Briscoe Group Limited Annual Report 2014

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FY2014 Annual Report · Briscoe Group Limited

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Annual Report
for the period ended 26 January 2014

Contents

Key Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Chairman’s Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Managing Director’s Review of Operations . . . . . . . . . . . . . . . . . . . 6

Income Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . 10

Statements of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 15

Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

General Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Top 20 Holder List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Key Facts

Audited

Audited
period ending period ending
27 January
2013
$000

26 January
2014
$000

Audited
period ending
29 January
2012
$000

Audited
period ending
30 January
2011
$000

Audited
period ending
31 January
2010
$000

Trading Results

Sales Revenue

Gross profit margin1 .

Earnings before interest and tax (EBIT)2 .

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

Store Numbers

Homeware

Sporting Goods

Briscoe Group

Total Store Area (m2)

Homeware

Sporting Goods

483,566

452,702

438,037

419,294

416,686

38.5%

45,222

33,575

46,092

38 .9%

40,970

30,468

31,406

140,648

215,384

128,581

191,831

21.0c

15.6c

21.4c

2.1:1

19 .2c

14 .3c

14 .7c

2 .3:1

38 .5%

36,666

27,529

42,030

141,212

207,305

17 .2c

12 .9c

19 .7c

2 .4:1

68 .1%

38 .9%

32,755

21,612

45,264

131,886

191,119

15 .4c

10 .2c

21 .3c

2 .5:1

69 .0%

39 .1%

30,118

21,026

14,910

127,621

173,707

14 .2c

9 .9c

7 .0c

2 .7:1

73 .5%

94,402

51,884

93,014

51,884

90,615

51,417

93,964

53,204

94,852

53,714

Shareholders' funds to total assets

65.3%

67 .0%

Briscoe Group

146,286

144,898

142,032

147,168

148,566

1. Gross profit margin has been restated to reflect the reclassification of distribution costs to cost of goods sold. Refer to

Note 4 on page 31.

2. Earnings before interest and tax (EBIT) is a non-GAAP measure. Refer to the Income Statement on Page 9.

Chairman’s Review

We are pleased to present the Directors’ Reports on the

and owned homeware brands which are widely

financial and operational performance of Briscoe Group

respected and trusted

Limited for the 52 week period ended 26 January 2014 .

Another highlight of the 2013-14 financial year was

In a year of mixed results posted by retailers in both

the performance of the Group’s online business with a

New Zealand and Australia, we were extremely

positive bottom line being achieved in only its second

delighted and proud to announce, during March,

full year of operation . We are excited about the online

another record full year profit for the Group . This was

channel’s potential to grow further and are determined

our third consecutive year of record profit and a result

to maximise that potential in the most cost effective

which represents an increase of 55% over the full year

and efficient ways . Achieving complementarity between

profit posted just three years before . As one analyst

online and in-store shopping is critical as shoppers

succinctly put it “the earnings growth is very pleasing” .

switch with ease between these different modes of

This profit growth doesn’t just happen by chance and

shopping .

the Board would like to acknowledge the significant

The Group remains in a very strong financial position

contribution from all employees and in particular the

with an $85 million cash balance reported at year-end

executive team which is constantly challenging itself

and no interest-bearing liabilities . It is important to

for continuous improvement across all facets of the

consider this cash balance however, in the context of

business . Their focus on inventory management, cost

the relatively early year-end cut-off date of 26 January

control, people development, technology improvements,

2014 . As at this date approximately $16 million of

promotional planning, operational structure and

creditor payments were included in the trade payables

expansion of online operations has strengthened the

balance, which were subsequently paid within five

Group’s commitment to continually reinforce the

days of balance date . In addition to this, GST of $7

exceptional value proposition offered to customers

million was paid on 28 January 2014 and $5 million

across all of its retail trading brands .

for property transaction settlements was made on 13

The continued strength in Rebel Sport is particularly

February 2014 .

pleasing to report . Earnings before interest and tax (EBIT)

We actively pursue and evaluate opportunities

increased by 22% over the previous year for the Group’s

to generate increased future returns via property

sporting goods segment . The same store sales growth

acquisition, business acquisition or store rollout . These

and margin expansion achieved by this segment must be

opportunities are evaluated on the basis of their potential

noted against the highly competitive sectors of sporting

to add value to Briscoe Group and its shareholders .

hard goods, apparel, footwear and supporters’ gear, in

which it operates .

The homeware segment, championed by Briscoes

Homeware, remains a powerhouse for the Group and

continues to be well positioned amongst homeware

Financial performance
Sales revenue increased by 6 .82% to $483 .57 million,

compared with $452 .70 million previously . On a same

store basis, sales increased for the year by 5 .23% .

retailers in New Zealand . Briscoes Homeware’s

The Group’s gross profit margin for the year decreased

commitment to product quality, range and value has

from 38 .86% to 38 .50%, reflecting the extraordinarily

continued to evolve and improve through a combination

challenging beginning to the year as a result of the very late

of astute buying and innovative product selection . We

start to the winter category sales and also the continued

believe it is a formidable house of quality international

competitiveness of the market throughout the year .

As disclosed at the half-year the reported gross margin

in online sales and increased levels of product directly

and prior year comparisons also reflect a reclassification

imported by the Group .

of costs that the Group has applied to the financial

statements for this year and which will apply for future

periods . As a result of the Group’s regular review of

reporting practices and policies, costs relating to the

distribution of product from the central warehouse

facility to stores have been reclassified from store

expenses and administration expenses to cost of goods

sold . The reclassification will bring the cost allocations in

line with the allocations adopted by other New Zealand

retailers, making the costs more directly comparable .

Reported gross profit margin for the full year

was 38 .50% as compared to 39 .74% before the

reclassification . The prior year comparative has been

adjusted from 40 .01% to 38 .86% . Correspondingly,

expenses have been decreased by a total of $6 .02 million

for this full year as a result of the reclassification and

by $5 .16 million for the prior year comparative . As the

reclassification represents a transfer of cost only, there is

no impact on Group EBIT or net profit after tax (NPAT) .

NPAT was $33 .58 million compared to the $30 .47

million for last year, an improvement of 10 .20% on last

year’s reported NPAT .

The results were for the 52 week period from 28 January

2013 to 26 January 2014 compared to the 52 week

period last year from 30 January 2012 to 27 January 2013 .

Inventories totalled $69 .31 million at year-end, being

$4 .74 million higher than the $64 .57 million reported

for last year reflecting the additional Briscoes Homeware

store opened in Kerikeri during the year, increased stock

holdings to satisfy the significant increases experienced

Net cash inflows from operating activities were $46 .09

million, $14 .68 million above those of last year,

primarily as a result of increased sales volume and the

timing of creditor payments at year-end .

Net cash outflows from investing activities were $16 .17

million reflecting investment made in property transactions,

store fit-outs and refurbishments during the year .

Dividend
The directors resolved to pay a final dividend of 8 .00

cents per share (cps), fully imputed . When added to the

interim dividend of 4 .50 cps, the total dividend for the

year is 12 .50cps, representing 80% of the Group’s tax

paid earnings . During the last four years the Group has

paid out 80% of tax paid earnings in normal dividends

and 99% when the special dividend paid in June 2012

is included .

The directors approved the final dividend payment

date of 31 March 2014 and the share register closed to

determine entitlements to the dividend at 5 pm on 21

March 2014 .

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 1,700,000 options

in the current 2014-15 financial year . This will result in

leading-edge research to enhance the quality of life for

the total number of share options issued under the scheme

thousands of kiwi children and their families .

since its inception and still exercisable being equivalent to

2 .9% of the current issued share capital .

Alaister Wall, Executive Director of Briscoe Group

continues as a director of Cure Kids, with support for

The five tranches of options, issued between 2003 and

the charity also coming from throughout the Group and

2007 have now lapsed with 432,500 options being

from Group suppliers and other parties we work with .

exercised . The sixth tranche expired on 28 November

2012 with 1,115,000 options being exercised from the

original 1,430,000 options issued . The seventh tranche

expired on the 26 November 2013 with 1,244,000

being exercised from the original 1,560,000 options

issued . The eighth tranche became exercisable at a

price of $1 .30 each from 27 October 2013 . Of the

1,505,000 options issued in that tranche, 215,500 are

still exercisable at the time of writing this report . The

holders have until 26 October 2014 to exercise them .

The necessary 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 22 (page 45) of the financial

statements contained within this Annual Report .

Appointment of New Director
On 21 August 2013, we were delighted to announce

the appointment of Mary Devine as an additional

independent Non-Executive Director of the Company .

Mary Devine is currently Chief Executive of the

Christchurch based property business Carter Group

Limited and has formerly held positions as Managing

Director for Department store J . Ballantyne & Co Ltd

and also Chief Executive of EziBuy Ltd, Australasia’s

largest apparel and home décor multi-channel retailer .

She holds other directorships with Meridian Energy Ltd

and IAG New Zealand Ltd and is also involved with not-

for-profit organisations, New Zealand Global Women

(NZGW) and the New Zealand Hockey Foundation .

Mary is a high calibre corporate director and her

experience (including as a driving force behind

developing EziBuy as a multi-channel retailer with

significant Australasian presence) is already proving to

be extremely valuable to the Group .

Community Sponsorship
At Briscoe Group we pride ourselves on being a

responsible and socially aware corporate citizen .

We are proud to be a key partner of Cure Kids and

believe it’s important to put our support and resources

behind a cause that fits our values . To date we have

raised in excess of $3 million to help them fund

In addition to 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 .

Briscoe Group Scholarship
To celebrate 150 years of trading in New Zealand,

Briscoe Group in conjunction with the RA Duke Trust

has established a scholarship fund to encourage tertiary

level study for eligible staff and their children .

The Group’s partnership with the First Foundation, an

organisation very experienced in managing scholarships,

brings together mentors, schools, and the scholars

themselves to create a proven and holistic four year

programme that will include paid work experience,

networks, financial support and advice and guidance

from personal mentors allowing the recipients to reach

and achieve their goals and aspirations .

During the year the first three scholarships were

awarded . These were won by regional store team

members from Porirua, Masterton and Napier .

It is our vision that the Briscoe Group Scholarship will

continue the strong tradition Briscoes has in supporting

community causes by encouraging employees and their

children to up-skill and fulfil their educational ambitions

- a helping hand to make an amazing difference to

someone’s impact on themselves, their family, their

community and wider society .

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 employees to the

Group’s performance during the year . Their contributions

are sincerely appreciated .

Dame Rosanne Meo,
CHAIRMAN

Managing Director’s Review of Operations

Introduction
Our continued focus on managing and developing

members of both the store and support management

teams through our incentive and profit share schemes .

our retail brands has again produced substantial profit

The level of reward achieved by many of the team

growth in a market which has been challenging for

retailers . We continue to believe that the best way to

grow shareholder value is to concentrate on doing the

retail basics well while simultaneously leveraging our

systems and resources to maximise innovation and

opportunity .

since we introduced these schemes is a key driver of

our management retention and motivation strategy . For

the third consecutive year every full-time and part-time

employee of the Group received a bonus payment in

recognition of their efforts towards the Group’s record

profit achievement .

Each year we continually review the performance of all

The continued strength of the New Zealand dollar has

elements of the business to maximise profitability by:

• driving aggressive and relevant promotions - we have

increased transaction numbers,

• continued focus on stock management - we have

again improved our stock-turn,

• keeping all areas of cost under firm control - we have

continued to reduce the ratio of costs to sales, and

allowed us to directly import higher levels of stock

than in previous years and with careful inventory

management we have improved stock-turn right across

the business .

The Sales and Service programme of our store

management teams places our customers at the centre

of everything we do . It is clear that the decisions our

retail teams make are right for our customers and right

for the generation of profitability for the stores and for

• focusing on improving the level of service we offer

the Group as a whole . Our focus on developing the

customers - we have continued to make our retail

skills of our retail teams has continued throughout the

brands the favoured place to shop .

year with plans firmly in place to continue to drive our

While we continue to improve in these areas we are by

training programmes .

no means satisfied with the market share we hold across

This year has seen sales driven through our transactional

the categories in which we compete and believe that

websites almost double in value . The success

further improvements in these key areas will continue to

experienced by the online team during the year has

drive profit growth for the Group .

The competitiveness of the market has necessitated

more aggressive promotions, which have slightly eroded

gross margin percentage compared to last year, but

by continuing to improve the quality of products we

sell and increasing the average sale and transaction

numbers, our gross margin dollars have increased

by nearly 6% . The merchandise team made good

improvements as we moved through the year to reduce

the extent of margin erosion .

The record level of profit achieved during 2013-14

has once again generated significant rewards for key

helped them to identify additional opportunities to

drive sales, improve efficiencies and optimise the use

of resources to support growth . We are working to

develop our fulfilment capability to ensure we can

service the expected increase in sales in the most

cost effective ways . The team driving this part of our

business has been bolstered by the addition of a new

General Manager Supply Chain, Dave Hughes, who

joined Briscoe Group during the year . Dave has added

additional skills to the senior management team in the

online and logistics areas .

Homeware
Briscoes Homeware continued to gain market share

throughout the year . Our commitment to providing

excellent quality products at fantastic prices communicated

by the use of layered advertising campaigns has

continued to resonate strongly with customers .

Our merchandise team has remained stable and their

levels of knowledge and effort as well as the excellent

relationships they have with suppliers, ensures our

product ranges continue to evolve and improve .

Further development of the Jamie Oliver, Maxwell and

Williams, and Hampton and Mason brands and the

exciting addition of the Simon Gault product range

across a number of categories, are just a few examples

of how the desirability of our product offer continues to

be enhanced .

In October we opened a new Briscoes Homeware

store in Kerikeri, which had been eagerly anticipated

and warmly welcomed by the local community and

in early December we extended the trading area of

the Ashburton store to allow for improved sales in the

seasonal categories . Four other Briscoes Homeware

stores had work completed in relation to counter-

realignments to maximise the amount of space available

for retail, resulting in improved merchandising and

higher sales .

We closed loss making Living & Giving stores during

the year at Manukau, Nelson and Lambton Quay and

continue to assess the future potential of this brand .

Sporting Goods
Rebel Sport experienced good growth throughout

the year assisted by the downward price realignment

implemented by a number of key suppliers . The

realignment made Rebel Sport’s product offering in

apparel and footwear much more attractive when

compared to competitors . The momentum generated by

this change should continue to drive sales through the

new financial year .

Our merchandise and operations teams both rose to the

challenges which resulted from the price realignment

and increased unit numbers, and were successful

in improving stock-turn over the previous year and

controlling store labour costs .

During the year substantial improvements were made to

Rebel Sport stores with five stores (at Panmure, The Base

in Hamilton, Dunedin, New Plymouth and Invercargill)

benefiting from full store refurbishments and seven other

stores gaining from service counter realignments and/or new

apparel fixtures . As was the case for the Briscoes Homeware

development projects, all of the Rebel Sport projects freed

up additional retail space and improved trading results .

Priorities and outlook for 2014/15
To continue to drive growth and profitability we must

execute initiatives that are customer-centric to ensure

The focus of the Human Resource team is to support

Briscoe Group’s strategic initiatives with training and

development programmes at different levels within the

we supply the right product at the right price at the right

business to enhance the knowledge and management

time at the right place with the right people through

the right channel . These initiatives will transgress all

parts of the business from frontline operations in the

skills which have been identified as critical for success .

Leadership, health and safety, achieving operational

objectives and company values are examples of where

way we design and refurbish stores, to merchandise and

this focus will be concentrated .

marketing in the way we optimise buying decisions and

structure promotions, to human resources in the way

we effectively train and incentivise our teams, to supply

chain management in the way we efficiently distribute

product, and to finance and IT in the way in which we

report and keep our systems relevant and innovative .

During the second half of the year we will introduce

back door inventory scanning in all stores . This is a

major project for the Group and is a central pillar of our

drive to improve operational effectiveness . This change

will allow stores to receipt goods quickly and efficiently,

increasing the speed and flow of product onto the sales

Major works are planned to extend and totally refurbish

floor, improving product availability for customers . The

the Hamilton and Invercargill Briscoes Homeware

savings made by removing repetitive and unproductive

stores . Both of these stores are old format and will gain

tasks will be re-invested to improve stock management

significantly from increased trading and back-of-house

processes and customer service .

areas . The existing Briscoes Homeware store at Taupo

will relocate to a larger site resulting in increased retail

space, improved back-of-house facilities and better

customer parking . In Wanganui we will relocate both

the Briscoes Homeware and Rebel Sport stores together

on one site and in Coastlands we will relocate the

Briscoes Homeware store to a new larger site adjacent to

the existing location and open a new Rebel Sport store

in the vacated Briscoes Homeware space . All of these

major projects will provide customers with brand new,

state-of-the-art stores, which can be expected to result

in improved customer experience and higher levels of

While many commentators are talking up the outlook

for the New Zealand economy we see a number of

retailers continuing to struggle to grow profitability . Our

experience leads us to be cautiously optimistic about

the year ahead for Briscoe Group but we are confident

that with the initiatives we have in place and the

pleasing start to the new financial year, we will continue

to strengthen our position as New Zealand’s leading

retailer of homeware and sporting goods .

profitability . In addition to these store developments, we

are planning for a number of larger projects involving

Rod Duke

new stores within the next three years .

GROUP MANAGING DIRECTOR

With the higher proportion of directly imported product

in Briscoes Homeware, a number of stores will have

projects aimed at improving the efficiency and capacity

of their back storerooms . If these projects drive the level

of improvement anticipated we will apply the same

logic to the remaining stores in future years .

A key focus for the merchandise and marketing teams

will be the improvement of gross margin . While we

believe the market will continue to be challenging we

are confident that with better planning and management

of our promotional programmes, gross margin can

improve in a number of categories .

The business planning process for our store business

managers is a key part of our Sales and Service

programme . The process rolls throughout the year

helping to focus effort on key goals and the continued

development of our store teams .

Financial Statements

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

ended 26 January 2014 . The Financial Statements presented are signed for and on behalf of the Board, and were

authorised for issue on the date below .

Dame Rosanne Meo

Rod Duke

CHAIRMAN

GROUP MANAGING DIRECTOR

6 March 2014

Income Statements

For the 52 week period ended 26 January 2014

Group

Parent

Period ended
26 January 2014
$000

Notes

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Sales revenue
Cost of goods sold

Gross profit
Other operating income
Store expenses
Administration expenses

Earnings before interest and tax
Net finance income

Profit before income tax
Income tax expense

Net profit attributable to shareholders

4,5
4

4,5
4,6
4
4

5
6

483,566
(297,392)

452,702
(276,760)

186,174
118
(85,319)
(55,751)

45,222
1,706

46,928
(13,353)

175,942
221
(81,414)
(53,779)

40,970
1,702

42,672
(12,204)

–
–

–
25,519
–
(14,496)

11,023
1,298

12,321
(909)

33,575

30,468

11,412

Period ended
27 January 2013
$000

–
–

–
58,888
–

(13,758)

45,130
1,199

46,329

(868)

45,461

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

8
8

15.6
15.3

14 .3
14 .0

5.3
5.2

21 .3
20 .8

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

Statements of Comprehensive Income

For the 52 week period ended 26 January 2014

Group

Parent

Period ended Period ended Period ended Period ended

26 January
2014
$000

27 January
2013
$000

26 January
2014
$000

27 January
2013
$000

Notes

Net Profit attributable to shareholders

33,575

30,468

11,412

45,461

Other comprehensive income:

Items that may be subsequently reclassified to profit or loss:
Fair value loss recycled to income statement
Fair value gain /(loss) 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

15
15

Total other comprehensive income

875
113
(245)
(31)

712

1,422
(1,744)
(398)
488

(232)

–
–
–
–

–

–
–
–
–

–

Total comprehensive income attributable to shareholders

34,287

30,236

11,412

45,461

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

Statements of Changes in Equity

For the 52 week period ended 26 January 2014

Group

Notes

capital

Share Cashflow
hedge
reserve
$000

$000

options
reserve
$000

Share Retained
earnings

Total
equity

$000

Balance at 29 January 2012

41,732

(403)

660

99,223

141,212

Net profit attributable to shareholders
Other comprehensive income:
Fair value loss recycled to income statement
Fair value loss taken to the cashflow hedge reserve
15
Deferred tax on fair value hedge taken to income statement
Deferred tax on fair value transfers to cashflow hedge reserve 15

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

–

–
–
–
–

–

1,422
(1,744)
(398)
488

(232)

–

–
–
–
–

–

30,468

–
–
–
–

1,422
(1,744)
(398)
488

30,468

30,236

21
22
20,22
22

–
–
585
–

–
–
–
–

–
458
(104)
(92)

(43,806)
–
–
92

(43,806)

458
481
–

Balance at 27 January 2013

42,317

(635)

922

85,977

128,581

Net profit attributable to shareholders
Other comprehensive income:
Fair value loss recycled to income statement
Fair value gain taken to the cash hedge reserve
Deferred tax on fair value hedge taken to income statement
15
Deferred tax on fair value transfers to cashflow hedge reserve 15

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

21
22
20,22
22

–
–
2,561
–

–

–
–
–
–

–

875
113
(245)
(31)

712

–
–
–
–

–

–
–
–
–

–

33,575

–
–
–
–

875
113
(245)
(31)

33,575

34,287

–
528
(609)
(56)

(24,700)
–
–
56

(24,700)
528
1,952
–

Balance at 26 January 2014

44,878

785

94,908

140,648

Parent

Balance at 29 January 2012

Net profit attributable to shareholders

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

Balance at 27 January 2013

Net profit attributable to shareholders

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

Balance at 26 January 2014

capital

Share Cashflow
hedge
reserve
$000

$000

Share Retained
earnings

options
reserve
$000

Total
equity

$000

55,513

45,461

660

13,121

$000

45,461

–

45,461

–
458
(104)
(92)

(43,806)
–
–
92

(43,806)
458
481
–

922

14,868

58,107

–

11,412

–
528
(609)
(56)

(24,700)
–
–
56

(24,700)
528
1,952
–

785

1,636

47,299

–

–
–
–
–

–

–
–
–
–

–

Notes

21
22
20,22
22

41,732

–

–
–
585
–

42,317

–

21
22
20,22
22

–
–
2,561
–

44,878

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

Balance Sheets

As at 26 January 2014

Group

Parent

26 January 2014
$000

27 January 2013 26 January 2014
$000

$000

27 January 2013
$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
Due to related parties
Provisions
Employee benefits
Taxation payable
Derivative financial instruments

Total current liabilities

TOTAL LIABILITIES

20
3(c),9
22

16
23
17
18
15(b)
3(c)

44,878
77
785
94,908

42,317
(635)
922
85,977

140,648

128,581

545

62,785
–
96
7,756
3,349
205

74,191

74,736

575

50,532
–
89
7,638
3,561
855

62,675

63,250

TOTAL EQUITY AND LIABILITIES

215,384

191,831

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

12
13
14
15(a)

9
10
23
11
15(b)
3(c)

–
54,610
1,435
1,269

57,314

84,762
3,624
–
69,312
–
372

–
44,563
1,307
1,237

47,107

77,541
2,534
–
64,573
–
76

158,070

144,724

215,384

191,831

44,878
–
785
1,636

47,299

131

891
6,750
–
2,365
–
–

10,006

10,137

57,436

2,783
–
–
336

3,119

51,402
1,117
1,394
–
404
–

54,317

57,436

42,317
–
922
14,868

58,107

150

992
7
–
2,281
–
–

3,280

3,430

61,537

2,783
–
–
280

3,063

52,696
1,110
4,288
–
380
–

58,474

61,537

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

Statements of Cash Flows

For the 52 week period ended 26 January 2014

Group

Parent

Period ended

Period ended
26 January 2014 27 January 2013 26 January 2014 27 January 2013
$000

Period ended

$000

Notes

OPERATING ACTIVITIES

Cash was provided from

Receipts from customers
Rent received
Dividends received
Interest received
Insurance recovery
Management fees received
Net GST received

Cash was applied to

Payments to suppliers
Payments to employees
Interest paid
Net GST paid
Income tax paid

483,744
114
4
1,765
–
–
–

485,627

(364,388)
(52,943)
(11)
(8,319)
(13,874)

452,904
46
4
1,778
171
–
–

454,903

(347,420)
(49,581)
(12)
(14,463)
(12,021)

–
–
9,670
1,368
–
15,468
430

26,936

(4,809)
(9,314)
(7)
–
(989)

–
–
43,781
1,195
–
15,790
343

61,109

(6,003)
(8,488)
(8)
–
(1,045)

(439,535)

(423,497)

(15,119)

(15,544)

Net cash inflows from operating activities

46,092

31,406

11,817

45,565

INVESTING 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

13
14

Net cash (outflows) from investing activities

FINANCING ACTIVITIES

Cash was provided from

Net advances from subsidiaries
Issue of new shares

Cash was applied to

Net advances to subsidiaries
Dividends paid

(15,248)
(922)

(16,170)

(16,165)

–
1,952

1,952

(5,175)
(651)

(5,826)

(5,802)

–

–
–

–

–
481

481

9,637
1,952

11,589

–
(24,700)

–
(43,806)

–
(24,700)

(24,700)

(43,806)

(24,700)

Net cash (outflows) from financing activities

(22,748)

(43,325)

(13,111)

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period
Foreign cash balance cash flow hedge adjustment

Cash and cash equivalents at period end

7,179

77,541
42

84,762

(17,721)

95,337
(75)

77,541

(1,294)

52,696
–

51,402

–

–
–

–

26,451
481

26,932

–
(43,806)

(43,806)

(16,874)

28,691

24,005
–

52,696

Statements of Cash Flows continued

For the 52 week period ended 26 January 2014

Group

Parent

Period ended
26 January 2014
$000

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

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Reported net profit attributable to shareholders

33,575

30,468

11,412

45,461

Items not involving cash flows

Depreciation and amortisation expense
Adjustment for fixed increase leases
Bad debts and movement in doubtful debts
Inventory adjustments
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

5,817
117
33
907
528
173

7,575

(1,122)
(5,646)
(212)
4,777
7,145

4,942

46,092

6,128
(78)
37
211
458
202

6,958

51
(2,727)
560
(4,176)
272

(6,020)

–
–
–
–
528
–

528

(6)
–
(24)
(116)
23

(123)

–
–
–
–
458
–

458

(71)
–
(164)
56
(175)

(354)

31,406

11,817

45,565

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

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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 28 January 2013 to 26 January 2014 and provide balance

sheets as at 26 January 2014 . The comparative period is in respect of the 52 week period 30 January 2012 to 27 January

2013 . 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 5-6 years .

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 13 and 14 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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 13 .

(b) Principles of consolidation

Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Briscoe Group Limited as at 26

January 2014 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 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 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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 5 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 (trading as Rebel Sport) . Financial details of these segments are outlined in Note 5 .

(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 of consideration 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 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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 Group operates and generates 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 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

(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 10 . 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) .

At the inception of a transaction the relationship between hedging instruments and hedged items, as well as the risk

management objective and strategy for undertaking various hedge transactions is documented . An assessment is also

documented, 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

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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

Certain derivative instruments 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 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

(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 .

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

their estimated 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 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

(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 has been 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 .

(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 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

Bonus plans

A liability is recognised for bonuses payable to employees where a contractual obligation arises for an agreed level of payment

dependent on both company and individual performance criteria .

(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 .

(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;

• NZ IAS 1 Amendments Presentation of Items of Other Comprehensive Income (effective 1 January 2013)

The amendment requires entities to separate items presented in other comprehensive income into two groups, based on

whether they may be recycled to profit or loss in the future . This has not affected the measurement of any of the items

recognised in the balance sheet or the profit or loss in the current period .

• NZ IFRS 13: Fair Value Measurement (effective for annual periods beginning on or after 1 January 2013)

NZ IFRS 13 explains how to measure fair value and aims to enhance fair value disclosures . The Group has determined

that there is no material impact on any of the amounts recognised in the financial statements and that none of its current

measurement techniques will be changed as a result of the new guidance .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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:

• NZ IFRS 9: Financial Instruments (mandatory for annual periods beginning on or after 1 January 2015)

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 . The

classification model is driven by the entity’s business model for managing the financial assets and the contractual cashflow

characteristics of the financial assets . This will affect future financial statements through disclosure only as the recognition

and measurement guidance relating to financial liabilities is unchanged from NZ IAS 39 . The Group intends to apply this

standard in the 2015/16 financial year .

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 (such as 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 forward foreign exchange contracts 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 and affects profit when the underlying inventory to which the derivatives relate, is sold .

Trade payables are shown at carrying value in the table . No discounting has been applied as the impact of discounting is not

significant .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

Group
As at 26 January 2014

3 months
or less
$000

3-6
months
$000

6-9
months
$000

9-12
months
$000

Total
$000

Carrying
Value
$000

Trade and other payables

(62,785)

–

(62,785)

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

(14,556)
14,573

(13,209)
13,145

(14,579)
14,789

(615)
619

(42,959)
43,126

– Net

(64)

210

167

As at 27 January 2013

3 months
or less
$000

3-6
months
$000

6-9
months
$000

9-12
months
$000

Total
$000

Carrying
Value
$000

Trade and other payables

(50,532)

–

(50,532)

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

(14,209)
13,799

(12,029)
11,768

(15,290)
15,175

(1,212)
1,219

(42,740)
41,961

– Net

(410)

(261)

(115)

(779)

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

Parent
As at 26 January 2014

3 months
or less
$000

3-6
months
$000

6-9
months
$000

9-12
months
$000

Total
$000

Carrying
Value
$000

Trade and other payables

(891)

–

(891)

As at 27 January 2013

3 months
or less
$000

3-6
months
$000

6-9
months
$000

9-12
months
$000

Total
$000

Carrying
Value
$000

Trade and other payables

(992)

–

(992)

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 rated, Board approved 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 10) .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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 foreign denominated

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
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Current assets
Forward foreign exchange contracts

Total current derivative financial instrument assets

Current liabilities
Forward foreign exchange contracts

Total current derivative financial instrument liabilities

372

205

855

–

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 $372,209 (2013: $76,201) and liabilities of $205,102 (2013:

$855,369) and together are included in equity as part of the cash flow hedge reserve, net of deferred tax, as a net gain of

$120,317 (2013: net loss $561,001) . 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 $43,658 (2013: net loss $74,128), refer Note 9 . The total of these net gains

and losses amount to a net gain of $76,659 (2013: net loss $635,129)

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 (2013: Nil) .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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 (2013: 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 reported to the Board monthly . Surplus funds are placed on call or

short-term deposit with high credit rated, Board approved financial institutions only .

Sensitivity analysis
Based on historical movements and volatilities and review of current economic commentary the following movements are

considered reasonably possible over the next 12 month period:

• Proportional foreign exchange rate depreciation of -10% (2013:-15%) and appreciation of +10% in the NZD against

the USD, from the year-end rate of 0 .8268 (2013: 0 .8356),

• A shift of between +1% and -0 .5% (2013: +1% and -0 .5%) in market interest rates from the year-end weighted

average deposit rate of 3 .25% (2013: 3 .48%) .

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

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

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

Carrying
amount

$000

Interest rate

-0.5%

+1%

Profit
$000

Equity
$000

Profit
$000

Equity
$000

-10%

Foreign exchange rate
+10%
Profit Equity
$000
$000

Equity
$000

Profit
$000

84,762

(305)

610

–

405

–

(331)

–

2,569

–

(2,042)

As at 26 January 2014
Group

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 .

372

205

–

Total increase / (decrease)

(305)

610

–

938

–

(761)

3,912

–

(3,134)

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 $610,287. For a -0.5% movement in interest rates the sensitivity is ($305,144).

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% / +10% shift in the NZD:USD foreign exchange rate has an impact of $3,912,396 / ($3,134,243)
on derivative and cash valuation. There is no profit and loss sensitivity as the hedges are 100% effective.

As at 26 January 2014
Parent

Carrying
amount

$000

Interest rate

-0.5%

+1%

Profit
$000

Equity
$000

Profit
$000

Equity
$000

Financial assets:
Cash and cash equivalents

51,402

(185)

Total increase / (decrease)

(185)

370

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 $370,091. For a -0.5% movement in interest rates the sensitivity is ($185,046).

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

As at 27 January 2013
Group

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)

Carrying
amount

Interest rate

-0.5%

+1%

Foreign exchange rate
+10%

-15%

$000

Profit
$000

Equity
$000

Profit
$000

Equity
$000

Profit
$000

Equity
$000

Profit
$000

Equity
$000

77,541

(279)

558

–

344

–

(177)

–

2,563

–

(1,299)

Total increase / (decrease)

(279)

558

855

–

4,942

–

(2,535)

7,849

–

(4,011)

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 $558,293. For a -0.5% movement in interest rates the sensitivity is ($279,146).

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 $7,848,777 / ($4,010,864)
on derivative and cash valuation. There is no profit and loss sensitivity as the hedges are 100% effective.

As at 27 January 2013
Parent

Carrying
amount

Interest rate

-0.5%

+1%

$000

Profit
$000

Equity
$000

Profit
$000

Equity
$000

Financial assets:
Cash and cash equivalents

52,696

(190)

Total increase / (decrease)

(190)

379

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 $379,415. For a -0.5% movement in interest rates the sensitivity is ($189,707).

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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

As at 26 January 2014

Group

Loans and Derivatives
used for
receivables
hedging
$000

$000

Total

$000

Parent

Loans and Derivatives
used for
receivables
hedging
$000

$000

Total

$000

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

84,762
2,594
–
–

–
–
–
372

84,762
2,594
–
372

Total

87,356

372

87,728

51,402
266
1,394
–

53,062

–
–
–
–

–

51,402
266
1,394
–

53,062

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
Derivative financial instruments

62,785
–
–

–
–
205

62,785
–
205

Total

62,785

205

62,990

As at 27 January 2013

Assets 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

77,541
1,510
–
–

79,051

–
–
–
76

Total

$000

77,541
1,510
–
76

79,127

891
6,750
–

7,641

–
–
–

–

Parent

Loans and Derivatives
used for
receivables
hedging
$000

$000

52,696
213
4,288
–

57,197

–
–
–
–

–

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
Derivative financial instruments

50,532
–
–

–
–
855

50,532
–
855

Total

50,532

855

51,387

992
7
–

999

–
–
–

–

Total

$000

891
6,750
–

7,641

Total

$000

52,696
213
4,288
–

57,197

Total

$000

992
7
–

999

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

3.2 Capital risk management
The Group’s objective when managing capital is to optimise the balance between maximising shareholder wealth and ensuring the

Group is able to operate competitively with the flexibility to take advantage of growth opportunities as they arise . In order to meet

these objectives the Group may adjust the amount of dividend payment made to shareholders and/or seek to raise capital through debt

and/or equity . There are no specific banking or other arrangements which require the Group to maintain specified equity levels .

4. Reclassification

As a result of the Group’s regular review of reporting practices and policies, costs relating to the distribution of product from

the central warehouse facility to stores have been reclassified from store expenses and administration expenses to cost of goods

sold . The reclassification will bring the cost allocations in line with the allocations adopted by other New Zealand retailers

making the costs more directly comparable . The aggregate effect of the reclassification on the financial statements for the

period ended 26 January 2014 and the corresponding comparative period ending 27 January 2013 is shown below:

Period Ended 26 January 2014
$000
Effect

Restated

Previous
classification

Period Ended 27 January 2013
$000
Effect

Restated

Previously
Stated

Income Statement Reclassification
Sales revenue
Cost of goods sold

Gross profit
Other operating income
Store expenses
Administration expenses

Earnings before interest and tax
Net finance income

Profit before income tax
Income tax expense

483,566
(291,374)

192,192
118
(90,783)
(56,305)

45,222
1,706

46,928
(13,353)

Net profit attributable to shareholders

33,575

–
(6,018)

(6,018)
–
5,464
554

–
–

–

483,566
(297,392)

186,174
118
(85,319)
(55,751)

45,222
1,706

46,928
(13,353)

33,575

452,702
(271,598)

–
(5,162)

452,702
(276,760)

181,104
221
(86,082)
(54,273)

40,970
1,702

42,672
(12,204)

30,468

(5,162)
–
4,668
494

–
–

–

175,942
221
(81,414)
(53,779)

40,970
1,702

42,672
(12,204)

30,468

There is no impact on the financial statements of the Parent as a result of the reclassification .

5. 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 solely 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 (2013: Nil) .

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

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) .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

For the period ended 26 January 2014

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

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

$000

326,726

124,954

31,227

(3)
(8,783)

22,441

Sporting
goods
$000

Eliminations/
Unallocated
$000

Total Group

$000

156,840

61,220

12,644

411
(3,661)

9,394

–

1,351

1,298
(909)

1,740

483,566

186,174

45,222

1,706
(13,353)

33,575

110,367

44,604

59,508

29,140

45,509

992

215,384

74,736

$000

307,051

118,621

29,251

–
(8,284)

20,967

Sporting
goods
$000

Eliminations/
Unallocated
$000

Total Group

$000

145,651

57,321

10,370

503
(3,052)

7,821

–

1,349

1,199
(868)

1,680

452,702

175,942

40,970

1,702
(12,204)

30,468

88,183

40,736

50,146

24,336

53,502

(1,822)

191,831

63,250

OTHER SEGMENTAL ITEMS:

Acquisitions of property, plant and equipment,
intangibles and investments

Depreciation and amortisation

14,184

3,872

1,986

1,945

–

16,170

5,817

For the period ended 27 January 2013

Homeware

OTHER SEGMENTAL ITEMS:

Acquisitions of property, plant and equipment,
intangibles and investments

Depreciation and amortisation expense

4,431

4,027

1,395

2,101

–

5,826

6,128

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

6. Income and expenses

Group

Parent

Period ended
26 January 2014
$000

Profit before income tax includes the following

specific income and expenses:

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Income

Rental income

Dividends received

Insurance recovery

Management fees

Finance income

Expenses

Operating lease rental expense

Bad debts written off

Amounts paid to auditors:

Statutory Audit

Half year review

Other assurance services

Directors’ fees

Share options expense (refer Note 22)

114

–

171

–

1,717

1,714

28,240

101

–

186

528

26,740

–

150

458

–

9,670

–

15,849

1,305

–

101

–

186

528

–

43,781

–

15,107

1,207

–

150

458

Wages, salaries and other short term benefits

53,561

50,569

9,906

9,147

Loss on disposal of property, plant and equipment

Inventory writedown expense

Finance expense

Depreciation of property, plant and equipment

Amortisation of software costs

173

1,435

5,023

794

202

1,454

5,530

598

–

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

7. Income tax expense

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

(a) Income tax expense

Current tax expense:

Current tax
Adjustments for prior years

Deferred tax expense:

Decrease in future tax benefit current year
Adjustments for prior years

13,033
629

13,662

305
(614)

(309)

11,931
650

12,581

171
(548)

(377)

Total income tax expense

13,353

12,204

837
128

965

72
(128)

(56)

909

713
168

881

148
(161)

(13)

868

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

Profit before income tax expense

Tax at the corporate rate of 28% (2013: 28%)

46,928

13,140

42,672

11,948

12,320

3,450

46,329

12,972

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

Income not subject to tax
Expenses not deductible for tax

Prior period adjustments

(12)
209

(16)
170

102

Total income tax expense

13,353

12,204

(2,708)
168

(1)

909

(12,258)
147

868

The Group has no tax losses (2013: Nil) and no unrecognised temporary differences (2013: Nil)

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

8. 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
26 January 2014

Period ended

Period ended
27 January 2013 26 January 2014

Period ended
27 January 2013

Net profit attributable to shareholders ($000)

33,575

30,468

11,412

45,461

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

214,912

213,647

214,912

213,647

Basic earnings per share

15.6 cents

14 .3 cents

5.3 cents

21 .3 cents

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

219,867

218,401

219,867

218,401

Diluted earnings per share

15.3 cents

14 .0 cents

5.2 cents

20 .8 cents

9. Cash and cash equivalents

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Cash at bank or in hand

84,762

77,541

51,402

52,696

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

At 26 January 2014 the Group had purchased foreign currency equivalent of NZ$ 5 .074 million (2013: NZ$ 1 .950 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)

Foreign currency 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 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

In respect of foreign currency balances that 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 $60,636 (2013: losses of $102,955)

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 $43,658 (2013: net loss of $74,128) . The cash flow hedge reserve, net of deferred tax, from forward foreign

exchange contracts used as hedges, represents a net gain of $120,317 (2013: net loss of $561,001), refer note 3(c) . The total of

these amount to a net gain of $76,659 (2013: net loss of $635,129) .

In respect of foreign currency balances that 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 (2013: Nil) .

10. Trade and other receivables

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Trade receivables
Provision for impaired receivables

Net trade receivables
Prepayments
Other receivables

Total trade and other receivables

1,900
(2)

1,898
1,030
696

3,624

583
(12)

571
1,024
939

2,534

–
–

–
851
266

–
–

–
897
213

1,117

1,110

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

No interest is charged on trade receivables .

As at 26 January 2014, trade receivables of $17,556 (2013: $35,839) 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
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Months past due:
0 – 3
4 – 6
6 +

Total

17
1
–

36
–
–

–
–
–

–

–
–
–

–

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

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

As at 26 January 2014, trade receivables of $1,704 (2013: $11,976) were considered impaired . The amount of the provision
is $1,704 (2013: $11,976) . 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
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Months past due:
0 – 3
4 – 6
6 +

Total

–
1
1

12
–
–

–
–
–

–

–
–
–

–

Movements in the provision for impaired receivables are shown below:

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

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

Closing balance

12
2
–
(12)

2
12
(1)
(1)

–
–
–
–

–

–
–
–
–

–

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 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

11. Inventories

Finished goods
Inventory adjustments

Net inventories

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

72,612
(3,300)

69,312

67,810
(3,237)

64,573

–
–

–

–
–

–

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

12. Investments in subsidiaries

(a) Investments

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Shares in subsidiaries

Total Investments in subsidiaries

–

2,783

(b) Principal subsidiaries

Name

Activity

2014 Interest

2013 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%

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 .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

13. Property, plant and equipment

Group

Freehold
land
$000

Freehold
buildings
$000

Plant and
equipment
$000

At 29 January 2012
Cost
Accumulated depreciation
Accumulated impairment

Net book value

Period ended 27 January 2013
Opening net book value
Additions
Disposals
Depreciation charge

Closing net book value

At 27 January 2013
Cost
Accumulated depreciation
Accumulated impairment

Net book value

Period ended 26 January 2014
Opening net book value
Additions
Disposals
Depreciation charge

Closing net book value

At 26 January 2014
Cost
Accumulated depreciation
Accumulated impairment

Net book value

16,118
–
–

16,118

16,118
–
–
–

16,118

16,118
–
–

16,118

16,118
7,596
–
–

23,714

23,714
–
–

23,714

Total
$000

106,449
(60,926)
(379)

14,453
(3,165)
–

75,878
(57,761)
(379)

11,288

17,738

45,144

11,288
–
–
(434)

17,738
5,175
(226)
(5,096)

10,854

17,591

14,453
(3,599)
–

76,397
(58,584)
(222)

45,144
5,175
(226)
(5,530)

44,563

106,968
(62,183)
(222)

10,854

17,591

44,563

10,854
3,866
–
(453)

17,591
3,786
(178)
(4,570)

44,563
15,248

(178))
(5,023)

14,267

16,629

54,610

18,319
(4,052)
–

77,054
(60,393)
(32)

119,087
(64,445)
(32)

14,267

16,629

54,610

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 $50 .39 million (2013: $39 .60 million) .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

Computer
Software
$000

6,474
(5,220)
–

1,254

1,254
651
–
(598)

1,307

7,044
(5,737)
–

1,307

1,307
922
–
(794)

1,435

7,944
(6,509)
–

1,435

14. Intangible assets

Group

At 29 January 2012
Cost
Accumulated amortisation
Accumulated impairment

Net book amount

Period ended 27 January 2013
Opening net book amount
Additions
Disposals
Amortisation charge

Closing net book amount

At 27 January 2013
Cost
Accumulated amortisation
Accumulated impairment

Net book amount

Period ended 26 January 2014
Opening net book amount
Additions
Disposals
Amortisation charge

Closing net book amount

At 26 January 2014
Cost
Accumulated amortisation
Accumulated impairment

Net book amount

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

15. Taxation

(a) Deferred tax benefit
Group

At 29 January 2012
Credited to the income statement
Net credited to other comprehensive income

At 27 January 2013
Credited to the income statement
Net charged to other comprehensive income

At 26 January 2014

Depreciation
$000

Provisions
$000

(977)
203
–

(774)
118
–

(656)

1,590
174
–

1,764
190
–

1,954

Derivative
financial
instruments
$000

157
–
90 1 .

247
–
(276)1.

(29)

1. Net charged to other comprehensive income comprises deferred tax on fair value hedge taken to income statement
of $245,121 (2013:$398,259) and deferred tax on fair value transfers to cashflow hedge reserve of $31,285 (2013:
($488,370))

Parent

At 29 January 2012
Credited to the income statement

At 27 January 2013
Credited to the income statement

At 26 January 2014

Depreciation
$000

Provisions
$000

–
–

–

267
13

280
56

336

Derivative
financial
instruments
$000

–
–

–

Total
$000

770
377
90

1,237
308
(276)

1,269

Total
$000

267
13

280
56

336

Net deferred tax asset / (liability)

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$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

Deferred tax asset (net)

1,769
1,692

3,461

(185)
(2,007)

(2,192)

1,269

1,878
1,826

3,704

(366)
(2,101)

(2,467)

1,237

299
37

336

–
–

–

238
42

280

–
–

–

336

280

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

(b) Taxation (payable)/receivable

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

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

(3,561)
(13,662)
13,714
160

(3,001)
(12,581)
11,682
339

Balance at end of period

(3,349)

(3,561)

380
(965)
829
160

404

216
(881)
706
339

380

16. Trade and other payables

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Trade payables
Other payables and accruals

Total trade and other payables

44,099
18,686

62,785

39,322
11,210

50,532

394
497

891

510
482

992

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

17. Provisions

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

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

Balance at end of period

89
96
(89)

84
89
(84)

–
–
–

–

–
–
–

–

Provisions shown above relate to returns in relation to sales of goods directly imported by the Group . Provisions relating

to inventory, receivables and employee benefits have been treated as part of those specific balances . There are no other

provisions relating to these financial statements .

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

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

18. Employee Benefits

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

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$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

19. Imputation credits

575
103
(133)

545

7,638
8,608
(8,490)

7,756

572
128
(125)

575

7,109
8,621
(8,092)

7,638

150
41
(60)

131

2,281
2,148
(2,064)

2,365

170
24
(44)

150

2,061
2,254
(2,034)

2,281

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Imputation credits available for use in
subsequent accounting periods

47,058

43,099

1,888

7,171

The above amounts represent the balance of the imputation account as at the end of the reporting period, adjusted for:

Imputation credits that will arise from the payment of the provision for income tax

Imputation debits that will arise from the payment of dividends recognised as a liability at the reporting date and;

Imputation credits that will arise from the receipt of dividends recognised as receivables at the reporting date .

The consolidated amounts include imputation credits that would be available to the parent if subsidiaries paid dividends .

Imputation credit account movements:

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

Balance at beginning of period
Tax payments, net of refunds
Credits attached to dividends received
Distributed and disposed

43,099
14,000
1
(10,042)

45,347
16,186
1
(18,435)

7,171
1,000
3,759
(10,042)

22,901
(15,340)
18,045
(18,435)

Balance at end of period

47,058

43,099

1,888

7,171

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

20. Share capital

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. of authorised shares

Share capital

Group and Parent

Period ended
26 January 2014
Shares

Period ended

Period ended
27 January 2013 26 January 2014
$000

Period ended
27 January 2013
$000

Opening ordinary shares

213,697,500

213,047,500

42,317

41,732

Issue of ordinary shares during the period:

Exercise of options

1,836,500

650,000

2,5611.

5851 .

Balance at end of period

215,534,000

213,697,500

44,878

42,317

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

exercise price paid by the employee, is transferred to share capital. The amounts transferred for the 1,836,500 shares issued
during the period ended 26 January 2014 were $609,069 and $1,952,050 respectively (2013: $104,390 and $481,000
respectively for the 650,000 shares issued).

21. Dividends paid

Group and Parent

Period ended
26 January 2014
Cents per share

Period ended

Period ended
27 January 2013 26 January 2014
$000
Cents per share

Period ended
27 January 2013
$000

Interim dividend for the period ended 26 January 2014
Final dividend for the period ended 27 January 2013
Interim dividend for the period ended 27 January 2013
Special dividend for the period ended 27 January 2013
Final dividend for the period ended 29 January 2012

4.50
7.00
–
–
–

11.50

–
–
4 .00
10 .00
6 .50

20 .50

9,670
15,030
–
–
–

24,700

–
–
8,548
21,369
13,889

43,806

All dividends paid were fully imputed . Supplementary dividends of $159,541 (2013: $339,331) were provided to shareholders

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

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

22. 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 within 5 days of the date they are exercised .

During the financial year the Company issued 1,537,000 options (2013: 1,437,000) to senior executives .

The fair value of these options is estimated at $426,979 (2013: $755,862) under the Black Scholes valuation model using the

following inputs and assumptions:

• Risk free interest rate

3 .17%

(2013: 2 .65%)

• Expected dividend yield

4 .89%

(2013: 5 .16%)

• Expected life (years)

• Share price at grant date

• Exercise price

3 .65

$2 .30

$2 .43

(2013: 3 .39)

(2013: $2 .13)

(2013: $1 .55)

• Expected share volatility

25 .50%

(2013: 26 .50%)

The expected share volatility is derived by analysing the historic volatility over a recent historical period similar to the term of

the options .

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 $527,926 (2013: $458,282) 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
26 January 2014

Period ended
27 January 2013

Average
exercise price
$ per share

1.30
2.43
1.47
1.06
0.95

1.74

Options
000

5,425
1,537
(55)
(1,837)
(73)

4,997

Average
exercise price
$ per share

1 .14
1 .55
1 .25
0 .74
0 .74

1 .30

Options
000

4,953
1,437
(145)
(650)
(170)

5,425

Weighted average share price for options exercised during the period $2 .39 (2013: $1 .53)

Of the 4,996,500 outstanding options, 680,500 are currently exercisable (2013: 1,318,000) .

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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

November 2013

November 2012

October

July

2014

2015

2016

2017

October

July

2013

2014

2015

2016

Total share options outstanding

$0 .95

$1 .30

$1 .38

$1 .55

$2 .43

Period ended
26 January 2014
000

Period ended
27 January 2013
000

–

681

1,372

1,407

1,537

4,997

1,318

1,273

1,397

1,437

–

5,425

The weighted average remaining contractual life of options outstanding at the end of the period was 2 .43 years (2013: 2 .31)

Share options reserve

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

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

922
528
(56)
(609)

Balance at end of year

785

660
458
(92)
(104)

922

922
528
(56)
(609)

785

660
458
(92)
(104)

922

23. 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 . No interest is charged on internal current accounts . 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:

Management fees charged by the Company to:

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

Total management fees

Dividends received by the Company from:

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

Total dividends received

Period ended
26 January 2014
$000

Period ended
27 January 2013
$000

10,640
5,209

15,849

4,835
4,835

9,670

10,164
4,943

15,107

18,138
25,643

43,781

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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

Period ended
26 January 2014
$000

Period ended
27 January 2013
$000

Loan (to) / from the Company (from) / to Briscoes (NZ) Limited
Loan from / (to) the Company to / (from) The Sports Authority Limited
(trading as Rebel Sport)

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

(6,750)

1,394

(5,356)

4,288

(7)

4,281

In addition the Group undertook transactions with the following related parties 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 $580,000 (2013: $580,000) from the Group, under an agreement to lease

premises to The Sports Authority Limited (trading as Rebel Sport) .

• The RA Duke Trust received dividends of $19,377,886 (2013: $34,255,057) .

• P Duke, spouse of the Managing Director, received payments of $65,000 (2013: $65,000) in relation to her

employment as an overseas buying specialist with Briscoe Group Limited, and rental payments of $669,671 (2013:

$223,304) as owner of the Briscoes Homeware premises at Panmure, Auckland under an agreement to lease premises

to Briscoes (NZ) Limited .

• The Hualien Trust, of which P Duke is a trustee, received dividends of $145,475 (2013: $259,325)

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

MM Devine1 .

Period ended
26 January 2014

Period ended
27 January 2013

Directors’ Fees
$000

Dividends
$000

Directors’ Fees
$000

Dividends
$000

–

186

–

115

–

140

–

150

–

205

–

250

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

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

Executive Director
RA Duke2 .
AJ Wall2 .,3 .

Non Executive Directors

SH Johnstone

RPO’L Meo

MM Devine

Period ended
26 January 2014
$000

Period ended
27 January 2013
$000

19,378

19,519

34,255

34,507

–

1. Mary Devine was appointed by the Board of Directors as an independent Non-Executive Director of Briscoe Group Limited

on 21 August 2013

2. The RA Duke Trust, of which RA Duke and AJ Wall are trustees, received dividends of $19,377,886 during the period

(2013: $34,255,057)

3. The Tunusa Trust, of which AJ Wall is a trustee, received dividends of $141,450 during the period (2013: $252,150).

Key management compensation was as follows:

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

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

Total benefits

2,814
134
186

3,1341.

3,391
130
150

3,671

2,814
134
186

3,1341.

3,391
130
150

3,671

Key management includes the Directors of the Company and those employees who the Company has 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 (2013: Nil) . In addition key management did not

receive and are not entitled to receive any post employment or long term benefits (2013: Nil) .

Internal management structure changes made during 2013 resulted in a decrease in the number of employees having
disclosure obligations under Section 19T of the Securities Markets Act 1988.

Notes to the Financial Statements

For the 52 week period ended 26 January 2014

24. Capital expenditure commitments

Group

Parent

Period ended
26 January 2014
$000

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

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

5,066

247

–

25. Operating lease rental commitments

Group

Parent

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

Period ended
26 January 2014
$000

23,351
20,267
34,177
28,631

Total operating lease rental commitments

106,426

Period ended

Period ended
27 January 2013 26 January 2014
$000

$000

Period ended
27 January 2013
$000

22,645
18,333
31,633
21,130

93,741

–
–
–
–

–

–
–
–
–

–

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 .

26. Contingent liabilities

There were no contingent liabilities as at 26 January 2014 (2013: Nil) .

27. Events after balance date

On 6 March 2014 the Directors resolved to provide for a final dividend to be paid in respect of the year ended 26 January

2014 . The dividend will be paid at a rate of 8 .00 cents per share, for all shares on issue as at 21 March 2014, with full

imputation credits attached .

Since balance date and up to the date of these financial statements a further 30,000 ordinary shares have been issued under

the Executive Share Option Plan as a result of executives exercising share options .

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 (“the Company”) on pages 9
to 49, which comprise the balance sheets as at 26 January 2014, the income statements,
statements of comprehensive income and statements of changes in equity and statements of
cash flows 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 26
January 2014 or from time to time during the financial year.

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 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 auditors
consider the internal controls relevant to the Company and the 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 the 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.

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 services
have not impaired our independence as auditors of the Company and the Group.

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

Independent Auditors’ Report
to the shareholders of Briscoe Group Limited

Opinion
In our opinion, the financial statements on pages 9 to 49:

(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 26 January 2014, and their financial performance and cash flows for the period
then ended.

Report 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 26 January 2014:

(i)

(ii)

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

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

Restriction 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
6 March 2014

Auckland

Corporate Governance

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

activities including key performance indicators . In

addition, the Board receives regular briefings from the

Limited (“the Company”) is elected by shareholders

management team on key strategic and performance

to oversee the management of the Company and its

issues either as part of regular Board meetings or in

subsidiaries and to direct performance in the long term

specific briefing sessions .

best interests of the Company and its shareholders .

The focus of the Board is the creation of company

and shareholder value and ensuring the Company is

Board Membership
The Company’s constitution sets out policies and

managed in accordance with best practice . Corporate

procedures on the operation of the Board including

governance is continually reviewed and updated in

the appointment and removal of Directors . The NZSX

accordance with good business practice .

The principal responsibilities of the Board are to:

• establish the Company’s objectives and review the

major strategies for achieving these objectives;

• establish an overall policy framework within which

the Company conducts its business;

• review the Company’s performance including

approval of and monitoring against budget;

• ensure that Group financial statements are prepared

and presented to give a true and fair view of the

Group’s financial position, financial performance and

cash flows;

Listing Rules and the Company’s constitution provide

that a minimum of three Directors is required, of whom

at least two shall be independent . Currently the Board

comprises five Directors, being an independent Non-

Executive Chairman, the Group Managing Director, the

Deputy Managing Director and two independent Non-

Executive Directors .

The Board acknowledges the importance of

independent Directors in ensuring an optimal balance

between Board members who are able to bring a wide

range of business experience and skills and those

with direct company knowledge and operational

• review performance of senior executive against

responsibility .

approved objectives and key performance indicators;

Under the constitution, one third of Directors must

• ensure effective policies and procedures are in place

retire by rotation at the annual meeting each year

to safeguard the integrity of the Company’s financial

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

reporting;

The Group Managing Director, in his capacity as an

• ensure that any significant risks facing the Company

Executive Director, is exempt from the requirement to

are identified and that appropriate risk management

retire by rotation .

programmes are in place to control and report on

these risks;

• ensure that the Group operates in accordance

with New Zealand laws, regulations, the listing

rules (including the continuous disclosure regime),

professional standards and contractual obligations;

and

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

is required to make an announcement to the market

advising the closing date for Director nominations . That

announcement must be no less than 10 business days

prior to the closing date and the closing date must be

not more than two months prior to the annual meeting .

• report to shareholders and other key stakeholders .

The Board undertakes to meet at least ten times during

The Board has delegated day-to-day management of

the Company to the Group Managing Director and

other executives of the Company . Operational and

the financial year . For the year ending 26 January 2014

the Board met twelve times .

Profiles of the current Directors appear on page 55 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 .

The Chairman, Managing Director and Deputy

Managing Director determine the agenda for Board

meetings . On a monthly basis, the Board receives

operational reports summarising the Company’s

Board Review
The Board annually reviews its performance, and that

of Board committees, to ensure that the Board and its

committees are performing satisfactorily and meeting

their respective objectives . In addition, the performance

of individual Directors is also subject to review with a

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 two

independent Directors – Dame Rosanne Meo

provide specific input and guidance to particular areas

(Chairman) and Stuart Johnstone, 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

responsibilities . In order to fulfil its responsibilities,

which management talent and potential can be

each committee is empowered to seek any information

identified, 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), Dame Rosanne

Company . Each Director undertakes to ensure they have

Meo and Mary Devine, as well as the Group Managing

the necessary time and resources required to enable

Director, Rod Duke . The Committee assists the Board

them to meet the responsibilities associated with their

in fulfilling its responsibilities for Company financial

directorship . Specific requirements of governance are

statements and external financial reporting .

addressed at Board meetings during the course of the

The Audit Committee is responsible to the Board for

reviewing the Company’s accounting policies and

financial statements, promoting integrity in financial

reporting, reviewing the adequacy and effectiveness of

the Company’s internal controls and recommending the

appointment of, as well as reviewing the performance

and recommendations of the external auditors . In turn,

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 .

The Audit Committee is responsible for determining

whether potential engagements of the auditors are

appropriate in the context of seeking to prevent audit

independence from being impaired (or being seen to be

impaired) .

The Chief Financial Officer is responsible for the

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

year . These specific requirements include ensuring

the Board contains an appropriate mix of skills and

experience, making recommendations to the Board

on new Directors for nomination, determining the

independence of Directors, and ensuring the Company

maintains a high level of corporate governance .

Independent Directors
Under the Corporate Governance requirements of NZX

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

of its Directors are determined by the Board to be

independent .

The current board and committee memberships

are detailed below together with the independence

classification as determined by the Board, in accordance

with the guidelines issued by NZX . As a relatively small

board, there is a clear understanding of the required

roles and expectations of the Independent Directors .

Board Composition as at April 2014
Director

Classification

Committee membership

Audit committee

Human Resources committee

Dame Rosanne Meo

Independent (Chair)

Rod Duke

Stuart Johnstone

Mary Devine

Alaister Wall

Executive

Independent

Executive

Member

Chair

Member

–

Chair

Member

–

Board Remuneration
Shareholders are asked to approve the level of Directors’

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

relation to nominations, rather than have a separate

Remuneration Committee (governed by a charter), the

Board as a whole takes responsibility for monitoring

developments in the New Zealand market and

recommending remuneration packages for Directors to

the Company’s shareholders . Fees are established to be

in line with those of New Zealand based organisations

of a similar scope and size to the Company .

disciplinary measures are available to address any

violations . It covers:

• Conflicts of interest;

• Confidentiality;

• Payments, gifts and entertainment;

• Trading in company securities;

• Workplace principles;

• Use of company information and assets;

• Obligations to act honestly and in the best interests of

the Company as required by law;

• Delegation of authority;

• Accuracy of records;

Diversity
A breakdown of the gender composition of Directors

• Compliance with any applicable laws, regulations and

rules; and

and officers as at the Company’s balance date, including

• Fair dealing with customers, employees, suppliers and

comparative figures, is shown below:

competitors .

26 January 2014

27 January 2013

The Board is responsible for reviewing the Code of

Female

Male

Female

Male

Conduct and adherence to it .

Directors1

Officers2,3

1 . The increase in total Directors reflects the appointment of an additional

Director in August 2013 .

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

the sale and purchase of the Company’s securities by

Directors and employees . All Directors and employees

2 . Excludes Managing Director and Deputy Managing Director (included

must act in accordance with this procedure and the

in breakdown of Directors) .

requirements of the Securities Markets Act 1988 .

3 . Officers includes only those employees who the Directors have
deemed to have disclosure obligations under section 19T of the
Securities Market Act 1988 and is consistent with that used for the
Key management compensation disclosure in the Financial Statements
(Note 23) . The decrease in total Officers reflects internal management
structure changes made during 2013 .

The procedure requires employees to obtain the written

consent of the Chief Financial Officer, or in the case of a

Director, of the Chairman of the Board, prior to trading

in the Company’s shares . Generally, this consent will only

be given in respect of trading in the 60 day period following

The Company does not have a formal Diversity policy .

the announcement of the Company’s half year and annual

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

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

Code of Conduct defines the levels of ethical business

practice expected of the Board and within the Company

(including employees and contractors) . The Company

ensures that all new employees are aware of the Code

of Conduct and are provided with relevant training . In

addition, the Code of Conduct addresses compliance

standards and procedures, provides mechanisms

for reporting unethical behaviour and ensures that

results .

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

management of the Company and its subsidiaries,

the Board approves the Company’s risk management

policies and receives regular reports to monitor the

Company’s risk management performance relative to

these policies, with particular emphasis on:

• Operational Risks: risks associated with the Company’s

normal business operations, including normal day-to-

General Disclosures

day exposures relating to customers, stores, employees,

systems, suppliers and regulatory bodies;

• Funding Risks: risks associated with the funding of the

Company’s operations, including exposures relating

to investment of surplus cash, and to interest rate and

exchange movements;

Board of Directors
Dame Rosanne Meo, OBE: Chairman (Non-Executive)

Chairman of AMP Staff Superannuation and The Real

Estate Institute of New Zealand . Director of Overland

Footwear Limited and James Dunlop Textiles Limited .

Trustee of the Middlemore Foundation .

• Environmental Risks: risks associated with the

Rod Duke: Group Managing Director and

environment in which the Company operates that are

Deputy Chairman

outside the Company’s control, including exposures

Group Managing Director since 1991 . Director of

to natural disasters and to changes in social trends,

Pumpkin Patch Limited .

economic conditions and customer preferences; and

Alaister Wall: Deputy Managing Director

• Strategic Risks: risks associated with Company initiatives

Executive of Group since 1982 . Director of Cure Kids .

that are outside the normal course of business, including

exposures relating to initiatives to expand into new

brands, markets, regions and business activities, and to

adopt new systems .

Effective Communication
The Board places great importance on effective

communications to the Company’s shareholders and

employees and the market generally . As a result, in

addition to making the required release of annual and

half-yearly results, the Company makes quarterly sales

Stuart Johnstone: Director (Non-Executive)

Investment Banker and Company Director .

Mary Devine, ONZM: Director (Non-Executive)

Chief Executive of Carter Group Limited . Director of

Meridian Energy Limited and IAG New Zealand Limited .

Trustee of New Zealand Hockey Foundation .

Subsidiary Companies
Rod Duke and Alaister Wall are Directors of the

following subsidiaries: Briscoes (NZ) Limited, The Sports

releases . The Company regularly reviews its practices to

Authority Limited (trading as Rebel Sport), Rebel Sport

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 .

The Board encourages shareholder attendance at the

Limited, Living and Giving Limited . Stuart Johnstone is a

Director of The Sports Authority Limited .

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

Company’s annual meeting and welcomes shareholder

year ended 26 January 2014 are shown on pages 9 to 49

debate on all matters of significance affecting the

in this report .

Company and its business .

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

Changes in Accounting Policies
In preparing these financial statements the accounting

policies outlined in Note 1 to the financial statements

conform with the guidelines set down in the NZX

have been applied .

There were no significant changes in accounting

policies during the year .

Corporate 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 requirements for Directors, the

lack of a Nominations Committee and the absence of

Director remuneration by means of a performance-

based equity remuneration plan . The Board as a whole

takes responsibility for 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 .

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 26 January 2014

Group

$000

483,566
46,928
(13,353)

33,575

Parent

$000

–
12,321
(909)

11,412

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 8 .00 cents per share payable 31 March

2014 . Non resident shareholders of the Group will also

receive a supplementary dividend of 1 .4118 cents per

share . Dividends are fully imputed to New Zealand

resident shareholders .

Directors

A. Remuneration and all other benefits relating to the

year ending 26 January 2014 ($000)

B. Shareholdings

Beneficially Held

SH Johnstone
AJ Wall

As at 21 March 2014

1,005,000
220,000

Non-Beneficially Held

As at 21 March 2014

RA Duke and AJ Wall each as Trustees
of the RA Duke Trust
AJ Wall*
RPO’L Meo

169,091,163
1,230,000
100,000

* Other than in relation to the RA Duke Trust .
For further details refer to Substantial Security Holders
information on page 57 of this report .

C. Share dealings
During the year ended 26 January 2014 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

12 March 2013
18 March 2013
10 April 2013
10 September 2013
13 September 2013
17 September 2013
9 October 2013
21 October 2013
25 October 2013
30 October 2013
4 November 2013

1,000,000
369,000
77,000
3,083
2,717
10,525
55,000
11,500
30,000
27,000
42,500

$2,400,000
$885,600
$184,800
$7,461
$6,575
$25,415
$129,250
$27,140
$70,500
$63,450
$99,875

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

Non Executive Directors

following transactions:

RPO’L Meo

SH Johnstone

MM Devine

Executive Directors

RA Duke (Managing Director)

AJ Wall (Deputy Managing Director)

Executive Directors do not receive Directors’ fees .

891

465

• Payment of rental of $580,000 (2013: $580,000) on the

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

(Refer to Note 23 of the financial statements) .

E. 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 .

F. Directors’ and Officers’ use of Company Information

During the period the Board received no notices pursuant

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

to Section 145 of the Companies Act 1993 relating to use

PricewaterhouseCoopers was $101,400 (2013: $90,000) .

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

Fees paid to the auditors for other services provided,

including a half yearly review, amounted to $24,800

(2013: $23,600) .

Shareholders Information

Managing Director’s Review of Operations and the

Holding Range at 21 March 2014

audited financial statements .

No. Investors

Total Holdings

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

Directors) receiving remuneration and benefits above

$100,000, relating to the period ending 26 January 2014,

are indicated in the following table:

1-1,000

1,001-5,000

5,001-10,000

10,001-100,000

100,001 and over

914

1,538

505

397

659,333

4,586,843

4,104,281

10,236,578

0 .31

2 .12

1 .90

4 .74

196,411,965

90 .93

Number of Employees

3,393

215,999,000

100%

$100,000 – 109,999

$110,000 – 119,999

$120,000 – 129,999

$130,000 – 139,999

$140,000 – 149,999

$150,000 – 159,999

$160,000 – 169,999

$170,000 – 179,999

$180,000 – 189,999

$190,000 – 199,999

$200,000 – 209,999

$240,000 – 249,999

$250,000 – 259,999

$270,000 – 279,999

$310,000 – 319,999

$390,000 – 399,999

$410,000 – 419,999

$620,000 – 629,999

$650,000 – 659,999

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 the Securities Markets Act 1988, are

substantial security holders of the company as at

21 March 2014 are as follows:

Substantial

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

R A Duke (1)

166,644,369

169,091,163

A J Wall (2)

168,094,369

170,541,163

(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 13 March 2012, in
respect of 166,644,369 shares . As at 21 March 2014 this interest was
in respect of 169,091,163 shares .

(2) A J Wall has three relevant interests, which were disclosed in the

SSH notice dated 13 March 2012 . These were (i) as a trustee of the
R A Duke Trust, in respect of 166,644,369 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 21 March 2014
the relevant interest as a trustee of the R A Duke Trust was in respect
of 169,091,163 shares . The other interests remain unchanged .

(3) This information reflects the most recently lodged substantial security
holder notice, in accordance with the Securities Markets Act 1988 .

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

Top 20 Holder List

As at 21 March 2014

Rank

Holder’s Name

Total

JB Were (NZ) Nominees Limited (RA Duke Trust) . . . . . . . . . . . . . . . . 169,091,163 . . . . . . . 78 .28

Gerald Harvey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,250,000 . . . . . . . . 2 .43

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

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

2 .43

New Zealand Central Securities Depository Limited . . . . . . . . . . . . . . . . 4,363,122 . . . . . . . .

2 .02

FNZ Custodians Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,302,625 . . . . . . . .

0 .60

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

0 .59

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 .57

Stuart Hamilton Johnstone and Lorraine Rose Johnstone . . . . . . . . . . . . . 1,000,000 . . . . . . . .

0 .46

Graham John Paull and Owen Brent Ennor . . . . . . . . . . . . . . . . . . . . . . . . 800,000 . . . . . . . . 0 .37

Geoffrey Peter Scowcroft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 683,000 . . . . . . . . 0 .32

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

573,907 . . . . . . . .

0 .27

Peter William Burilin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515,000 . . . . . . . .

0 .24

New Zealand Central Securities Depository Limited . . . . . . . . . . . . . . . . . 402,556 . . . . . . . .

0 .19

Keith Arthur William Brunt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365,000 . . . . . . . .

0 .17

Custodial Services Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348,404 . . . . . . . . 0 .16

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

Custodial Services Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294,635 . . . . . . . . 0 .14

Gemscott Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,000 . . . . . . . . 0 .11

Shu-Wen Chiang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228,053 . . . . . . . . 0 .11

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

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

Notes