Briscoe Group Limited

Annual Report 
for the period ended 30 January 2011

Contents

Key Facts  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 1

Chairman’s Review  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 2

Managing Director’s Review of Operations .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 4

Income Statements  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7

Statements of Comprehensive Income  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8

Statements of Changes in Equity .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 9

Balance Sheets .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 10

Statements of Cash Flows  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 11

Notes to the Financial Statements .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 13

Auditors’ Report .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 49

Corporate Governance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 51

General Disclosures  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 54

Top 20 Holder List  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 57

Directory  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 58

Calendar  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 58

Key Facts

Audited 

Audited 
period ending  period ending 
31 January 
2010 
$000 

30 January 
2011 
$000 

Audited 
period ending 
25 January 
2009 
$000 

Audited 
period ended 
27 January 
2008 
$000 

Audited 
period ended 
28 January 
2007 
$000 

Trading Results

Sales Revenue 

Gross profit margin 

Earnings before interest and tax (EBIT)  

Net profit after tax (NPAT) 

Net cash flows from operating activities 

Financial Position and Statistics

Shareholders' funds 

Total assets 

EBIT per share 

NPAT per share 

Operating cashflow per share 

Current ratio 

419,294 

416,686 

388,467 

407,750 

372,078 

39.8% 

32,755 

21,612 

45,264 

131,886 

191,119 

15.4c 

10.2c 

21.3c 

2.5:1 

39 .9% 

30,118 

21,026 

14,910 

127,621 

173,707 

14 .2c 

9 .9c 

7 .0c 

2 .7:1 

38 .6% 

15,113 

11,634 

28,099 

121,550 

177,184 

7 .1c 

5 .5c 

13 .2c 

2 .3:1 

68 .6% 

40 .4% 

31,774 

22,441 

22,672 

117,979 

180,389 

15 .0c 

10 .6c 

10 .7c 

2 .0:1 

65 .4% 

40 .8% 

36,252 

26,048 

45,802 

112,062 

172,391 

17 .1c 

12 .3c 

21 .6c 

2 .0:1 

65 .0% 

Shareholders' funds to total assets 

69.0% 

73 .5% 

Store Numbers 

Homeware  

Sporting Goods 

Briscoe Group 

Total Store Area (m2) 

Homeware  

Sporting Goods 

Briscoe Group 

54 

32 

86 

58 

32 

90 

57 

32 

89 

54 

32 

86 

48 

27 

75 

93,964 

53,204 

94,852 

53,714 

94,602 

53,714 

92,214 

53,812 

87,249 

47,948 

147,168 

148,566 

148,316 

146,026 

135,197 

1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chairman's Review

We are pleased to present the Directors’ Reports on the 
financial and operational performance of Briscoe Group 
Limited for the 52 week period ended 30 January 2011 .

The 2010-11 year was one of substantial growth for the 
Group, despite a continuation of the very challenging 
and competitive retail environment that has adversely 
affected retailers so severely in recent years . Given this 
operating environment and the competitive retail market 
we are pleased with the result and believe there are still 
further growth opportunities and scope for improved 
performance .

At our annual meeting last year we spoke about 
structural, strategic and cost-reduction initiatives that we 
had undertaken . A number of these are still continuing 
with increasing refinement and focus whilst the 
commitment and much hard work to achieve improved 
results continues throughout the organisation . 

We continue to focus on providing the customer 
with great product and exceptional prices delivered 
through the best possible in-store experience . The major 
restructuring we commenced just over two years ago 
of operational and merchandising activities gave our 
managers greater ownership and accountability and 
it is apparent that this ownership has translated into 
pride in their stores . The sense of ownership has greatly 
added to the customer experience and brings us all 
tangible results . The profit centre structure is enabling 
more flexibility in the allocation of resources across 
brands and the “profit-sharing” arrangements that we 
put in place have certainly been a win-win for the high 
performing managers as well as for the Group and its 
shareholders .

Our investment in new technology in recent years 
continues to generate improved performance with 
increased ability to control inventories and refine 
product ranges . Complementing this has been the 
streamlining of our marketing operations, again to drive 
improvement in the shopping experience for customers .

Notwithstanding numerous changes we have made to 
Living & Giving, a number of these stores continued 
to struggle, under the pressure of continued low levels 
of discretionary spending . Four of these stores were 
closed during the year as the leases expired and we 
will continue to closely monitor the performance of the 
remaining stores and make appropriate decisions as 
leases come up for renewal .

Your directors and senior management are still far from 
complacent . There is still much to do, but we have a 
strong foundation in place from which the Group can 
continue to develop and prosper .

The Group remains in a strong financial position to 
weather the ongoing volatile economic environment . 
Indeed with no debt and a strong cash balance 
Briscoe Group continues to be favorably positioned 
to take advantage of investment opportunities, 
should they present, as well as maximising organic 
growth opportunities that we believe would improve 
shareholder wealth . 

The Board is keen to pursue further growth initiatives 
for the homeware and sporting goods operations and to 
extend the Group’s reach into new geographical areas . 
Opportunities for further expansion through acquisition 
or store rollout will continue to be evaluated on the 
basis of the potential to add value to Briscoe Group and  
its shareholders .

Financial performance
Sales revenue was $419 .29 million, compared with 
$416 .69 million previously . On a same store same day 
basis, sales increased for the year by 2 .4 percent .  

Gross profit increased from $166 .46 million to $166 .75 
million, equating to a gross profit margin of 39 .8 percent 
compared with 39 .9 percent for the previous year .

Net profit after tax (NPAT) was $21 .61 million compared 
to the $21 .03 million for last year .

The result includes a tax adjustment of $2 .48 million 
that the Group is required to book under New Zealand 
Equivalent to International Accounting Standard 12 as 
a result of tax changes announced by the Government 
during the year . This deferred tax liability adjustment 
is a one-off non-cash accounting entry which has 
no material impact on Briscoe Group’s underlying 
profitability, cash flows or dividend policy . Excluding 
this adjustment NPAT for the full year was $24 .10 
million or 14 .6 percent higher than the full year result 
reported for last year .

The results were for the 52 week period from 1 February 
2010 to 30 January 2011 compared to the 53 week period 
last year from 26 January 2009 to 31 January 2010 .
Inventories were $63 .18 million at 30 January 2011, 
being slightly below the $63 .35 million reported for last 
year, reflecting the lower store numbers and also the 

2

 
 
constant focus on inventory that the Group has at all 
operating levels . 

Net cash inflows from operating activities were $45 .26 
million, $30 .35 million above those of last year 
primarily as a result of the abnormally high payments 
made last year due to the 53 week financial period .  

Net cash outflows from investing activities were $4 .79 
million reflecting investment made in store fit-outs 
during the year .

Dividend
The directors have resolved to pay a final dividend of 
6 .00 cents per share (cps), fully imputed . When added 
to the interim dividend of 3 .00 cps, this brings the total 
dividend for the year to 9 .00 cps, representing 88% of 
the Group’s tax paid earnings . During the last four years 
the Group has paid out 79% of tax paid earnings .  

The directors have approved the final dividend payment 
date of 31 March 2011and the share register will close 
to determine entitlements to the dividend at 5 pm on 24 
March 2011 . 

Executive Share Option Plan
The Board is of the view that all shareholders benefit 
from the issue to key senior executives of long-term, 
appropriately-priced share options that crystallise only 
on delivery of increased shareholder value . In 2003 the 
Group established an Executive Share Option Plan to 
issue options to selected senior executives and, subject 
to shareholder approval, to Executive Directors . The 
Board intends to issue up to a further 1,500,000 options 
in the current 2011-12 financial year . This will result 
in the total number of share options issued under the 
scheme since its inception and still exercisable being 
equivalent to 3 .3% of the current issued share capital . 

The first four tranches of options, issued between 2003 
and 2006 have now lapsed with no options being 
exercised . The fifth tranche became exercisable at a 
price of $1 .38 each from 14 December 2010 . Of the 
1,139,000 options issued in that tranche, 1,077,000 are 
still exercisable . The holders have until 14 December 
2011 to exercise them . Disclosures will continue to 
be made in relation to the share options issued by the 
Group as and when options are exercised or lapse . 

Further details of the Executive Share Options Plan 
can be found in Note 21 (page 44) of the financial 
statements contained within this Annual Report .

Community Sponsorship 
At Briscoe Group we continue to be aware of the need 
to be a responsible and socially aware corporate citizen . 

The two recent earthquakes in Christchurch have 
affected many people and Briscoes Group has been 
working and continues to work closely with the Red 
Cross to ensure our contribution is effective and timely .  

We have continued our support of Cure Kids as our 
charity of choice as we continue to believe it is a 
cause that fits our values . Cure Kids has been funding 
life saving research for over 30 years and more than 
$25 million has been invested to improve the lives of 
children in New Zealand and around the world . Some of 
the successful research that Cure Kids has helped fund 
includes:

•	 Research into the understanding and treatment of 
congenital diseases . Professor Stephen Robertson 
is the Cure Kids Chair of Child Health research at 
the University of Otago and after many years of 
frustrating research he has stunned the medical 
world by identifying a deadly mutation in a 
single gene – amongst a staggering 3,000 million 
individual units . 

•	 Research into cot death . In the past 15 years, New 
Zealand’s rate of cot death has plummeted from 
over 280 per year to around 60, and continues 
to fall . Much of this is due to the preventative 
strategies by Professor Ed Mitchell, Cure Kids Chair 
of Child Health Research at the University  
of Auckland . 

•	 Research into child leukaemia . Researchers 

funded by Cure Kids at the University of Otago 
have recently made groundbreaking advances 
into understanding when the genetic change for 
leukaemia occurs in children .

Alaister Wall, Deputy Managing Director of Briscoe 
Group continues as a Director of Cure Kids, reinforcing 
our commitment to this incredible charity as it strives to 
find cures for every disease affecting kiwi children (and 
their families) and improve their quality of life along the 
way .

As well as our alignment with Cure Kids we support 
a wide variety of local community based charities, 
sports clubs and other initiatives by donating product to 
support fundraising efforts .

Directors, Management and Staff
In addition to participating in formal monthly Board 
meetings throughout the year, the directors attended 
other meetings of directors and regular meetings of the 
Board’s Audit and Human Resources Committees .

On behalf of my fellow directors, I wish to acknowledge 
the enormous contributions of all managers, profit 
partners and other employees to the Group’s 
performance during the year . Their contributions are 
sincerely appreciated . 

Rosanne Meo, CHAIRMAN 

3

 
 
Managing Director's Review of Operations 

Introduction
During another tough trading year the Group continued 

to focus on doing the basics well . Controlling costs, 

buying well and planning and implementing effective 

promotions have contributed to our continued growth in 

profit .

The New Zealand dollar remained high throughout the 

year and we took advantage of this by further expanding 

our import programme . The higher level of imports 

enabled us to fuel aggressive promotional offers without 

cutting too deeply into our closing margins . 

The Profit Centre structure continues to have a major 

positive effect on our business as the Senior Profit 

Partners (SPPs) grow in confidence in their roles . The 

reduction in store controllable costs has substantially 

contributed to our improved profit performance and is a 

result of the ownership embraced by the SPPs who run 

our stores .

merchandise division to help improve the quality of our 

data maintenance . This function is now well established 

and provides improved support to the merchandise 

team .

Our store and support profit share schemes continue 

to keep our people clearly focused on producing 

incremental profit . During a year when our trading 

performance has been under pressure the drive for 

incremental profit growth has been a major reason for 

our success .

With another tough year ahead, the ability and 

motivation of our senior management team to quickly 

respond to changing conditions will underpin our drive 

to increase market share and continue to improve 

returns to our shareholders .

Homeware
Briscoes Homeware remains committed to offering 

The merchandise team has continued to develop 

excellent value for money through an aggressive 

product ranges which offer our customers better choice 

promotional programme .

and value for money . We remain committed to offering 

The high level of promotional aggression from 

a wide range of branded products believing that brands 

competitors continued throughout the year and our 

at excellent prices deliver to our customer what they 

ability to keep our own promotional programme 

want .

interesting and attractive to customers has been an 

important driver of sales .

The Group has experienced a number of cost increases 

During the year we relocated the Briscoes Homeware 

in key commodities this year and has worked hard 

store in Palmerston North to a new site with improved 

with our suppliers to minimise the impact to retail 

parking and storage facilities .

prices whenever possible . Cotton prices have increased 

considerably and the merchandise team has managed 

As signalled in the Interim Report we have taken the 

to lessen the effect on retail prices by strategic forward 

opportunity to exit four loss making Living & Giving 

buying to take advantage of pricing opportunities . Some 

stores as their leases have expired . The closures at 

of these cost increases will inevitably flow through to 

Northlands, Newmarket, Takapuna and Hamilton have 

increased retail prices and we will monitor competitors’ 

been successfully managed by our SPPs with very 

prices closely to ensure we remain competitive .

little residual stock . We would like to thank the teams 

involved for the professional way they have managed 

In the last Interim Report we announced that the Group 

theses closures and we will continue to closely monitor 

had created an administration function within the 

the performance of our specialty stores and make 

appropriate decisions as leases come up for renewal .

4

 
Sporting Goods
Rebel Sport promoted aggressively throughout the year 

to compete for its share of discretionary spend .

Improved inventory management supported by a strong 

promotional programme featuring Sonny Bill Williams 

helped Rebel Sport produce acceptable same store sales 

growth despite difficult trading conditions through the 

second half of the year .

escaped without major injury . The costs that we incur 

and any profit we lose as a result of the earthquake are 

covered by our insurance policies . The directors and 

management thank everyone for the way they have 

responded to these extraordinary challenges .

GST rate change
During the second half of the year we successfully 

Rebel Sport stores at Palmerston North and Central 

managed the change in the GST rate which required a 

Wellington were relocated to improved sites during the 

significant amount of re-pricing in all Briscoe Group 

year .

Christchurch Earthquakes, 4th September 

2010, 22nd February 2011
We have all been shocked by the two major earthquakes 

that struck Christchurch . All of the Group’s seven 

Christchurch based stores were affected in varying 

degrees by the first earthquake on September 4th . 

However all stores reopened within a short time and 

were trading at a reasonable level until the second 

major quake on February 22nd . The second quake did 

further damage to a number of our stores and at the 

time of this report we are still assessing the full level 

of damage to Rebel Sport Colombo Street and Briscoes 

Homeware Salisbury Street . We are fortunate and very 

thankful that during both disasters our customers and 

staff who were in our stores at the time of the quakes 

stores . We took the view that our customers needed 

to have clarity around pricing pre and post the change 

and applied price stickers showing both prices to all of 

our products during the months before the change . This 

decision was welcomed by our customers and received 

positive coverage in the media .

We believe that the increased rate did slow sales in 

some categories as customer confidence was affected by 

the large amount of media coverage approaching and 

after the rate change .

People and performance
The tough nature of the retail market as well as ‘one-off’ 

extraordinary events has put additional pressure on our 

team . By keeping our focus on doing the basics well we 

have managed to absorb this pressure and still achieve 

our goals throughout the year .

5

We will continue to develop and support the key people 

Our Briscoes Homeware and Rebel Sport stores in 

in our stores and support office . This year we will focus 

Nelson will be relocated to a new site where the stores 

on delivering targeted training to SPPs and their teams 

will be adjacent . This move will result in superior 

following the completion of a training needs analysis . 

locations with better customer parking and will allow 

The coming year will also see additional resource 

the SPP to gain all of the synergies which come from 

invested to further up-skill this team in the interpretation 

operating two stores on one site .

and use of information available to them from the 

Group’s SAP information system . By improving the SPPs’ 

In addition to these major projects we will support our 

skills in this area we are confident they will provide 

SPPs to complete minor works throughout the year as 

improved detailed feedback to the merchandise team 

opportunities are identified to increase returns .

allowing them to further improve sales, stock turn and 

gross profit margin . 

Priorities and outlook for 2011/12
The Group’s goal remains to offer customers excellent 

value for money across the best ranges of quality 

branded products we can source .

The last two years have been tough and despite a market 

which has adversely affected many of our competitors 

we have managed to produce increased profits in 

both years . We will continue to focus on generating 

incremental profits by managing our business carefully .

While we do expect to continue to strengthen our 

position in the current year as New Zealand’s leading 

retailer of homeware and sporting goods, the extent 

of any improvement in financial performance will be 

highly dependent on the overall economic environment, 

which remains volatile . 

Our focus remains on improving returns to our 

shareholders and we believe that our profit centre and 

support structure, information systems and merchandise 

expertise will allow the Group to maintain or grow 

market shares in both the homeware and sporting goods 

During this year the space management models will be 

sectors .    

increasingly used by our SPPs in Briscoes Homeware 

and Rebel Sport stores . By using these models they will 

continue to increase the return from the space in their 

stores by allocating space in optimal proportions based 

Rod Duke

on sales and gross profit returns .

GROUP MANAGING DIRECTOR

In three of our key locations (Albany, Henderson 

and Botany Downs) where Rebel Sport and Briscoes 

Homeware stores are adjacent, we will re-align the 

space to make the Briscoes Homeware store and the 

storage facilities larger by reducing the space for Rebel 

Sport to an optimum size . By doing this we aim to 

increase sales at Briscoes Homeware, hold existing 

sales at Rebel Sport and gain synergies by creating one 

set of backroom and storage facilities . Based on the 

performance of these projects we may look for further 

opportunities in other locations .

6

Financial Statements

The Board of Directors is pleased to present the Financial Statements for Briscoe Group Limited for the 52 week period 

ended 30 January 2011 . The Financial Statements presented are signed for, and on behalf of, the Board, and were 

authorised for issue on the date below .

Rosanne Meo 

CHAIRMAN 

Rod Duke

GROUP MANAGING DIRECTOR

8 March 2011

Income Statements

For the 52 week period ended 30 January 2011

Group 

Parent

Period ended 
30 January 2011 
$000 

Notes 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Sales revenue 
Cost of goods sold 

Gross profit 
Other operating income 
Store expenses 
Administration expenses 

Operating profit 
Net finance income 

Profit before income tax 
Income tax expense 

419,294 
(252,548) 

166,746 
101 
(83,365) 
 (50,727) 

32,755 
1,415 

34,170 
 (12,558) 

416,686 
(250,227) 

166,459 
116 
(86,805) 
(49,652) 

30,118 
1,187 

31,305 
(10,279) 

– 
– 

– 
29,112 
– 
(11,036) 

18,076 
1,034 

19,110 
(782) 

5 

5 

5 
6 

Net profit attributable to shareholders 

21,612 

21,026 

18,328 

Period ended
31 January 2010
$000

–
–

–
23,200
–
(10,484)

12,716
945

13,661
(702)

12,959

Earnings per share for profit attributable to
shareholders:
Basic earnings per share (cents) 
Diluted earnings per share (cents) 

7 
7 

10.2 
9.9 

9 .9 
9 .7 

8.6 
8.4 

6 .1
6 .0

The above income statements should be read in conjunction with the accompanying notes.

7

 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Comprehensive Income

For the 52 week period ended 30 January 2011

                   Group 
Period ended 
30 January 
2011  
$000 

Period ended 
31 January 
2010  
$000 

      Parent

Period ended 
30 January 
2011  
$000 

Period ended
31 January
2010
$000

Notes 

Net Profit attributable to shareholders 

                         21,612     

        21,026 

18,328 

12,959

Other comprehensive income: 
1,454                      –  
Fair value loss/(gain) recycled to income statement                                   2,608 
Fair value (loss)/gain taken to the cashflow hedge reserve                          (3,625)              (6,515)                       – 
Deferred tax on fair value hedge taken to income statement       14               (782)                (436)                       – 
Deferred tax on fair value transfers to cashflow hedge reserve       14                1,059                 1,954                      –  

Total other comprehensive income                                                      (740)              (3,543) 

– 

–
–
–
–

–

Total comprehensive income attributable to shareholders                   20,872               17,483               18,328 

12,959

The above statements of comprehensive income should be read in conjunction with the accompanying notes.

8

 
 
 
 
 
 
 
 
 
 
 
 
Statements of Changes in Equity

For the 52 week period ended 30 January 2011

Group 

Notes 

capital 

Share  Cashflow 
hedge 
reserve 
$000 

$000 

Share 
options 
reserve 
$000 

Retained 
earnings 

Total
equity

$000 

$000

Balance at 25 January 2009 

40,625 

3,261 

486 

77,178 

121,550

Net profit attributable to shareholders 
Other comprehensive income: 
Fair value loss/(gain) recycled to income statement 
Fair value (loss)/gain taken to the cashflow hedge reserve 
Deferred tax on fair value hedge taken to income statement 
Deferred tax on fair value transfers to cashflow hedge reserve 

Total comprehensive income for the period 
Transactions with owners:
Dividends paid 
Share options charged to income statement 
Transfer for share options lapsed and forfeited 

14 
14 

20 
21 
21 

– 

– 
– 
– 
– 

– 

– 
– 
– 

– 

1,454 
(6,515) 
(436) 
1,954 

(3,543) 

– 

– 
– 
– 
– 

– 

21,026 

21,026

– 
– 
– 
– 

1,454
(6,515)
(436)
1,954

21,026 

17,483

– 
– 
– 

– 
256 
(162) 

(11,668) 
– 
162 

(11,668) 

256
–

Balance at 31 January 2010 

40,625 

(282) 

580 

86,698 

127,621

Net profit attributable to shareholders 
Other comprehensive income: 
Fair value loss/(gain) recycled to income statement 
Fair value (loss)/gain taken to the cash hedge reserve 
Deferred tax on fair value hedge taken to income statement  14 
14 
Deferred tax on fair value transfers to hedge reserve 

Total comprehensive income for the period  
Transactions with owners: 
Dividends paid 
Share options charged to income statement 
Transfer for share options lapsed and forfeited 

20 
21 
21 

– 

– 
– 
– 
– 

– 

– 
– 
– 

– 

2,608 
(3,625) 
(782) 
1,059 

(740) 

– 

– 
– 
– 
– 

– 

21,612 

21,612

– 
– 
– 
– 

2,608
(3,625)
(782)
1,059

21,612 

20,872

– 
– 
– 

– 
365 
(309) 

(16,972) 
– 
309 

(16,972)
365
–

Balance at 30 January 2011 

40,625 

(1,022) 

636 

91,647 

131,886

Parent 

Notes 

capital 

Share  Cashflow 
hedge 
reserve 
$000 

$000 

options 
reserve 
$000 

Share   Retained  
earnings  

Total
equity

$000 

$000

Balance at 25 January 2009 

40,625 

Net profit attributable to shareholders  

Total comprehensive income for the period 
Transactions with owners: 
Dividends paid 
Share options charged to income statement 
Transfer for share options lapsed and forfeited 

Balance at 31 January 2010 

Net profit attributable to shareholders 

Total comprehensive income for the period 
Transactions with owners: 
Dividends paid 
Share options charged to income statement 
Transfer for share options lapsed and forfeited 

– 

– 

– 
– 
– 

40,625 

– 

– 

– 
– 
– 

20 
21 
21 

20 
21 
21 

Balance at 30 January 2011 

40,625 

– 

– 

– 

– 
– 
– 

– 

– 

– 

– 
– 
– 

– 

486 

8,198 

49,309

– 

– 

12,959 

12,959

12,959 

12,959

– 
256 
(162) 

(11,668) 
– 
162 

(11,668)
256
–

580 

9,651 

50,856

– 

– 

18,328 

18,328

18,328 

18,328

– 
365 
(309) 

(16,972) 
– 
309 

(16,972)
365
–

636 

11,316 

52,577

The above statements of changes in equity should be read in conjunction with the accompanying notes.

9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheets

As at 30 January 2011

Group 

Parent

30 January 2011 
$000 

31 January 2010  30 January 2011 
$000 

$000 

31 January 2010
$000

Notes 

EQUITY 
Share capital 
Cashflow hedge reserve 
Share options reserve 
Retained earnings 

TOTAL EQUITY 

LIABILITIES 
Non-current liabilities 
Employee benefits 

Total non-current liabilities 

Current liabilities 
Trade and other payables 
Provisions 
Employee benefits 
Taxation payable 
Derivative financial instruments 

Total current liabilities 

TOTAL LIABILITIES 

19 
3(c),8 
21 

17 

15 
16 
17 
14 
3(c) 

40,625 
(1,022) 
636 
91,647 

40,625 
(282) 
580 
86,698 

131,886 

127,621 

518 

518 

49,891 
92 
5,604 
1,892 
1,236 

58,715 

59,233 

461 

461 

33,230 
53 
7,716 
3,873 
753 

45,625 

46,086 

40,625 
– 
636 
11,316 

52,577 

102 

102 

619 
– 
1,557 
– 
– 

2,176 

2,278 

40,625
–
580
9,651

50,856

73

73

957
–
1,782
13
–

2,752

2,825

TOTAL EQUITY AND LIABILITIES 

191,119 

173,707 

54,855 

53,681

ASSETS 
Non-current assets 
Investments in subsidiaries 
Property, plant and equipment 
Intangible assets 
Deferred tax 

Total non-current assets 

Current assets 
Cash and cash equivalents 
Trade and other receivables 
Due from related parties 
Inventories 
Taxation receivable 
Derivative financial instruments 

Total current assets 

TOTAL ASSETS 

11 
12 
13 
14 

8 
9 
22 
10 
14 
3(c) 

– 
42,201 
520 
544 

43,265 

82,794 
1,862 
– 
63,177 
– 
21 

– 
44,096 
1,412 
2,691 

48,199 

59,250 
2,310 
– 
63,353 
– 
595 

147,854 

125,508 

191,119 

173,707 

2,783 
– 
– 
159 

2,942 

31,655 
687 
19,288 
– 
283 
– 

51,913 

54,855 

2,783
–
–
183

2,966

37,669
629
12,417
–
–
–

50,715

53,681

The above balance sheets should be read in conjunction with the accompanying notes.

10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Cash Flows

For the 52 week period ended 30 January 2011

Group 

Parent

Period ended 

Period ended
30 January 2011  31 January 2010   30 January 2011  31 January 2010
$000

Period ended 

Period ended 

$000 

$000 

$000 

Notes 

OPERATING ACTIVITIES 
Cash was provided from 
Receipts from customers 
Rent received 
Dividends received 
Interest received  
Management fees received 
Net GST received 

Cash was applied to
Payments to suppliers 
Payments to employees 
Interest paid 
Net GST paid 
Income tax paid 

419,862 
96 
5 
1,151 
– 
– 

417,099 
111 
5 
1,251 
– 
– 

421,114 

418,466 

(303,694) 
(47,442) 
(6) 
(12,592) 
(12,116) 

(338,936) 
(43,617) 
(5) 
(13,006) 
(7,992) 

– 
– 
16,972 
822 
11,525 
345 

29,664 

(3,498) 
(7,278) 
(6) 
– 
(1,054) 

–
–
11,668
1,005
11,455
318

24,446

(3,475)
(5,697)
(5)
–
(944)

(375,850) 

(403,556) 

(11,836) 

(10,121)

Net cash inflows from operating activities 

45,264 

14,910 

17,828 

14,325

INVESTMENT ACTIVITIES
Cash was provided from
Proceeds from sale of property, plant and equipment 

Cash was applied to
Purchase of property, plant and equipment 
Purchase of intangible assets  

12 
13 

Net cash (outflows) from investment activities 

FINANCING ACTIVITIES
Cash was applied to
Advances to subsidiaries 
Dividends paid 

8 

8 

(4,539) 
(256) 

(4,795) 

(4,787) 

16 

16 

(6,358) 
(335) 

(6,693) 

(6,677) 

– 

– 

– 
– 

– 

– 

–

–

–
–

–

–

– 
(16,972) 

20 

– 
(11,668) 

(6,870) 
(16,972) 

(13,215)
(11,668)

(16,972) 

(11,668) 

(23,842) 

(24,883)

Net cash (outflows) from financing activities 

(16,972) 

(11,668) 

(23,842) 

(24,883)

Net increase (decrease) in cash and cash equivalents 
Cash and cash equivalents at beginning of period   
Foreign cash balance cash flow hedge adjustment   

23,505 
59,250 
39 

(3,435) 
63,291 
(606) 

(6,014) 
37,669 
– 

(10,558)
48,227
–

Cash and cash equivalents at period end 

8 

82,794 

59,250 

31,655 

37,669

11

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Cash Flows continued

For the 52 week period ended 30 January 2011

Group 

Parent

Period ended 
30 January 2011 
$000 

RECONCILIATION OF NET CASH FLOWS FROM
OPERATING ACTIVITIES TO REPORTED NET PROFIT

Period ended 

Period ended 
31 January 2010   30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Reported net profit attributable to shareholders 

21,612 

21,026 

18,328 

12,959

Items not involving cash flows 

Depreciation and amortisation expense 
Adjustment for fixed increase leases 
Asset impairment adjustment 
Creation of deferred tax liability 
Bad debts and movement in doubtful debts 
Amortisation of executive share options cost   
Loss on disposal of assets 

Impact of changes in working capital items

Decrease (increase) in trade and other receivables 
Decrease (increase) in inventories 
Increase (decrease) in taxation payable 
Increase (decrease) in trade payables 
Increase (decrease) in other payables and accruals 

7,319 
(191) 
– 
2,484 
28 
365 
255 

8,435 
187 
1,857 
– 
28 
256 
3 

10,260 

10,766 

420 
176 
(1,981) 
17,528 
(2,751) 

13,392 

45,264 

291 
(5,893) 
3,078 
(14,523) 
165 

(16,882) 

– 
– 
– 
– 
– 
365 
– 

365 

(58) 
– 
(297) 
138 
(648) 

(865) 

–
–
–
–
–
256
–

256

(111)
–
(245)
(228)
1,694

1,110

14,910 

17,828 

14,325

The above statements of cash flows should be read in conjunction with the accompanying notes. 

12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

1. Summary of significant accounting policies

These consolidated financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting 

Practice (NZ GAAP) . They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) . The 

financial statements comply with International Financial Reporting Standards (IFRS) .

(a) Basis of preparation of financial statements
The principal accounting policies adopted in the preparation of the financial report are set out below . These policies have been 

consistently applied to all the periods presented, unless otherwise stated .

Entities reporting

Briscoe Group Limited (‘Company’ or ‘Parent’) and its subsidiaries together are referred to in these financial statements as 

the Group or the consolidated entity . The Company and its subsidiaries are designated as profit-oriented entities for financial 

reporting purposes .

The financial statements of the Parent are for the Company as a separate legal entity .

Reporting period

These financial statements are in respect of the 52 week period 1 February 2010 to 30 January 2011 and provide balance 

sheets as at 30 January 2011 . The comparative period is in respect of the 53 week period 26 January 2009 to 31 January 

2010 . The Group operates on a weekly trading and reporting cycle resulting in 52 weeks for most years with a 53 week year 

occurring once every 6 years as was the case last year .

Statutory base

Briscoe Group Limited is a company incorporated and domiciled in New Zealand, registered under the Companies Act 1993 

and is an issuer in terms of the Securities Act 1978 . The Company is also listed on the New Zealand Stock Exchange (NZSX) .

The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993 and the 

Companies Act 1993 .

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial 

assets and liabilities (including derivative instruments) at fair value through profit or loss .

Critical accounting estimates, judgements and assumptions

The preparation of financial statements in conformity with NZ IFRS requires the use of certain critical accounting estimates . 

It also requires management to exercise its judgement in the process of applying the Company’s accounting policies . The 

Directors regularly review all accounting policies and areas of judgement in presenting the financial statements .

Estimates

The Group tests annually whether tangible and intangible assets have suffered any impairment, in accordance with the 

accounting policy stated in Note 1(h) and as disclosed in Notes 12 and 13 .

13

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

The Group also reviews at each reporting date, whether the provisions for inventory obsolescence and store shrinkage 

calculated in accordance with the accounting policy stated in Note 1(k), are adequate . If outcomes within the next 

financial year are significantly different from assumptions, this could result in adjustments to carrying amounts of the asset 

or liability affected . 

Judgements

The Group assesses whether there are indications for certain trigger events which may indicate that an impairment in 

property, plant and equipment values exist as disclosed in Note 12 .

(b) Principles of consolidation
Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Briscoe Group Limited as at 30 

January 2011 and the results of all subsidiaries for the 52 week period then ended . 

Subsidiaries are all those entities over which the Company has the power to govern the financial and operating policies, 

generally accompanying a shareholding of more than one-half of the voting rights . The existence and effect of potential voting 

rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity .

Subsidiaries are fully consolidated from the date on which control is transferred to the Group . They are deconsolidated from 

the date that control ceases .

The acquisition method of accounting is used to account for business combinations by the Group . The consideration 

transferred for the acquisition of a subsidiary is an aggregate of the fair values of the assets transferred, the liabilities incurred 

and the equity interests issued by the Group . The consideration transferred includes the fair value of any asset or liability 

resulting from a contingent consideration agreement . Acquisition-related costs are expensed as incurred . Identifiable assets 

acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values 

at the acquisition date . On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the 

acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets .

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date 

fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets 

acquired is recorded as goodwill . If this is less than the fair value of the net assets of the subsidiary acquired the difference is 

recognised directly in the income statement .

Intercompany transactions, balances and unrealised gains on transactions between subsidiary companies are eliminated . 

Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred . 

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the 

Company .

(c) Segment reporting
An operating segment is a component of an entity that engages in business activities which earns revenue and incurs expenses 

and for which the chief operating decision maker (CODM) reviews the operating results on a regular basis and makes decisions 

on resource allocation . The Group has determined its CODM to be the group of executives comprising the Managing Director, 

Chief Operating Officer and Chief Financial Officer on the basis that it is this group which determines the allocation of 

resources to segments and assesses their performance .

14

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

The reportable operating segments of the Group have been determined based on the components of the Group that the CODM 

monitors in making decisions about operating matters . Such components have been identified on the basis of internal reports 

that the CODM reviews regularly in order to allocate resources and to assess the performance of the entity . The CODM reviews 

finance income on a net basis .

The Group is organised into two reportable operating segments, namely homeware and sporting goods, reflecting the different 

retail sectors solely in New Zealand, within which the Group operates . The Parent holding company is not considered to be a 

reportable operating segment and as such eliminations and unallocated amounts within Note 4 are primarily attributable to the 

Parent . The corporate structure of the Group also reflects these segments with its two trading subsidiaries, Briscoes (NZ) Limited 

and The Sports Authority Limited . Financial details of these segments are outlined in Note 4 . 

(d) Foreign currency translation
Functional and presentation currency

Items included in the financial statements of each of the Group’s operations are measured using the currency of the primary 

economic environment in which it operates (‘the functional currency’) . The financial statements are presented in New Zealand 

dollars, which is the Company’s functional currency and the Group’s presentation currency .

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the 

transactions . Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at 

period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income 

statement, except when deferred in other comprehensive income as qualifying cash flow hedges .

(e) Revenue recognition
Revenue comprises the fair value for the sale of goods and services, net of Goods and Services Tax (GST), rebates and 

discounts and after eliminating sales within the Group . Revenue is recognised as follows:

Sales of goods – retail

Sales of goods are recognised when a Group entity sells a product to a customer . Retail sales are usually in cash or by credit card . 

Interest income

Interest income is recognised on a time-proportionate basis using the effective interest method .

Dividend income

Dividend income is recognised when the right to receive the dividend is established .

(f) Income tax
The income tax expense for the period is the tax payable on the current period’s taxable income based on the income tax rate 

adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets 

and liabilities and their carrying amounts in the financial statements, and to unused tax losses .

15

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet 

date in New Zealand, being the country where the Company’s subsidiaries operate and generate taxable income . Management 

periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to 

interpretation . It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities .

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets 

are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted . The relevant tax 

rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset 

or liability . An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability . 

No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other 

than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss .

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future 

taxable amounts will be available to utilise those temporary differences and losses .

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of 

investments in operations where the Group is able to control the timing of the reversal of the temporary differences and it is 

probable that the differences will not reverse in the foreseeable future .

Deferred tax is not recognised in relation to brands where they are deemed to have an indefinite life .

(g) Leases
The Group is the lessee

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating 

leases . Payments made under operating leases (net of any incentives received from the lessor) are charged to the income 

statement on a straight-line basis over the period of the lease .

The Group is the lessor

Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the period of the lease .

(h) Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment and whenever 

there is an indication of an impairment . Assets that are subject to amortisation are reviewed for impairment whenever events or 

changes in circumstances indicate that the carrying amount may not be recoverable . For the purposes of assessing impairment, 

assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units) . An 

impairment loss is recognised for the amount by which an asset’s carrying amount exceeds its recoverable amount . The 

recoverable amount is the higher of an asset’s fair value less costs to sell, or value in use .

(i) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other short-term, highly 

liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and 

which are subject to an insignificant risk of changes in value . 

16

 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

(j) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for 

impairment . Trade receivables arise from sales made to customers on credit or through the collection of purchasing rebates 

from suppliers not otherwise deducted from suppliers’ payable accounts . 

Trade receivable balances are reviewed on an ongoing basis . Debts known to be uncollectible are written off . A provision for 

impaired receivables is established when there is objective evidence that the Group will not be able to collect all amounts due 

according to the original terms of receivables . Significant financial difficulties of the debtor, probability that the debtor will 

enter bankruptcy and inconsistency in timing of payments are considered indicators that the collection of a particular trade 

receivable is doubtful . The amount of the provision is the difference between an asset’s carrying amount and the present value 

of estimated future cash flows, discounted at the effective interest rate . The amount of the provision is recognised in the income 

statement . When a trade receivable is uncollectible, it is written off against the provision . Subsequent recoveries of amounts 

previously written off are credited against the income statement .

(k) Inventories
Inventories are stated at the lower of cost and net realisable value . Cost is determined using a weighted average method and 

includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition . Net 

realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses .

(l) Financial assets
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active 

market . They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the 

receivable . Loans and receivables are recognised initially at fair value plus transaction costs and are subsequently measured at 

amortised cost . They are included in current assets, except for those with maturities greater than 12 months after the balance 

date, which are classified as non-current assets . Loans and receivables are included in receivables in the balance sheet . An 

assessment is made at each balance date as to whether there is objective evidence that a financial asset or group of financial 

assets is impaired . Impairment testing of trade receivables is described in Note 9 . Regular purchases and sales of financial 

assets are recognised on the date on which the Group commits to purchase or sell the asset .

(m) Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently 

re-measured to their fair value . The method of recognising the resulting gain or loss depends on whether the derivative is 

designated as a hedging instrument, and if so, the nature of the item being hedged . The Group designates certain derivatives 

as either: (1) hedges of the fair value of recognised assets or liabilities or firm commitments (fair value hedge); or (2) hedges of 

highly probable forecast transactions (cash flow hedges) .

Certain subsidiaries document at the inception of a transaction the relationship between hedging instruments and hedged 

items, as well as its risk management objective and strategy for undertaking various hedge transactions . These subsidiaries also 

document their assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging 

transactions have been and will continue to be effective in offsetting changes in fair values or cash flows of hedged items .

17

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income 

statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk .

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is 

recognised in other comprehensive income . The gain or loss relating to the ineffective portion is recognised immediately in the 

income statement .

Amounts accumulated in other comprehensive income are recycled in the income statement in the periods when a hedged 

item will affect profit or loss (for instance when the forecast purchase that is hedged takes place) . However, when a forecast 

transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, 

the gains and losses previously deferred in other comprehensive income are transferred from other comprehensive income and 

included in the measurement of the initial cost or carrying amount of the asset or liability .

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge 

accounting, any cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive 

income and is recognised when a forecast transaction is ultimately recognised in the income statement . When a forecast 

transaction is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive income is 

immediately transferred to the income statement .

Derivatives that do not qualify for hedge accounting

Hedge accounting has not been adopted for some hedges including certain derivative instruments that do not qualify for hedge 

accounting . Changes in the fair value of these derivative instruments are recognised immediately in the income statement .

(n) Fair value estimation
The fair value of financial assets and financial liabilities is estimated for recognition, measurement and disclosure purposes .

The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) 

is determined using valuation techniques . The fair value of forward exchange contracts is determined by mark to market 

valuations using forward exchange market rates at the balance date .

(o) Derecognition of financial assets and liabilities
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been 

transferred and the Group has transferred substantially all risks and rewards of ownership . Financial liabilities are derecognised 

when the obligations for payment of cash flows have expired or have been transferred and the Group has transferred 

substantially all of the obligations .

(p) Property, plant and equipment
All property, plant and equipment is stated at historical cost less depreciation and any impairment adjustments . Historical cost 

includes expenditure that is directly attributable to the acquisition of property, plant and equipment .

Subsequent costs are included in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when 

it is probable that future economic benefits associated with an item will flow to the Group and the cost of an item can be 

measured reliably . All other repairs and maintenance are charged to the income statement during the financial period in which 

they are incurred .

18

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Land is not depreciated . Depreciation on other assets is calculated using the straight-line method to allocate their cost, net of 

their residual values, over their estimated useful lives, as follows:

•	 Freehold	Buildings	

•	 Plant	and	equipment	

33	years

3	–	15	years

Assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date .

An asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its 

estimated recoverable amount .

Gains and losses on disposals are determined by comparing proceeds with carrying amounts . These gains and losses are 

included in the income statement .

(q) Intangible assets

Brands

Brands are valued independently as part of the fair value of a business acquired from third parties where the brand has a value 

which is substantial and long-term and where the brand can be sold separately from the rest of the business acquired . Brands 

are amortised over their estimated lives, except where it is considered that the economic useful life is indefinite .

Indefinite life brands are tested for impairment annually and whenever there is an indication that the brand may be impaired .

Software

Software costs have a finite useful life . Software costs are capitalised and amortised on a straight-line basis over the estimated 

useful economic life of 2 to 5 years . All software has been acquired externally .

(r) Trade and other payables
Trade and other payable amounts represent liabilities for goods and services provided to the Group prior to the end of a 

financial period, which are unpaid . The amounts are unsecured and are usually paid within 60 days of recognition . They are 

initially recognised at fair value then subsequently recognised at amortised cost using the effective interest method .

(s) Goods and Services Tax (GST)
The income statements, statements of comprehensive income and statements of cash flows have been prepared exclusive of 

GST . All items in the balance sheets are stated net of GST, with the exception of trade receivables and trade payables, which 

include GST invoiced .

(t) Provisions
Provisions are recognised when:

•	

the	Group	has	a	present	legal	or	constructive	obligation	as	a	result	of	past	events;	

•	

it	is	more	likely	than	not	that	an	outflow	of	resources	will	be	required	to	settle	the	obligation;	and

•	

the	amount	can	be	reliably	estimated.

Provisions are not recognised for future operating losses .

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by 

considering the class of obligations as a whole .

19

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

(u) Share capital
Ordinary shares are classified as capital .

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, 

from the proceeds .

(v) Deferred landlord contributions
Landlord contributions to fit-out costs are capitalised as deferred contributions and amortised to the income statement over the 

period of the lease .

(w) Employee benefits 
Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non monetary benefits, annual leave and accumulating sick leave expected to 

be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to 

the reporting date and are measured at the amounts expected to be paid when the liabilities are settled . Liabilities for non- 

accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable .

Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of 

expected future payments to be made in respect of services provided by employees up to the reporting date using the projected 

unit credit method . Consideration is given to expected future wage and salary levels, history of employee departure rates and 

periods of service . Expected future payments are discounted using market yields at the reporting date on government bonds 

with terms to maturity that match, as closely as possible, the estimated future cash outflows .

Equity settled share based compensation

The Executive Share Option Plan allows Group employees to be granted options to acquire shares of the Parent . The fair value 

of options granted is recognised as an employee expense in the income statement with a corresponding increase in the share 

options reserve . The fair value is measured at grant date and spread over the vesting periods . The fair value of the options 

granted is measured using the Black Scholes valuation model, taking into account the terms and conditions upon which the 

options are granted . When options are exercised the amount in the share options reserve relating to those options, together 

with the exercise price paid by an employee, is transferred to share capital .

(x) Dividends
Provision is made for the amount of any dividend declared on or before the balance date but not distributed at balance date .

(y) Earnings per share
Basic earnings per share is computed by dividing net profit attributable to shareholders by the weighted average number of 

ordinary shares on issue during the period .

Diluted earnings per share is computed by dividing net profit attributable to shareholders by the weighted average number of 

ordinary shares on issue during the period, adjusted to include the potentially dilutive effect if share options to issue ordinary 

shares were exercised and converted into shares .

20

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

(z) Statements of cash flows
The following are the definitions of the terms used in the statements of cash flows:

•	 Cash	comprises	cash	and	bank	balances	(Note	1(i));

•	

Investing	activities	are	those	activities	relating	to	the	acquisition,	holding	and	disposal	of	property,	plant	and	

equipment and investments;

•	 Financing	activities	are	those	activities	which	result	in	changes	in	the	size	and	composition	of	the	capital	structure	of	

the Group . This includes both equity and debt not falling within the definition of cash . Loans to and from the Parent 

and subsidiaries are treated as financing cash flows . Dividends paid are included in financing activities; and

•	 Operating	activities	include	all	transactions	and	other	activities	that	are	not	investing	or	financing	activities.

2. Accounting standards

The following new standards and amendments to standards were applied during the period; 

This amendment includes a number of updates including the requirement that all costs relating to a business 

combination must be expensed and subsequent re-measurement of the business combination must be put through 

the income statement . Both standards were required to be adopted at the same time . As the Group has had no 

transactions involving business combinations there has been no impact from the application of these new standards . 

This amendment provides clarification that the potential settlement of a liability by the issue of equity is not relevant 

to its classification as current or non-current . By amending the definition of current liability, the amendment permits 

a liability to be classified as non-current (provided that the entity has an unconditional right to defer settlement 

by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact that 

the entity could be required by the counterparty to settle in shares at any time . There is no impact on the Group’s 

financial statements from the application of this amendment . 

Certain new standards, amendments and interpretations of existing standards have been published that are mandatory for later 

periods and which the Group has not early adopted . These will be applied by the Group in the mandatory periods listed below . 

The key items applicable to the Group are:

 (mandatory for periods beginning on or after 1 January 2013) 

This replaces the multiple classification and measurements models in IAS 39 Financial Instruments: Recognition and 

measurements with a single model that has only two classification categories: amortised cost and fair value . This will 

affect future financial statements through disclosure only .

definition of a related party which may result in other related parties being identified . Management have reviewed the 

proposed clarification and no further related parties have been identified for the Group . 

 (mandatory for periods beginning on or after 1 January 2011) Further clarifies the 

There are no other standards, amendments or interpretations to existing standards which have been issued, but are not yet 

effective, which are expected to impact the Company or Group .

21

 
  
  
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

3. Financial risk management

3.1 Financial risk factors
The Group’s activities expose it to various financial risks including, liquidity risk, credit risk and market risk (including currency 

risk and cash flow interest rate risk) . The Group’s overall risk management programme seeks to minimise potential adverse 

effects on the Group’s financial performance . The Group uses certain derivative financial instruments to hedge certain risk 

exposures .

(a) Liquidity risk
Liquidity risk is the risk that an unforeseen event or miscalculation in the required liquidity level will result in the Group 

foregoing investment opportunities or not being able to meet its obligations in an orderly manner, and therefore gives rise to 

lower investment income or to higher borrowing costs than otherwise . Prudent liquidity risk management includes maintaining 

sufficient cash, and ensuring the availability of adequate amounts of funding from credit facilities .

The Group’s liquidity exposure is managed by ensuring sufficient levels of liquid assets and committed facilities are maintained 

based on regular monitoring of a rolling 3-month daily cash requirement forecast . Taking into account the present levels 

of cash held by the business, this risk is considered by management to be low . The Group’s liquidity position fluctuates 

throughout the year, being strongest immediately after the end of year trading period . The months leading up to Christmas 

trading put the greatest strain on Group cash flows due to the build up of inventory as well as the interim dividend payment . 

The Group has an overdraft facility of $500,000 but to date this has not been utilised .

The table below analyses the Group’s financial liabilities and gross-settled derivatives into relevant maturity groupings based 

on the remaining period from the balance sheet date to the contractual maturity date . The cash flow hedge ‘outflow’ amounts 

disclosed in the table are the contractual undiscounted cash flows liable for payment by the Group in relation to all forward 

foreign exchange contracts in place at balance date . The cash flow hedge ‘inflow’ amounts represent the corresponding 

injection of foreign currency back to the Group as a result of the gross settlement on those contracts, converted using the 

forward rate at balance date . The carrying value shown is the net amount of derivative financial liabilities and assets as shown 

in the balance sheet . 

Trade payables are shown at carrying value in the table . No discounting has been applied as the impact of discounting  

is not significant .

22

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Group 
As at 30 January 2011 

Less than 
3 months 
$000 

3-5 
months 
$000 

6-8 
months 
$000 

9-12 
months  
$000 

Total 
$000 

Carrying
Value
$000

Trade and other payables 

(49,891) 

– 

– 

– 

(49,891) 

(49,891)

Forward foreign exchange contracts 
Cash flow hedges: 
  – outflow 
  – inflow 

(8,662) 
8,117 

 (8,564) 
8,182 

(10,477) 
10,209 

(1,676) 
 1,656 

– 
 (29,379) 
 28,164                –

  – Net 

(545) 

(382) 

(268) 

(20) 

(1,215) 

(1,215)

As at 31 January 2010 

Less than 
3 months 
$000 

3-5 
months 
$000 

6-8 
months 
$000 

9-12 
months  
$000 

Total 
$000 

Carrying
Value
$000

Trade and other payables 

(33,230) 

– 

– 

– 

(33,230) 

(33,230)

Forward foreign exchange contracts 
Cash flow hedges:
  – outflow 
  – inflow 

(8,748) 
8,185 

(5,913) 
6,085 

(8,413) 
8,646 

(145) 
145 

(23,219) 
23,061 

–
–

  – Net 

(563) 

172 

233 

– 

(158) 

(158)

The cash flow hedges inflow amounts use the forward rate at balance date . 

Parent 
As at 30 January 2011 

Less than 
3 months 
$000 

3-5 
months 
$000 

6-8 
months 
$000 

9-12 
months  
$000 

Total 
$000 

Carrying
Value
$000

Trade and other payables 

(619) 

– 

– 

– 

(619) 

(619)

As at 31 January 2010 

Less than 
3 months 
$000 

3-5 
months 
$000 

6-8 
months 
$000 

9-12 
months  
$000 

Total 
$000 

Carrying
Value
$000

Trade and other payables 

(957) 

– 

– 

– 

(957) 

(957)

There are no financial derivative liabilities or assets in the name of the Parent . 

(b) Credit risk
Credit risk refers to the risk of a counterparty failing to discharge an obligation . In the normal course of its business, Briscoe 

Group incurs credit risk from trade receivables and transactions with financial institutions . The Group places its cash, short-

term investments and derivative financial instruments with only high credit quality financial institutions . Sales to retail 

customers are settled predominantly in cash or by using major credit cards . Less than 1% of reported sales give rise to trade 

receivables . The Group holds no collateral over its trade receivables . (Refer also to Notes 1 .(j) and 9) .

23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

(c) Market risk
Foreign exchange risk

The Group is exposed to foreign exchange risk arising from currency exposures primarily to the US dollar, in respect of 

purchases of inventory directly from overseas suppliers .

Management work to Board-approved Group Treasury Risk Management Policies to manage the Group’s foreign exchange 

risk . The current policy requires hedging of both committed and forecasted foreign currency payment levels across the current 

and subsequent three calendar quarters . The policy is to cover 100% of committed purchases but lower levels of coverage 

for forecasted purchases depending on which quarter the forecasted exposure relates to . Hedging is reviewed regularly by 

management and reported to the Board monthly .

The Group uses forward foreign exchange contracts and maintains short-term holdings of foreign currencies in denominated 

foreign currency bank accounts, with major financial institutions only, to hedge its foreign exchange risk arising from future 

purchases .

The following table shows the fair value of forward foreign exchange contracts held by the Group as derivative financial 

instruments at balance date:

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Current assets
Forward foreign exchange contracts 

Total current derivative financial instrument assets 

Current liabilities
Forward foreign exchange contracts 

21 

21 

1,236 

Total current derivative financial instrument liabilities 

1,236 

595 

595 

753 

753 

– 

– 

– 

– 

–

–

–

–

Forward foreign exchange contracts – cash flow hedges

Forward foreign exchange contracts are used for hedging committed or highly probable forecast purchases of inventory for the 

ensuing financial year . The contracts are timed to mature when major shipments of inventory are scheduled to be dispatched 

and the liability settled . The cash flows are expected to occur at various dates within one year from balance date . Where 

forward foreign exchange contracts have been designated and tested as an effective hedge the portion of the gain or loss on the 

hedging instrument that is determined to be an effective hedge is recognised directly in other comprehensive income . These 

gains or losses are released to the income statement at various dates over the subsequent financial year as the inventory for 

which the hedge exists, is sold .

At balance date these contracts are represented by assets of $21,141 (2010: $594,584) and liabilities of $1,236,152 (2010: 

$753,426) and together are included in equity as part of the cash flow hedge reserve, net of deferred tax, as a net loss of 

$874,808 (2010: net loss $111,189) . The cash flow hedge reserve also consists of gains and losses, net of deferred tax, from 

foreign currencies used as hedges, as a net loss of $147,329 (2010: net loss of $170,354), refer Note 8 .

When forward foreign exchange contracts are not designated and tested as an effective hedge, the gain or loss on the forward 

foreign exchange contract is recognised in the income statement . At balance date there are no such contracts in place (2010: 

Nil) .

24

 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Fair value hierarchy

The only financial instruments held by the Group in relation to fair value measurements are over the counter derivatives . These 

derivatives have all been determined to be within level 2 of the fair value hierarchy (2010: level 2) as all significant inputs 

required to ascertain the fair value of these derivatives are observable (refer Note 1(n)) . The carrying value is a reasonable 

approximation for fair value for trade and other receivables, trade and other payables and related parties payables and receivables . 

Interest rate risk

The Group has no interest-bearing liabilities therefore its exposure to interest rate risk arises only from the impact on income 

and operating cash flows as a result of interest-bearing assets, such as cash deposits . The Group’s short to medium term 

liquidity position is monitored daily by management and surplus funds placed on call or short-term deposit with major 

financial institutions only .

Sensitivity analysis
Based on historical movements and volatilities and review of current economic commentary management believes that the 

following movements are reasonably possible over the next 12 month period:

•	 Proportional	foreign	exchange	rate	movement	of	-15%	(depreciation	of	NZD)	and	+10%	(appreciation	of	NZD)	

against the USD, from the year-end rate of 0 .7725,

•	 A	shift	of	between	+1%	and	-0.5%	in	market	interest	rates	from	the	year-end	deposit	rate	of	4.48%.	

If these movements were to occur, the positive / (negative) impact on consolidated profit before tax and on consolidated equity 

for each category of financial instrument held at balance date is presented below . 

25

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

As at 30 January 2011
Group 
                                            amount          -0.5%                       +1%                           -15%                  +10%

Interest rate 

Carrying 

Foreign exchange rate

$000 

Profit 
$000 

Equity 
$000 

Profit 
$000 

Equity 
$000 

Profit 
$000 

Equity 
$000 

Profit  Equity
$000
$000 

Financial Assets: 
Cash and cash equivalents1 . 
Derivatives – designated as  
cashflow hedges (Forward  
foreign exchange contracts)2 . 

Financial liabilities:
Derivatives – designated as  
cashflow hedges (Forward  
foreign exchange contracts)2 . 

82,794 

(414) 

(414) 

828 

828 

21 

– 

– 

– 

– 

1,236 

– 

– 

– 

– 

Total increase / (decrease) 

(414) 

(414) 

828 

828 

– 

– 

– 

– 

367 

– 

(189)

473 

– 

(238)

4,588 

– 

(2,338)

5,428 

– 

(2,765)

Receivable and payables have not been included above as they are denominated in NZD and are non-interest bearing and 
therefore not subject to market risk .

1.  Cash and cash equivalents include deposits at call which are at floating interest rates. The sensitivity to a +1% movement in 

interest rates is $827,942. For a -0.5% movement in interest rates the sensitivity is ($413,971).

2.  Derivatives designated as cashflow hedges are foreign exchange contracts and foreign currencies used to hedge against the 
NZD:USD foreign exchange risk arising from foreign denominated future purchases. Based on outputs from a derivative 
valuation model, a -15% / +10% shift in the NZD:USD foreign exchange rate has an impact of $5,428,160 / ($2,765,025) 
on derivative valuation. There is no profit and loss sensitivity as the hedges are 100% effective.

As at 30 January 2011
Parent                                  Carrying                            Interest rate 
                                            amount                  -0.5%                     +1%   
                                                                 Profit       Equity          Profit   Equity 
                                                $000           $000        $000            $000    $000

Financial assets: 
Cash and cash equivalents        31,655          (158)        (158)             316      316 

Total increase / (decrease)                             (158)         (158)            316      316 

1.  Cash and cash equivalents include deposits at call which are at floating interest rates. The sensitivity to a +1%
   movement in interest rates is $316,550. For a -0.5% movement in interest rates the sensitivity is ($158,275).

26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

As at 31 January 2010
Group
                                                  Carrying         
                                                    amount               -0.5% 

Interest rate 

   +1% 

Foreign exchange rate
  +10%

    -10% 

$000 

Profit 
$000 

Equity 
$000 

Profit 
$000 

Equity 
$000 

Profit 
$000 

Equity 
$000 

Profit 
$000 

Equity
$000

59,250 

(296) 

(296) 

593 

593 

– 

403 

– 

(330)

595 

– 

– 

– 

– 

– 

2,107 

– 

(1,703)

Financial assets: 
Cash and cash equivalents  
Derivatives – designated as  
cashflow hedges (Forward  
foreign exchange contracts)  

Financial liabilities: 
Derivatives – designated as .  
cashflow hedges (Forward foreign  
exchange contracts)  

Total increase / (decrease) 

(296) 

(296) 

593 

593 

753 

– 

– 

– 

– 

– 

– 

492 

– 

(406)

3,002 

– 

(2,439)

Receivables and payables have not been included above as they are denominated in NZD and are non-interest bearing and 
therefore not subject to market risk .

1.  Cash and cash equivalents include deposits at call which are at floating interest rates. The sensitivity to a +1% movement in 

interest rates is $592,503. For a -0.5% movement in interest rates the sensitivity is ($296,252).

2.   Derivatives designated as cashflow hedges are foreign exchange contracts and foreign currencies used to hedge against the 
NZD:USD foreign exchange risk arising from foreign denominated future purchases. Based on outputs from a derivative 
valuation model, a -/+10% shift in the NZD:USD foreign exchange rate has an impact of $3,001,571 / ($2,438,567) on 
derivative valuation. There is no profit and loss sensitivity as the hedges are 100% effective.

As at 31 January 2010
Parent                                         Carrying                        Interest rate 
                                                   amount                -0.5%                    +1% 
                                                                    Profit     Equity         Profit      Equity 
                                                       $000       $000      $000         $000       $000 

Financial assets: 
Cash and cash equivalents               37,669       (188)      (188)            377         377 

Total increase / (decrease)                                (188)      (188)            377          377 

1.  Cash and cash equivalents include deposits at call which are at floating interest rates. The sensitivity to a +1% movement in 

interest rates is $376,686. For a -0.5% movement in interest rates the sensitivity is ($188,343).

27

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Financial instruments by category
The accounting policies for financial instruments have been applied to the line items below:

As at 30 January 2011 

Assets as per balance sheet
Cash and cash equivalents  
Trade receivables 
Due from related parties 
Derivative financial instruments 

Total 

Group 

Loans and  Derivatives 
used for 
receivables 
hedging 
$000 

$000 

82,794 
1,059 
– 
– 

83,853 

– 
– 
– 
21 

21 

Total 

$000 

82,794 
1,059 
– 
21 

83,874  

 Parent

Loans and  Derivatives 
used for
receivables 
hedging
$000 

$000 

31,655 
249 
19,288 
– 

51,192 

– 
– 
– 
– 

– 

Other financial  Derivatives 
used for 
hedging 
$000 

liabilities at 
amortised cost 
$000 

Total 

$000 

Other financial  Derivatives 
used for
hedging
$000 

liabilities at 
amortised cost 
$000 

Liabilities as per balance sheet 
Trade and other payables 
Derivative financial instruments 

49,891 
– 

– 
1,236 

49,891 
1,236 

Total 

49,891 

1,236 

51,127  

As at 31 January 2010 

Group 

Loans and  Derivatives 
used for 
receivables 
hedging 
$000 

$000 

Total 

$000 

59,250 
1,063 
– 
– 

– 
– 
– 
595 

59,250 
1,063 
– 
595 

Assets per balance sheet
Cash and cash equivalents 
Trade receivables 
Due from related parties 
Derivative financial instruments 

Total 

60,313 

595 

60,908  

619 
– 

619 

– 
– 

– 

Parent

Loans and  Derivatives 
used for
receivables 
hedging
$000 

$000 

37,669 
– 
12,417 
– 

50,086 

– 
– 
– 
– 

– 

37,669
–
12,417
–

50,086

Total

$000

31,655
249
19,288
–

51,192

Total

$000

619
–

619

Total

$000

Other financial  Derivatives 
used for 
hedging 
$000 

liabilities at 
amortised cost 
$000 

Total 

$000 

Other financial  Derivatives 
used for
hedging
$000 

liabilities at 
amortised cost 
$000 

Liabilities as per balance sheet 
Trade and other payables 
Due to related parties 

33,230 
– 

– 
753 

33,230 
753 

Total 

33,230 

753 

33,983  

957 
– 

957 

– 
– 

– 

Total

$000

957
–

957

28

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

3.2 Capital risk management
Group’s objectives when managing capital are to maximise shareholder wealth whilst ensuring that the Group continues to 

safeguard its ability to continue as a going concern . In order to meet these objectives the Group may adjust the amount of 

dividend payment made to shareholders . There are no specific banking or other arrangements which require the Group to 

maintain specified equity levels .

4. Segment information

The Group has two reportable operating segments that are defined by the retail sectors within which the Group operates, 

namely homeware and sporting goods . The following is an analysis of the Group’s revenue and results by operating segment . 

Revenue reported below is generated purely in New Zealand from sales to external customers and due to the nature of the 

retail businesses there is no reliance on any individual customer . There were no inter-segment sales in the period (2010: Nil) . 

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 1 . 

Information regarding the operations of each reportable operating segment is included below . Segment profit represents the 

profit earned by each segment and reflects the income statements associated with the two trading subsidiary companies, 

Briscoes (NZ) Limited and The Sports Authority Limited (trading as Rebel Sport) .

29

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

For the period ended 30 January 2011 

Homeware 

$000 

286,693 

114,952 

24,534 

24 
(9,440) 

15,118 

Sporting  
goods 
$000 

Eliminations/ 
Unallocated  
$000 

Total Group

$000

132,601 

51,794 

7,117 

357 
(2,336) 

5,138 

– 

– 

1,104 

1,034 
(782) 

1,356 

419,294

166,746

32,755

1,415
(12,558)

21,612

102,277 

56,818 

57,171 

20,568 

31,671 

(18,153) 

191,119

59,233

3,504 

4,771 

2,484 

1,291 

2,548 

– 

– 

– 

–  

4,795

7,319

2,484

$000 

286,149 

115,221 

23,399 

84 
(7,728) 

15,755 

Sporting  
goods 
$000 

Eliminations/ 
Unallocated  
$000 

Total Group

$000

130,537 

51,238 

5,670 

158 
(1,849) 

3,979 

– 

– 

1,049 

945 
(702) 

1,292 

416,686

166,459

30,118

1,187
(10,279)

21,026    

88,830 

40,747 

47,160 

15,696 

37,717 

(10,357) 

173,707

46,086

6,293 

5,530 

1,857 

400 

2,905 

– 

– 

– 

– 

6,693

8,435

1,857

INCOME STATEMENT 
Total sales revenue 

Gross profit 

Earnings before interest and tax  

Net finance income 
Income tax expense 

Net profit after tax 

BALANCE SHEET ITEMS:

Assets 

Liabilities 

OTHER SEGMENTAL ITEMS: 

Acquisitions of property, plant and equipment,  
intangibles and investments 

Depreciation and amortisation 

Impact of statutory change in depreciation on  
buildings included in income tax expense 

For the period ended 31 January 2010 

Homeware 

INCOME STATEMENT 
Total sales revenue 

Gross profit  

Earnings before interest and tax  

Net finance income 
Income tax expense 

Net profit after tax 

BALANCE SHEET ITEMS:

Assets 

Liabilities 

OTHER SEGMENTAL ITEMS: 

Acquisitions of property, plant and equipment,  
intangibles and investments 

Depreciation and amortisation expense 

Impairment of property, plant and equipment,  
intangibles and investments 

30

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

5. Income and expenses

Profit before income tax includes the  

following specific income and expenses: 

Income

Rental income 

Dividends received 

Management fees 

Finance income 

Expenses

96 

5 

– 

1,421 

111 

5 

– 

1,192 

Operating lease rental expense 

28,295 

28,409 

Bad debts written off 

Amounts paid to auditors: 

Statutory Audit 

Half year review 

Other assurance services 

Directors’ fees 

Share options expense 

Wages, salaries and other short term benefits  

Loss on disposal of property, plant and equipment 

Inventory writedown expense 

Finance expense 

Depreciation of property, plant and equipment 

Amortisation of software costs 

Fixed asset impairment adjustment 

Intangible asset impairment adjustment 

27 

80 

20 

– 

176 

365 

45,926 

255 

1,260 

6 

6,171 

1,148 

– 

– 

83 

80 

20 

6 

160 

256 

47,430 

3 

1,361 

5 

7,153 

1,282 

1,424 

433 

– 

16,972 

12,140 

1,040 

– 

– 

80 

20 

– 

176 

365 

–

11,668

11,532

950

–

–

80

20

6

160

256

7,265 

6,771

– 

– 

6 

– 

– 

– 

– 

–

–

5

–

–

–

–

31

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Group 

Parent

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

6. Income tax expense

(a) Income tax expense

Current tax expense: 

  Current tax 

  Adjustments for prior years 

Deferred tax expense: 

Period ended 
30 January 2011 
$000 

9,660 

474 

10,134 

(Increase) / Decrease in future tax benefit current year 
Impact from reduction in tax rate from 30% to 28% (i) 
Impact of statutory change in depreciation on buildings (ii)  2,484 

736 

10 

  Adjustments for prior years 

(806) 

2,424 

Total income tax expense 

12,558 

10,279 

(b) Reconciliation of income tax expense to tax rate applicable to profits

10,157 

914 

11,071 

(97) 

– 

– 

(695) 

(792) 

543 

215 

758 

219 
11 

– 

(206) 

24 

782 

521

178

699

160

–

–

(157)

3

702

Profit before income tax expense 
Tax at the corporate rate of 30% (2010: 30%)  

34,170 
10,251 

31,305 
9,392 

19,110 
5,733 

13,661
4,098

Tax effect of amounts which are either non-deductible  
or non-assessable in calculating taxable income: 

(17) 
   Income not subject to tax 
162 
   Expenses not deductible for tax  
   Impact of reduction in tax rate from 30% to 28% (i) 
10 
   Impact of statutory change in depreciation on buildings (ii)  2,484 
(332) 

Prior period adjustments 

(17) 
685 
– 
– 
219 

Total income tax expense 

12,558 

10,279 

(5,092) 
121 
11 
– 
9 

782 

(3,500)
83
–
–
21

702

The Group has no tax losses (2010: Nil) and no unrecognised temporary differences (2010: Nil)

(i)  During the period, as a result of the change in the NZ corporate tax rate from 30% to 28% that was enacted on 27 May 

2010 and that will be effective from 31 January 2011, the relevant deferred tax balances have been re-measured. Deferred 
tax expected to reverse in the period to 29 January 2012 or later has been measured using the effective rate that will apply 
for the period, being 28%. 

(ii)  Buildings are currently depreciated for tax purposes. As a result of the change in tax legislation that was enacted on 27 

May 2010, with effect from 31 January 2011 being the beginning of the 2011/12 income year, the tax depreciation rate on 
buildings with an estimated useful life of 50 years or more will be reduced to 0%. This reduction in the tax depreciation 
rate has significantly reduced the tax base of the Group’s buildings as future tax deductions for building depreciation will 
no longer be available from the 2011/12 income year. This has resulted in an increase to the deferred tax liability in  
relation to buildings by $2,483,721 which has been recognised in the tax expense in the current period.

32

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

7. Earnings per share

Basic earnings per share is computed by dividing net profit attributable to shareholders by the weighted average number of 

ordinary shares on issue during the period .

Diluted earnings per share is computed by dividing net profit attributable to shareholders by the weighted average number of 

ordinary shares on issue during the period, adjusted to include the potentially dilutive effect if share options to issue ordinary 

shares were exercised and converted into shares .

Group 

Parent

Period ended 
30 January 2011 

Period ended 

Period ended 
31 January 2010  30 January 2011 

Period ended
31 January 2010

Net profit attributable to shareholders ($000) 

21,612 

21,026 

18,328 

12,959

Basic 
Weighted average number of ordinary shares  
on issue (thousands) 

212,150 

212,150 

212,150 

212,150

Basic earnings per share 

10.2 cents 

9 .9 cents 

8.6 cents 

6 .1 cents

Diluted 
Weighted average number of ordinary shares  
on issue adjusted for share options issued  
but not exercised (thousands) 

217,341 

216,545 

217,341 

216,545

Diluted earnings per share 

9.9 cents 

9 .7 cents 

8.4 cents 

6 .0 cents

8. Cash and cash equivalents

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Cash at bank or in hand 

82,794 

59,250 

31,655 

37,669

The carrying amount for cash and cash equivalents equals the fair value .

At 30 January 2011 the Group had purchased foreign currency equivalent of NZD 2 .097 million (2010: NZD 3 .626 million) 

which is included in the table above . The foreign currency in which the Group primarily deals is the US dollar .

Foreign currency cash – cash flow hedges (cash flow hedge reserve)

These cash balances are used for hedging committed or highly probable forecast purchases of inventory for the ensuing 

financial year . The foreign currency purchases are held and allocated by calendar quarter to the highly probable forecast 

purchases which are timed to mature when major shipments of inventory are scheduled to be dispatched and the liability 

settled . The cash flows are expected to occur at various dates within one year from balance date .

33

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Where foreign currency balances have been designated and tested as an effective hedge, the portion of the gain or loss on the

hedging instrument that is determined to be an effective hedge is recognised directly in other comprehensive income . These 

gains or losses are released to the income statement at various dates over the subsequent financial year as the inventory for 

which the hedge exists, is sold . At balance date foreign currency losses of $204,623 (2010: losses of $243,363) in relation to 

foreign currency balances, were included in equity as part of the cash flow hedge reserve, net of deferred tax, as a net loss of 

$147,329 (2010: net loss of $170,354) . The cash flow hedge reserve also consists of gains and losses, net of deferred tax, from 

forward foreign exchange contracts used as hedges, as a net loss of $874,808 (2010: net loss of $111,189), refer note 3(c) . 

When foreign currency balances are not designated and tested as an effective hedge, the gain or loss as at balance date is 

recognised in the income statement . At balance date there are no such balances (2010: Nil) .

9. Trade and other receivables 

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Trade receivables 
Provision for impaired receivables 

Net trade receivables 
Other receivables 

Total trade and other receivables  

523 
(7) 

516 
1,346 

1,862 

1,069 
(6) 

1,063 
1,247 

2,310 

– 
– 

– 
687 

687 

–
–

–
629

629

The fair value of trade and other receivables approximates their carrying value . 

No interest is charged on trade receivables .

As at 30 January 2011, trade receivables of $37,706 (2010: $180,807) were past due but not considered impaired . These relate 

to a number of accounts for which there is no recent history of default . The aging analysis of these receivables is shown below:

Receivables past due not impaired 

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Months past due: 
  0 – 3 
  4 – 6 
	 6	+	

Total  

37 
– 
1 

38 

180 
1 
– 

181 

– 
– 
– 

– 

–
–
–

–

There are no receivables that would otherwise be past due or impaired whose terms have been renegotiated .

34

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
	
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

As at 30 January 2011, trade receivables of $6,864 (2010: $6,072) were considered impaired . The amount of the provision 
is $6,864 (2010: $6,072) . The individually impaired receivables mainly relate to debtors who are experiencing financial 
difficulties . The aging of these impaired receivables which have been provided for is shown below:

Receivables impaired 

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Months past due: 
  0 – 3 
  4 – 6 
	 6	+	

Total  

–  
– 
7 

7 

4  
– 
2 

6 

– 
– 
– 

– 

–
–
–

–

Movements in the provision for impaired receivables are shown below:

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Opening balance 
Provision for impaired receivables 
Receivables written off during the year  
Unused amounts reversed 

Closing balance  

6 
5 
(1) 
(3) 

7 

26 
6 
(21) 
(5) 

6 

– 
– 
– 
– 

– 

–
–
–
–

–

The creation and release of provision for impaired receivables have been included in ‘store expenses’ in the income statement .

Amounts charged to the provision are generally written off when there is no expectation of recovering additional cash .

The maximum exposure to credit risk at the reporting date is the fair value of receivables stated above . The Group does not 

hold any collateral as security .

35

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

10. Inventories

Finished goods 
Inventory adjustments 

Net inventories 

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

65,752 
(2,575) 

66,727 
(3,374) 

63,177 

63,353 

– 
– 

– 

–
–

–

Inventory adjustments are provided at period end for stock obsolescence and store inventory shrinkage .

11. Investments in subsidiaries

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

(a) Investments 

Shares in subsidiaries 

Total Investments 

(b) Principal subsidiaries 

Name 

– 

– 

– 

– 

2,783 

2,783 

2,783

2,783

Activity 

2011 Interest 

2010 Interest

Briscoes (New Zealand) Limited 
The Sports Authority Limited (trading as Rebel Sport) 
Rebel Sport Limited 
Living and Giving Limited 

Homeware retail 
Sporting goods retail 
Name protection 
Name protection 

100% 
100% 
100% 
100% 

100%
100%
100%
100%

All companies above were incorporated in New Zealand and have a balance date consistent with that of the Parent as outlined 

in the accounting policies .

36

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Closing net book value 

13,046 

9,776 

21,274 

12. Property, plant and equipment

Group 

Freehold 
 land 
$000 

Freehold 
buildings 
$000 

Plant and
 equipment 
$000 

At 25 January 2009 
Cost 
Accumulated depreciation 
Accumulated impairment 

Net book value 

Period ended 31 January 2010 
Opening net book value 
Additions 
Disposals 
Depreciation charge 
Impairment adjustment 

9,324 
– 
– 

9,324 

9,324 
3,722 
– 
– 
– 

At 31 January 2010 
Cost 
Accumulated depreciation 
Accumulated impairment 

Net book value 

Period ended 30 January 2011 
Opening net book value 
Additions 
Disposals 
Depreciation charge 
Impairment adjustment 

Closing net book value 

At 30 January 2011 
Cost 
Accumulated depreciation 
Accumulated impairment 

Net book value 

13,046 
– 
– 

13,046 

13,046 
203 
– 
– 
– 

13,249 

13,249 
– 
– 

13,249 

Total 
$000

95,934
(49,463)
(141)

46,330
6,358
(15)
(7,153)
(1,424)

44,096

102,260
(56,683)
(1,481)

11,055 
(2,095) 
– 

75,555 
(47,368) 
(141) 

8,960 

28,046 

46,330

8,960 
1,170 
– 
(354) 
– 

28,046 
1,466 
(15) 
(6,799) 
(1,424) 

12,225 
(2,449) 
– 

76,989  
(54,234) 
(1,481) 

9,776 

21,274 

44,096

9,776 
722 
– 
(382) 
– 

21,274 
3,614 
(263) 
(5,789) 
– 

44,096
4,539
(263)
(6,171)
–

10,116 

18,836 

42,201

12,947 
(2,831) 
– 

76,768  
(57,932) 
– 

102,964
(60,763)
–

10,116 

18,836 

42,201

The Parent has no property, plant and equipment .

The Directors, having taken into consideration purchase offers, independent and government valuations and other known 

factors, have assessed the fair market value of freehold land and buildings to be $32 .14 million (2010: $31 .90 million) .

37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Impairment tests

For the purposes of assessing impairment, a cash generating unit (‘CGU’) is defined as the property, plant and equipment that 

can be grouped at the lowest level for which there are separately identifiable cash flows . Typically a CGU will represent a 

group of assets directly attributable to a specific store . An impairment loss is recognised for the amount by which an asset’s 

carrying amount exceeds its recoverable amount . 

Impairment testing is performed when certain trigger events indicate that an impairment in asset values may exist . The primary 

impairment indicator is the significant underperformance of a CGU in relation to management’s expectations . For these CGUs, 

value-in-use is calculated using pre-tax cash flow projections based on financial forecasts and assumptions prepared by 

management covering a five year period . A terminal growth rate in perpetuity is adopted to take account of cash flows beyond 

the five year period . The key assumptions used for the value-in-use calculations are as follows:

•	 Revenue	growth		

3.0%	to	5.0%	

(2010:	3.0%	to	9.9%)

•	 Pre-tax	discount	rate	

15.6%	

(2010:	15.6%)

•	 Terminal	growth	rate	

2.5%	

(2010:	2.5%)

The revenue growth rates adopted reflect management’s expectations . The discount rate used reflects management’s estimate 

of the company’s weighted average cost of capital and the terminal growth rate reflects management’s estimate of the future 

rate of inflation . As part of the impairment testing process management have considered reasonably possible changes to key 

assumptions . 

Based on the indicators and assumptions outlined above, no CGUs associated within the Group’s operating segments were 

determined to have asset carrying values in excess of the greater of either the CGU’s value-in-use calculation or the fair value 

less costs to sell of the CGU’s assets . Therefore no impairment adjustment has been recognised in the income statement (2010: 

$1,424,016) .

38

Notes to the Financial Statements

For the 52 week period ended 30 January 2011

13. Intangible assets

Group 

At 25 January 2009 
Cost 
Accumulated amortisation 

Net book amount 

Period ended 31 January 2010
Opening net book amount 
Additions 
Disposals 
Amortisation charge 
Impairment adjustment 

Closing net book amount 

At 31 January 2010 
Cost 
Accumulated amortisation 
Accumulated impairment 

Net book amount 

Period ended 30 January 2011 
Opening net book amount 
Additions 
Disposals 
Amortisation charge 
Impairment adjustment 

Closing net book amount 

At 30 January 2011  
Cost 
Accumulated amortisation 
Accumulated impairment 

Net book amount 

The Parent has no intangible assets .

Computer 
Software 
$000 

Brands 
$000 

4,853 
(2,489) 

2,364 

2,364 
335 
(5) 
(1,282) 
– 

1,412 

5,107 
(3,695) 
– 

1,412 

1,412 
256 
– 
(1,148) 
– 

520 

5,326 
(4,806) 
– 

520 

433 
– 

433 

433 
– 
– 
– 
(433) 

– 

433 
– 
(433) 

– 

– 
– 
– 
– 
– 

– 

– 
– 
– 

– 

Total
$000

5,286
(2,489)

2,797

2,797
335
(5)
(1,282)
(433)

1,412

5,540
(3,695)
(433)

1,412

1,412
256
–
(1,148)
–

520

5,326
(4,806)
–

520

39

 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Impairment tests for indefinite life brands

For the purposes of assessing impairment in relation to a brand value with an indefinite life, the carrying amount of the brand 

is compared to its recoverable amount . An impairment loss is recognised for the amount by which the carrying value exceeds 

its recoverable amount . 

During the period ended 30 January 2010 the Living & Giving brand was fully impaired by $433,130 and was recognised in 

the income statement . The recoverable amount of the brand was determined based on value-in-use calculations specific to the 

cash generating unit (CGU) associated with that brand . The defined CGU for the Living & Giving brand incorporates all Living 

& Giving stores . The calculations used pre-tax cash flow projections based on financial budgets and forecasts prepared by 

management covering a five year period . A terminal growth rate in perpetuity is adopted to take account of cash flows beyond 

the five year period . The key assumptions used for the value-in-use calculations for this brand were as follows:

•	 Revenue	growth	rate:	

	3.0%	to	9.9%

•	 Pre-tax	discount	rate:	

15.6%

•	 Terminal	growth	rate:	

2.5%

The growth rates adopted reflected management’s expectations . The discount rate used reflected management’s estimate of the 

company’s weighted average cost of capital and the terminal growth rate reflected management’s estimate of the future rate of 

inflation .

Given the nil balance of brands in the current year impairment tests are not required .

14. Taxation

(a) Deferred tax benefit 
Group 

At 25 January 2009 
Credited to the income statement 
Credited to other comprehensive income 

At 31 January 2010 
Charged to the income statement 
Credited to other comprehensive income 

At 30 January 2011 

Depreciation 
$000 

Provisions 
$000 

329 
769 
– 

1,098 
(2,184) 
– 

(1,086) 

1,449 
23 
– 

1,472 
(240) 
– 

1,232 

Deritative
financial 
instruments 
$000 

(1,397) 
– 
1,518 

121 
– 
277 

398 

Total
$000

381
792
1,518

2,691
(2,424)
277

544

40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Parent 

At 25 January 2009 
Charged to the income statement 

At 31 January 2010 
Charged to the income statement 

At 30 January 2011 

Depreciation 
$000 

Provisions 
$000 

– 
– 

– 
– 

– 

186 
(3) 

183 
(24) 

159 

Derivative
financial
instruments 
$000 

– 
– 

– 
– 

– 

Total
$000

186
(3)

183
(24)

159

Net deferred tax asset / (liability) 

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Deferred tax assets
– to be recovered within 12 months  
– to be recovered after more than 12 months  

Deferred tax liabilities

– to be settled within 12 months  
– to be settled after more than 12 months 

1,205 
1,784 

2,989 

(158) 
(2,287) 

(2,445) 

1,062 
1,811 

2,873 

(182) 
– 

(182) 

131 
28 

159 

– 
– 

– 

161
22

183

–
–

–

Deferred tax asset (net) 

544 

2,691 

159 

183

(b) Taxation (payable)/receivable 

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Movements:
Balance at beginning of period 
Current tax  
Tax paid 
Foreign investor tax credit (FITC) 

(3,873) 
(10,134) 
11,885 
230 

(795) 
(11,071) 
7,877 
116 

Balance at end of period 

(1,892) 

(3,873) 

(13) 
(758) 
824 
230 

283 

(258)
(699)
828
116

(13)

41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

15. Trade and other payables

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Trade payables 
Other payables and accruals 

Total trade and other payables 

40,000 
9,891 

49,891 

22,472 
10,758 

33,230 

198 
421 

619 

60
897

957

The fair value of trade and other payables approximates their carrying value . No interest is paid on payables .

16. Provisions

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Balance at beginning of period 
Charged to income statement 
Used during the period 

Balance at end of period 

53 
92 
(53) 

92 

49 
53 
(49) 

53 

– 
– 
– 

– 

–
–
–

–

Provisions relate to returned inventory for sales made to customers for goods directly imported by the Group, which are 

subsequently returned by customers .

Provisions have been classified as current as they are expected to be fully utilised in the next twelve months .

17. Employee Benefits

Employee benefits include provision for annual leave, long service leave, sick leave and bonuses .

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

(a) Non-current liabilities 

Balance at beginning of period 
Charged to income statement 
Used during the period 

Balance at end of period 

(b) Current liabilities 

Balance at beginning of period 
Charged to income statement 
Used during the period 

Balance at end of period 

42

461 
122 
(65) 

518 

7,716 
6,600 
(8,712) 

5,604 

427 
82 
(48) 

461 

3,937 
8,639 
(4,860) 

7,716 

73 
33 
(4) 

102 

1,782 
1,598 
(1,823) 

1,557 

66
7
–

73      

716
1,758
(692)

1,782

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

18. Imputation credits

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Imputation credit account balance 

43,746 

39,671 

6,010 

5,051

Imputation credit account movements: 
Balance at beginning of period 
Tax payments, net of refunds 
Credits attached to dividends received 
Distributed and disposed 

39,671 
11,798 
1 
(7,724) 

37,332 
7,968 
2 
(5,631) 

Balance at end of period 

43,746 

39,671 

5,051 
731 
7,952 
(7,724) 

6,010 

4,169
766
5,747
(5,631)

5,051

19. Share capital

No. of authorised shares 

Share capital

Group and Parent

Period ended 
30 January 2011 
Shares 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

Shares 

Period ended
31 January 2010
$000

Opening ordinary shares 

212,150,000 

212,150,000 

Balance at end of period 

212,150,000 

212,150,000 

40,625 

40,625 

40,625

40,625

All shares on issue are fully paid . All ordinary shares rank equally with one vote attached to each fully paid ordinary share and 

have equal dividend rights and no par value .

No shares were issued during the period ended 30 January 2011 (2010: Nil) .

20. Dividends paid

Group and Parent

Period ended 
30 January 2011 
Cents per share 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 
Cents per share 

Period ended
31 January 2010
$000

– 
Interim dividend for the period ended 30 January 2011 
– 
Final dividend for the period ended 31 January 2010 
Interim dividend for the period ended 31 January 2010                –                      2 .00  
Final dividend for the period ended 25 January 2009                  –                       3 .50 

3.00 
5.00 

6,365 
10,607 
– 
– 

–
–
4,243
7,425

                                                                                     8.00                        5 .50                  16,972                   11,668

All dividends paid were fully imputed . Supplementary dividends of $230,258 (2010: $116,280) were provided to shareholders 

not tax resident in New Zealand, for which the Group received a Foreign Investor Tax Credit entitlement .

43

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

21. Executive share options

On 25 July 2003 the Board approved an Executive Share Option Plan to issue options to selected senior executives and, 

subject to shareholder approval, to Executive Directors . Options may be exercised in part or in full by the holder three years 

after the date of issue, and lapse after four years if not exercised . Each option entitles the holder to one ordinary share in the 

capital of the Company . The exercise price is determined by the Board but is generally set by reference to the weighted average 

market price of ordinary shares in the Company for the period of five business days before and five business days after, as the 

Board in its discretion sees fit, either:

(a)  the date on which allocations are decided by the Board; or

(b)  the date on which allocations are made .

Payment must be made in full for all options exercised on the dates they are exercised .

During the financial year the Company issued 1,505,000 options (2010: 1,560,000) to senior executives .

The fair value of these options is estimated at $402,889 (2010: $564,876) under the Black Scholes valuation model using the 

following inputs and assumptions:

•	 Risk	free	interest	rate	

4.09%	

(2010:	4.77%)

•	 Expected	dividend	yield	

6.06%	

(2010:	5.07%)

•	 Expected	life	(years)	

3.47		

(2010:	3.38)

•	 Expected	share	volatility	

35.00%		

(2010:	41.00%)

•	 Share	price	at	grant	date	

$1.32	

(2010:	$1.18)

•	 Exercise	price	

$1.30	

(2010:	$0.95)

The estimated fair value for each tranche of options issued is amortised over the vesting period of three years, from the grant 

date . The Company has recognised a compensatory expense in the income statement of $365,177 (2010: $256,159) which 

represents this amortisation .

Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

Balance at beginning of year 
Issued 
Forfeited 
Exercised 
Lapsed 

Balance at end of year  

Period ended 
30 January 2011 

Period ended
31 January 2010

Average  
exercise price 
$ per share 

1.09 
1.30 
0.92 
– 
1.48 

1.08 

Options 
000 

5,102 
1,505 
(130) 
– 
(1,020) 

5,457 

Average 
exercise price 
$ per share 

1 .16 
0 .95 
1 .38 
– 
1 .24 

1 .09 

Options 
000

4,159
1,560
(2)
–
(615)

5,102 

Of the 5,457,000 outstanding options, 1,077,000 are currently exercisable (2010: 1,020,000) .

44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Share options outstanding at the end of the year have the following expiry dates, exercise dates and exercise prices:

Expiry Month 

  Exercise Month 

Exercise Price 

October 
2010 
December  2011 
December  2012 
November  2013 
2014 
October  

October 
2009 
December  2010 
December  2011 
November  2012 
2013 
October 

$1 .48 
$1 .38 
$0 .74 
$0 .95 
$1 .30 

Total share options outstanding 

Period ended 
30 January 2011 
000 

Period ended
31 January 2010
000

– 
1,077 
1,380 
1,495 
1,505 

5,457 

1,020
1,092
1,430
1,560
–

5,102

Share options reserve 

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000 

Balance at beginning of year 
Current year amortisation 
Options forfeited and lapsed transferred
to retained earnings 

Balance at end of year  

580 
365 

(309) 

636 

486 
256 

(162) 

580 

580 
365 

(309) 

636 

486 
256 

(162) 

580 

22. Related party transactions

During the period the Company advanced and repaid loans to its subsidiaries by way of internal current accounts . In 

presenting the financial statements of the Group, the effect of transactions and balances between fellow subsidiaries and those 

with the Parent have been eliminated . All transactions with related parties were in the normal course of business and provided 

on commercial terms .

Material transactions between the Company and its subsidiaries were:

Period ended  
30 January 2011 
$000 

Period ended
31 January 2010
$000

Management fees charged by the Company to:

Briscoes (NZ) Limited 
The Sports Authority Limited 

Total management fees 

8,198  
3,942  

12,140 

Dividends received by the Company from Briscoes (NZ) Limited   

16,972 

7,825
3,707

11,532

11,668

45

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

Material amounts outstanding between the Company and its subsidiaries at year end were:

Loan (to) / from the Company (from) / to Briscoes (NZ) Limited 
Loan (to) / from the Company (from) / to The Sports Authority Limited 

Total loans (to) / from the Company (from) / to subsidiaries  

Period ended  
30 January 2011 
$000 

19,284 
4 

19,288 

Period ended
31 January 2010
$000

10,808
1,609

12,417

In addition the Group undertook transactions with the related interests of the majority shareholder as detailed below:

•	 The	RA	Duke	Trust,	of	which	RA	Duke	and	AJ	Wall	are	trustees,	as	owner	of	the	Rebel	Sport	premises	at	Panmure,	

Auckland, received rental payments of $546,999 (2010: $546,999) from the Group, under an agreement to lease 

premises to The Sports Authority Limited . 

•	 The	RA	Duke	Trust	received	dividends	of	$12,727,600	(2010:	$8,750,225).

•	 P	Duke,	spouse	of	the	Managing	Director,	received	payments	of	$65,000	(2010:	$65,000)	in	relation	to	her	

employment as an overseas buying specialist with Briscoe Group Limited .

•	 The	Hualien	Trust,	of	which	P	Duke	is	a	trustee,	received	dividends	of	$101,200	(2010:	$69,575)

Directors received directors’ fees and dividends in relation to their personally held shares as detailed below:

Executive Director 

RA Duke 

AJ Wall 

Non Executive Directors 

SH Johnstone 

RPO’L Meo 

RJ Skippen 

Period ended 
30 January 2011 

Period ended
31 January 2010

Directors’ Fees 
$000 

Dividends 
$000 

Directors’ Fees 
$000 

Dividends
$000

– 

– 

48 

85 

43 

176 

– 

18 

80 

– 

– 

98 

– 

– 

40 

80 

40 

160 

–

12

55

–

–

67

46

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

The following Directors received dividends in relation to their non-beneficially held shares as detailed below:

Executive Director 
RA Duke1 . 
AJ Wall2 . 

Non Executive Directors 

SH Johnstone 

RPO’L Meo 

RJ Skippen 

Period ended 
  30 January 2011 
$000 

Period ended
31 January 2010
$000

12,728 

98 

8,750

68

– 

8 

– 

–

6

–

12,834 

8,824

1.   The RA Duke Trust, of which RA Duke and AJ Wall are trustees, received dividends of $12,727,600 during the

   period (2010: $8,750,225)

2.  The Tunusa Trust, of which AJ Wall is a trustee, received dividends of $98,400 during the period (2010: $67,650).

Key management compensation was as follows:

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Salaries and other short term employee benefits 
Share options benefit 
Directors’ fees 

Total benefits 

2,726 
125 
176 

3,027 

2,673 
111 
160 

2,944 

2,726 
125 
176 

3,027 

2,673
111
160

2,944

Key management includes the Directors of the Company and those employees who the Company have deemed to have 

disclosure obligations under Section 19T of the Securities Markets Act 1988

Key management did not receive any termination benefits during the period (2010: Nil) . In addition key management did not 

receive and are not entitled to receive any post employment or long term benefits (2010: Nil) .

47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the Financial Statements

For the 52 week period ended 30 January 2011

23. Capital expenditure commitments

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Commitments in relation to fit-out and property  
projects at the end of the period not provided  
for in the financial statements 

7,556 

25 

– 

–

24. Operating lease rental commitments

Group 

Parent

Period ended 
30 January 2011 
$000 

Period ended 

Period ended 
31 January 2010  30 January 2011 
$000 

$000 

Period ended
31 January 2010
$000

Lease commitments expire as follows: 
Within one year 
One to two years 
Two to five years 
Beyond five years 

Total operating lease rental commitments 

23,514 
20,083 
33,170 
9,666 

86,433 

24,837 
21,464 
39,808 
15,050 

101,159 

– 
– 
– 
– 

– 

–
–
–
–

–

The Group leases various retail outlets under non-cancellable operating lease agreements . The leases reflect normal 

commercial arrangements with varying terms, escalation clauses and renewal rights .

25. Contingent liabilities

There were no contingent liabilities as at 30 January 2011 (2010: Nil) .

26. Events after balance date

On 3 February 2011 settlement of $3 .0 million was made for the purchase of properties in Taranaki Street, Wellington .

On 8 March 2011 the Directors resolved to provide for a final dividend to be paid in respect of the year ended 30 January 

2011 . The dividend will be paid at a rate of 6 .00 cents per share, totaling $12,729,000 on issue as at 24 March 2011, with full 

imputation credits attached .

On 22 February 2011 Christchurch suffered its second major earthquake in six months . Briscoe Group has seven stores in the 

region which were all affected to some extent . The costs incurred and any profit lost by the Group as a result of the earthquake 

are covered by the Group’s insurance policies .

48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Auditors’ Report

Independent Auditors’ Report
to the shareholders of Briscoe Group Limited

Report on the Financial Statements
We have audited the financial statements of Briscoe Group Limited on pages 7 to 48, which
comprise the balance sheets as at 30 January 2011, the income statements, statements of 
comprehensive income, statements of changes in equity and cash flow statements for the period 
then ended, and the notes to the financial statements that include a summary of significant 
accounting policies and other explanatory information for both the Company and the Group. 
The Group comprises the Company and the entities it controlled at 30 January 2011 or from  
time to time during the financial period.

Directors’ Responsibility for the Financial Statements
The Directors are responsible for the preparation of these financial statements in accordance
with generally accepted accounting practice in New Zealand and that give a true and fair view of 
the matters to which they relate and for such internal controls as the Directors determine are 
necessary to enable the preparation of the financial statements that are free from material 
misstatement, whether due to fraud or error.

Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We 
conducted our audit in accordance with International Standards on Auditing (New Zealand) and 
International Standards on Auditing. These standards require that we comply with relevant 
ethical requirements and plan and perform the audit to obtain reasonable assurance about 
whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 
disclosures in the financial statements. The procedures selected depend on the auditors’ 
judgement, including the assessment of the risks of material misstatement of the financial 
statements, whether due to fraud or error. In making those risk assessments, the auditor 
considers the internal controls relevant to the Company and Group’s preparation of financial 
statements that give a true and fair view of the matters to which they relate, in order to design 
audit procedures that are appropriate in the circumstances, but not for the purpose of 
expressing an opinion of the effectiveness of the Company and Group’s internal control. An 
audit also includes evaluating the appropriateness of accounting policies used and the 
reasonableness of accounting estimates, as well as evaluating the overall presentation of the 
financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a 
basis for our audit opinion.

PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand

T: +64 (9) 355 8000, F: +64 (9) 355 8001, www.pwc.com/nz

49

Independent Auditors’ Report
to the shareholders of Briscoe Group Limited

We have no relationship with, or interests in, Briscoe Group Limited or any of its subsidiaries 
other than in our capacities as auditors and providers of other assurance services. These matters 
have not impaired our independence as auditors of the Company and Group.

Opinion
In our opinion, the financial statements on pages 7 to 48:

(i) 

comply with generally accepted accounting practice in New Zealand;

(ii) 

comply with International Financial Reporting Standards; and

(iii) 

give a true and fair view of the financial position of the Company and the Group as 
at 30 January 2011, and their financial performance and cash flows for the period 
then ended.

Reports on Other Legal and Regulatory Requirements
We also report in accordance with Sections 16(1)(d) and 16(1)(e) of the Financial Reporting Act 
1993. In relation to our audit of the financial statements for the period ended 30 January 2011:

(i) 

we have obtained all the information and explanations that we have required; and

(ii) 

in our opinion, proper accounting records have been kept by the Company as far as 
appears from an examination of those records.

Restrictions on Distribution or Use
This report is made solely to the Company’s shareholders, as a body, in accordance with Section 
205(1) of the Companies Act 1993. Our audit work has been undertaken so that we might state 
to the Company’s shareholders those matters which we are required to state to them in an 
auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not 
accept or assume responsibility to anyone other than the Company and the Company’s 
shareholders, as a body, for our audit work, for this report or for the opinions we have formed.

Chartered Accountants 
8 March 2011

Auckland

50

 
 
 
 
 
 
 
 
 
 
 
Corporate Governance

Role of the Board
The Board of Directors (“the Board”) of Briscoe Group 

meetings . On a monthly basis, the Board receives 

operational reports summarising the Company’s 

Limited (“the Company”) is elected by shareholders 

activities including key performance indicators . In 

to oversee the management of the Company and its 

addition, the Board receives regular briefings from the 

subsidiaries and to direct performance in the long term 

management team on key strategic and performance 

best interests of the Company and its shareholders . 

issues either as part of regular Board meetings or in 

The focus of the Board is the creation of Company 

specific briefing sessions .

and shareholder value and ensuring the Company is 

managed in accordance with best practice . Corporate 

governance is continually reviewed and updated in 

Board Membership
The Company’s constitution sets out policies and 

accordance with good business practice .

procedures on the operation of the Board including 

the appointment and removal of Directors . The NZSX 

The principal responsibilities of the Board are to:

Listing Rules and the Company’s constitution provide 

•	 establish	the	Company’s	objectives	and	review	the	

that a minimum of three Directors is required, of whom 

major strategies for achieving these objectives;

at least two shall be independent . Currently the Board 

•	 establish	an	overall	policy	framework	within	which	

comprises five Directors, being an independent Non-

the Company conducts its business;

Executive Chairman, the Group Managing Director, the 

•	 review	management’s	performance	including	

Deputy Managing Director and two independent Non-

approval of and monitoring against budget;

Executive Directors . 

•	 ensure	that	Group	financial	statements	are	prepared	

The Board acknowledges the importance of independent 

and presented to give a true and fair view of the 

Directors in ensuring an optimal balance between 

Group’s financial position, financial performance and 

Board members who are able to bring a wide range of 

cash flows;

business experience and skills and those with direct 

•	 ensure	effective	policies	and	procedures	are	in	place	

company knowledge and operational responsibility .

to safeguard the integrity of the Company’s financial 

Under the constitution, one third of Directors must 

reporting;

retire by rotation at the annual meeting each year 

•	 ensure	that	any	significant	risks	facing	the	Company	

but, if eligible, may offer themselves for re-election . 

are identified and that appropriate risk management 

The Group Managing Director, in his capacity as an 

programmes are in place to control and report on 

executive director, is exempt from the requirement to 

these risks;

retire by rotation .

•	 ensure	that	the	Group	operates	in	accordance	

Pursuant to NZSX Listing Rule 3 .3 .5, the Company 

with New Zealand laws, regulations, the listing 

is required to make an announcement to the market 

rules (including the continuous disclosure regime), 

advising the closing date for Director nominations . That 

professional standards and contractual obligations; 

announcement must be no less than 10 business days 

and

prior to the closing date and the closing date must be 

•	 report	to	shareholders	and	other	key	stakeholders.

not more than 2 months prior to the annual meeting .

The Board undertakes to meet at least ten times during 

The Board has delegated day-to-day management of 

the financial year . For the year ending 30 January 2011 

the Company to the Group Managing Director and 

the Board met twelve times .

other executives of the Company . Operational and 

Profiles of the current Directors appear on page 54 of 

administrative policies relative to the Company’s 

this report .

business are in place and the Company has an internal 

audit system for monitoring the Company’s operational 

policies and practices .

Board Review
The Board annually reviews its performance, and that 

The Chairman, Managing Director and Deputy 

of Board committees, to ensure that the Board and its 

Managing Director determine the agenda for Board 

committees are performing satisfactorily and meeting 

51

their respective objectives . In addition, the performance 

The Chief Financial Officer is responsible for the 

of individual Directors is also subject to review with a 

Company’s day-to-day relationship with the auditors, 

particular emphasis on those Board members who are 

including for ensuring that the Company’s business 

due to retire by rotation and wish to seek re-election . 

divisions provide the auditors with timely and accurate 

The review process also assists with the process of 

information and full access to the Company’s records . In 

identifying the training needs, if any, of Board members 

addition, the auditors are able to communicate directly 

to ensure that they remain current on how to best 

with the chairman of the Audit Committee at any time .

perform their duties as a director .

Board Committees
There are two formally constituted committees to 

Human Resources Committee
The Human Resources Committee comprises three 

independent Directors – Rosanne Meo (Chairman), 

provide specific input and guidance to particular areas 

Stuart Johnstone and John Skippen, as well as the Group 

of corporate governance; the Audit Committee and the 

Managing Director, Rod Duke .

Human Resources Committee .

The Human Resources Committee is responsible for 

The committees meet as required and operate under 

ensuring the Company has a sound employment policy 

specific charters which are reviewed and approved by 

framework, that there is an effective and stimulating 

the Board annually, setting out committees’ roles and 

workplace and that there is an environment within which 

responsibilities . In order to fulfil its responsibilities, 

management talent and potential can be identified, 

each committee is empowered to seek any information 

assessed and developed .

it requires from employees and to obtain such 

independent legal or other professional advice it may 

deem necessary . The proceedings of the committees are 

Nominations and Governance
Briscoe Group does not have a formally constituted 

reported to the Board . These charters are published on 

Nominations and Governance Committee . The Board 

our website at www .briscoegroup .co .nz .

views the responsibilities usually associated with this 

Audit Committee
The Audit Committee comprises three independent 

committee as a collective responsibility and those 

matters are included as part of its primary role of 

overseeing the management and performance of the 

Directors – Stuart Johnstone (Chairman), Rosanne Meo 

Company . Each director undertakes to ensure they have 

and John Skippen . The Committee assists the Board 

the necessary time and resources required to enable 

in fulfilling its responsibilities for Company financial 

them to meet the responsibilities associated with their 

statements and external financial reporting .

directorship . Specific requirements of governance are 

The Audit Committee is responsible to the Board for 

addressed at Board meetings during the course of the 

reviewing the Company’s accounting policies and 

year . These specific requirements include ensuring 

financial statements, promoting integrity in financial 

the Board contains an appropriate mix of skills and 

reporting, reviewing the adequacy and effectiveness of 

experience, making recommendations to the Board 

the Company’s internal controls and recommending the 

on new Directors for nomination, determining the 

appointment of, as well as reviewing the performance 

independence of Directors, and ensuring the Company 

and recommendations of the external auditors . In turn, 

maintains a high level or corporate governance .

the Company’s management team makes representations to 

the Audit Committee and the Board, as to the completeness 

and accuracy of the Company’s financial statements .

Independent Directors
Under the Corporate Governance requirements of NZX 

The Audit Committee is responsible for determining 

Limited (“NZX”), a listed company must identify which 

whether potential engagements of the auditors are 

of its Directors are determined by the Board to be 

appropriate in the context of seeking to prevent audit 

independent .

independence from being impaired (or being seen to be 

The current board and committee memberships 

impaired) .

are detailed below together with the independence 

52

Board Composition as at April 2011
Director 

Classification 

Committee membership 

Audit committee 

Human Resources committee

Rosanne Meo 

Independent (Chair) 

Member 

Rod Duke 

Executive 

Stuart Johnstone 

Independent 

Alaister Wall 

John Skippen 

Executive 

Independent  

 – 

Chair 

– 

Member 

Chair  

Member 

Member 

– 

Member

classification as determined by the Board, in accordance 

•	 Obligations	to	act	honestly	and	in	the	best	interests	

with the guidelines issued by NZX . As a relatively small 

of the Company as required by law;

board, there is a clear understanding of the required 

•	 Delegation	of	authority;

roles and expectations of the Independent Directors .

•	 Accuracy	of	records;

Board Remuneration
Shareholders are asked to approve the level of Director’s 

and rules; and

•	 Fair	dealing	with	customers,	employees,	suppliers	

•	 Compliance	with	any	applicable	laws,	regulations	

fees from time to time . In keeping with its views in 

and competitors .

relation to nominations, rather than have a separate 

Remuneration Committee (governed by a charter), the 

The Board is responsible for reviewing the Code of 

Board as a whole takes responsibility for monitoring 

Conduct and adherence to it .

developments in the New Zealand market and 

recommending remuneration packages for Directors to 

the Company’s shareholders . Fees are established to be 

Trading in Briscoe Group Securities
The Company has adopted a formal procedure 

in line with those of New Zealand based organisations 

governing the sale and purchase of the Company’s 

of a similar scope and size to the Company .

securities by Directors and employees . All Directors and 

employees must act in accordance with this procedure 

Code of Conduct
The Board has adopted a corporate Code of Conduct, 

and the requirements of the Securities Markets Act 1988 .

The procedure requires employees to obtain the written 

available on our website www .briscoegroup .co .nz . The 

consent of a Director, or in the case of a Director, of the 

Code of Conduct defines the levels of ethical business 

Chairman of the Board, prior to trading in the Company’s 

practice expected of the Board and within the Company 

shares . Generally, this consent will only be given in respect 

(including employees and contractors) . The Company 

of trading in the 60 day period following the announcement 

ensures that all new employees are aware of the Code 

of the Company’s half year and annual results . 

of Conduct and are provided with relevant training . In 

addition, the Code of Conduct addresses compliance 

standards and procedures, provides mechanisms 

Risk Management
As an integral part of its role of overseeing the 

for reporting unethical behaviour and ensures that 

management of the Company and its subsidiaries, 

disciplinary measures are available to address any 

the Board approves the Company’s risk management 

violations . It covers:

•	 Conflicts	of	interest;

•	 Confidentiality;

policies and receives regular reports to monitor the 

Company’s risk management performance relative to 

these policies, with particular emphasis on:

•	 Payments,	gifts	and	entertainment;

•	 Operational Risks: risks associated with the Company’s 

•	 Trading	in	company	securities;

•	 Workplace	principles;

normal business operations, including normal day-

to-day exposures relating to customers, stores, 

•	 Use	of	company	information	and	assets;

employees, systems, suppliers and regulatory bodies;

53

 
 
 
 
 
 
General Disclosures

•	 Funding Risks: risks associated with the financing 

Board of Directors

of the Company’s operations, including exposures 

relating to investment of surplus cash, and to interest 

Rosanne Meo: Chairman (Non-Executive)

rate and exchange movements;

Chairman of the Auckland Philharmonia Orchestra,  

•	 Environmental Risks: risks associated with the 

The Real Estate Institute and AMP Services (NZ) Limited . 

environment in which the Company operates that are 

Director of Overland Footwear Limited . Trustee of the 

outside the Company’s control, including exposures 

Kelliher Trust and the South Auckland Health Foundation . 

to natural disasters and to changes in social trends, 

economic conditions, customer preferences, 

Rod Duke: Group Managing Director and

legislation and regulations; and

Deputy Chairman

•	 Strategic Risks: risks associated with Company 

Group Managing Director since 1991 .

initiatives that are outside the normal course of 

business, including exposures relating to initiatives 

Alaister Wall: Deputy Managing Director

to expand into new brands, markets, regions and 

Executive of Group since 1982 . Director of Cure Kids .

business activities, and to adopt new systems .

Effective Communication
The Board places great importance on effective 

Stuart Johnstone: Director (Non-Executive)

Investment Banker and Company Director .

communications to the Company’s shareholders and 

John Skippen: Director (Non-Executive)

employees and the market generally . As a result, in 

Non-Executive Director of the following companies 

addition to making the required release of annual and 

listed in Australia: Flexigroup Limited, Super Retail Group 

half-yearly results, the Company makes quarterly sales 

Limited, Slater & Gordon Limited and Emerging Leaders 

releases . The Company regularly reviews its practices to 

Investments Limited .

ensure it clearly communicates its goals, strategies and 

performance . This information is made available to the 

NZX and also to a variety of media, including by means 

of the Company’s website .

Subsidiary Companies
Rod Duke and Alaister Wall are Directors of the following

subsidiaries: Briscoes (NZ) Limited, The Sports Authority

The Board encourages shareholder attendance at the 

Limited trading as Rebel Sport, Rebel Sport Limited,

Company’s annual meeting and welcomes shareholder 

Living and Giving Limited . Stuart Johnstone is a Director

debate on all matters of significance affecting the 

of The Sports Authority Limited .

Company and its business .

NZX Corporate Governance Best Practice Code
The Company’s corporate governance practices conform 

Financial Statements
The financial statements for the Parent and Group for the

year ended 30 January 2011 are shown on pages 7 to 48

with the guidelines set down in the NZX Corporate 

in this report .

Governance Best Practice Code in almost all respects . 

The areas in which the Company’s practices depart from 

that Code are confined to the absence of specific training 

Changes in Accounting Policies
In preparing these financial statements the accounting 

requirements for Directors, the lack of a Nominations 

policies outlined in Note 1 to the financial statements 

Committee and the absence of Director remuneration 

have been applied .

by means of a performance-based equity remuneration 

There were no significant changes in accounting policies 

plan . The Board as a whole takes responsibility for 

during the year .

monitoring developments in the New Zealand market and 

recommending remuneration packages for Directors to the 

Company’s shareholders rather than delegating this function 

to a Remuneration Committee pursuant to a written charter .

54

Principal Activities of the Group
Briscoe Group Limited is a non-trading holding company,

but provides management services to its subsidiaries .

The principal trading subsidiaries are Briscoes (New

Zealand) Limited, a specialist homeware retailer selling

leading branded products, and The Sports Authority

Limited, trading as Rebel Sport, New Zealand’s largest

retailer of most leading brands of sporting goods .

The subsidiaries are 100% owned by Briscoe Group

Limited . There were no changes in company structure

during the year .

Review of Operations

A. Results for the Year Ended 30 January 2011

Group 
$000 

419,294  
34,170  
(12,558)  

21,612 

Parent
$000

–
19,110
(782)

18,328

Sales Revenue  
Profit Before Income Tax  
Income Tax  

Profit After Income Tax  

B. Dividends

Subsequent to balance date, the Directors have declared

a final dividend of 6 .00 cents per share payable

31 March 2011 . Non resident shareholders of the Group

will also receive a supplementary dividend of 1 .0588 

cents per share . Dividends are fully imputed to New 

Zealand resident shareholders .

Directors

A. Remuneration and all other benefits relating to the

year ending 30 January 2011 ($000)

Non Executive Directors

RPO’L Meo  

SH Johnstone  

RJ Skippen  

Executive Directors

RA Duke (Managing Director)  

AJ Wall (Deputy Managing Director)  

85

48

43

746

415

Executive Directors do not receive Directors’ fees .

B. Shareholdings

Beneficially Held  

SH Johnstone  

AJ Wall  

As at 11 March 2011

1,000,000

220,000

Non-Beneficially Held  

As at 11 March 2011

RA Duke and AJ Wall each as Trustees
of the RA Duke Trust  

RJ Skippen  

AJ Wall*  

RPO’L Meo 

SH Johnstone  

159,443,584

–

1,230,000

100,000

5,000

* Other than in relation to the RA Duke Trust .

For further details refer to Substantial Security Holders 
information on page 56 of this report . 

C. Share dealings

During the year the following Directors acquired shares in 

the Company:

R A Duke and A J Wall each as trustees of  
the R A Duke Trust:

Date of 
transaction 

Number of 
shares acquired 

Consideration

17 March 2010 
24 March 2010 
29 March 2010 
1 April 2010 
6 April 2010 
7 April 2010 
19 April 2010 
15 September 2010 
27 September 2010 
20 October 2010 
2 November 2010 
5 November 2010 

500 
5,500 
40,000 
1,000 
112,225 
31,300 
25,000 
35,000 
10,500 
17,706 
49,853 
20,000 

 $670 
 $7,370 
 $51,600 
 $1,290 
 $143,648 
 $40,064 
 $32,250 
 $45,430 
 $13,650 
 $23,018 
 $69,196 
 $28,000 

D. Interests in contracts

During the year the following Directors have declared

pursuant to Section 140 (1) of the Companies Act

1993 that they be regarded as having an interest in the

following transactions:

•	Payment	of	rental	of	$546,999	(2010:	$546,999)	on	the 

retail property of which the RA Duke Trust is the owner . 

(Refer to Note 22 of the financial statements) .

E. Interests in Executive Share Options

Executive Share Options Plan (refer to Note 21 of the

financial statements) . Options outstanding as at balance

date are as follows:

Expiry  
Date 

Exercise  
Date 

Exercise  
Price 

No.

AJ Wall:   Dec 2011   Dec 2010   $1 .38   150,000 

Dec 2012   Dec 2011   $0 .74   150,000

55

 
 
 
 
 
 
F. Directors’ Insurance 

As provided by the Group’s Constitution and in

accordance with Section 162 of the Companies Act 1993

the Group has arranged Directors’ and Officers’ Liability

Insurance which ensures Directors will incur no monetary

loss as a result of actions undertaken by them as Directors

provided they act within the law .

G. Directors’ and Officers’ use of Company Information

During the period the Board received no notices pursuant

to Section 145 of the Companies Act 1993 relating to use

of Company information .

State of Affairs
The Directors are of the opinion that the state of affairs

of the Group is satisfactory . Details of the period under

review are included in the Chairman’s Review, the

Managing Director’s Review of Operations and the

audited financial statements .

Employee Remuneration
The number of employees within the Group (other than

Directors) receiving remuneration and benefits above

$100,000, relating to the period ending 31 January 2010,

are indicated in the following table:

Number of Employees

$100,000 – 109,999  

$110,000 – 119,999  

$120,000 – 129,999  

$130,000 – 139,999  

$140,000 – 149,999  

$160,000 – 169,999  

$170,000 – 179,999  

$180,000 – 189,999 

$190,000 – 199,999 

$200,000 – 209,999  

$210,000 – 219,999  

$270,000 – 279,999  

$320,000 – 329,999  

$340,000 – 349,999  

$500,000 – 509,999 

$510,000 – 519,999 

3

3

3

5

3

1

1

2

1

1

1

1

1

1

1

1

Remuneration to Auditors
The fee for the audit of the Group and subsidiaries paid to

PricewaterhouseCoopers was $80,000 (2010: $80,000) .

Fees paid to the auditors for other services provided, 

including a half yearly review, amounted to $19,500 

(2010: $26,000) .

Shareholders Information

Holding Range at 11 March 2011 

No. Investors 

 Total Holdings 

1-1,000  

938 

676,378  

1,001-5,000  

1,284  

3,754,108  

5,001-10,000  

10,001-100,000  

334  

263  

2,712,777  

7,127,338  

%

0 .32

1 .77

1 .28

3 .36

100,001 and over  

30  

197,879,399  

93 .27

2,849 

212,150,000 

100%

Substantial Security Holders
The following information is given pursuant to section 

35F of the Securities Markets Act 1988 . The persons who, 

according to the records of the company maintained 

pursuant to section 35C of the Securities Markets Act 

1988, are substantial security holders of the company as 

at 11 March 2011 are as follows:

Substantial 

Security Holder   Last SSH Notice (3)  Current Holding (4)

R A Duke (1) 

157,500,000 

159,443,584

A J Wall (2) 

160,760,525 

160,893,584

(1)  R A Duke has a relevant interest as a trustee of the R A Duke Trust 
which was disclosed in the SSH notice dated 18 April 2002, in 
respect of 157,500,000 shares . As at 11 March 2011 this interest is 
in respect of 159,443,584 shares . 

(2)  A J Wall has three relevant interests, which were disclosed in the 
SSH notice dated 2 July 2010 . These were (i) as a trustee of the R 
A Duke Trust, in respect of 159,310,525 shares; (ii) as a trustee of 
the Tunusa Trust, in respect of 1,230,000 shares; and (iii) legal and 
beneficial title, in respect of 220,000 shares . As at 11 March 2011 
the relevant interest as a trustee of the R A Duke Trust is in respect of 
159,443,584 shares . The other interests remain unchanged . 

(3)  This information reflects the most recently lodged substantial security 

holder notice, in accordance with section 35F of the Securities 
Markets Act 1988 .   

(4)  This information reflects the most recent understanding of the 
company of each of the substantial security holders’ positions . 

56

 
 
 
 
 
Top 20 Holder List

As at 11 March 2011

Rank  

Holder’s Name 

Total 

%

1  

2  

3  

JB Were (NZ) Nominees Limited (RA Duke Trust)   .  .  .  .  .  .  .  .  .  .  .  .  .  .  . . 159,443,584  .  .  .  .  .  .  .  . 75 .16

New Zealand Central Securities Depository Limited   .  .  .  .  .  .  .  .  .  .  .  .  .  . . 11,496,358  .  .  .  .  .  .  .  . .  5 .42

Portfolio Custodian Limited   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .

 6,714,239   .  .  .  .  .  .  . .

 3 .16

4=  

Gerald Harvey   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . . 5,250,000  .  .  .  .  .  .  .  .  . 2 .47

4=  

Harvey Norman Properties (NZ) Ltd  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .

 5,250,000   .  .  .  .  .  .  . .

 2 .47

6  

7  

JB Were (NZ) Nominees Limited  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  1,265,000  .  .  .  .  .  .  .  . .  0 .60

Alaister John Wall, Beverley Ann Wall and Benedict Douglas Tauber

as Trustees of the Tunusa Trust established for the benefit of the

family of AJ and BA Wall .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . . 1,230,000   .  .  .  .  .  .  .  . 0 .58

8=  

Stuart Hamilton Johnstone .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . . 1,000,000  .  .  .  .  .  .  .  . .  0 .47

8=  

Hugh Green Investments Limited .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . . 1,000,000  .  .  .  .  .  .  .  .  . 0 .47

10  

FNZ Custodians Limited  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 979,619  .  .  .  .  .  .  .  . .  0 .46

11  

Investment Custodial Services Limited   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . .

 427,811  .  .  .  .  .  .  .  . .  0 .20

12  

Gemscott Limited  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 350,000   .  .  .  .  .  .  .  . 0 .16

13  

Carla Zwart Brockman   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 336,300   .  .  .  .  .  .  .  . 0 .16

14  

Keith Arthur William Brunt   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 300,000  .  .  .  .  .  .  .  . .  0 .14

15  

Pirie St Nominees Pty Ltd and Rowena Investments Pty Ltd  .  .  .  .  .  .  .  .  .  .  .  . 299,997  .  .  .  .  .  .  .  .  . 0 .14

16  

Alaister John Wall  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 220,000   .  .  .  .  .  .  .  . 0 .10

17  

Ogilvy New Zealand Limited  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . .

 206,833  .  .  .  .  .  .  .  .  . 0 .10

18  

Jontee Farms Limited   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . .

 200,684   .  .  .  .  .  .  .  . 0 .09

19= 

Douglas Gordan Brown .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 200,000   .  .  .  .  .  .  .  . 0 .09

19=  

Keith A W Brunt and Glenda Brunt   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 200,000   .  .  .  .  .  .  .  . 0 .09

19=  

JB Were (NZ) Nominees Limited  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 200,000   .  .  .  .  .  .  .  . 0 .09

A number of the registered holders listed above hold shares as nominees for, or on behalf of, other parties.

57

 
 
Directory

Calendar

Annual Balance Date  .  .  .  .  .  .  .  .  .  .  .  .  January

Preliminary Profit Announcement .  .  . March

Annual Report Published   .  .  .  .  .  .  .  . April

Final Dividend  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 31 March 2011

Annual Meeting  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 19 May 2011

Half Year Results  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .

 September

Interim Dividend  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . October

Directors

Rosanne PO’L Meo (Chairman)

Rodney A Duke

Stuart H Johnstone

R John Skippen

Alaister J Wall

Registered Office

36 Taylors Road

Morningside

Auckland

Telephone (09) 815 3737

Facsimile (09) 815 3738

Postal Address

PO Box 884

Auckland Mail Centre

Auckland

Solicitors

Simpson Grierson

Bankers

Bank of New Zealand

Auditors

PricewaterhouseCoopers

Share Registrars

Link Market Services Limited

National Bank Chambers

138 Tancred Street

PO Box 384

Ashburton

Telephone (03) 308 8887

Websites

www .briscoegroup .co .nz

www .briscoes .co .nz

www .rebelsport .co .nz

www .livingandgiving .co .nz