
Restated
(108,334)
(40,363)
80,092
(24,575)
55,517
28 June 2020
$’000
Previously
Reported
(733,194)
–
166,672
(23,836)
–
(32,789)
(67,307)
(115,224)
Consolidated
$’000
$’000
$’000
Intangibles
Reclass
Adjustment
Accounting
Policy
Change
Adjustment
(SaaS)
Lease
Liability
payments
reclass*
28 June 2020
$’000
Restated
–
–
–
4,603
(4,603)
–
–
–
(510)
–
(510)
–
510
510
–
–
22,093
(711,611)
(9,564)
(9,564)
12,529
178,691
–
–
–
(12,529)
(12,529)
(19,233)
(4,093)
(32,279)
(79,836)
(127,753)
Expenses
Depreciation amortisation and impairment
Other expenses*
Profit before tax
Income tax expense
Profit after income tax expense for the year
* Other expenses includes IT costs.
Statement of cash flows
Payments to suppliers and employees
Interest on lease liabilities
Net cash generated by operating activities
Payments for property, plant and equipment
Payments to acquire intangible assets
Net cash used in investing activities
Payment of lease liabilities
Net cash used in financing activities
*
Further to the above restatements, the Group also restated its prior year cashflow which resulted in a reclassification between operating activities and
financing activities associated with the payment of lease liabilities.
NOTE 4. NEW OR AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED
In the current year, the Group has adopted all of the following new and revised Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board ('AASB') that are relevant to its operations and mandatory for the current annual
reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the
Group include:
– AASB 2018-6 Definition of a Business
– AASB 2018-7 Definition of Material
– AASB 2019-1 Conceptual Framework for Financial Reporting
– AASB 2019-3 Interest Rate Benchmark Reform
– AASB 2019-5 Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia
– AASB 2020-4 Covid-19 Related Rent Concessions
Except for the adoption of AASB 2020-4, the above standards and interpretations have not led to any changes to the Group's
accounting policies or had any other material impact on the financial position or performance of the Group.
51
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 4. NEW OR AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED (CONTINUED)
COVID-19 related rent concessions
In April 2021 the AASB issued AASB 2021-3 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions
beyond 30 June 2021 which extends the practical expedient by one year to cover rent concessions that reduce only lease payments
due on or before 30 June 2022. The amendment is effective for annual reporting periods beginning on or after 1 April 2021 but
earlier application is permitted, including in financial statements not authorised for issue at 31 March 2021.
During the year, the Group received COVID-19 related rental concessions. The Group has adopted the practical expedient for rental
concessions allowing the Group to elect not to account for changes in leases payments as a lease modification where the following
conditions were met:
– The change in lease payments were substantially the same or less than the payments prior to the rental concession;
– The reductions only affect payments which fall due before 30 June 2022; and
– There has been no substantive change in the terms and conditions of the lease.
The practical expedient has been applied to leases that have executed agreements in place as at 27 June 2021. For independent
landlords, the Group has applied the practical expedient to written agreements in conjunction with the lessor’s acceptance of a
lower rent payment. The Group considers the amendment to the lease contract as enforceable as both parties were committed to
performing their obligations as at 27 June 2021.
The treatment of the rental concessions was dependent on the events that trigger the concession. The Group had rent concessions
which were entirely unconditional and rent concessions which remained conditional on other factors, predominantly future sales.
For unconditional rent concessions, the Group recognised the present value of the rent concession in the profit and loss on the date
the change in terms was agreed. For conditional rent concessions the Group recognised the benefit in the profit and loss and the
corresponding reduction in the lease liability on the date the trigger for the conditional rent concession occurred.
The Group has negotiated $19,556,381 of COVID-19 rental concessions. Of the total, $7,630,788 met the conditions of the practical
expedient in the year ended 28 June 2020, with an additional $8,689,657 being recognised in the year ended 27 June 2021, as a
reduction in occupancy expense. The remaining $3,235,936 has been treated as a lease modification upon execution of new lease
agreements resulting in a reduction in the lease liability and corresponding right of use asset.
These rental concessions recognised in the 2021 financial year partially offset the sales impact of mandated store closures in
Melbourne, regional Victoria, Auckland, Adelaide, Brisbane and Perth.
NOTE 5. OPERATING SEGMENTS
The Group is required to determine and present its operating segments based on the way in which financial information is organised
and reported to the chief operating decision-makers (CODM’s). The CODM’s have been identified as the Board of Directors on the
basis they make the key operating decisions of the Group and are responsible for allocating resources and assessing performance.
Key internal reports received by the CODM’s, primarily the management accounts, focus on the performance of the Group as a
whole. The CODM’s assess the performance of the Group based on a measure of EBIT (earnings before interest and tax) prior to the
impact of AASB 16 Leases and non-operating intercompany charges.
The Group has considered its internal reporting framework, management and operating structure and the Directors’ conclusion is
that the Group has one operating segment.
The Group’s New Zealand operations generated revenue in excess of 10% of the total Group’s revenue. As a result, the Group
recognises two geographical areas, Australia and New Zealand.
The following is an analysis of the Group’s revenue and non-current assets. The geographical split for intangible assets is not
available and has not been disclosed.
27 June 2021
28 June 2020 (Restated)
Australia
$'000
New Zealand
$'000
Group
$'000
Australia
$'000
New Zealand
$'000
Group
$'000
Sales to customers
844,107
123,648
967,755
720,504
86,588
807,092
Other geographical information
Additions to property, plant and
equipment
49,464
7,077
56,541
28,480
8,016
36,496
52
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 6. REVENUE
Sales revenue
Sales to customers
Royalties and other franchise related income
Other revenue
Marketing levies received from TAF stores
Other revenue
Revenue
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
967,755
807,092
13,924
12,200
981,679
819,292
8,928
2,147
7,620
2,893
11,075
10,513
992,754
829,805
Recognition and measurement
The major sources of the Group’s revenue are from sales to customers, royalties and other franchise related income received from
TAF stores. The Group’s revenue is principally generated on a ‘point in time’ basis.
Sales to customers
Sales to customers of goods comprise the sale of branded performance and lifestyle footwear to customers outside the Group less
discounts, markdowns, loyalty scheme vouchers and an appropriate deduction for actual and expected returns. Sales to customers
is stated net of tax. Revenue is recognised when performance obligations are satisfied, goods are delivered to the customer and the
control of goods is transferred to the buyer.
Gift cards are considered a prepayment for goods to be delivered in the future. The Group has an obligation to transfer the goods
in the future, creating a performance obligation. The Group recognises deferred revenue when the gift card is purchased and
recognises revenue when the customer redeems the gift card and the Group fulfills the performance obligation.
Royalties and other franchise related income
Franchise royalty fee income is generally earned based upon a percentage of sales that has occurred and is recognised on an
accrual basis.
Franchise establishment fees are recognised as income over the term of the Franchise Agreement. Franchise establishment fees are
recognised on an ‘over time’ basis.
Marketing levies
Marketing levies are recognised in the period the sales are recorded by TAF stores. Marketing levies are collected by the Group
for specific use within the TAF Marketing Fund, which is operated on behalf of the TAF network. Expenses in relation to the
marketing of TAF stores are recorded within advertising and promotion expenses in profit or loss. In any given year, a deficit in the
marketing fund will need to be recouped in the following year and any surplus in the marketing fund will need to be spent in the
subsequent year.
53
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 7. EXPENSES
Profit before income tax includes the following specific expenses:
Depreciation
Right of use assets
Plant and equipment
Total depreciation
Amortisation
Licence fee
Distribution rights
Re-acquired rights
Software
Total amortisation
Impairment of assets
Impairment charge – right of use assets
Impairment charge / (reversal) – property, plant and equipment
Total impairment
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
Restated
78,415
31,378
74,169
26,860
109,793
101,029
32
2,323
160
2,723
5,238
2,163
(84)
2,079
32
2,323
258
1,928
4,541
2,584
180
2,764
Total depreciation, amortisation and impairment
117,110
108,334
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Leases
Variable lease payments
3,153
11,750
14,903
3,920
11,776
15,696
24,739
23,833
During the year, the Group recognised $8,689,657 (2020: $7,630,788) of COVID-19 related rental
concessions from landlords. These concessions are included as a reduction in occupancy expense in
the statement of profit or loss.
Share-based payments expense
7,307
2,005
Employee expenses
Government wage subsidies are recorded as a reduction in employee expenses on the statement of profit or loss.
During the year, the Group received government grants under the JobKeeper program of $24,513,000 for the period July 2020 to
September 2020. The Group did not apply for, nor was it eligible to receive, the JobKeeper extension for the period beyond the end
of September.
All of the JobKeeper funds of $24,513,000 received, were deployed throughout the financial year and had been fully utilised by
July 2021 to keep team members employed during the various government mandated store closures due to COVID-19 related
lockdowns.
54
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 8.
INCOME TAX EXPENSE
Income tax expense
Current tax
Deferred tax
Adjustment recognised for prior periods
Aggregate income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
Share-based payments
Impairment
Sundry items
Adjustment recognised for prior periods
Difference in overseas tax rates
Income tax expense
Amounts recognised directly to equity
Adoption of AASB 16 Leases
Tax effect of hedges in reserves
Change in accounting policy (refer Note 3)
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Capital losses
Total deferred tax assets not recognised
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
Restated
42,087
(7,098)
(913)
29,752
(4,594)
(583)
34,076
24,575
110,999
33,300
80,092
24,027
24
2,192
–
(120)
35
601
723
30
35,396
25,416
(913)
(407)
(583)
(258)
34,076
24,575
–
(318)
–
(318)
3,145
1,941
227
5,313
7,199
7,199
7,199
7,199
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been recognised in the
statement of financial position as the recovery of this benefit is uncertain.
Recognition and measurement
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation authorities at the tax
rates and tax laws enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is accounted for using the balance sheet liability method, providing for temporary differences between the carrying
amounts of assets and liabilities under financial reporting and taxation purposes. Deferred tax is measured at the rates that are
expected to apply in the period in which the liability is settled or asset realised, based on tax rates enacted or substantively enacted
at the reporting date.
Deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a
business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit or in
relation to the initial recognition of goodwill.
55
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 INCOME TAX EXPENSE (CONTINUED)
NOTE 8.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
deductible temporary differences or unused tax losses and tax offsets can be utilised. Deferred tax assets are reduced to the extent
that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
Tax consolidation
Accent Group Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their
own current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in
determining the appropriate amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable
from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge
equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head
entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
NOTE 9. TRADE AND OTHER RECEIVABLES
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Movement in the allowance for credit losses were as follows:
Carrying value at beginning of year
Allowance for credit losses recognised
Receivables written off during the year as uncollectable
Allowances for expected credit losses at year end
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
38,282
23,828
(1,291)
(1,101)
36,991
2,741
39,732
22,727
10,537
33,264
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
(1,101)
(273)
83
(584)
(637)
120
(1,291)
(1,101)
Set out below is the information about the credit risk exposure on the Group’s trade receivables.
2021
Current
Under one month
One to two months
Two to three months
Over three months
Carrying
amount
$'000
Expected
credit
loss rate
%
Expected
credit loss
$'000
29,728
5,390
2,228
473
463
38,282
2.6%
2.0%
9.0%
17.8%
27.1%
773
108
201
84
125
1,291
56
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 9. TRADE AND OTHER RECEIVABLES (CONTINUED)
2020
Current
Under one month
One to two months
Two to three months
Over three months
Carrying
amount
$'000
20,002
1,380
791
588
1,067
23,828
Expected
credit
loss rate
%
Expected
credit loss
$'000
2.0%
4.0%
11.0%
17.0%
43.0%
400
55
87
100
459
1,101
Recognition and measurement
Trade receivables
Trade receivables generally have terms of between 30 to 60 days. They are recognised at amortised cost less allowance for expected
credit losses (‘ECL’). Customers who wish to trade on credit terms are subject to extensive credit verification procedures. Receivable
balances are monitored on an ongoing basis and the ECL recognised is based on management’s expectation of losses without regard
to whether an impairment event exists.
Other receivables
Other receivables include rebates receivable from suppliers, fit-out contributions from landlords and Government wage subsidy
grants (prior year only) which are considered fully recoverable and therefore no allowance has been made.
Impairment of trade receivables
Collectability and impairment of trade receivables is assessed on an ongoing basis at an individual customer level by a centralised
accounts receivable function. The Group has established a provision matrix that is based on average write-offs as a proportion of
average debt over a period of 24 months. The historical loss rates are adjusted for current and forward-looking information where
significant.
NOTE 10. INVENTORIES
Finished goods (at lower of cost or net realisable value)
Goods in transit
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
177,304
39,577
216,881
115,979
13,127
129,106
Recognition and measurement
Finished goods are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the
ordinary course of business. Cost comprises of the purchase price on a weighted average basis and logistic expenses incurred in
bringing the inventories to their present location and condition.
Determining the net realisable value of inventories relies on key assumptions that require the use of management judgement.
An inventory provision is booked for cases where the realisable value from the sale of inventory is estimated to be lower than the
inventory carrying value. Management’s estimate of the inventory provision is based on historical finished goods sold below cost
over a 24 month period and inventory write-off transactional data over a 12 month period.
The provision for write-down of inventories to net realisable value amounted to $9,955,509 (2020: $5,963,211) at 27 June 2021.
NOTE 11. LEASE RECEIVABLE
Current
Lease receivable
Non-Current
Lease receivable
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
9,300
8,811
16,993
17,074
The Group sub-leases property leases to TAF franchises. The Group has classified these sub-leases as a finance lease, because the
sub-lease is substantially on the same terms as the head lease.
57
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021
NOTE 11. LEASE RECEIVABLE (CONTINUED)
The following table sets out the maturity analysis of lease receivables, showing the undiscounted lease payments to be received
after the reporting date.
Consolidated
Less than one year
One to five years
More than five years
Total undiscounted lease payments
Discounted using the Group’s incremental borrowing rate
Total lease receivable
Of which are:
Current lease receivables
Non-current lease receivables
NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS
Forward foreign exchange contracts - receivable
Total derivative financial instruments receivable - non-current
Forward foreign exchange contracts – payable
Total derivative financial instruments payable - current
Interest rate swap contracts – payable
Total derivative financial instruments payable - non-current
$'000
10,026
18,185
9
28,220
(1,927)
26,293
9,300
16,993
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
81
81
2,622
2,622
26
26
–
–
3,627
3,627
–
–
Foreign exchange forward contracts are held as hedging instruments against forecast purchases in USD. The notional amount for
the contracts held at 27 June 2021 totalled $USD153,885,715 (28 June 2020: $USD63,500,000). The average rate of the forward
contracts is 0.75 (2020: 0.66).
The net gain or loss recognised as other comprehensive income is equal to the change in fair value of the hedging instruments. There
is no ineffectiveness recognised in profit or loss.
Recognition and measurement
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange risk,
including foreign exchange forward contracts and interest rate swaps. Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. Derivatives are carried
as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
When a cash flow hedge is discontinued, any cumulative gain or loss on the hedging instrument recognised in other comprehensive
income is retained in equity until the forecast transaction occurs.
NOTE 13. OTHER CURRENT ASSETS
Prepayments
Other current assets
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
4,180
628
4,808
4,304
203
4,507
Prepayments represent general prepaid expenses, largely insurance premiums and license fees for the Group’s
eCommerce platforms.
58
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 14. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment - at cost
Less: Accumulated depreciation
Assets under construction - at cost
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
Restated
257,589
210,488
(151,782)
(122,439)
105,807
88,049
9,720
115,527
2,233
90,282
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Additions
Transfer
Additions through business combinations (Note 34)
Disposals
Exchange differences
Impairment (charge) / reversal
Depreciation expense
Balance at 28 June 2020
Additions2
Transfer
Additions through business combinations (Note 34)
Disposals
Exchange differences
Impairment (charge) / reversal
Depreciation expense
Balance at 27 June 2021
Plant and
equipment
$'000
Assets under
construction
$'000
Total1
$'000
81,118
36,392
–
104
(117)
(175)
(180)
(26,860)
90,282
55,578
–
963
(17)
15
84
(31,378)
2,919
2,233
(2,919)
–
–
–
–
–
2,233
11,125
(3,638)
–
–
–
–
–
9,720
115,527
78,199
34,159
2,919
104
(117)
(175)
(180)
(26,860)
88,049
44,453
3,638
963
(17)
15
84
(31,378)
105,807
1. Re-presented for the reclassification of software from property, plant and equipment to intangibles. Refer to Note 3.
2. Landlord contributions to store fit-out costs have been netted off against actual fit-out costs incurred for cash flow disclosure purposes.
Recognition and measurement
The carrying value of property, plant and equipment is measured as the cost of the asset, less accumulated depreciation, and
impairment.
Depreciation and amortisation
Items of property, plant and equipment are depreciated on a straight-line basis over the expected useful lives. Most of the property,
plant and equipment represents leasehold improvements which are amortised over the period of the lease. As at 27 June 2021, the
average lease term is 5 years. Assets under construction are not depreciated.
Derecognition
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is expected to
bring no future economic benefits. Any gain or loss between the carrying amount and the disposal proceeds are included in the
income statement in the period the item is derecognised.
Impairment
Refer to Note 15 for details on impairment testing.
59
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 15. RIGHT-OF-USE ASSETS
Buildings – right-of-use
Less: Accumulated depreciation
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
428,577
307,045
(157,229)
(74,047)
271,348
232,998
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Recognised as assets on first-time adoption of AASB 16
Additions
Additions through business combinations (Note 34)
Disposals
Exchange differences
Impairment of assets
Depreciation expense
Balance at 28 June 2020
Additions
Additions through business combinations (Note 34)
Disposals
Exchange differences
Impairment of assets
Depreciation expense
Balance at 27 June 2021
Buildings
$'000
–
254,218
55,439
7,222
(6,563)
(565)
(2,584)
(74,169)
232,998
108,940
10,606
(647)
29
(2,163)
(78,415)
271,348
Recognition and measurement
A right-of-use asset is recognised at the commencement date of a lease. The Group leases land and buildings for its offices and retail
stores under agreements with an average term of 5 years. The right-of-use asset is measured initially at cost based on the value of
the associated lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any
lease incentives received and any initial direct costs incurred.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease. Right-of use assets are subject to
impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of
12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred within
occupancy expense.
Impairment of property, plant and equipment and right-of-use assets
For impairment testing purposes the Group has determined that each store is a separate Cash Generating Unit (CGU). Each CGU
is tested for impairment at the balance sheet date if any indicators of impairment have been identified with the exception of Outlet
stores which are used for the predominant purpose of clearing aged inventory. For this reason, management anticipate that Outlet
stores may be loss making.
The value in use of each CGU is calculated based on the latest Board approved full year forecast for FY22. Cash flows beyond
year one represent the Groups five-year strategy which was presented to the Board on 2 June 2021. Growth rates were applied
to store generated sales and click and dispatch and click and collect sales. Gross profit margins were assumed to remain in line
with the forecasted FY22 margins and all operating expenses of each CGU were considered variable to sales. The value in use
calculations make no assumptions for government assistance and rental concessions. Cash flows were discounted to present
value using a mid-point after-tax discount rate of 8.2%.
60
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 15. RIGHT-OF-USE ASSETS (CONTINUED)
The COVID-19 pandemic has resulted in changes to customer shopping habits, patterns, and sources of finance. CBD locations are
still heavily enduring the impacts of COVID-19, largely due to declining commuter foot traffic, an increase in people working from
home and international border closures presenting challenges to the performance of the Group’s CBD locations. For this reason,
the Group has recognised a net impairment charge of $2,079,442 during the year ended 27 June 2021 as disclosed in Note 7.
Management has performed sensitivity analysis on the key assumptions in the impairment model using reasonably possible changes
in these key assumptions. These reasonable possible changes do not lead to a significant increase in the impairment charge.
NOTE 16. INTANGIBLES
Goodwill - at cost
Brands and trademarks - at cost
Less: Accumulated impairment
Licence fees - The Athlete's Foot - at cost
Less: Accumulated amortisation
Distribution rights - at cost
Less: Accumulated amortisation
Re-acquired rights
Less: Accumulated amortisation
Other intangible assets - The Athlete's Foot - at cost
Less: Accumulated amortisation
Software
Less: Accumulated amortisation
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
Restated
319,022
311,529
44,825
44,825
(9,714)
(9,714)
35,111
35,111
7,832
(360)
7,472
7,832
(328)
7,504
16,800
16,800
(15,659)
(13,336)
1,141
1,308
(493)
815
720
(720)
–
3,464
1,308
(333)
975
720
(720)
–
15,460
10,030
(6,298)
9,162
(3,575)
6,455
372,723
365,038
61
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 16. INTANGIBLES (CONTINUED)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Goodwill
$'000
Brands and
trademarks
$'000
Licence
fees
$'000
Distribution
rights
$'000
Re-acquired
rights
$'000
Software3
$'000
Total
$'000
Balance at 1 July 2019
304,456
35,111
7,536
5,787
Additions
Additions through business
combinations (Note 34)
Disposals
Exchange differences
Impairment charge
Amortisation expense
–
7,073
–
–
–
–
–
–
–
–
–
–
Additions
Additions through business
combinations (Note 34)
Other4
Disposals
Exchange differences
Impairment charge
Amortisation expense
8,935
(1,444)
–
2
–
–
–
–
–
–
–
–
–
Balance at 27 June 2021
319,022
35,111
–
–
–
–
–
–
–
–
–
–
3
–
4,290
4,093
357,183
4,093
1,230
–
–
–
–
–
–
–
8,303
–
–
–
(32)
(2,323)
(258)
(1,928)
(4,541)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,455
5,430
365,038
5,430
–
–
–
–
–
8,935
(1,444)
–
2
–
(32)
7,472
(2,323)
1,141
(160)
815
(2,723)
(5,238)
9,162
372,723
Balance at 28 June 2020
311,529
35,111
7,504
3,464
975
3. Re-presented for the reclassification of software from property, plant and equipment to intangibles. Refer to Note 3.
4. During the year ended 27 June 2021, the Group retrospectively adjusted the provisional amounts recognised for a business combination to reflect new
information obtained. The retrospective adjustment relates to recognising a deferred tax asset for the termination payments of TAF franchise agreements
that were acquired in the last 12 months. The corresponding impact is a reduction to goodwill.
Recognition and measurement
Goodwill
Goodwill acquired in a business combination is initially measured at cost. Cost is measured as the cost of the business combination
minus the net fair value of the acquired and identifiable assets, liabilities and contingent liabilities. Following initial recognition,
goodwill is measured at cost less any accumulated impairment losses.
Brands and trademarks
Brands and trademarks are recognised at cost in a business combination. Brands and trademarks have indefinite useful lives. This
assessment reflects management's intention to continue to utilise these intangible assets in the foreseeable future. Each period, the
useful life of these assets is reviewed to determine whether events and circumstances continue to support an indefinite useful life
assessment for the assets.
Other intangible assets
Intangible assets with finite lives are amortised on a straight-line basis over their useful lives and tested for impairment whenever
there is an indication that they may be impaired. The amortisation period and method is reviewed at each financial year-end.
A summary of the useful lives of other intangible assets is as follows:
Other intangible assets
License fees
Distribution rights
Re-acquired rights
Software
Useful life
Finite (up to 249 years)
Finite (up to 7 years)
Finite (up to 8 years)
Finite (up to 4 years)
62
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 16. INTANGIBLES (CONTINUED)
Impairment testing of goodwill
Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired.
The impairment test at 27 June 2021 was carried out based on value in use calculations for the Group’s one operating segment. The
recoverable amount was determined using estimated cash flows that were based on the Groups five-year strategic plan which was
presented to the Board of Directors on 2 June 2021. The strategic plan included calculations and assumptions on sales growth, gross
margin and cost of doing business ('CODB'). The assumptions were based on past experience and the Company’s forecast operating
and financial performance taking into account current market and economic conditions and placing caution on the recovery of the
Australian economy given the global uncertainty resulting from COVID-19. The cash flows beyond the five-year period have been
extrapolated using a steady state 1.0% long term growth rate (2020: 2.0%). Cash flows were discounted to present value using a
mid-point after-tax discount rate of 9.8% (2020: 10.5%).
Management has performed sensitivity analysis on the key assumptions used in the impairment model. Management has considered
possible changes in key assumptions that would cause the carrying amount of goodwill to exceed the value in use.
There is no indication of impairment at balance date.
Brand names and trademarks
The Group recognises the following brands and trademarks as indefinite life intangible assets:
Carrying amount of brand names and trademarks:
The Athlete's Foot
Platypus
Hype DC
Brands and trademarks
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
3,466
11,100
20,545
35,111
3,466
11,100
20,545
35,111
Impairment testing of brands and trademarks
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more
frequently if events or changes in circumstances indicate that they might be impaired.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount was determined independently using the Relief from Royalty (‘RFR’) valuation method at acquisition date. The
calculations reflect a five-year revenue forecast and requires the use of assumptions, including estimated royalty rates, tax rate,
estimated discount rates and expected useful life.
The five-year revenue forecast was based on the Group’s five-year strategic plan which was presented to the Board of Directors
on 2 June 2021. The five-year strategic plan was based on past experience and the Company’s forecast operating and financial
performance, taking into account current market and economic conditions. As part of the impairment test, management has
considered the shift in consumer behaviour to digital and online shopping as a consequence of COVID-19, anticipating that the
current trend of greater online demand will continue to be embedded into consumer spending patterns going forward. Consequently,
revenue beyond the five-year period applied a terminal growth rate to bricks and mortar and a terminal growth rate to digital
revenue.
The royalty rates used in the valuation model were brand specific and based on rates observed in the market. The royalty rates
across all brands ranged between 3.5% to 5.25%. The TAF brands royalty rate was in line with current franchise agreements.
The tax rate applied in the valuation model is based on the corporate tax rate in Australia of 30.0% and the after tax discount rate
used is 11.7% (2020: 13.0%).
Management has performed sensitivity analysis on the key assumptions in the impairment model using possible changes in these key
assumptions.
The Group has concluded that no impairment is required based on expected performance and current market and economic
conditions.
63
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 17. NET DEFERRED TAX
Net deferred tax comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Allowance for expected credit losses
Provision for shrinkage and stock obsolescence
Provision for employee entitlements
Other provisions and accrued expenses
Difference in accounting and tax depreciation
Landlord and supplier contributions
Net lease liability / (right-of-use asset)
Trademarks, brand names and distribution rights
TAF franchisee surrender payments
Other
Amounts recognised directly to equity
Adoption of AASB 16 Leases
Tax effect of hedges in reserves
Change in accounting policy (refer Note 3)
Net Deferred tax asset
NOTE 18. TRADE AND OTHER PAYABLES
Trade payables
Goods and services tax payable
Accrued expenses
Other payables
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
Restated
285
2,995
5,996
3,207
5,400
15,525
6,109
(10,949)
968
393
309
1,837
4,144
2,025
5,641
11,632
1,153
(11,784)
–
58
29,929
15,015
–
770
–
770
3,145
1,088
298
4,531
30,699
19,546
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
76,631
5,740
46,905
20,170
149,446
24,504
7,171
44,939
17,121
93,735
Trade payables and accruals represent liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. Other payables represent goods receipted that have not been invoiced as at 27 June 2021. Trade and other payables are
stated at amortised cost. The amounts are unsecured and are usually settled within 30 to 60 days of recognition.
64
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021
NOTE 19. DEFERRED REVENUE
Current
Gift cards
Other deferred revenue
Non-current
Other deferred revenue
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
4,354
4,430
8,784
4,208
12,992
3,121
1,107
4,228
2,864
7,092
Deferred revenue relates to unredeemed gift cards, loyalty program liabilities, and unused supplier contributions for fixtures, fittings
and point of purchase. These contributions will be utilised for future store openings and refurbishments.
NOTE 20. PROVISIONS
Current
Employee benefits
Other provisions
Non-Current
Employee benefits
Other provisions
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
17,215
2,003
19,218
659
–
659
19,877
12,027
2,190
14,217
664
911
1,575
15,792
Recognition and measurement
Employee benefits
Liabilities for annual leave, bonuses and other employee benefits expected to be settled wholly within 12 months of the reporting
date are measured at the amounts expected to be paid when the liabilities are settled.
Employee benefits not expected to be settled within 12 months of the reporting date are measured at the present value of expected
future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments
are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date.
65
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 21. BORROWINGS
Current
Secured
Bank loans
Working capital facility
Non-Current
Secured
Bank loans
Movements in borrowings
Movements in current borrowings during the current financial year is set out below:
Carrying amount at start of the year
Repayments
Additional loans
Carrying amount at end of the year
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
5,000
35,000
40,000
5,000
10,000
15,000
61,125
101,125
71,125
86,125
Borrowings
$'000
86,125
(70,000)
85,000
101,125
The majority of the Group’s financing facilities with National Australia Bank (‘NAB’) and Hongkong and Shanghai Banking Corporation
(‘HSBC’) are due to mature in August 2023. The weighted average interest rate on these financing facilities is 1.74%.
On the 18 August 2020, the Group entered into an interest rate swap contract to mitigate the risk of changing interest rates on the
variable rate debt held. The interest rate swap contract matures in line with the Group’s financing facilities.
66
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 21. BORROWINGS (CONTINUED)
Recognition and measurement
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting date and intends to do so.
The Group monitors compliance with its financial covenants on a monthly basis and reports compliance on a monthly basis to the
banks. The Group has complied with all such requirements.
Assets pledged as security
The senior bank debt made available by NAB and HSBC is secured by cross-guarantees and all assets of Accent Group Limited
and each of its wholly-owned subsidiaries. Total secured assets amounted to $814,535,000 at 27 June 2021 (28 June 2020:
$693,579,900).
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank overdraft
Bank loans
Working capital facility
Bank guarantee and letters of credit
Used at the reporting date
Bank overdraft
Bank loans
Working capital facility
Bank guarantee and letters of credit
Unused at the reporting date
Bank overdraft
Bank loans
Working capital facility
Bank guarantee and letters of credit
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
5,700
66,125
5,700
76,125
98,250
100,000
18,650
16,900
188,725
198,725
–
66,125
35,000
16,054
–
76,125
10,000
15,200
117,179
101,325
5,700
5,700
–
–
63,250
90,000
2,596
71,546
1,700
97,400
On 28 June 2021, subsequent to year-end, the Group increased its available debt facilities from $188,725,000 to $218,725,000
which is associated with the acquisition of the assets of Next Athleisure Pty Ltd.
67
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021
NOTE 22. LEASE LIABILITIES
Current
Lease liability
Non-current
Lease liability
Consolidated
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities
Total Liabilities included in the statement of financial position
Current lease liabilities
Non-current lease liabilities
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
106,811
78,461
277,015
236,882
$'000
121,471
279,452
16,724
417,647
383,826
106,811
277,015
Recognition and measurement
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of
the lease payments to be made over the term of the lease, discounted using the Group's incremental borrowing rate. Leases are
entered into for varying terms and rent reviews are based on CPI increases or fixed increases. Variable lease payments are expensed
in the period in which they are incurred.
The carrying amount of a lease liability is remeasured if there is a change in the lease payments arising from a change in an index
or a rate used and a change in lease term. Most of the Group’s leases do not contain renewal or extension options. When a lease
liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of
the right-of-use asset is fully written down.
NOTE 23. EQUITY - ISSUED CAPITAL
Ordinary shares - fully paid
Less: Treasury shares
Consolidated
27 Jun 2021
Shares
28 Jun 2020
Shares
27 Jun 2021
$'000
28 Jun 2020
$'000
541,866,715
541,866,715
390,926
390,926
(200,000)
(1,350,002)
(310)
(1,326)
541,666,715
540,516,713
390,616
389,600
Ordinary shares
Ordinary shares are classified as equity and entitle the holder to participate in dividends and the proceeds on the winding up of the
Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and
the Company does not have a limited amount of authorised capital.
Treasury shares
No shares were issued to employees under the Employee Share Scheme (28 June 2020: nil). During the year, employee loan
repayments reduced the number of treasury shares under the Employee Share Scheme. Details of the scheme are set out in Note 39.
Share buy-back
There is no current on-market share buy-back.
68
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 23. EQUITY – ISSUED CAPITAL (CONTINUED)
Movements in ordinary share capital
Details
Balance
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Shares issued during the period(i)
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Balance
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Employee Share Scheme - loans repaid
Date
Shares
Issue price
$'000
30 June 2019
27 August 2019
29 August 2019
05 September 2019
10 September 2019
2 October 2019
3 October 2019
3 October 2019
8 October 2019
9 October 2019
15 October 2019
24 December 2019
24 December 2019
20 February 2020
20 February 2020
20 February 2020
15 May 2020
28 June 2020
30 June 2020
30 June 2020
1 September 2020
2 September 2020
25 September 2020
1 October 2020
14 October 2020
23 October 2020
3 November 2020
24 November 2020
26 November 2020
2 February 2021
4 February 2021
23 February 2021
538,484,554
250,000
100,000
33,333
66,666
50,000
83,334
83,334
50,000
925,491
66,667
16,667
33,333
66,667
66,667
66,667
73,333
$0.730
$1.010
$1.140
$1.140
$0.590
$0.590
$0.590
$0.590
$0.000
$1.010
$0.730
$1.140
$0.590
$0.590
$0.590
$0.730
388,756
183
101
38
76
30
49
49
30
–
67
12
38
39
39
39
54
540,516,713
389,600
250,000
250,000
100,000
100,000
33,333
33,334
66,666
33,333
33,333
33,334
33,334
66,668
66,667
50,000
$0.730
$0.730
$0.730
$1.010
$1.140
$1.140
$1.010
$0.730
$1.140
$0.730
$1.140
$1.140
$1.140
$1.140
183
183
73
101
38
38
67
24
38
24
38
76
76
57
Balance
27 June 2021
541,666,715
390,616
(i) A total of 925,491 ordinary shares were issued in relation to the performance rights plan in FY20.
69
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 24. EQUITY - RESERVES
Foreign currency translation reserve
Hedging reserve - cash flow hedges
Share-based payments reserve
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
9,512
(1,797)
18,309
26,024
2,787
4,683
11,002
18,472
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
Hedging reserve - cash flow hedges
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are
recognised in other comprehensive income with the remaining change in fair value recognised in the hedging reserve. Any ineffective
portion is recognised immediately in the statement of profit and loss.
Share-based payments reserve
The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to employees,
including key management personnel, as part of their remuneration.
NOTE 25. EQUITY - DIVIDENDS
Dividends
Dividends paid during the financial year were as follows:
Final dividend for the year ended 28 June 2020 of 4.00 cents (2019: 3.75 cents) per ordinary share
Interim dividend for the year ended 27 June 2021 of 8.00 cents (2020: 5.25 cents) per ordinary share
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
21,675
43,349
65,024
20,297
28,464
48,761
In respect of the financial year ended 27 June 2021, the directors recommended the payment of a final fully franked dividend of
3.25 cents per share to be paid on 16 September 2021 to the registered holders of fully paid ordinary shares as at 9 September 2021.
Franking credits
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
37,399
17,067
New Zealand imputation credits available to New Zealand residential shareholders amount to NZ$6,569,688 (28 June 2020:
NZ$5,381,585).
70
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 26. FINANCIAL INSTRUMENTS
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate
risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial
instruments such as forward foreign exchange contracts to hedge foreign currency exposures and interest rate swaps to hedge
interest rate exposures. Derivatives are exclusively used for hedging purposes, i.e. not as trading or other speculative instruments.
The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity
analysis in the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors ('the Board').
These policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits.
Finance identifies, evaluates and hedges financial risks within the Group's operating units. Finance reports to the Board on a periodic basis.
Market risk
Foreign currency risk
The Group has transactional foreign currency exposures arising from the purchase of inventory denominated in US dollars. To
minimise the impact of changes in the Australian Dollar / US Dollar exchange rate on profit and loss, the Group enters into forward
exchange contracts in accordance with its Board-approved foreign exchange hedging policy.
The Group's exposure to foreign currency risk as at the end of the reporting period, expressed in Australian dollars, is shown below:
Consolidated
Forward contracts
Foreign currency trade payables
Transactional foreign exchange risk
27 Jun 2021
28 Jun 2020
US dollar
transactional
exposure
$'000
Australian
dollar
equivalent
$'000
US dollar
transactional
exposure
$'000
Australian
dollar
equivalent
$'000
153,886
27,689
181,575
204,998
36,461
241,459
63,500
8,896
72,396
96,098
12,554
108,652
The sensitivity of the Group's transactional foreign currency risk exposure is estimated by assessing the impact that a 10% increase and
10% decrease in the Australian Dollar / US Dollar exchange rate would have on profit and equity of the Group at the reporting date.
27 Jun 2021
28 Jun 2020
Movement
in Australian
dollar
US dollar
exchange rate
%
Increase/
(decrease) in
profit or loss
$'000
Increase/
(decrease)
in other
comprehensive
income
$'000
Movement
in Australian
dollar
US dollar
exchange rate
%
Increase/
(decrease) in
profit or loss
$'000
Increase/
(decrease)
in other
comprehensive
income
$'000
10%
(10%)
10%
(10%)
–
–
455
(556)
(14,545)
12,535
2,860
(3,495)
10%
(10%)
10%
(10%)
–
–
210
(256)
(9,066)
3,867
932
(1,139)
Forward Contracts
Trade Payables
In management’s opinion, the above sensitivity analysis is not fully representative of the inherent foreign exchange risk as the year
end exposure does not necessarily reflect the exposure during the course of the year.
As noted above the Group manages its foreign currency risk through forward currency contracts.
71
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 26. FINANCIAL INSTRUMENTS (CONTINUED)
The maturity, settlement amounts and the average contractual exchange rates of the Group's outstanding forward foreign exchange
contracts at the reporting date were as follows:
Buy US dollars
Maturity:
0 - 3 months
3 - 6 months
6 - 12 months
> 12 months
Sell Australian dollars
Average exchange rates
27 Jun 2021
$'000
28 Jun 2020
$'000
27 Jun 2021
28 Jun 2020
94,957
54,013
50,853
5,175
37,338
17,601
41,159
–
0.7429
0.7506
0.7674
0.7730
0.6562
0.6534
0.6681
–
Translational Foreign Currency Risk
The Group includes certain subsidiaries whose functional currencies are different to the Group’s presentation currency of Australian
Dollars. As stated in Note 2, on consolidation the assets and liabilities of these entities are translated into Australian dollars at
exchange rates prevailing on the balance date. The income and expenses of these entities are translated at the average exchange
rates for the year. Exchange differences arising are classified as equity and are transferred to a foreign exchange translation reserve.
The main operating entities outside of Australia are based in New Zealand. The Group’s future reported profits could therefore be
impacted by changes in rates of exchange between the Australian Dollar and the New Zealand Dollar.
27 Jun 2021
28 Jun 2020
NZ dollar
translational
exposure
$'000
Australian
dollar
equivalent
$'000
NZ dollar
translational
exposure
$'000
Australian
dollar
equivalent
$'000
New Zealand dollar net assets
29,492
27,481
17,570
16,354
The sensitivity of the Group's translational foreign currency risk exposure is estimated by assessing the impact that a 10% increase
and 10% decrease in the Australian Dollar / NZ Dollar exchange rate would have on profit and equity of the Group at the reporting
date.
27 Jun 2021
28 Jun 2020
Movement
in Australian
dollar
NZ dollar
exchange rate
%
Increase/
(decrease)
in other
comprehensive
income
$'000
Movement
in Australian
dollar
NZ dollar
exchange rate
%
Increase/
(decrease)
in other
comprehensive
income
$'000
10%
(10%)
(2,498)
3,053
10%
(10%)
(1,414)
1,906
New Zealand dollar net assets
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to
interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.
On the 18 August 2020, the Group entered into an interest rate swap contract to mitigate the risk of changing interest rates on the
variable rate debt held. The interest rate swap contract matures in line with the Group’s financing facilities.
72
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 26. FINANCIAL INSTRUMENTS (CONTINUED)
As at the reporting date, the Group had the following cash and cash equivalents, variable rate borrowings and interest rate swap
contracts outstanding:
Consolidated
Bank loans
Interest rate swap
Net exposure to cash flow interest rate risk
27 Jun 2021
28 Jun 2020
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$'000
Balance
$'000
1.61%
1.93%
(101,125)
2.02%
(86,125)
56,250
(44,875)
–
–
(86,125)
Sensitivity impact of interest rate changes has not been shown as a 0.5% change in interest rates would have an immaterial profit or
loss impact based on the net exposure to cash flow interest rate risk at balance date.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and
available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Bank overdraft
Working capital facility
Bank guarantee and letters of credit
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
5,700
5,700
63,250
90,000
2,596
71,546
1,700
97,400
73
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 26. FINANCIAL INSTRUMENTS (CONTINUED)
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are
required to be paid, and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 27 Jun 2021
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Lease liabilities
Interest-bearing - variable
Term loans
Working capital facility
Total non-derivatives
Derivatives
Weighted
average
interest rate
%
1 year or less
$'000
Between
1 and 2 years
$'000
Between
2 and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
–
–
–
76,631
20,170
–
–
–
–
–
–
76,631
20,170
121,471
102,864
176,588
16,723
417,646
1.68%
1.47%
5,000
35,000
10,000
51,125
–
–
–
–
66,125
35,000
258,272
112,864
227,713
16,723
615,572
Interest rate swaps net settled
1.93%
–
Forward foreign exchange contracts net
settled
Total derivatives
–
(2,622)
(2,622)
–
81
81
(26)
–
(26)
–
–
–
(26)
(2,541)
(2,567)
Consolidated - 28 Jun 2020
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Lease liabilities
Interest-bearing - variable
Term loans
Working capital facility
Total non-derivatives
Derivatives
Interest rate swaps net settled
Forward foreign exchange contracts net
settled
Total derivatives
Weighted
average
interest rate
%
1 year
or less
$'000
Between
1 and 2 years
$'000
Between
2 and 5 years
$'000
Over
5 years
$'000
Remaining
contractual
maturities
$'000
–
–
–
24,504
17,121
95,374
–
–
–
–
–
–
24,504
17,121
84,091
154,113
21,773
355,351
2.02%
1.96%
–
–
10,000
151,999
–
(3,627)
(3,627)
5,000
10,000
61,125
–
–
–
–
76,125
10,000
94,091
215,238
21,773
483,101
–
–
–
–
–
–
–
–
–
–
(3,627)
(3,627)
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
74
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 26. FINANCIAL INSTRUMENTS (CONTINUED)
Capital risk management
The Group manages its capital to ensure that all the entities within the Group are able to continue as going concerns while
maximising the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of cash and cash equivalents, trade and other receivables, inventories, intangibles and
net working capital. The equity attributable to equity holders of the parent entity comprises issued capital, reserves and accumulated
losses.
Management effectively manage the Group’s capital by assessing the Group’s financial risks and adjusting the Group’s capital
structure in response to changes in these risks and in the market. These responses include the management of debt levels,
distributions to shareholders and share issues.
None of the Group entities are subject to externally-imposed capital requirements.
The capital risk management policy has not changed since the 28 June 2020 year.
NOTE 27. FAIR VALUE MEASUREMENT
The only financial assets or financial liabilities carried at fair value are interest rate swaps and foreign currency forward contracts. All
these instruments are Level 2 financial instruments because, unlike Level 1 financial instruments, their measurement is derived from
inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly.
Valuation techniques for fair value measurements
The fair values are determined using the valuation techniques below. The fair value was obtained from third party valuations.
Forward foreign exchange contracts
The fair value was obtained from third party valuations derived from discounted cash flow forecasts of forward exchange rates at
the end of the reporting period and contract exchange rates.
Interest rate swap contracts
Future cash flows are estimated based on forward interest rates (from observable yield curves at the end of the reporting period)
and contract interest rates, discounted at a rate that reflects the credit risk of various counterparties.
There were no transfers between levels during the year.
The carrying amount of other financial assets and financial liabilities recorded in the financial statements approximate their fair values.
NOTE 28. KEY MANAGEMENT PERSONNEL DISCLOSURES
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
4,193,422
4,210,017
94,802
89,736
1,716,599
939,903
6,004,823
5,239,656
NOTE 29. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by Deloitte Touche Tohmatsu, the auditor of
the Company:
Audit services - Deloitte Touche Tohmatsu
Audit or review of the financial statements
Other services - Deloitte Touche Tohmatsu
Other consulting services
75
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
560,680
540,010
–
–
560,680
540,010
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 30. CONTINGENT LIABILITIES
The Group has bank guarantees outstanding as at 27 June 2021 of $4,208,739 (28 June 2020: $2,757,387). The Group also
has open letters of credit of $11,845,474 (28 June 2020: $12,501,817). These guarantees and letters of credit are in favour of
international stock suppliers and landlords where parent guarantees cannot be negotiated.
NOTE 31. COMMITMENTS
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Property, plant and equipment
29,645
10,295
The commitment amounts disclosed above represent the maximum amounts that the Group is obliged to pay and exclude Landlord
contributions to store fit-out costs.
NOTE 32. RELATED PARTY TRANSACTIONS
Parent entity
Accent Group Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 35.
Key management personnel
Disclosures relating to key management personnel are set out in Note 28 and the remuneration report included in the directors'
report.
Entities associated with key management personnel
Rivan Pty Limited, a shareholder, is a company associated with David Gordon.
2 Como Pty Ltd, a shareholder, is a company associated with Daniel Agostinelli.
BBRC International Pte Ltd, a shareholder, is a company associated with Brett Blundy.
Placed Pty Ltd, a company associated with Daniel Agostinelli and Brett Blundy.
Aventus Kotara South Pty Ltd, a company associated with Brett Blundy.
Musician Pty Ltd, a shareholder, is a company associated with Matthew Durbin.
Lyneliz Pty Ltd, a company associated with Daniel Agostinelli.
Transactions with related parties
The following transactions occurred with related parties:
Placed Pty Ltd, a company associated with Daniel Agostinelli and Brett Blundy, provided recruitment services to the Group
amounting to $140,722 (28 June 2020: $241,684).
Aventus Kotara South Pty Ltd, a company associated with Brett Blundy, is the landlord of the Skechers Kotara outlet.
Retail Reality Pty Ltd, a company associated with Daniel Agostinelli, provided mystery shopping services to the Group amounting to
$40,737 (28 June 2020: $196,369).
Lyneliz Pty Ltd, a company associated with Daniel Agostinelli, providing storage services to the Group amounting to $40,355
(28 June 2020: nil).
Retail Oasis Pty Limited, a company associated with Stephen Kulmar (resigned 28 November 2019), provided business strategy &
planning services to the Group in the prior year only (28 June 2020: $117,416).
Loans to/from related parties
There were no loans to/from related parties outstanding at the reporting date.
76
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 33. PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Other comprehensive income for the year, net of tax
Total comprehensive income
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
27 Jun 2021
$'000
28 Jun 2020
$'000
41,563
57,666
–
–
41,563
57,666
Parent
27 Jun 2021
$'000
28 Jun 2020
$'000
61,156
376,484
437,640
23,487
64,333
87,820
349,820
107,445
376,074
483,519
35,413
82,817
118,230
365,289
390,616
389,600
18,309
(59,105)
11,002
(35,313)
349,820
365,289
The financial information for the parent entity has been prepared on the same basis as the consolidated financial statements, except
as set out below.
– Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
– Dividends received from subsidiaries are recognised in the parent entity’s profit or loss.
77
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021
NOTE 34. BUSINESS COMBINATIONS
27 June 2021
During the year to 27 June 2021, the Group completed the acquisition of Glue Store retail business and the wholesale and
distribution brands business of Next Athleisure Pty Ltd (NAL), a leading Australian youth apparel, shoe and accessory retailer offering
an aspirational range spanning global street, fashion and sport cultures. In addition to this, the Group acquired lifestyle womenswear
brand, Exie and 1 TAF store. The total consideration transferred for these acquisitions was $14,065,544. Goodwill of $8,934,926
was recognised on acquisition.
Details of the provisional assets and liabilities acquired are as follows:
Cash and cash equivalents
Inventories
Other current assets
Trade and other receivables
Property, plant and equipment
Right-of-use assets
Net deferred tax
Trade and other payables
Provisions
Deferred revenue
Other current liabilities
Lease liability
Net assets acquired
Reacquired rights
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Outstanding debts
Payments to be made in future periods
Details of the cash flow movement relating to the acquisition are as follows:
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Add: outstanding debts
Less: payments to be made in future periods
Less: cash and cash equivalents
Net cash used
Provisional
fair value
$'000
–
15,904
1
6,688
963
10,606
2,975
(16,679)
(1,377)
(493)
–
(13,457)
5,131
–
8,935
14,066
12,996
(30)
1,100
14,066
Provisional
fair value
$'000
14,066
30
(1,100)
–
12,996
The fair value of assets acquired, liabilities and contingent liabilities assumed are initially estimated by the Group taking into
consideration all available information at the reporting date. Fair value adjustments on the finalisation of the business combination
accounting is retrospective, where applicable, to the period the combination occurred and may have an impact on the assets and
liabilities, depreciation and amortisation reported.
78
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 34. BUSINESS COMBINATIONS (CONTINUED)
The Group engaged independent experts to identify and value intangible assets associated with the acquisition of Glue / Next
Athleisure Pty Ltd. The report from the independent experts provided a lower and higher range of values for the Brand value of
Glue and other vertical brands acquired as well as Glue’s customer database. The Group elected to use the lower end of the range
provided and notes that both the Brand and Customer database assets are immaterial and therefore not recognised.
28 June 2020
During the year to 28 June 2020, the Group completed the acquisition of 14 TAF stores. In addition to this, the Group acquired the
assets of the Stylerunner business, a premium digital business in the fast-growing women’s athleisure segment, out of administration.
The total consideration transferred for these acquisitions was $8,887,201. Goodwill of $7,072,803 was recognised on acquisition.
Details of the business combination are as follows:
Fair value
$'000
3
2,197
9
104
7,222
(264)
(170)
(836)
(85)
(7,596)
584
1,230
7,073
8,887
8,818
69
8,887
Fair value
$'000
8,887
69
(3)
8,953
Cash and cash equivalents
Inventories
Other current assets
Property, plant and equipment
Right-of-use assets
Net deferred tax
Provisions
Deferred revenue
Other current liabilities
Lease liability
Net assets acquired
Reacquired rights
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Outstanding debt
Details of the cash flow movement relating to the acquisition are as follows:
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: outstanding debt/loans forgiven
Less: cash and cash equivalents
Net cash used
79
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 35. INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with
the accounting policy described in Note 2:
Name
Principal place of business/Country of incorporation
Ownership interest
27 Jun 2021
%
28 Jun 2020
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
The Athlete's Foot Australia Pty Ltd
TAF Constructions Pty Ltd(a)
RCG Brands Pty Ltd
RCG Retail Pty Ltd
TAF eStore Pty Ltd(a)
TAF Partnership Stores Pty Ltd(a)
TAF Rockhampton Pty Ltd(b)
TAF Eastland Pty Ltd(b)
TAF The Glen Pty Ltd(b)
TAF Hornsby Pty Ltd(b)
TAF Hobart Pty Ltd(b)
TAF Booragoon Pty Ltd(b)
Accent Group Ltd(c)
Platypus Shoes Ltd(d)
Accent Footwear Ltd(d)
Hype DC Ltd(d)
TAF New Zealand Ltd(d)
Accent Brands Pty Ltd(c)
Platypus Shoes (Australia) Pty Ltd(c)
42K Pty Ltd(e)
RCG Grounded Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
Australia
Australia
Australia
Australia
RCG Accent Group Holdings Pty Ltd
Australia
Hype DC Pty Ltd
Subtype Pty Ltd
Pivot Store Pty Ltd
Accent Lifestyle Pty Ltd(f)
Accent Active Pty Ltd(g)
Subtype Limited(d)
Accent Active (NZ) Limited
Accent Lifestyle (NZ) Limited
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand
New Zealand
(a) Indirectly held through The Athlete's Foot Australia Pty Ltd
(b) Indirectly held through TAF Partnership Stores Pty Ltd
(c) Indirectly held through RCG Accent Group Holdings Pty Ltd
(d) Indirectly held through Accent Group Ltd (New Zealand)
(e) Indirectly held through Accent Brands Pty Ltd
(f) This company was renamed during the year ended 27 June 2021 (previously Cremm Pty Ltd)
(g) This company was renamed during the year ended 27 June 2021 (previously Accent Stylerunner Pty Ltd)
80
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 36. DEED OF CROSS GUARANTEE
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:
Accent Group Ltd
RCG Brands Pty Ltd
The Athlete's Foot Australia Pty Ltd
RCG Retail Pty Ltd
RCG Accent Group Holdings Pty Ltd
Hype DC Pty Limited
TAF Partnership Stores Pty Ltd
TAF eStore Pty Ltd
T.A.F Constructions Pty Ltd
Accent Group Pty Ltd
Platypus Shoes (Australia) Pty Ltd
42K Pty Ltd
RCG Grounded Pty Ltd
Subtype Pty Ltd
Pivot Store Pty Ltd
Accent Lifestyle Pty Ltd
Accent Active Pty Ltd
(ACN 108 096 251)
(ACN 125 433 972)
(ACN 001 777 582)
(ACN 144 955 117)
(ACN 613 017 422)
(ACN 081 432 313)
(ACN 164 791 048)
(ACN 158 031 040)
(ACN 097 684 430)
(ACN 001 742 552)
(ACN 122 726 907)
(ACN 169 043 145)
(ACN 611 621 482)
(ACN 628 866 419)
(ACN 634 893 691)
(ACN 636 815 284)
(ACN 637 053 028)
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial statements and
directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments Commission.
The above subsidiaries and Accent Group Limited together referred to as the ‘Closed Group’ either originally entered the Deed on
23 February 2017 or have subsequently joined the Deed.
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial position of
the 'Closed Group'.
Statement of profit or loss and other comprehensive income
Revenue
Other income
Interest revenue
Cost of sales
Distribution
Marketing
Occupancy
Employee expenses
Other
Depreciation, amortisation and impairment
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense
Other comprehensive income
Net change in the fair value of cash flow hedges taken to equity, net of tax
Foreign currency translation
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income for the year
81
27 Jun 2021
$'000
28 Jun 2020
$'000
859,796
742,458
5,146
998
9,902
1,250
(370,690)
(317,987)
(33,017)
(31,668)
(10,027)
(27,564)
(28,697)
(12,592)
(171,465)
(144,150)
(34,284)
(105,945)
(13,421)
95,423
(32,021)
(99,103)
(14,311)
77,185
(28,413)
(21,035)
67,010
56,150
(6,480)
6,725
245
67,255
2,692
484
3,176
59,326
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 36. DEED OF CROSS GUARANTEE (CONTINUED)
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Lease receivable
Other current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Lease receivable
Intangibles
Derivative financial instruments
Net deferred tax
Total assets
Current liabilities
Trade and other payables
Deferred revenue
Provisions
Borrowings
Lease liabilities
Derivative financial instruments
Provision for income tax
Non-current liabilities
Provisions
Deferred revenue
Borrowings
Lease liabilities
Derivative financial instruments
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
82
27 Jun 2021
$'000
28 Jun 2020
$'000
20,525
38,357
39,405
50,516
190,905
112,404
9,300
4,059
8,811
4,204
263,146
215,340
98,881
236,309
16,993
83,695
201,351
17,074
371,644
358,779
81
30,038
753,946
1,017,092
130,459
7,948
18,497
40,000
98,104
2,622
12,023
–
17,096
677,995
893,335
89,348
3,295
13,439
15,000
70,560
3,627
23,390
309,653
218,659
659
3,385
61,125
239,947
26
305,142
614,795
402,297
1,451
2,864
71,125
203,959
–
279,399
498,058
395,277
390,616
389,600
24,375
(12,694)
18,328
(12,651)
402,297
395,277
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 37. CASH FLOW INFORMATION
Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Provision for asset impairment
Foreign exchange differences
Other non-cash items
Change in assets and liabilities, net of the effect from acquisition of businesses
Receivables
Inventories
Trade creditors and provisions
Tax assets and liabilities
Net cash from operating activities
NOTE 38. EARNINGS PER SHARE
Profit after income tax
Profit after income tax attributable to the owners of Accent Group Limited
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
Restated
76,923
55,517
115,031
105,570
7,307
2,079
(15)
4,136
2,005
2,764
175
2,423
(80)
(5,943)
(71,871)
46,106
(20,207)
4,562
4,391
7,227
159,409
178,691
Consolidated
27 Jun 2021
$'000
28 Jun 2020
$'000
76,923
76,923
55,517
55,517
Number
Number
Weighted average number of ordinary shares used as the denominator in calculating basic earnings
per share
541,430,396 539,880,461
Adjustments for calculation of diluted earnings per share:
Options and loan funded shares
Performance rights
200,000
1,150,002
21,497,379
19,900,000
Weighted average number of ordinary shares used as the denominator in calculating diluted earnings
per share
563,127,775 560,930,463
Basic earnings per share
Diluted earnings per share
Recognition and measurement
Cents
14.21
13.66
Cents
10.28
9.90
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Accent Group Limited, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial
year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
83
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 39. SHARE-BASED PAYMENTS
Option Plans
Employee Share Scheme
Shares under the Accent Group Employee Share Scheme ('ESS') are held in escrow until certain vesting conditions are met. The
shares were issued at market value at the date of the offer and the Company has provided employees with a limited recourse loan to
acquire the shares. Interest on the loan is equivalent to the value of franked dividends paid in respect of the shares. The shares are
treated as in substance options and accounted for as share-based payments.
Set out below are the outstanding options granted under each plan.
27 Jun 2021
Grant date
Expiry date
Exercise price
27/05/2015
30/09/2020
27/05/2015
30/09/2020
28/08/2015
30/08/2020
13/05/2016
28/02/2022
$0.730
$1.010
$1.140
$1.490
28 Jun 2020
Grant date
Expiry date
Exercise price
02/10/2014
30/03/2020
30/03/2015
30/09/2020
27/05/2015
30/09/2020
27/05/2015
30/09/2020
28/08/2015
30/08/2020
13/05/2016
28/02/2022
$0.590
$0.730
$0.730
$1.010
$1.140
$1.490
Balance at
the start of
the year
666,667
166,666
316,669
200,000
1,350,002
Balance at
the start of
the year
466,668
73,334
933,334
333,333
550,001
400,000
2,756,670
Granted
Exercised
Expired/
forfeited/other
–
–
–
–
–
(666,667)
(166,666)
(316,669)
–
(1,150,002)
–
–
–
–
–
Granted
Exercised
Expired/
forfeited/other
(466,668)
(73,334)
(266,667)
(166,667)
(133,332)
–
–
–
–
–
(100,000)
(200,000)
–
–
–
–
–
–
–
Balance at
the end of
the year
–
–
–
200,000
200,000
Balance at
the end of
the year
–
–
666,667
166,666
316,669
200,000
(1,106,668)
(300,000)
1,350,002
The weighted average share price during the financial year was $1.490 (28 June 2020: $0.973).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 0.2 years (2020: 0.3 years).
Performance rights
On 14 October 2016, the Board approved a performance rights plan called the RCG Performance Rights Plan ('PRP'). The PRP was
introduced following a review by the Board of the existing remuneration arrangements of the Company. The PRP replaces the ESS.
The objective of the PRP is to align the interests of employees of the Group with those of the shareholders and provide employees
of the Group who are considered to be key to the future success of the Company with an opportunity to receive shares in order
to reward and retain the services of those persons and recognise the employees of the Group for their contribution to the future
success of the Company.
Eligibility and grant of performance rights
The Board may, from time to time, grant performance rights to an employee of the Group who the Board determines to be eligible
to participate in the PRP. This may include an executive director of the Company but may not include a non-executive director of
the Company. The performance rights granted are under the terms and conditions of the PRP and may include additional terms and
conditions, including any performance conditions, as the Board determine. The Board may only grant performance rights where an
employee continues to satisfy any relevant conditions imposed by the Board.
Vesting of performance rights
Vesting of performance rights are subject to prescribed performance conditions. The number of equity instruments that are
expected to vest is based on management’s assessment of the likelihood of the vesting conditions attached to the equity
instruments being satisfied. The key vesting conditions that are assessed are earnings per share targets and required service periods.
If the performance condition is met, 100% of the performance rights vest. If the performance condition is not met, none of the
performance rights vest unless the Board determines otherwise.
84
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 39. SHARE-BASED PAYMENTS (CONTINUED)
Recognition and measurement
The Group recognises the fair value at the grant date of equity settled shares as an expense with a corresponding increase in equity
over the vesting period. Fair value is independently determined using either a Monte Carlo simulation or the Black-Scholes option
pricing model, as appropriate, that takes into account the exercise price, the term of the option, the impact of dilution, the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate
for the term of the option. Vesting is also subject to the recipients of the performance rights remaining in employment with the
Company.
Lapsing of performance rights
An unvested performance right will lapse in various prescribed circumstances, unless the Board determines otherwise. Such
circumstances include:
– the circumstances specified by the Board on or before the grant of the performance right;
– if a participant ceases to be an employee and/or director of a Group company for any reason or they cease to satisfy any other
relevant conditions imposed by the Board at the time of the grant of the performance rights;
– failure to meet the performance conditions attaching to the performance right or any performance condition no longer, in the
opinion of the Board, being capable of being satisfied in accordance with their terms; and
– if in the opinion of the Board a participant acts fraudulently or dishonestly, is in breach of their material duties or obligations to
any Group company, has committed an act of harassment or discrimination or has done any act which has brought the Group or
any Group company into disrepute.
Set out below are summaries of the performance rights granted:
27 Jun 2021
Grant date
Expiry date
30/10/2022
30/10/2022
30/10/2022
30/11/2022
30/11/2024
31/08/2024
03/10/2017
27/12/2017
20/06/2018
30/11/2019
30/11/2019
30/11/2020
28 Jun 2020
Grant date
Expiry date
11/01/2017
03/10/2017
27/12/2017
20/06/2018
30/11/2019
30/11/2019
09/11/2019
30/10/2022
30/10/2022
30/10/2022
30/11/2022
30/11/2024
Balance at
the start of
the year
16,700,000
6,700,000
400,000
1,684,863
3,577,253
–
–
–
15,000
107,659
–
6,645,416
29,062,116
6,768,075
Granted
Exercised
Expired/
forfeited/other
Balance at
the end of
the year
–
–
–
–
–
–
–
(3,900,000)
12,800,000
–
–
(102,484)
(322,981)
6,700,000
400,000
1,597,379
3,361,931
(82,165)
6,563,251
(4,407,630)
31,422,561
Balance at the
start of the
year
1,076,154
16,700,000
6,700,000
400,000
24,876,154
Granted
Exercised
Expired/
forfeited/other
Balance at the
end of the year
–
–
–
–
1,684,863
3,577,253
5,262,116
(925,491)
(150,663)
-
–
–
–
–
–
–
–
–
16,700,000
6,700,000
400,000
1,684,863
3,577,253
(925,491)
(150,663)
29,062,116
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 1.95 years
(2020: 2.6 years).
85
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 40. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES
Significant and other accounting policies adopted in the preparation of the financial statements are provided throughout the notes.
These policies have been consistently applied to all the years presented, unless otherwise stated.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting
period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily for
the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer
the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or
other assets are acquired.
The consideration transferred is the sum of the acquisition date fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree.
For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate
share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms, economic conditions, the Group's operating or accounting policies and
other pertinent conditions in existence at the acquisition date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the acquiree at
the acquisition date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or
loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in
the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition date fair value of assets acquired, liabilities assumed and any non-controlling interest in
the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is
recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable
net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the
acquirer on the acquisition date, but only after a reassessment of the identification and measurement of the net assets acquired, the
non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the
acquirer.
If the initial accounting for a business contribution is incomplete by the end of the reporting period in which the combination occurs,
the Group reports provisional amounts for items for which the accounting is incomplete.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions
will be complied with. When the grant relates to an expense item, it is recognised as a reduction of the expense to which it relates.
Dividends
Dividends are recognised when declared during the financial year.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from
the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from,
or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
86
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 NOTE 40. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Software-as-a-Service (SaaS) arrangements
During the year, the Company revised its accounting policy in relation to upfront configuration and customisation costs incurred in
implementing SaaS arrangements in response to the IFRIC agenda decision clarifying its interpretation of how current accounting
standards apply to these types of arrangements. The new accounting policy is presented below.
SaaS arrangements are service contracts providing the Company with the right to access the cloud provider’s application software
over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider's
application software, are recognised as operating expenses when the services are received.
Some of these costs incurred are for the development of software code that enhances or modifies, or creates additional capability to,
existing on-premise systems and meets the definition of and recognition criteria for an intangible asset. These costs are recognised
as intangible software assets and amortised over the useful life of the software on a straight-line basis. The useful lives of these
assets are reviewed at least at the end of each financial year, and any change accounted for prospectively as a change in accounting
estimate.
Historical financial information has been restated to account for the impact of the change – refer Note 3.
NOTE 41. EVENTS AFTER THE REPORTING PERIOD
The lockdowns and government mandated store closures experienced in Victoria, South Australia, New South Wales, Queensland
and the Australian Capital Territory at various times across July and August have impacted sales in more than 350 stores, over 55%
of our store portfolio. Inclusive of this impact, like for like retail sales for the first 7 weeks of FY22 (including digital) were down -16%
to prior year. Digital sales continue to grow and over the last 3 weeks, with New South Wales and Victorian stores largely closed,
were up 66.7%.
The Company estimates that the group EBIT impact due to the COVID related disruption experienced across the months of July
and August will be at least -$15 million compared to management expectations prior to the lockdowns. This is the result of both lost
sales and the impact to gross margin of driving sales and ensuring that inventory levels are appropriately managed. The Company has
however implemented a range of inventory management and cost reduction initiatives.
Whilst the duration of the current lockdowns is unknown and we remain cautious on the near-term outlook, we expect this to have a
temporary impact on the trading environment. The company remains in a strong position with a flexible and resilient business model,
a database of 8.4 million contactable customers, a strong balance sheet and conservative gearing levels. The company continues to
invest for the future in new stores, digital capability and new business formats.
The health and wellbeing of our team and customers remains paramount, and the Company will continue to follow Government
health guidelines over the coming weeks and months. This could involve further restrictions in Australia and New Zealand,
impacting the Group’s operations.
There remains significant ongoing environmental uncertainty due to COVID-19, increasing risk and volatility and making future
outcomes hard to predict.
Additionally, on 28 June 2021, the Group increased its available debt facilities from $188.7 million to $218.7 million which is
associated with the acquisition of the assets of Next Athleisure Pty Ltd.
Apart from the dividend declared as disclosed in Note 25 and the matters described above, no other matters or circumstances have
arisen since 27 June 2021 that have significantly affected, or may significantly affect the Group's operations, the results of those
operations, or the Group's state of affairs in future financial years.
87
Notes to the Financial Statementsfor the year ended 27 June 2021Accent Group Limited Annual Report 2021 Directors' Declaration
In the directors' opinion:
– the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements;
– the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as disclosed in Note 2 of the financial statements;
– the attached financial statements and notes give a true and fair view of the Group's financial position as at 27 June 2021 and of
its performance for the financial year ended on that date;
– there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable; and
– at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will
be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee
described in Note 36 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
David Gordon
Chairman
18 August 2021
Melbourne
88
for the year ended 27 June 2021Accent Group Limited Annual Report 2021
Independent Auditor’s Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
477 Collins Street
Melbourne VIC 3000
Tel: +61 3 9671 7000
Fax: +61 3 9671 7001
www.deloitte.com.au
Independent Auditor’s Report to the Members of
Accent Group Limited
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrttss
Opinion
We have audited the financial report of Accent Group Limited (the “Company”) and its subsidiaries (the “Group”)
which comprises the consolidated statement of financial position as at 27 June 2021, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
• Giving a true and fair view of the Group’s financial position as at 27 June 2021 and of its financial performance
for the year then ended; and
• Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
89
Accent Group Limited Annual Report 2021
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
How the scope of our audit responded to
the Key Audit Matter
Our audit procedures included, but were not limited
to:
• Understanding the Group’s process and relevant
controls related to its impairment assessment of
the HYPE brand;
•
•
•
•
Evaluating the principles and integrity of the
Relief from Royalty discounted cash flow model
used by management to ensure it complies with
the relevant accounting standards;
Challenging management with respect to the
revenue growth rates underlying the cash flow
they are
to determine whether
forecast
reasonable and supportable based on historical
performance, management’s strategic growth
plans for the brand, and other known industry
factors;
Evaluating the
Group’s future trading performance; and
impact of COVID-19 on the
Engaging our valuation specialists to assess the
reasonableness of
the basis adopted by
management in determining the other key inputs
and assumptions underlying the calculations in
the models including:
the
o Evaluating
rate used by
royalty
comparison to the market data on similar
brand’s royalty rates; and
o Evaluating the discount rate used by
assessing the cost of capital of the Group and
comparison to market data.
•
Performing sensitivity analysis on the key model
inputs and assumptions.
We also assessed the appropriateness of the
disclosures in Note 16 to the financial statements.
Key Audit Matter
CCaarrrryyiinngg vvaalluuee ooff HHYYPPEE BBrraanndd
Following the acquisition of the HYPE business on 4
August 2016, the Group recognised an indefinite life
intangible asset relating to the HYPE Brand totalling
$30.2m. This was subsequently impaired by $9.7m in
the year ended 2 July 2017 based on the current and
forecast trading performance of the HYPE business.
As at 27 June 2021, the carrying value of the HYPE
Brand in the consolidated statement of financial
position is $20.5m and forms part of intangibles
totalling $372.7m in the consolidated statement of
financial position.
Management conducts an impairment test annually
(or more frequently if impairment indicators exist) to
assess the recoverability of the carrying value of the
HYPE Brand. This is performed through a Relief from
Royalty discounted cash flow model.
As disclosed in Note 16, there are a number of key
estimates made which require significant judgement
in determining the inputs into this discounted cash
flow model, which include:
•
•
Revenue growth;
Royalty rates; and
• Discount rates applied to the projected future
cash flows.
Management is also required to determine whether
there should be any reversal of the historical
impairment recognised of $9.7m as part of its
impairment assessment.
90
Independent Auditor’s ReportAccent Group Limited Annual Report 2021
Key Audit Matter
PPrroovviissiioonn ffoorr iimmppaaiirrmmeenntt ooff iinnvveennttoorriieess
As at 27 June 2021, the Group has recognised
$216.9m in inventories in the statement of financial
position as disclosed in Note 10.
Inventories are recognised net of a provision for
impairment where the net realisable value of
inventories is less than cost. The level of the provision
is assessed by taking into account the anticipated level
of sales and margins based on recent historical
performance, the quality of inventory held at balance
date and the broader market conditions.
To the extent that these judgements and estimates
prove incorrect, the Group may be exposed to
inventory write-downs or
potential additional
reversals in future periods.
How the scope of our audit responded to
the Key Audit Matter
Our audit procedures included, but were not limited
to:
• Understanding
the Group’s processes and
relevant controls related to the determination of
the inventory provision;
•
Challenging management’s estimate of the
provision by considering, amongst others, the
following sources of information to assess net
realisable value:
o Actual losses incurred in the previous 12
months due to inventory being sold below
cost and inventory written off;
Inventory not sold during the period; and
o
o The likelihood of current inventory becoming
impaired in the future based on internal and
external factors, including the impact of
COVID-19.
•
•
Assessing the reasonableness of the basis
adopted by management in determining the
provision calculations;
Recalculating the inventory provision to test
compliance with the Group’s accounting policy.
We also assessed the appropriateness of the
disclosures in Note 10 to the financial statements.
91
Independent Auditor’s ReportAccent Group Limited Annual Report 2021
Key Audit Matter
CCOOVVIIDD--1199 RReenntt ccoonncceessssiioonnss
As disclosed in Note 4 to the financial statements, the
Group has negotiated rent concessions with its
landlords. Of these negotiated rent concessions,
$8.7m has been recognised as a reduction of
occupancy expenses in the statement of profit or loss
and $3.2m has been recognised as a
lease
modification.
The recognition of COVID-19 rent concessions is
significant because:
•
•
•
The rent concessions have a significant impact on
profit or loss and, in certain circumstances, lease
liabilities;
The Group entered into a number of agreements,
each with different terms and conditions; and
The timing of when the agreements were
reached could have a significant impact on the
profit or loss.
How the scope of our audit responded to
the Key Audit Matter
Our audit procedures included, but were not limited
to:
• Understanding the Group’s process and relevant
identification and
controls related
accounting for rent concessions;
the
to
•
•
•
relevant
Reviewing agreements and other
documentation between the Group and
its
landlords to identify the terms and conditions of
the amended lease agreements and the date at
which agreement was reached between the two
parties;
Assessing whether any conditions contained
within the agreements with the Group’s landlords
had been met as at 27 June 2021;
Testing on sample basis,
the accounting
treatment of rent concessions to the underlying
agreements; and
• Obtaining direct confirmation from a sample of
landlords of the timing, nature and amount of
rent concessions provided to the Group where
agreements had been reached with landlords
outside of
lease
agreements.
concessions
formal
to
We also assessed the appropriateness of the
disclosures included in Note 4 to the financial
statements.
Other Information
The directors are responsible for the other information. The other information comprises the Directors’ Report
and Shareholder Information, which we obtained prior to the date of this auditor’s report, and also includes the
following information which will be included in the Group’s annual report (but does not include the financial report
and our auditor’s report thereon): Chairman and Chief Executive Officer’s Report, which is expected to be made
available to us after that date.
Our opinion on the financial report does not cover the other information and we do not and will not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial report
or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we
have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
When we read the Chairman and Chief Executive Officer’s Report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our professional
judgement to determine the appropriate action.
92
Independent Auditor’s ReportAccent Group Limited Annual Report 2021
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
93
Independent Auditor’s ReportAccent Group Limited Annual Report 2021
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 29 to 43 of the Directors’ Report for the year
ended 27 June 2021.
In our opinion, the Remuneration Report of the Group, for the year ended 27 June 2021, complies with section
300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
David White
Partner
Chartered Accountants
Melbourne, 18 August 2021
94
Independent Auditor’s ReportAccent Group Limited Annual Report 2021 Shareholder Information
The shareholder information set out below was applicable as at 9 August 2021.
DISTRIBUTION OF EQUITABLE SECURITIES
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
EQUITY SECURITY HOLDERS
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
BBRC INTERNATIONAL
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CRAIG JOHN THOMPSON
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
JAMES WILLIAM DUELL
MR DANIEL JOHN GILBERT
MRS CINDY GILBERT
NATIONAL NOMINEES LIMITED
HIT GROUP LIMITED
BNP PARIBAS NOMINEES PTY LTD
PITTMAN PTY LIMITED
RIVAN PTY LTD
BNP PARIBAS NOMINEES PTY LTD
GRAHGER RETAIL SECURITIES PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
MR GEOFFREY WILLIAM WEBSTER
MR TERRY SPYRIDES
ROANNE PTY LTD
Number
of holders
of ordinary
shares
4,065
5,679
2,272
3,075
238
15,329
282
Ordinary shares
Number held
98,542,751
76,634,294
45,890,517
32,518,614
32,153,409
16,363,043
12,500,000
11,000,000
11,000,000
9,050,241
7,500,000
3,551,127
2,728,000
2,599,034
2,012,257
2,000,000
1,531,193
1,295,642
1,150,000
1,102,400
% of total
shares
issued
18.19
14.14
8.47
6
5.93
3.02
2.31
2.03
2.03
1.67
1.38
0.66
0.5
0.48
0.37
0.37
0.28
0.24
0.21
0.2
371,122,522
68.48
95
Accent Group Limited Annual Report 2021 SUBSTANTIAL HOLDERS
Substantial holders in the Company are set out below:
BBRC International
Craig John Thompson
VOTING RIGHTS
The voting rights attached to ordinary shares are set out below:
Ordinary shares
All ordinary shares carry one vote per share without restriction.
There are no other classes of equity securities.
RESTRICTED SECURITIES
Class
Ordinary shares subject to the RCG Employee Share Scheme restrictions
Ordinary shares
Number held
98,542,751
32,518,614
% of total
shares
issued
18.19
6.00
Expiry date
Number
of shares
Various
200,000
96
Shareholder InformationAccent Group Limited Annual Report 2021 DIRECTORS
Corporate Directory
David Gordon - Chairman
Daniel Agostinelli - Chief Executive Officer
Stephen Goddard
Michael Hapgood
Donna Player
Joshua Lowcock
Brett Blundy
Timothy Dodd – alternate Director for Brett Blundy
JOINT COMPANY SECRETARIES
Matthew Durbin
Alethea Lee
REGISTERED OFFICE AND PRINCIPAL
PLACE OF BUSINESS
SHARE REGISTER
AUDITOR
BANKERS
2/64 Balmain Street
Richmond VIC 3121
Telephone: +61 3 9427 9422
Facsimile: +61 3 9427 9622
Email: investors@accentgr.com.au
Computershare Investor Services Pty Limited
Level 4
60 Carrington Street
Sydney NSW 2000
Telephone: 1300 787 272
Deloitte Touche Tohmatsu
477 Collins Street
Melbourne VIC 3000
National Australia Bank
Hongkong and Shanghai Banking Corporation
STOCK EXCHANGE LISTING
Accent Group Limited shares are listed on the
Australian Securities Exchange (ASX code: AX1)
WEBSITE
www.accentgr.com.au
CORPORATE GOVERNANCE STATEMENT
www.accentgr.com.au/investor/investor-documents
97
Accent Group Limited Annual Report 2021 Accent Group Limited
(ABN: 85 108 096 251)
2/64 Balmain Street, Richmond VIC 3121
+61 3 9427 9422
www.accentgr.com.au