Annual
Report
2020
“We take great confidence from the quality
of our retail and product brands, our systems,
the improvements we have underway
and the capabilities of our teams. For that
reason, and notwithstanding the economic
headwinds, we are confident that we will
continue to grow the business and deliver
the value our customers have come to
expect from New Zealand’s pre-eminent
homeware and sporting brands”.
Rod Duke
Group Managing Director
Contents
At a glance 4
Chairman’s Review 6
Highlights 12
Managing Director’s Review 14
Preparing for the Future of Retail 20
Growing Together 24
Consolidated Financial Statements 30
Independent Auditor’s Report 73
Corporate Governance Statement 79
General Disclosures 93
Top 20 Shareholders 96
Directory 97
4
Briscoe Group Limited Annual Report 2020
At a Glance
At a Glance
We’re New Zealand’s leading
homeware and sporting goods
retailer offering our customers
great products to enhance every
room in their home and for every
sporting occasion.
We focus on style, quality and
value and are always working
hard to help our customers create
a home they love and to play the
sport of their choice.
90,000
We have over 90,000 products
available in store or online
800,000
We have over 800,000 visits to
either our physical or online stores
every week
Home delivery and Click & Collect
services
Biggest range of homewares
and sporting goods available in
New Zealand
We’re a leading New Zealand
multichannel retailer with national
coverage through our bricoes.co.nz,
livingandgiving.co.nz, rebelsport.co.nz
websites and store network.
Delivery or pick-up options
New purpose-built Support Office and
Customer Contact Centre in Auckland
32 stores providing online fulfilment capability
and 51 stores “Click and Collect” service
Distribution Centre in South Auckland
87 stores
Briscoe Group Limited Annual Report 2020
At a Glance
5
BRISCOES HOMEWARE STORES
REBEL SPORT STORES
DISTRIBUTION CENTRE
6
Briscoe Group Limited Annual Report 2020
Chairman’s Review
Chairman’s
Review
I am pleased to be able to say that our story is not
all about the day-to-day contest for revenue in this
tough environment. We remain very focused on
opportunity – in the short, medium and long term. We
are determined to remain at the forefront of the retail
scene in New Zealand, in terms of both performance
and adaptation to the changing environment.
Briscoe Group Limited Annual Report 2020
Chairman’s Review
7
The complementarity of the roles of our Executive and
Management teams and their compatibility enables the agility
and effectiveness that so effectively drive our organisation.
It is exciting for us as a Board to see the diversity of thinking
and experience increasingly demonstrated in the teams at
all levels of the company and to acknowledge how this is
contributing to changing attitudes and performance.
We are determined to remain at the forefront of the retail
scene in New Zealand and have several workstreams
underway to increase profitability through internal
process improvement and growth. We are excited by the
development and review of the Group’s strategy for the
coming 3-4 years. This will take account of the ongoing
change in the retail environment and in particular customers’
priorities but at the same time acknowledge the shorter term
economic challenges both domestically and internationally in
the current 2020/21 year.
As a Board and Executive team, we believe that this also
provides us with significant opportunities ahead and that we
are well placed to deliver sustainable growth.
Overview
Our highlights well illustrate that Briscoe Group has once
again demonstrated its ability to navigate the competitive
challenges that are increasingly prevalent in our retail
environment.
Retail has always needed agility, an ability to move quickly
and the foresight to predict when and how to respond,
but the impact of dramatically changing lifestyles,
demands and preferences of our customers has increased
the pressure on all retailers. It is simplistic to place all the
emphasis on the impact of social media in relation to our
changes in lifestyle. It’s more complex than that but it
certainly emphasises that our ability to report increased
revenue and operating earnings whilst responding to this
changing marketplace is all the more significant.
As a Board we are proud of the continuing and
heightened efforts of our people across all parts of the
company and the results they continue to achieve in
driving continued growth and profitability. We openly
acknowledge their hard work and commitment.
Last year was one of significant change in our leadership
team. It demonstrated the Company’s ability to both
attract and promote from within, high achieving and
committed individuals, whilst accentuating the significant
ongoing contribution of established critical team
members.
Dame Rosanne Meo
Chairman
8
Briscoe Group Limited Annual Report 2020
Chairman’s Review
This annual report includes, as a separate section, a summary
Our investment in Kathmandu continued to perform well
of our views on the changing retail environment and the
during our 2019/20 year, returning an increased dividend for
work we are undertaking to ensure that we respond in ways
the year.
that not only maximise our competitive advantage but are
the right decisions for our business and our stakeholders. A
We also note Kathmandu’s market release at the end of
more detailed update on this will be presented at the annual
March 2020 in relation to their response to the COVID-19
meeting.
situation and also their subsequent equity raising, which as a
Board, we decided to not participate in.
The Managing Director’s review of operations (below)
summarises our work programmes and performance over the
As Rod Duke commented at the time, we are obviously
2019-20 year and provides an insight into the trading outlook
supportive of the Kathmandu business and would like
for 2020-21.
Financial Performance
Briscoe Group’s sales revenue grew by 3.34% to a record
$653.0 million in the year ended 26 January 2020. Gross
margin dollars increased by 1.64% to $257.5 million, while
gross margin percentage decreased to 39.43%.
to see them successfully alleviate their balance sheet
pressures. However, our immediate priority in this period
of unprecedented uncertainty surrounding the potential
impact of COVID-19, is to our shareholders and employees to
continue to ensure the strength of our own business both in
the short-term and for the future.
NZ IFRS 16
Net profit after tax (NPAT) before the impact of accounting
As previously indicated the Group adopted the accounting
standard NZ IFRS 16 (see below) was up by 2.54% to $65.0
standard NZ IFRS 16: Leases on 28 January 2019 and this is
million. NPAT included dividends received totalling $6.8
thus the first year of reporting under this new standard.
million from our investment in Kathmandu Holdings Limited,
as well as $2.7 million received for rights entitlements not
Like a number of other retailers, we lease many of our store
exercised in that company’s capital raising for its acquisition
properties. The new standard requires lessees to recognise
of the Rip Curl business. NPAT after the impact of NZ IFRS 16
nearly all leases on the balance sheet, which will reflect their
was $62.6 million.
right to use the asset for a period of time and the associated
liability for payments. The new standard has changed the
The Group’s balance sheet remains strong, with cash and
presentation of the balance sheet and the statement of cash
bank balances of $67.4 million as at 26 January 2020 and no
flows, as well as affecting the amounts shown in the income
term debt. Approximately $25 million of creditor payments
statement. Rent expense in the income statement has been
included in the trade payables balance were subsequently
replaced by depreciation and interest.
paid on or before 31 January 2020.
$
653M
SALES REVENUE
3.34%.
Briscoe Group Limited Annual Report 2020
Chairman’s Review
9
The Group has elected to apply the modified retrospective
made the decision to cancel the final dividend in the best
transition method. Under this method the Group has
interests of the company. There is no doubt in our minds
not restated comparatives for this reporting period.
given the rapid deterioration of the operating environment
“Briscoe Group is committed
to the highest standards
of governance and
management, based on
implementing best practice
structures and policies.”
since then, that this was the right decision. We will however
continue to assess our ability to pay a dividend as is
practicable and prudent.
Corporate Governance
Briscoe Group is committed to the highest standards of
governance and management, based on implementing best
practice structures and policies. It has always been a strong
feature of this company that the Board and Executive teams
work effectively together and are aligned around the business
objectives.
We have, in recent months, been in search of an additional
independent, non-executive director. We also undertook a
comprehensive, external assessment of our capabilities in the
Reclassifications and adjustments are therefore recognised
latter part of 2019 and used this as a component of both our
in the opening balance sheet. Reported net profit after tax
governance strategic planning and in determining what we
(NPAT) includes a $2.4 million impact from the introduction
need in our next director. That review identified the benefit
of NZ IFRS 16. Due to its January balance date, Briscoe
we could derive for additional e-commerce and international
Group is one of the first companies to adopt the new leasing
experience and we are progressing an appointment process.
standard, which will significantly affect all businesses with
sizeable portfolios of leased properties. It is important to note
that the changes have no cash effect on the Group and the
change is for financial reporting purposes only.
Further details can be found in Note 6.5 (page 70) of the
financial statements within this Annual Report, including
tables outlining the impacts of the new standard on the
consolidated income statement and consolidated balance
sheet.
Dividend
Equity-Based Remuneration Schemes
The Board is of the view that all shareholders benefit from the
participation of key senior executives in long-term, appropri-
ately-priced, equity-based remuneration that crystallises only
on delivery of increased shareholder value.
The Group established an Executive Share Option Plan in
2003 to issue options to selected senior executives and,
subject to shareholder approval, to Executive Directors. No
options have been issued under this plan since 2016. The
total number of share options still exercisable represents 0.5%
We were, of course disappointed to have to take the difficult
of the current issued share capital.
decision to cancel the final dividend which had been
announced with our full year result (refer Notes 5.3.3 and 6.4
Subsequent to a review conducted in 2018 with independent
of the financial statements).
external advisors engaged by the Board, a new long-term
In light of the uncertainty surrounding the impact of
incentive plan was established to replace the Executive Share
COVID-19 and the rapid escalation to Alert level 4
Option Plan. Under this new plan, performance rights subject
implemented by the New Zealand Government, the Board
10
Briscoe Group Limited Annual Report 2020
Chairman’s Review
Briscoe Group Limited Annual Report 2020
Chairman’s Review
10
to performance hurdles measured over a three-year period
On behalf of my fellow directors, I thank you all for your
are granted to selected senior executives. There were two
continued support as shareholders in the Briscoe Group.
tranches of performance rights issued during the 2019-20
financial year.
Further details in relation to equity-based remuneration can
be found in Note 6.2 (page 66) of the financial statements
within this Annual Report.
The 2020/21 year has already clearly demonstrated that
it will be the most economically, socially and operationally
challenging period that any of us have faced. However we
remain excited by the significant opportunities that lie ahead
for our Group. The response of our team in these recent
weeks has clearly demonstrated the agility of which we spoke
earlier in this report to you.
Dame Rosanne Meo
Chairman
On behalf of the Board:
Rod Duke
Andy Coupe
Tony Batterton
Unpredictability and uncertainty abound, but we remain
confident that we are well-placed to maintain our position as
the leading homeware and sporting goods retailer in
New Zealand.
Andy Coupe
Independent Director
Tony Batterton
Independent Director
12
Briscoe Group Limited Annual Report 2020
Highlights
Highlights
Briscoe Group Limited Annual Report 2020
Highlights
13
Key performance indicators (KPIs) are used by the Board and throughout the Group to monitor business performance
TOTAL REVENUE
$M AND GROWTH %
NET PROFIT AFTER TAX*
$M AND % SALES
ONLINE MIX OF SALES
%
9.2%
5.5%
4.4%
3.3%
3.3%
653.0
631.9
605.1
585.9
555.5
8.5%
47.1
10.1% 10.1%
10.0%
63.4
61.3
59.4
10.0%
65.0
11.3%
10.0%
8.2%
6.1%
4.5%
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
Growth of 3.3% includes same-store
Net profit after tax* (NPAT) continues
Online continues to grow with
growth of 2.0% in stores and online
to grow in a challenging retail
additional fulfilment stores and the
and 3 new store openings.
environment and despite significant
launch of Click and Collect.
wage and other cost pressures.
* Net profit after tax is presented before the impact of
the introduction of NZ IFRS 16.
GROSS PROFIT MARGIN
%
FREE CASH FLOW
$M
EARNINGS PER SHARE*
CENTS
40.6%
40.1%
40.0%
40.1%
75.0
39.4%
55.5
46.7
43.5
2017
2018
2019
2020
2016
-41.9
2016
2017
2018
2019
2020
29.3
28.7
27.8
27.2
21.7
2016
2017
2018
2019
2020
The competitive retail environment
Solid positive free cash flow (defined as
Earnings per share increasing
continues to keep margins under
net cash from operating activities less
reflecting the steady increase in profit
pressure.
net cash used in investing activities)
performance.
since the 2015/16 investment in
Kathmandu Holdings Limited.
* Earnings per share is presented using earnings
before the impact of the introduction of NZ IFRS 16.
14
Briscoe Group Limited Annual Report 2020
Managing Director’s Review of Operations
Managing
Director’s
Review of
Operations
We look forward to expanding revenues
from our existing store network and online
platform, new revenue streams and increased
profitability through improvements in key
facets of our business.
Briscoe Group Limited Annual Report 2020
Managing Director’s Review of Operations
15
In the year to January 2020 our performance was
and declines in consumer and business confidence both in
commendable with sales at a record level. Net profit after
New Zealand and internationally. In particular the challenges
tax was also a record before the extra impact of the new
of the COVID-19 environment have just highlighted the
accounting standard on leases.
importance and value of our high performing and dedicated
executive team and their leadership that permeates right
As Managing Director, I cannot emphasise enough the
through the organisation.
effectiveness of our people in achieving such results. My
direct reports of Geoff Scowcroft (CFO), Andrew Scott (COO)
Margins were under pressure, especially in the second half
and Aston Moss (GM Human Resources), supported by great
of the year with a late start to winter having a significant
teams in every part of the Group, continue to demonstrate
impact on demand in relevant product categories. While
the values and energy that make us successful and passionate
Gross Margin dollars increased for the year, the equivalent
about our company.
percentage was lower.
Due to this commitment, we were and continue to be
Due to this commitment, we were and continue to be
well-placed to take on the intense competition across the
well-placed to take on the intense competition across the
retail environment, including wage and general cost increases
retail environment, including wage and general cost increases
Rod Duke
Group Managing Director
Group Managing Director
16
Briscoe Group Limited Annual Report 2020
Managing Director’s Review of Operations
Despite being faced by changing consumer spending
• Building a deeper understanding of our customers
patterns – growth in online shopping, the focus on mega
wants and needs.
shopping events at the expense of ‘normal’ trading and the
later start of Christmas, both the homeware and sporting
goods segments continue to perform well operationally.
These disciplines will remain at the core of our business
and go hand in hand with initiatives that will help us retain
our strong competitive position as we evolve and grow.
On a same-store basis – adjusted for store openings and
closures – Group sales were 2.04% ahead of those for
the previous corresponding period. Our online channels
continued to experience strong growth with sales 16%
higher than the previous years. Online sales now represent
just over 11% of our total sales and continue to grow.
We made $19.2 million of capital investment, with $10.1
million going toward development of Group owned property
and the balance for the fit-out of new and relocated stores,
online platform improvements, security system upgrades
and enhancements to system software and hardware.
Inventories were $87.4 million at year end, $6.4 million
higher than the $81.0 million for 2018-19. The increase
reflected three new store openings during the year, the
increased demand for online shopping and a higher mix of
imported inventory.
Our strong performance was built on basic disciplines –
•
Investing in our people, their growth and performance.
•
Improving productivity – in particular managing
inventory better.
• Optimising our store network and growing our
online platform
Our Store Network
The store development programme progressed well
throughout the year. The Briscoes Homeware and Rebel
Sport stores in New Plymouth were fully refurbished
during the first half, following earthquake strengthening
works.
Projects continued at pace during the second half, led
by the completion of the new Support Office at 1 Taylors
Road, Auckland. The full support team was relocated by
the end of August. The Briscoes Homeware store at 36
Taylors Road was relocated in September to retail space
on the ground floor of the new Support Office building.
This allowed for a complete rebuild on the previous site, for
which siteworks have since commenced.
September also saw the opening of a new Rebel Sport
store in Newmarket, Auckland as part of the Westfield
retail redevelopment. This store reflects a contemporary
fit-out and design, parts of which will be replicated in
future new and refurbished Rebel Sport stores.
11.3 %
ONLINE MIX
OF SALES
Briscoe Group Limited Annual Report 2020
Managing Director’s Review of Operations
17
New Briscoes Homeware and Rebel Sport stores, including
We will enhance our store network through new openings,
online fulfilment centres, opened in Mt Roskill in October –
refurbishments and upgrades in new and existing locations.
welcome additions to the Group’s Auckland network. The
Our store development programme will include the opening
Briscoes Homeware store at Riccarton, Christchurch was
of bigger and better Briscoes Homeware and Rebel Sport
relocated to a new site on Riccarton Road. The extension
stores in Nelson, a new Briscoes Homeware at 36 Taylors
and full refurbishment of the Briscoes Homeware store in
Road, Auckland and the conversion of our site at 1 Taylors
Tauranga was completed, along with the creation of an
Road to a flagship Rebel Sport store. We will also be working
enlarged common back-of-house facility.
on developments in Napier to open in 2021 and Silverdale
By the end of the year the homewares segment had 47
likely in early 2022.
bricks and mortar stores including 24 fulfilment hubs,
There will be further improvement in internal processes,
and there were 40 stores in the sporting goods segment
including the launch of a notable project to enhance our
including 20 fulfilment hubs.
supply chain management by enhancing logistics, inventory
Our Ongoing Online Mission
and store processes, combining our own expertise with
specialised external assistance.
We will launch a review of the way we engage with customers
The last year has seen considerable investment in our
with a view to optimising our marketing spend and cost
online platform with the full launch of our new websites in
control will remain a key focus.
February. The addition of fulfilment hubs as part of the store
refurbishment programme and continuing work to improve
We take great confidence from the quality of our retail and
the way we deliver orders to customers, are essential
product brands, our systems, the improvements we have
to our future online development. We are committed
underway and the capabilities of our teams. For that reason,
to increasing our capacity, capability and customer
and notwithstanding the economic headwinds, we are
understanding in this area.
confident that we will continue to grow the business and
deliver the value our customers have come to expect from
Our Click and Collect offering allowing shoppers to order
New Zealand’s pre-eminent homeware and sporting brands.
Rod Duke
Group Managing Director
online and pick up in-store, was launched after an extended
trial and is now available to customers at 51 stores. Our
intention is to have this service available at all stores by the
end of this year.
The Year Ahead
Although New Zealand retailing continues to remain
highly competitive, our dominant perspective is one of
opportunity. We look forward to expanding revenues from
our existing store network and online platform, new revenue
streams and increased profitability through improvements
in key facets of our business.
We will continue to enhance our customer offering through
both online channels and physical stores with the roll-out
of Click and Collect and other customer engagement
initiatives.
20
Briscoe Group Limited Annual Report 2020
Preparing for the Future of Retail
Preparing
for the
Future of
Retail
Retailing has never been simple.
It requires a strange alchemy of
foresight, ambition, risk-taking,
innovation and disciplined execution
to achieve survival and growth.
Briscoe Group Limited Annual Report 2020
Preparing for the Future of Retail 21
Briscoe Group was founded on the recognition of those basic
We see the most significant changes within the
requirements and our willingness to meet them day-by-day
following areas:
and year-by-year. Years later we are still here, with a national
footprint and a clear position as New Zealand’s leading retailer
1. COVID-19:
of homewares and sporting goods.
Our position has been built on a strategy that places
customers at the centre of our business – offering customers
the best range of brands at the best prices and making it
easy for them to do business with us. In all likelihood, that will
never change.
What does change is the shape and structure of the
retail environment.
For most of our lifespan change has been gradual – an
evolution of the bricks and mortar retail platform. In
recent years it has become more rapid and fundamental –
rearranging the competitive structure of markets through
global forces such as the spread of major international retail
brands, the rise of e-commerce including the introduction of
online trading platforms with global reach, and a revolution in
marketing and advertising based on far-reaching changes in
the media landscape.
The result is a potent mix of evolving trends that underline
the Darwinian nature of retail success – that it is predicated
not on size, strength or intelligence but rather on the ability to
adapt to change.
“The strength of our balance
sheet provides a solid
foundation for future growth”
Geoff Scowcroft
CFO
First and foremost is the global crisis that is COVID-19.
We have yet to see the full scope of the national health
response or the economic implications but it’s obvious
that retail will undoubtedly be impacted. While this may
not be a long-term market change it still presents the most
disruptive force to retail in New Zealand this year. Purchase
patterns have radically shifted from the impact of enforced
isolation and this should be a solid test of our online and
offline fulfilment options and experiences.
2. Customer behaviours and preferences:
Multi-channel purchasing opportunities, online research
and comparison, new technologies, readily available global
information and shifts in spending patterns (like the recent
concentration of promotional activity, and thus consumer
demand, around major event-based campaigns such
as Singles Day (‘11/11’), Black Friday and Boxing Day) all
highlight the extent to which it will be our understanding
of our customer that keeps us relevant and reliable.
3. The role of the physical store:
So much more than a fulfilment centre, the physical
store is increasingly the hub of the ‘brand experience’ –
used to inspire, demonstrate, educate and connect with
customers. Such multifunctional spaces need radical
rethinking that moves away from ‘rows of racks’ and leans
into desirable destinations.
4. Erosion of the traditional media landscape:
The decline in dominance of traditional media (television,
print and radio) and increased relevance of a range of
options including digital platforms, subscription television
and social networks makes putting national brand and
sales messages in front of customers more challenging
and expensive; but, on the other hand, offers ever-greater
potential for personalised targeting.
22
Briscoe Group Limited Annual Report 2020
Preparing for the Future of Retail
“We have a strong base to build
on with our store and fulfilment
network in a continual process
of growth and renewal”
Andrew Scott
COO
5. Operational cost pressures:
Continuing cost increases along with minimal opportunity
for retail price inflation put increased pressure on the
bottom line and highlights the need for the business
to run as smartly as possible with business intelligence
technology and systems leading the charge.
These, and other unforeseen, challenges present both
opportunities and risks and retailers need to plan to deal
with both. Some have adapted better than others. In what is
essentially a mirror of the international experience, a number
of retailers in New Zealand and Australia have been placed
in some form of voluntary or involuntary administration over
recent years. These changes in the operating environment, as
well as the competitive forces, are clear and present.
Briscoe Group is determined to be one of the retailers that
confronts both the challenges and the opportunities.
We have a strong base to build on with our store network
in a continual process of growth and renewal; the recent
upgrade of our online shopping experience, including Click
and Collect options at stores throughout the country; and the
excellent capabilities of our individual employees and teams.
Beyond that base we have a range of plans in place to
build the strength of our position. We see three key areas of
opportunity to drive growth:
•
Improving the experience our customers have with
us – through interactions with our people, the store
environment, the online platform and in responding
to promotions. We aim to offer a relevant and reliable
experience that differentiates us in the marketplace.
• Overhauling our supply chain to improve distribution
efficiency, improving the ‘speed-to-floor,’ and optimising
online fulfilment and stock levels.
• Developing new streams of revenue by identifying
opportunities for start-ups and acquisitions, and by
building strategic partnerships.
These plans reflect our existing knowledge base and
capabilities, reflection on those needed for continuing
growth and study of the changes made successfully by
our peers in overseas markets. They will be implemented
progressively in the coming years, and will be supplemented
by further reflection, learning and insights.
Most importantly, we are confident that they will enable the
company to seize the opportunities that exist now, and will
emerge, in a competitive retail environment.
“Collaboration and partnerships represent
huge opportunity for retailers to engage with
stakeholders and data and digitalisation will be
key enablers to unlocking this opportunity.”
Geoff Scowcroft & Andrew Scott
CFO
COO
24
Briscoe Group Limited Annual Report 2020
Growing Together
Growing
Together
Going beyond the expected, new
initiatives are being introduced
across the business to ensure that
our team are not only led in the
right direction, but continually
challenged to create a successful
and sustainable future.
Briscoe Group Limited Annual Report 2020
Growing Together 25
Our People
Briscoe Group Scholarship
We continue to invest in education to grow management
and leadership capability and to enhance product knowledge
and service skills. We have established educational pathways
for staff to study at a range of levels, from certificates and
diplomas through to degrees. We are particularly excited that
a number of our managers have enrolled in MBA degrees.
Both store and support teams are being trained on product
knowledge, job skills, cybersecurity and health & safety.
Recruitment is co-ordinated and managed by a centralised
platform enabling visibility of talent and ensuring robust
selection and appointment processes. The opportunities
these provide for collective and individual development are
wide ranging and we’re pleased with the way our teams have
embraced these systems.
A number of Zone Business Manager appointments were
made during the year. This role enhances our lean operating
model by providing career opportunities, sharpening focus on
the management of our retail network and supporting good
operating practice.
We implemented our online Health & Safety reporting and
recording system Ecoportal during 2019. This is an invaluable
tool in our relentless focus on good health and safety
practices across our business. Complementing this was the
introduction of internal and external traffic management plans
for every site across our network to assist us in providing a
safe working and shopping environment for team members
and customers alike.
“With around 2000 employees
all over New Zealand, it’s
important to us as a Group that
we not only create enduring
relationships with our staff
and partners, but also with our
communities.”
Aston Moss
Group GM – Human Resources
The Briscoe Group Education Foundation was established
to provide employees and their children the opportunity to
up-skill and fulfil their education ambitions. Offering a helping
hand that can make an amazing difference to our staff’s ability
to contribute to family, community and the wider society.
In 2013, thanks to the generosity of the RA Duke Trust, the
Group began a partnership with First Foundation, bringing
together sponsors, schools and talented young people with
limited financial resources into a proven four-year programme
that includes paid work experience, financial support and
personal guidance from mentors.
22 scholarships have been awarded to date and in February,
we had the privilege of awarding four scholarships as well as
celebrating two recipients who have recently completed the
First Foundation programme.
We continue to support other staff engaged in tertiary
education and have established relationships with Massey
University and Auckland University of Technology.
“Our uniquely structured
retail operations team
embodies a high performing,
committed and adaptable
force of Zone and Business
Managers. They embrace the
challenge of fundamentally
shifting traditional bricks and
mortar to the complexities of
omni-channel retailing.”
Nick Turner
Group GM Retail Operations
26
Briscoe Group Limited Annual Report 2020
Growing Together
Sustainability
Last year we recycled 2,100 tonnes of recyclable materials
including 1,920 tonnes of cardboard, the weight of the
Whilst we realise we still have a way to go, Briscoe Group
structural steel in the Sky Tower.
Limited is committed to reducing its business footprint on
the environment. This is a key focus for our company and we
already have a number of initiatives underway.
We now have ten waste diversion options to apply to sites
– paper, cardboard, commingle recycling, wood, metal,
compost, secure destruction, clear plastic film, batteries and
We are in the process of measuring our carbon footprint to
used electronics. Which means in 2020 GWP (Good waste
better understand the amount of greenhouse gas emissions
practices) has started across all group sites.
produced by our company. From there we can start to
consider sensible targets for future reduction. We also have
Community Sponsorship
compliance agreements in place with our partners to ensure
products are produced ethically. We are committed to the
At a charitable level, since 2004 Briscoe Group Limited has
highest standards of social responsibility and work with
been a key partner of Cure Kids, a charity set up to find cures
international organisations to uphold this.
and better treatments for serious illnesses and diseases that
affect thousands of children in New Zealand.
Making our buildings as energy efficient as possible is another
key area of focus and building specification reviews are
Our generous customers, staff and suppliers support the
underway to enable us to set new benchmarks in energy and
Group’s efforts to raise funds for this wonderful charity and
water use efficiency.
Over the last year, Cloud 9 pillows moved to home
compostable packaging – removing 400,000 bags.
we’re proud to say that in 15 years of partnership we have
raised over $7.5 million dollars together.
We provide funding to the Westpac Rescue Helicopter and
Fieldcrest, KAS, Royal Doulton and Design Plus moved to
support the fund-raising activities of a wide variety of local
cotton self-pack bags – removing 314,000 bags and John
community-based charities, sports clubs and others.
Cotton duvet inners moved to calico bags and cardboard
boxes – that’s 18,000 bags fewer.
Last year also saw the launch of our continuing make-over
campaign to support local communities, with the first
Combined with the legislative changes early last year
recipients being Marlborough Hospice in Blenheim and the
restricting single-use plastic bags at counters, we have
Rotorua school for young parents.
removed in excess of 6,100,000 plastic bags from landfill and
will continue to identify opportunities for further reductions.
“As a Group, we’re on a journey
to reduce our impact on the
environment and working
with our partners is just one
of the ways to help make that
happen.”
Fraser Collins
Group GM Merchandise
“As a marketing team, it’s
initiatives like these that can
really make a difference at a
grass roots level.”
Fiona Stewart
GM Marketing and Strategy
Briscoe Group Limited Annual Report 2020
Growing Together 27
28
Briscoe Group Limited Annual Report 2020
Our Brands
Briscoe Group Limited Annual Report 2020
Our Brands 29
Papanui Christchurch
New Store set up.
30
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Consolidated
Financial
Statements
For the 52 week period ended 26 January 2020
Introduction
These financial statements have been presented in a style which attempts to make them less complex and more relevant to
shareholders.
We have grouped the note disclosures into six sections:
1. Basis of Preparation
2. Performance
3. Operating Assets and Liabilities
4. Investments
5. Financing and Capital Structure
6. Other Notes
Each section sets out the accounting policies applied to the relevant notes.
The purpose of this format is to provide readers with a clearer understanding of the financial affairs of the Group.
Accounting policies have been shown in shaded areas for easier identification.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 31
Introduction and Table of Contents
For the 52 week period ended 26 January 2020
Table of Contents
Consolidated Financial Statements
Directors’ Approval of Consolidated Financial Statements
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements:
1. Basis of Preparation
1.1 General Information
1.2 General Accounting Policies
2. Performance
2.1 Segment Information
2.2 Income and Expenses
2.3 Taxation
2.3.1 Taxation – Income Statement
2.3.2 Taxation – Balance Sheet
2.3.3 Imputation Credits
2.4 Earnings Per Share
3. Operating Assets and Liabilities
3.1 Working Capital
3.1.1 Cash and Cash Equivalents
3.1.2 Trade and Other Receivables
3.1.3 Inventories
3.1.4 Trade and Other Payables
3.2 Held-for-sale Assets
3.3 Property Plant and Equipment
3.4 Intangible Assets
33
34
35
36
37
39
40
40
40
42
42
43
44
45
46
47
47
48
48
48
48
49
49
50
5 1
53
32
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Introduction and Table of Contents
For the 52 week period ended 26 January 2020
3.5 Leases
3.5.1 Right-of-use Assets
3.5.2 Lease Liabilities
3.5.3 Lease Liabilities Maturity Analysis
3.5.4 Lease Related Expenses Included in the Income Statement
3.5.5 Lease Payments Included in the Cashflow Statement
3.5.6 Sensitivity Analysis
4. Investments
4.1 Investment in Equity Securities
5. Financing and Capital Structure
5.1 Interest Bearing Liabilities
5.2 Financial Risk Management
5.2.1 Derivative Financial Instruments
5.2.2 Credit Risk
5.2.3 Interest Rate Risk
5.2.4 Liquidity Risk
5.2.5 Market Risk
5.2.6 Sensitivity Analysis
5.3 Equity
5.3.1 Capital Risk Management
5.3.2 Share Capital
5.3.3 Dividends
5.3.4 Reserves and Retained Earnings
6. Other Notes
6.1 Related Party Transactions
6.1.1 Parent and Ultimate Holding Company
6.1.2 Key Management Personnel
6.1.3 Directors’ Fees and Dividends
6.2 Employee Share-Based Remuneration
6.2.1 Equity Settled Share Options
6.2.2 Equity Settled Performance Rights
6.2.3 Equity-Based Remuneration Reserve
6.3 Contingent Liabilities
6.4 Events After Balance Date
6.5 New Accounting Standards
53
53
54
54
54
55
55
56
56
57
57
57
57
58
58
58
59
60
62
62
62
63
63
64
64
64
64
65
66
66
67
69
69
69
70
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 33
Directors’ Approval of Consolidated Financial Statements
For the 52 week period ended 26 January 2020
Authorisation for Issue
The Board of Directors authorised the issue of these Consolidated Financial Statements on 16 March 2020.
Approval by Directors
The Directors are pleased to present the Consolidated Financial Statements for Briscoe Group Limited for the
52 week period ended 26 January 2020. (Comparative period is for the 52 week period ended 27 January
2019).
Dame Rosanne Meo
CHAIRMAN
16 March 2020
For and on behalf of the Board of Directors
Rod Duke
GROUP MANAGING DIRECTOR
34
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Consolidated Income Statement
For the 52 week period ended 26 January 2020
Sales revenue
Cost of goods sold
Gross profit
Other operating income
Store expenses
Administration expenses
Earnings before interest and tax
Finance income
Finance costs
Net finance income / (costs)
Profit before income tax
Income tax expense
Net profit attributable to shareholders
Earnings per share for profit attributable to shareholders:
Basic earnings per share (cents)
Diluted earnings per share (cents)
Notes
2.2
5.1
2.3.1
2.4
2.4
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
653,017
(395,515)
257,502
9,661
(100,342)
(69,598)
97,223
724
(13,635)
(12,911)
84,312
(21,729)
62,583
631,919
(378,564)
253,355
6,994
(103,202)
(71,152)
85,995
754
(142)
612
86,607
(23,214)
63,393
28.2
28.0
28.7
28.3
The above consolidated income statement should be read in conjunction with the accompanying notes. In relation to NZ IFRS 16 the
modified transition method has been applied as explained in Note 6.5.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 35
Consolidated Statement of Comprehensive Income
For the 52 week period ended 26 January 2020
Net Profit attributable to shareholders
Other comprehensive income:
Items that will not be subsequently reclassified
to profit or loss:
Notes
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
62,583
63,393
Change in value of investment in equity securities
4.1
38,513
994
Items that may be subsequently reclassified to
profit or loss:
Fair value gain recycled to income statement from
cashflow hedge reserve
Fair value gain taken to the cashflow hedge reserve
Deferred tax on fair value gain taken to income
statement from cashflow hedge reserve
Deferred tax on fair value gain taken to cashflow
hedge reserve
Total other comprehensive income
Total comprehensive income attributable
to shareholders
2.3.2
2.3.2
(4,077)
(3,904)
3,022
1,142
(846)
37,754
5,509
1,093
(1,543)
2,149
100,337
65,542
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. In relation
to NZ IFRS 16 the modified transition method has been applied as explained in Note 6.5.
36
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Consolidated Balance Sheet
As at 26 January 2020
Notes
26 January 2020
$000
27 January 2019
$000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Held-for-sale assets
Derivative financial instruments
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Right-of-use assets
Deferred tax
Investment in equity securities
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Taxation payable
Derivative financial instruments
Total current liabilities
Non-current liabilities
Trade and other payables
Lease liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Cashflow hedge reserve
Equity-based remuneration reserve
Other reserves
Retained earnings
TOTAL EQUITY
3.1.1
3.1.2
3.1.3
3.2
5.2.5
3.3
3.4
3.5.1
2.3.2
4.1
3.1.4
3.5.3
2.3.2
5.2.5
3.1.4
3.5.3
5.3.2
5.2.5
6.2.3
5.3.4
67,414
3,533
87,414
5,408
269
80,777
2,822
81,017
-
793
164,038
165,409
97,265
3,464
266,001
11,676
154,104
532,510
92,016
2,520
-
3,418
101,989
199,943
696,548
365,352
81,260
17,744
4,895
1,014
104,913
852
278,664
279,516
384,429
312,119
60,752
(519)
841
66,251
184,794
312,119
83,754
-
6,830
448
91,032
779
-
779
91,811
273,541
58,929
240
1,097
27,738
185,537
273,541
The above consolidated balance sheet should be read in conjunction with the accompanying notes. In relation to NZ IFRS 16 the
modified transition method has been applied as explained in Note 6.5.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 37
Consolidated Statement of Cash Flows
For the 52 week period ended 26 January 2020
Notes
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
652,701
12
6,832
2,720
850
97
631,881
589
6,405
-
748
-
663,212
639,623
(450,085)
(75,593)
(13,631)
(20,310)
(24,085)
(583,704)
79,508
11
11
(17,410)
(1,768)
(13,602)
(32,780)
(32,769)
1,620
-
1,620
(45,494)
(16,264)
(61,758)
(60,138)
(13,399)
80,777
36
67,414
(458,458)
(70,649)
(142)
(20,405)
(24,249)
(573,903)
65,720
4,905
4,905
(19,632)
(1,959)
(5,568)
(27,159)
(22,254)
2,178
-
2,178
(43,090)
-
(43,090)
(40,912)
2,554
78,193
30
80,777
OPERATING ACTIVITIES
Cash was provided from
Receipts from customers
Rent received
Dividends received
Premium received from KMD rights issue
Interest received
Insurance recovery
Cash was applied to
Payments to suppliers
Payments to employees
Interest paid
Net GST paid
Income tax paid
Net cash inflows from operating activities
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
Investment in equity securities
Net cash outflows from investing activities
FINANCING ACTIVITIES
Cash was provided from
Issue of new shares
Net proceeds from borrowings
Cash was applied to
Dividends paid
Lease liability payments
3.3
4.1
5.3.2
5.3.3
Net cash outflows from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at period end
3.1.1
38
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Consolidated Statement of Cash Flows (continued)
For the 52 week period ended 26 January 2020
RECONCILIATION OF NET CASH FLOWS FROM
OPERATING ACTIVITIES TO REPORTED NET PROFIT
Reported net profit attributable to shareholders
62,583
63,393
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
Items not involving cash flows
Depreciation and amortisation expense
Adjustment for fixed increase leases / inducements
Bad debts and movement in doubtful debts
Inventory adjustments
Amortisation of equity-based remuneration
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
Net cash inflow from operating activities
27,326
(790)
95
510
273
148
27,562
(806)
(6,907)
(1,935)
2,925
(3,914)
(10,637)
79,508
6,784
13
128
(435)
483
56
7,029
(213)
(6,088)
(150)
(350)
2,099
(4,702)
65,720
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. In relation to NZ IFRS 16
the modified transition method has been applied as explained in Note 6.5.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 39
Consolidated Statement of Changes in Equity
For the 52 week period ended 26 January 2020
Notes
Share
Capital
$000
Cashflow
Hedge
Reserve
$000
Equity-Based
Remuneration
Reserve
$000
Other
Reserves
Retained
Earnings
Total
Equity
$000
$000
$000
Balance at 28 January 2018
56,467
(915)
1,045
26,744
165,087
248,428
Net profit attributable to shareholders
for the period
Other comprehensive income:
Change in value of investment in
equity securities
Net fair value gain taken through
cashflow hedge reserve
Total comprehensive income
for the period
Transactions with owners:
Dividends paid
Share options charged to income
statement
4.1
5.3.3
6.2.1
-
-
-
-
-
-
Share options exercised
5.3.2,6.2
2,462
Transfer for share options lapsed
and forfeited
6.2.3
-
-
-
1,155
1,155
-
-
-
-
-
-
-
-
-
483
(284)
(147)
-
63,393
63,393
994
-
-
-
994
1,155
994
63,393
65,542
-
-
-
-
(43,090)
(43,090)
-
-
483
2,178
147
-
Balance at 27 January 2019
58,929
240
1,097
27,738
185,537
273,541
Impact of adopting NZ IFRS 16
-
-
-
-
(18,205)
(18,205)
Adjusted balance as at 28 January 2019
58,929
240
1,097
27,738
167,332
255,336
Net profit attributable to shareholders
for the period
Other comprehensive income:
Change in value of investment in
equity securities
Net fair value loss taken through
cashflow hedge reserve
Total comprehensive income
for the period
Transactions with owners:
Dividends paid
Share options charged to income
statement
Performance rights charged to
income statement
4.1
5.3.3
6.2.1
6.2.2
-
-
-
-
-
-
-
Share options exercised
5.3.2,6.2
1,823
Transfer for share options lapsed
and forfeited
Deferred tax on equity-based
remuneration
6.2.3
2.3.2,6.2.3
-
-
-
-
(759)
(759)
-
-
-
-
-
-
-
-
-
-
-
168
105
(203)
(373)
47
-
62,583
62,583
38,513
-
-
-
38,513
(759)
38,513
62,583
100,337
-
-
-
-
-
-
(45,494)
(45,494)
-
-
-
373
-
168
105
1,620
-
47
Balance at 26 January 2020
60,752
(519)
841
66,251
184,794
312,119
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. In relation to NZ
IFRS 16 the modified transition method has been applied as explained in Note 6.5.
40
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Basis of Preparation
For the 52 week period ended 26 January 2020
1. Basis of Preparation
This section presents a summary of information considered relevant and material to assist the reader in
understanding the foundations on which the financial statements as a whole have been compiled. Accounting
policies specific to notes shown in other sections are included as part of that particular note.
1.1 General Information
Briscoe Group Limited (the Company) and its subsidiaries (together the Group) is a retailer of homeware and sporting goods.
The Company is a limited liability company incorporated and domiciled in New Zealand and is listed on the New Zealand Stock
Exchange (NZX). Briscoe Group Limited is registered under the Companies Act 1993 and is an FMC Reporting Entity under Part
7 of the Financial Markets Conduct Act 2013. The address of its registered office is 1 Taylors Road, Morningside, Auckland. The
Company is registered in Australia as a foreign company under the name Briscoe Group Australasia Limited and is listed on the
Australian Securities Exchange as a foreign exempt entity. (NZX / ASX code: BGP).
The financial statements of the Group have been prepared in accordance with the requirements of Part 7 of the Financial
Markets Conduct Act 2013 and the NZX Main Board Listing Rules.
These audited consolidated financial statements have been approved for issue by the Board of Directors on 16 March 2020.
1.2 General Accounting Policies
These consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Practice
(GAAP). They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other
applicable Financial Reporting Standards, as appropriate for for-profit entities. The consolidated financial statements also
comply with International Financial Reporting Standards (IFRS).
The consolidated financial statements are presented in New Zealand dollars which is the Company’s functional currency and the
Group’s presentation currency. All financial information has been presented in thousands, unless otherwise stated.
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
The consolidated financial statements reported are for the consolidated Group which is the economic entity comprising Briscoe
Group Limited and its subsidiaries. The Group is designated as a for-profit entity for the purposes of complying with GAAP.
Reporting period
These consolidated financial statements are in respect of the 52 week period 28 January 2019 to 26 January 2020 and provide
a balance sheet as at 26 January 2020. The comparative period is in respect of the 52 week period 29 January 2018 to 27
January 2019. The Group operates on a weekly trading and reporting cycle resulting in 52 weeks for most years with a 53 week
period occurring once every 5-6 years.
Principles of consolidation
Subsidiaries are all entities over which the Company has control. The Company controls an entity when the Company is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are
deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains or losses on transactions between Group companies are eliminated.
Accounting policies of subsidiaries are changed when necessary to ensure consistency with the policies adopted by the
Company.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 41
Basis of Preparation
For the 52 week period ended 26 January 2020
Subsidiaries
Activity
2020 Interest
2019 Interest
Briscoes (New Zealand) Limited
Homeware retail
The Sports Authority Limited (trading as Rebel Sport)
Sporting goods retail
Rebel Sport Limited
Living and Giving Limited
Name protection
Name protection
100%
100%
100%
100%
100%
100%
100%
100%
All companies above are incorporated in New Zealand and have a balance date consistent with that of the Company as outlined
in the accounting policies.
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain
assets as identified in specific accounting policies detailed throughout these financial statements.
Critical accounting judgements and estimates
In the process of applying the Group’s accounting policies and the application of accounting standards, a number of estimates
and judgements have been made. The estimates and underlying assumptions are based on historical experience and adjusted
for current market conditions and other factors, including expectations of future events that are considered to be reasonable
under the circumstances. If outcomes within the next financial period are significantly different from assumptions, this could
result in adjustments to carrying amounts of the asset or liability affected. Further explanation as to estimates and assumptions
made by the Group can be found in the notes to the financial statements:
Areas of judgement and estimation
Inventories
Leases
Note
3.1.3
3.5
Foreign currency translation
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 which case they are recognised in other comprehensive income as qualifying cash flow
hedges.
42
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Performance
For the 52 week period ended 26 January 2020
2. Performance
This section reports on the results and performance of the Group, providing additional information about
individual items, including performance by operating segment, revenue, expenses, taxation and earnings per
share.
2.1 Segment Information
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.
The Group is organised into two reportable operating segments, namely homeware and sporting goods, reflecting the
different retail sectors within which the Group operates. The Company is considered not to be a reportable operating segment.
Eliminations and unallocated amounts as shown below are primarily attributable to the Company. There were no inter-segment
sales in the period (2019: Nil).
Information regarding the operations of each reportable operating segment is included below. Segment profit represents
the profit earned by each segment and is extracted from the income statements associated with the two trading subsidiary
companies, Briscoes (NZ) Limited and The Sports Authority Limited (trading as Rebel Sport). Earnings before interest and tax
(EBIT) is a non-GAAP measure and used by CODM to assess the performance of the operating segments.
For the period ended 26 January 2020
Homeware
$000
Sporting
goods
$000
Eliminations/
Unallocated
Total Group
$000
$000
410,908
242,109
162,297
49,390
185
(8,944)
(8,759)
(11,641)
28,990
95,205
36,447
515
(4,560)
(4,045)
(9,075)
23,327
-
-
653,017
257,502
11,386
97,223
24
(131)
724
(13,635)
(107)
(12,911)
(1,013)
(21,729)
10,266
62,583
337,014
257,717
220,417
145,045
139,1171.
696,548
(18,333)
384,429
15,332
17,309
3,846
10,017
13,602
32,780
-
27,326
INCOME STATEMENT
Total sales revenue
Gross profit
Earnings before interest and tax
Finance income
Finance costs
Net finance income / (costs)
Income tax expense
Net profit after tax
BALANCE SHEET ITEMS:
Assets
Liabilities
OTHER SEGMENTAL ITEMS:
Acquisitions of property, plant and
equipment, intangibles and investments
Depreciation and amortisation expense
1. Investment in equity securities
Intercompany eliminations
Other balances
$000
156,887
(23,159)
5,389
139,117
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 43
Performance
For the 52 week period ended 26 January 2020
Homeware
Sporting
goods
Eliminations/
Unallocated
Total
Group
$000
$000
$000
$000
403,159
162,170
46,689
177
-
177
(13,256)
33,610
155,031
56,287
19,443
4,720
228,760
91,185
31,062
537
-
537
(8,849)
22,750
107,444
39,399
2,148
2,064
-
-
631,919
253,355
8,244
85,995
40
(142)
(102)
754
(142)
612
(1,109)
(23,214)
7,033
63,393
102,8771.
365,352
(3,875)
91,811
5,568
27,159
-
6,784
For the period ended 27 January 2019
INCOME STATEMENT
Total sales revenue
Gross profit
Earnings before interest and tax
Finance income
Finance costs
Net finance income / (costs)
Income tax expense
Net profit after tax
BALANCE SHEET ITEMS:
Assets
Liabilities
OTHER SEGMENTAL ITEMS:
Acquisitions of property, plant and
equipment, intangibles and investments
Depreciation and amortisation expense
1. Investment in equity securities
Intercompany eliminations
Other balances
$000
101,989
(812)
1,700
102,877
2.2 Income and Expenses
Revenue recognition
Revenue comprises the fair value of consideration received or receivable for the sale of goods and services, net of Goods and
Services Tax (GST), and discounts and after eliminating sales within the Group. Revenue is recognised as follows:
Sales of goods - retail
For all sales, control is considered to pass to the customer at the point when the customer can use or otherwise benefit from
the goods and services. For in-store sales, control passes to the customer at point of sale. For online sales, the order along with
delivery to the customer are considered to comprise a single performance obligation, therefore control is considered to pass
to the customer on delivery of the goods. Retail sales are predominantly by credit card, debit card or in cash.
Rental income
Rental income (net of any incentives given to lessees) is recognised on a straight line basis over the period of the lease.
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.
44
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Performance
For the 52 week period ended 26 January 2020
Profit before income tax includes the following specific income and expenses:
Income
Rental income
Dividends received
Premium from KMD rights issue
Insurance recovery
Expenses
Depreciation of property, plant and equipment
Amortisation of software costs
Depreciation of right-of-use assets
Interest on leases
Operating lease rental expense
Wages, salaries and other short-term benefits
Equity-based remuneration (refer also Note 6.2)
Amounts paid to auditors:
Statutory Audit
Half year review
Other services
2.3 Taxation
Period ended
26 January 2020
Period ended
27 January 2019
$000
$000
12
6,832
2,720
97
6,594
824
19,908
13,504
1,215
73,712
273
108
26
-
589
6,405
-
-
5,981
803
-
-
29,903
72,905
483
128
26
134
Current and deferred 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.
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. The Group 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 income tax is provided in full, using the liability method, on temporary differences arising between tax bases of assets
and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset when the
entity has a legal enforceable right to offset and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 45
Performance
For the 52 week period ended 26 January 2020
Goods and Services Tax (GST)
The income statement, statement of comprehensive income and statement of cash flows have been prepared so that all
components are stated exclusive of GST. All items in the balance sheet are stated net of GST, with the exception of trade
receivables and trade payables, which include GST invoiced.
2.3.1 Taxation – Income statement
The total taxation charge in the income statement is analysed as follows:
(a) Income tax expense
Current tax expense:
Current tax
Adjustments for prior periods
Deferred tax expense:
Decrease in future tax benefit current period
Adjustments for prior periods
Total income tax expense
(b) Reconciliation of income tax expense to tax rate
applicable to profits
Profit before income tax expense
Tax at the corporate rate of 28% (2019: 28%)
Tax effect of amounts which are either non-deductible
or non-assessable in calculating taxable income:
Tax effect of disposal of buildings
Prior period adjustments
Total income tax expense
Period ended
26 January 2020
Period ended
27 January 2019
$000
$000
21,994
156
22,150
(294)
(127)
(421)
21,729
84,312
23,607
(1,906)
-
28
21,729
23,376
723
24,099
(142)
(743)
(885)
23,214
86,607
24,250
(1,016)
-
(20)
23,214
The Group has no tax losses (2019: Nil) and no unrecognised temporary differences (2019: Nil).
46
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Performance
For the 52 week period ended 26 January 2020
2.3.2 Taxation – Balance sheet
(a) Deferred Taxation
The following are the major deferred taxation liabilities and assets recognised by the Group and movements thereon during the
current and prior period:
Depreciation
$000
Provisions
$000
Derivative
financial
instruments
$000
Net lease
liability
$000
Total
$000
2,983
885
(450)
At 28 January 2018
Credited to the income statement
Net charged to other comprehensive income
At 27 January 2019
Impact of adopting NZ IFRS 16
Credited / (charged) to the income statement
Credited to equity
Net charged to other comprehensive income
(194)
32
-
(162)
-
64
-
-
2,821
853
356
-
-
(450)1.
-
-
-
3,674
-
(663)
47
-
(94)
-
3,418
-
-
-
2961.
7,494
7,494
1,020
-
-
421
47
296
At 26 January 2020
(98)
3,058
202
8,514
11,676
1. Net credited to other comprehensive income comprises deferred tax on fair value gain taken to income statement of $1,141,574 (2019:
deferred tax on fair value gain of $1,093,249) and deferred tax on fair value gain taken to cash flow hedge reserve of $846,031 (2019:
deferred tax on fair value gain of $1,542,469)
(b) Taxation payable
The following is the analysis of the movements in the taxation payable balance during the current and prior period:
Movements:
Balance at beginning of period
Current tax
Tax paid
Foreign investor tax credit (FITC)
Balance at end of period
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
(6,830)
(22,150)
23,761
324
(4,895)
(6,980)
(24,099)
23,932
317
(6,830)
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 47
Performance
For the 52 week period ended 26 January 2020
2.3.3 Imputation credits
Imputation credits available for use in
subsequent accounting periods:
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
92,284
85,445
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 liabilities 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 Company if subsidiaries paid dividends.
2.4 Earnings per share
Earnings per share (EPS) is the amount of post-tax profit attributable to each share.
Basic EPS is computed by dividing the net profit attributable to shareholders by the weighted average number of ordinary
shares on issue during the period.
Diluted EPS adjusts for any commitments the Group has to issue shares in the future that would decrease the Basic EPS. These
are in the form of share options. Diluted EPS is therefore computed by dividing the 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.
Period ended
26 January 2020
Period ended
27 January 2019
Net profit attributable to shareholders $000
62,583
63,393
Basic
Weighted average number of ordinary shares on issue (thousands)
Basic earnings per share
Diluted
221,998
28.2 cents
221,130
28.7 cents
Weighted average number of ordinary shares on issue adjusted for share options
issued but not exercised (thousands)
Diluted earnings per share
223,872
224,207
28.0 cents
28.3 cents
48
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Operating Assets and Liabilities
For the 52 week period ended 26 January 2020
3. Operating Assets and Liabilities
This section reports the assets used to generate the Group’s trading performance and the liabilities incurred
as a result. Liabilities relating to the Group’s financing activities are addressed in note 5. Assets and liabilities
in relation to deferred taxation and taxation payable are shown in note 2.3. The carrying amounts of financial
assets and liabilities are equivalent to their fair value unless otherwise stated.
3.1 Working Capital
Working capital represents the assets and liabilities the Group generates through its trading activity. The Group
therefore defines working capital as cash, trade and other receivables, inventories and trade and other payables.
3.1.1 Cash and cash equivalents
Cash and cash equivalents include 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 that are subject to an insignificant risk of changes in value.
Cash at bank or in hand
67,414
80,777
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
As at 26 January 2020 the Group held foreign currency equivalent to NZ$2.372 million (2019: NZ$1.820 million) which is
included in the table above. The foreign currency in which the Group deals primarily is the US Dollar.
3.1.2 Trade and other receivables
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 receivables are recognised
initially at the value of the invoice sent to the customer (fair value) and subsequently at the amounts considered
recoverable (amortised cost). Trade receivable balances are reviewed on an on-going basis.
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
611
2,198
724
3,533
513
1,612
697
2,822
Trade receivables
Prepayments
Other receivables
Total trade and other receivables
No interest is charged on trade receivables.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 49
Operating Assets and Liabilities
For the 52 week period ended 26 January 2020
3.1.3 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.
The Group assesses the likely residual value of inventory. Stock provisions are recognised for inventory which
is expected to sell for less than cost and also for the value of inventory likely to have been lost to the business
through shrinkage between the date of the last applicable stocktake and balance date. In recognising the
provision for inventory, judgement has been applied by considering a range of factors including historical results,
current trends and specific product information from buyers.
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
Finished goods
Inventory provisions and adjustments
Net inventories
90,204
(2,790)
87,414
84,816
(3,799)
81,017
3.1.4 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.
Trade payables
Trade payables are recognised at the value of the invoice received from a supplier (fair value). The carrying value of trade
payables is considered to approximate fair value as the amounts are unsecured and are usually paid within 60 days of
recognition.
Employee entitlements
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. The liability for
employee entitlements is carried at the present value of the estimated future cash flows.
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.
Long service leave
The liability for long service leave is recognised as a non-current liability 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.
50
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Operating Assets and Liabilities
For the 52 week period ended 26 January 2020
Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions relate to returns in relation to sales of goods directly imported by the Group and are expected to be fully utilised
within the next twelve months. 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.
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
60,434
10,463
11,107
108
82,112
81,260
852
82,112
57,509
12,344
14,562
118
84,533
83,754
779
84,533
Trade payables
Employee entitlements
Other payables and accruals
Provisions
Total trade and other payables
Shown in balance sheet as:
Current liabilities
Non-current liabilities
Total trade and other payables
3.2 Held-for-sale Assets
Held-for-sale assets are assets that are available for immediate sale in their present condition, subject only to
normal sale terms, and for which there is a high probability that they will be offered for sale or sold. The Group
measures a held-for-sale asset at the lower of carrying value and fair value less costs to sell.
Held-for-sale assets were:
Property
5,408
-
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
The held-for-sale assets at balance date related to Group owned property in Nelson and Napier. A sale and purchase agreement
for the Nelson property was signed on 11 July 2018 and management have approved the sale of the Napier property for which
settlement within twelve months is highly probable.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 51
Operating Assets and Liabilities
For the 52 week period ended 26 January 2020
3.3 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.
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.
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 of assets are determined by comparing proceeds with carrying amounts. These gains and losses
are included in the income statement.
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 33 years
- Plant and equipment 3 - 15 years
Property, plant and equipment is reviewed whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. 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.
The Group assesses whether there are indications, for example loss-making stores, for certain trigger events which may indicate
that an impairment in property, plant and equipment values exist at balance date.
52
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Operating Assets and Liabilities
For the 52 week period ended 26 January 2020
At 28 January 2018
Cost
Accumulated depreciation
Accumulated impairment
Net book value
Period ended 27 January 2019
Opening net book value
Additions
Disposals
Depreciation charge
Closing net book value
At 27 January 2019
Cost
Accumulated depreciation
Net book value
Period ended 26 January 2020
Opening net book value
Additions
Disposals
Reclassified as held-for-sale asset
Depreciation charge
Closing net book value
At 26 January 2020
Cost
Accumulated depreciation
Net book value
Capital commitments
Land and
buildings
$000
Plant and
equipment
$000
66,047
(4,778)
-
61,269
61,269
16,113
(4,894)
(1,075)
71,413
77,115
(5,702)
71,413
71,413
4,671
-
(5,408)
(1,426)
69,250
74,853
(5,603)
69,250
78,582
(56,523)
(2)
22,057
22,057
3,519
(67)
(4,906)
20,603
79,556
(58,953)
20,603
20,603
12,739
(159)
-
(5,168)
28,015
85,857
(57,842)
28,015
Total
$000
144,629
(61,301)
(2)
83,326
83,326
19,632
(4,961)
(5,981)
92,016
156,671
(64,655)
92,016
92,016
17,410
(159)
(5,408)
(6,594)
97,265
160,710
(63,445)
97,265
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
Capital commitments in relation to property, plant and equipment
at balance date not provided for in the financial statements
22,7401.
7,830
1. $22.1 million relates to building contracts for the development and construction of new retail premises at 36 Taylors Road, Auckland and also
at Silverdale, North Auckland.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 53
Operating Assets and Liabilities
For the 52 week period ended 26 January 2020
3.4 Intangible Assets
Intangible assets are non-physical assets used by the Group to operate the business. 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.
Software is the only intangible asset recorded in the financial statements. All software has been acquired externally.
3.5 Leases
Right-of-use assets and lease liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the remaining lease payments. Lease payments to be made under reasonably certain extension options
are also included in the measurement of the liabilities.
Right-of-use assets are initially recognised on commencement of lease at cost, comprising the initial amount of the lease
liabilities less any lease incentives received. Right-of-use assets are subsequently depreciated using the straight-line method
from the commencement date to the end of the lease term. In considering the lease term, the Group applies judgement in
determining whether it is reasonably certain that an extension or termination option will be exercised.
Both right-of-use assets and lease liabilities are discounted applying interest rate implicit in the lease, or if this cannot be
determined, the incremental borrowing rate at the commencement of the lease. To determine the incremental borrowing rate
the Group have applied a blended secured and unsecured borrowing rate.
For the secured rate the Group have utilised third party financing options and adjusted for an appropriate credit spread. The
unsecured rate has been based on a typical Loan-to-Value ratio for property lending.
Extension options are included in a number of property leases across the Group. These are used to maximise operational
flexibility in terms of managing the assets used in the Group’s operation. Extension options held are exercisable only by the
Group and not by the respective lessor.
The following tables show the movements and analysis in relation to the right-of-use assets and lease liabilities, created on the
adoption of NZ IFRS 16.
3.5.1 Right-of-use assets:
Opening net book value 28 January 2019
Movements on transition
Additions
Depreciation for the period
Carrying amount 26 January 2020
Cost
Accumulated depreciation
Carrying amount 26 January 2020
Land and
Buildings
$000
232,699
53,210
(19,908)
266,001
285,909
(19,908)
266,001
54
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Operating Assets and Liabilities
For the 52 week period ended 26 January 2020
3.5.2 Lease liabilities:
Operating lease commitment at 27 January 2019 as disclosed in the Group’s financial statements
Above discounted using the incremental borrowing rate at 28 January 2019
Recognition exemption for:
Short-term leases
Lease contracts committed to but not yet available for use
Adjustments as a result of different treatment of extension and termination options
Opening lease liabilities recognised 28 January 2019
Additions
Interest for the period
Lease payments made
Lease liabilities 26 January 2020
3.5.3 Lease liabilities maturity analysis:
Minimum lease
payments
$000
32,267
124,075
274,733
431,075
Interest
$000
(14,523)
(48,549)
(71,595)
(134,667)
Within one year
One to five years
Beyond five years
Total
Current
Non-current
Total
3.5.4 Lease related expenses included in the income statement:
Depreciation
Short-term leases
Interest on leases
Total
As at
26 January 2020
$000
141,395
117,133
(1,339)
(9,063)
152,731
259,462
53,210
13,504
(29,768)
296,408
Present
Value
$000
17,744
75,526
203,138
296,408
17,744
278,664
296,408
Period ended
26 January 2020
$000
19,908
1,215
13,504
34,627
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 55
Operating Assets and Liabilities
For the 52 week period ended 26 January 2020
Period ended
26 January 2020
$000
29,768
3.5.5 Lease payments included in the cashflow statement:
Total cash outflow in relation to leases
3.5.6 Sensitivity analysis
In the process of adopting NZ IFRS 16 Leases a number of judgements and estimates have been made. The Group has assumed
that virtually all extension options on leases will be exercised which is consistent with the business model and past practice as
the Group has consistently exercised rights of renewal on profit-making stores. This judgement has been applied unless a store
closure or a decision to relocate a store is known at the time of adoption.
The most significant components of the Group’s incremental borrowing rates are the base interest rates seen in the New Zealand
market and the adjustment for the Group’s credit risk. These assumptions were set by considering market observed corporate
borrowing costs aligned to the credit standing of the Group as at the date of adoption.
The effect on the opening consolidated balance sheet as at 28 January 2019 from an increase or decrease in the incremental
borrowing rate is as follows:
Incremental borrowing rate movement
Weighted Average
Right-of-use assets
Lease liabilities
Net increase / (decrease) difference
right-of-use assets and lease liabilities
5.17%
Opening
carrying
amount
$000
232,699
-1%
4.17%
-0.5%
4.67%
+0.5%
5.67%
+1%
6.17%
$000
19,005
$000
9,207
$000
$000
(8,660)
(16,813)
(259,462)
(16,327)
(7,953)
7,558
14,747
(26,763)
2,678
1,254
(1,102)
(2,066)
The effect on the consolidated income statement for the period ended 26 January 2020 from an increase or decrease in the
incremental borrowing rate is as follows:
Incremental borrowing rate movement
Net profit attributable to shareholders
-1%
$000
210
-0.5%
$000
99
+0.5%
$000
+1%
$000
(88)
(167)
56
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Investments
For the 52 week period ended 26 January 2020
4. Investments
This section explains how the Group records investments made in listed securities.
4.1 Investment in Equity Securities
During 2015 and 2018 Briscoe Group Limited acquired a total of 42,673,302 shares in Kathmandu Holdings Limited
(Kathmandu) for a cost of $74,250,932. In October 2019, as part of the capital raising programmes initiated by Kathmandu in
relation to their acquisition of the Rip Curl business, Briscoe Group Limited acquired a further 5,334,163 shares for a cost of
$13,602,116. This increased holding represented a 16.27% ownership in Kathmandu Holdings Limited as at 26 January 2020.
These shares are equity investments, quoted in the active market, which the Group has elected to designate as a financial asset
at fair value through other comprehensive income (FVOCI). An adjustment was made at period end to reflect the fair value of
these shares as at 26 January 20201..
At 28 January 2018
Additions
Change in fair value credited to other reserves
At 27 January 2019
Additions
Change in fair value credited to other reserves
At 26 January 2020
$000
95,427
5,568
994
101,989
13,602
38,513
154,104
1. Fair value determined to be $3.21 per share as per NZX closing price of Kathmandu Holdings Limited as at 24 January 2020 (2019: $2.39)
(Level 1 in the fair value hierarchy).
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 57
Financing and Capital Structure
For the 52 week period ended 26 January 2020
5. Financing and Capital Structure
This section reports on the Group’s funding sources and capital structure, including its balance sheet liquidity
and access to capital markets.
5.1 Interest Bearing Liabilities
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the
income statement over the period of the borrowings using the effective interest method. Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance
sheet date.
The Group has an unsecured facility with the Bank of New Zealand for $30 million. Any drawdowns are repayable in full on
expiry date of the facility being 20 September 2020. Interest is payable based on the BKBM rate plus applicable margin. The
facility is sufficiently flexible that the amounts can be drawn down and repaid to accommodate fluctuations in operating cash
flows within overall limits, without the need for prior approval of the bank. The maximum drawdown made under the facility
during the period was $15 million.
The covenants entered into by the Group require specified calculations of Group’s earnings before interest, tax, depreciation and
amortisation (EBITDA) plus lease rental costs to exceed total fixed charges (net interest expense and lease rental costs) at the
end of each half during the financial period. Similarly EBITDA must be no less than a specified proportion of total net debt at the
end of each half. The Group was in compliance with the covenants throughout the period.
There were no amounts repayable under the facility as at 26 January 2020. (2019: Nil)
Net finance income / (costs)
Interest income
Interest expense - leases
Interest expense – other
Other finance costs
Net finance income / (costs)
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
724
(13,504)
(11)
(120)
(12,911)
754
-
(10)
(132)
612
5.2 Financial Risk Management
The Group’s activities expose it to various financial risks including credit risk, liquidity risk, interest rate risk and market risk (such
as currency risk and equity price 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.
5.2.1 Derivative financial instruments
Derivatives are recognised initially 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
hedges of highly probable forecast transactions (cash flow hedges).
At the inception of a transaction the economic relationship between hedging instruments and hedged items, and the
risk management objective and strategy for undertaking various hedge transactions, are documented. An assessment is
also documented, both at hedge inception and on an on-going 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.
58
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Financing and Capital Structure
For the 52 week period ended 26 January 2020
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 within cost of goods sold.
Amounts accumulated in other comprehensive income are recycled in the income statement in the periods when the 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 the 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 within cost of goods sold.
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 within administration expenses.
5.2.2 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.
5.2.3 Interest rate risk
The Group has no long-term interest-bearing liabilities but does have interest rate risk exposure from periodic short-term draw-
downs of established funding facilities and placements of short term deposits, as operating cash flows necessitate. The Group’s
short to medium term liquidity position is monitored daily and reported to the Board monthly.
5.2.4 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 a timely 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. The Group’s liquidity position fluctuates
throughout the period, being strongest immediately after the end of the 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
operates well within its available funding facilities.
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. Changes in the carrying value affect profit when the underlying inventory to which the derivatives
relate, is sold.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 59
Financing and Capital Structure
For the 52 week period ended 26 January 2020
Trade and other payables are shown at carrying value in the table. No discounting has been applied as the impact of discounting
is not significant.
An analysis detailing remaining contractual maturities for lease liabilities is shown in Note 3.5.3.
As at 26 January 2020
Trade and other payables
(69,233)
-
-
-
(69,233)
(69,233)
3 months
or less
$000
3 – 6
months
$000
6 – 9
months
$000
9 – 12
months
$000
Total
$000
Carrying
Value
$000
Forward foreign exchange contracts
Cash flow hedges:
- outflow
- inflow
- Net
As at 27 January 2019
Trade and other payables
Forward foreign exchange contracts
Cash flow hedges:
- outflow
- inflow
- Net
(17,779)
(16,768)
(27,323)
(2,998)
(64,868)
17,746
16,600
26,763
3,014
64,123
(33)
(168)
(560)
16
(745)
(745)
3 months
or less
$000
(69,583)
3 – 6
months
$000
6 – 9
months
$000
9 - 12
months
$000
Total
$000
Carrying
Value
$000
-
-
-
(69,583)
(69,583)
(16,808)
(14,538)
(22,450)
17,338
14,367
22,434
530
(171)
(16)
(365)
367
2
(54,161)
54,506
345
345
The cash flow hedges inflow amounts use the forward rate at balance date.
5.2.5 Market risk
Equity price risk
The Group is exposed to equity price risk arising from the investment held in Kathmandu Holdings Limited, classified in the
balance sheet as investment in equity securities. (Refer note 4.1).
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposures primarily to the US dollar, in respect of
purchases of inventory directly from overseas suppliers.
The Group’s foreign exchange risk is managed in accordance with Board-approved Group Treasury Risk Management Policies.
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 and lower levels of forecasted
purchases depending on which quarter the forecasted exposure relates to. Hedging is reviewed regularly 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 in anticipation of
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.
60
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Financing and Capital Structure
For the 52 week period ended 26 January 2020
Current assets
Forward foreign exchange contracts
Total current derivative financial instrument assets
Current liabilities
Forward foreign exchange contracts
Total current derivative financial instrument liabilities
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
269
269
1,014
1,014
793
793
448
448
The contracts are subject to an enforceable master netting arrangement, which allows for net settlement of the relevant assets
and liabilities. For financial reporting purposes these are not offset.
Forward foreign exchange contracts – cash flow hedges
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 period as the
inventory for which the hedge exists, is sold.
The fair value of these contracts is determined by using valuation techniques as they are not traded in an active market. The
valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity
specific estimates. The fair value is determined by mark-to-market valuations using forward exchange. These derivatives have
been determined to be within level 2 of the fair value hierarchy as all significant inputs required to ascertain their fair value are
observable.
Forward foreign exchange contracts are used for hedging committed or highly probable forecast purchases of inventory for the
ensuing financial period. 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.
At balance date these contracts are represented by assets of $269,484 (2019: $793,395) and liabilities of $1,014,488 (2019:
$448,000) and together are included in equity as part of the cash flow hedge reserve, net of deferred tax, as a net loss of
$536,403 (2019: net gain $248,677). The cash flow hedge reserve also consists of gains and losses, net of deferred tax, from
foreign currencies used as hedges, as a net gain of $17,341 (2019: net loss of $8,543). The total of these net gains and losses
amount to a net loss of $519,062 (2019: net gain $240,134).
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 (2019: Nil).
5.2.6 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:
• A shift of -10% / +5% (2019: -10% / +5%) in the NZD against the USD, from the period-end rate of 0.6617 (2019: 0.6761),
• A shift of -0.25% / +0.25% (2019: -0.25% / +0.25%) in market interest rates from the period-end weighted average deposit
rate of 1.51% (2019: 2.27%).
• A shift of -10% / +20% (2019: -10% / +20%) in the NZX share price of Kathmandu Holdings Ltd from the period-end closing
share price of $3.21 (2019: $2.39)
If these movements were to occur, the positive / (negative) impact on consolidated profit after tax and consolidated equity for
each category of financial instrument held at balance date is presented below.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 61
Financing and Capital Structure
For the 52 week period ended 26 January 2020
As at 26 January 2020
Interest
rate
Foreign
exchange rate
Equity
price
Carrying
-0.25%
+0.25%
-10%
+5%
-10%
+20%
amount
Profit
Equity
Profit
Equity
Equity
Equity
Equity
Equity
$000
$000
$000
$000
$000
$000
$000
$000
$000
Financial Assets:
Cash and cash
equivalents1.
67,414
(117)
(117)
117
117
190
(81)
-
-
-
-
-
-
-
-
-
-
-
-
1,899
(813)
-
-
-
-
-
-
(15,410) 30,821
3,221
(1,383)
-
-
Derivatives – designated
as cashflow hedges
(Forward foreign
exchange contracts)2.
269
Investment in equity
securities3.
154,104
Financial Liabilities:
Derivatives – designated
as cashflow hedges
(Forward foreign
exchange contracts)2.
Total increase /
(decrease)
1,014
(117)
(117)
117
117
5,310
(2,277)
(15,410) 30,821
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.
As at 27 January 2019
Interest
rate
Foreign
exchange rate
Equity
price
Carrying
-0.25%
+0.25%
-10%
+5%
-10%
+20%
amount
Profit
Equity
Profit
Equity
Equity
Equity
Equity
Equity
$000
$000
$000
$000
$000
$000
$000
$000
$000
Financial Assets:
Cash and cash
equivalents1.
Derivatives – designated
as cashflow hedges
(Forward foreign
exchange contracts)2.
Investment in equity
securities3.
101,989
Financial Liabilities:
Derivatives – designated
as cashflow hedges
(Forward foreign
exchange contracts)2.
Total increase /
(decrease)
448
80,777
(142)
(142)
142
142
146
(62)
793
2,565
(1,050)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(10,199) 20,398
1,844
(761)
-
-
(142)
(142)
142
142
4,555
(1,873)
(10,199) 20,398
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.
2. Derivatives designated as cashflow hedges are foreign exchange contracts used to hedge against the NZD:USD foreign exchange risk arising
from foreign denominated future purchases. There is no profit or loss sensitivity as the hedges are 100% effective.
3. Investment in equity securities represents shares held in Kathmandu Holdings Ltd. There is no profit or loss sensitivity as impacts from
changes in KMD’s share price are accounted for through equity.
62
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Financing and Capital Structure
For the 52 week period ended 26 January 2020
5.3 Equity
5.3.1 Capital risk management
The Group’s capital comprises contributed equity, reserves and retained earnings.
The Group’s objective when managing capital is to achieve a 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 payments 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.
5.3.2 Share capital
Share capital comprises ordinary shares only. 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.
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.
Contributed equity – ordinary shares
No. of authorised shares
Share capital
Period ended
26 January 2020
Period ended
27 January 2019
Period ended
26 January 2020
Period ended
27 January 2019
Shares
Shares
$000
$000
Opening ordinary shares
221,599,500
220,794,500
58,929
56,467
Issue of ordinary shares arising from the
exercise of options
589,000
805,000
1,8231.
2,4621.
Balance at end of period
222,188,500
221,599,500
60,752
58,929
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 589,000 shares issued during the period ended 26 January
2020 were $202,970 and $1,619,750 respectively (2019: $284,059 and $2,178,550 respectively for the 805,000 shares issued).
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 63
Financing and Capital Structure
For the 52 week period ended 26 January 2020
5.3.3 Dividends
Provision is made for the amount of any dividend declared on or before the balance date but not distributed at balance date.
Period ended
26 January 2020
Cents per share
Period ended
27 January 2019
Cents per share
Period ended
26 January 2020
$000
Period ended
27 January 2019
$000
Interim dividend for the period ended
26 January 2020
Final dividend for the period ended
27 January 2019
Interim dividend for the period ended
27 January 2019
Final dividend for the period ended
28 January 2018
8.50
12.00
-
-
Balance at end of period
20.50
-
-
8.00
11.50
19.50
18,881
26,613
-
-
-
-
17,689
25,401
45,494
43,090
All dividends paid were fully imputed (refer also to Note 2.3.3 for imputation credits available for use in subsequent periods).
Supplementary dividends of $323,716 (2019: $316,690) were provided to shareholders not tax resident in New Zealand, for
which the Group received a Foreign Investor Tax Credit entitlement.
On 16 March 2020 the Directors resolved to provide for a final dividend to be paid in respect of the period ended 26 January
2020. The dividend will be paid at a rate of 12.50 cents per share for all shares on issue as at 23 March 2020, with full imputation
credits attached.
5.3.4 Reserves and retained earnings
Cashflow hedge reserve
The hedging reserve is used to record gains and losses on a hedging instrument in a cash flow hedge that are recognised
directly in other comprehensive income, as described in the accounting policy in section 5.2. The amounts are recognised as
profit or loss when the associated hedged transaction affects profit or loss. (Refer also to the consolidated statement of changes
in equity).
Equity-based remuneration reserve
The equity-based remuneration reserve is used to recognise the fair value of share options and performance rights granted but
not exercised, lapsed or forfeited. Amounts are transferred to share capital when vested share options or performance rights are
exercised. (Refer also to the consolidated statement of changes in equity, and note 6.2).
Other reserves
Other reserves represents the adjustment made at balance date to reflect the fair value of the investment in Kathmandu
Holdings Limited. (Refer also to the consolidated statement of changes in equity and note 4.1).
64
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Other Notes
For the 52 week period ended 26 January 2020
6. Other Notes
6.1 Related Party Transactions
6.1.1 Parent and ultimate controlling party
Briscoe Group Limited is the immediate parent, ultimate parent and controlling party for all companies in the Group.
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
Company have been eliminated. No interest is charged on internal current accounts. All transactions with related parties were in
the normal course of business and were provided on normal commercial terms.
The Group undertook transactions with the following related parties as detailed below:
• The RA Duke Trust, of which RA Duke is a trustee, as owner of the Rebel Sport premises at Panmure, Auckland, received
rental payments of $645,000 (2019: $645,000) from the Group, under an agreement to lease premises to The Sports
Authority Limited (trading as Rebel Sport).
• Kein Geld (NZ) Limited, an entity associated with RA Duke, received rental payments of $564,598 (2019: $535,164) as owner
of the Briscoes Homeware premises at Wairau Park, Auckland, under an agreement to lease premises to Briscoes (NZ)
Limited.
• The RA Duke Trust received dividends of $35,035,134 (2019: $33,283,012).
• P Duke, spouse of the Managing Director, received payments of $65,000 (2019: $65,000) in relation to her employment as
an overseas buying specialist with Briscoe Group Limited, and rental payments of $825,000 (2019: $825,000) as owner of
the Briscoes Homeware premises at Panmure, Auckland under an agreement to lease premises to Briscoes (NZ) Limited.
6.1.2 Key management personnel
Key management includes the Directors of the Company and those employees who the Company has deemed to have
disclosure obligations under subpart 6 of the Financial Markets Conduct Act 2013, namely the Chief Financial Officer, the Chief
Operating Officer and the General Manager Human Resources.
Key management compensation was as follows:
Salaries and other short-term employee benefits
Equity-based remuneration
Directors’ fees
Total benefits
Period ended
26 January 2020
Period ended
27 January 2019
$000
2,274
79
295
2,648
$000
2,748
117
357
3,222
Key management did not receive any termination benefits during the period (2019: Nil).
Key management did not receive and are not entitled to receive any post-employment or long-term benefits (2019: Nil).
Executives included in key management received dividends of $239,766 (2019: $250,812) in relation to Briscoe Group shares
held.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 65
Other Notes
For the 52 week period ended 26 January 2020
6.1.3 Directors’ fees and dividends
Directors received Directors’ fees and dividends in relation to their personally held shares as detailed below:
Executive Director
RA Duke
Non-Executive Directors
RPO’L Meo
MM Devine1.
AD Batterton
RAB Coupe
Period ended
26 January 2020
Period ended
27 January 2019
Directors’ fees
Dividends
Directors’ fees
Dividends
$000
$000
$000
$000
-
132
12
74
77
295
-
-
1
-
2
3
-
128
75
78
76
357
-
-
2
-
2
4
The following directors received dividends in relation to their non-beneficially held shares as detailed below:
Executive Director
RA Duke
Non-Executive Directors
RPO’L Meo
MM Devine1.
AD Batterton
RAB Coupe
1. Mary Devine resigned as a Director effective from 31 March 2019
Period ended
26 January 2020
Period ended
27 January 2019
$000
$000
35,035
33,283
21
-
4
-
19
-
3
-
66
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Other Notes
For the 52 week period ended 26 January 2020
6.2 Employee Share-Based Remuneration
6.2.1 Equity settled share options
The Executive Share Option Plan allows Group employees to be granted options to acquire shares of the Company. The fair
value of options granted is recognised as an employee expense in the income statement with a corresponding increase in the
equity-based payment reserve. The fair value is measured at grant date and amortised 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 equity-based payment reserve relating to those
options, together with the exercise price paid by an employee, is transferred to share capital. When any share options lapse
upon employee termination, the amount in the share-based payments reserve relating to those rights is transferred to retained
earnings.
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.
The Company does not intend to issue any further options under this plan and the final tranche was issued on 23 August 2016.
The estimated fair value for each tranche of options issued is expensed over the vesting period of three years, from the grant
date. The Company has expensed in the income statement $167,910 (2019: $482,575) in relation to share options.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
Opening balance
Issued
Forfeited
Exercised
Lapsed
Closing balance
Period ended 26 January 2020
Period ended 27 January 2019
Weighted average
exercise price
$ per share
Options
$000
3.09
-
3.25
2.75
2.75
3.31
2,472
-
(435)
(589)
(313)
1,135
Weighted average
exercise price
Options
$ per share
2.98
-
3.10
2.71
2.64
3.09
$000
3,547
-
(40)
(805)
(230)
2,472
The weighted average share price for options exercised during the period was $3.46 (2019: $3.41). Of the 1,135,000 outstanding options at
balance date (2019: 2,472,000), 1,135,000 were exercisable (2019: 952,000).
Share options outstanding at the end of the period have the following expiry dates, exercise dates and exercise prices:
Expiry month
Exercise month
Exercise price
November 2019
August 2020
November 2018
August 2019
$2.75
$3.31
Total share options outstanding
Period ended
26 January 2020
000
Period ended
27 January 2019
000
-
1,135
1,135
952
1,520
2,472
The weighted average remaining contractual life of options outstanding at the end of the period was 0.50 years (2019: 1.21)
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 67
Other Notes
For the 52 week period ended 26 January 2020
6.2.2 Equity settled performance rights
The Senior Executive Incentive Plan grants Group employees performance rights subject to performance hurdles being met.
The fair value of rights granted is recognised as an employee expense in the income statement with a corresponding increase in
the employee share-based payment reserve. The fair value is measured at grant date and amortised over the vesting periods.
When performance rights vest, the amount in the share-based payments reserve relating to those rights are transferred to share
capital. There is no exercise price for these performance rights and there is no right to dividends during the vesting periods.
On 26 March 2019 the Board approved the Briscoe Group Senior Executive Incentive Plan to grant performance rights to key
senior management personnel as a long-term incentive programme. Two tranches of performance rights have been issued
under this programme during the period.
Performance rights granted are summarised below:
Tranche Grant Date
1
2
15 Apr 2019
26 Jun 2019
Balance at
start of period
(number)
Granted during
the period
(number)
Vested during
the period
(number)
Lapsed during
the period
(number)
Balance at the
end of period
(number)
-
-
-
105,780
104,167
209,947
-
-
-
-
-
-
105,780
104,167
209,947
In each tranche the performance rights are subject to a combination of an absolute Total Shareholder Return (TSR) growth
hurdle and/or an EPS growth hurdle. EPS growth hurdle is considered a non-market condition. The relative hurdle weighting for
each tranche is shown in the table below:
Tranche
1
2
Grant Date
15 Apr 2019
26 Jun 2019
TSR Weighting
EPS Weighting
50%
50%
50%
50%
The proportion of performance rights subject to the absolute TSR growth hurdle which may vest is dependent on Briscoe Group
Limited’s TSR compound annual growth rate (CAGR) across a 3-year measurement period. For each tranche that vests the rights
are awarded on a straight-line basis dependent on the TSR CAGR achieved. The percentage of TSR related performance rights
vest according to the following performance criteria:
% Vesting
0%
50%
Tranche 1
< 9.0% CAGR
= 9.0% CAGR
Tranche 2
< 10.1% CAGR
= 10.1% CAGR
51% - 99% (Straight-line prorata)
> 9.0%, < 13.0% CAGR
> 10.1%, < 13.0% CAGR
100%
=> 13.0% CAGR
=> 13.0% CAGR
The TSR performance is calculated across the following periods:
Tranche
Performance Period
1
2
Announcement date of FY 2017/18 Result to announcement date of FY 2020/21 Result
Announcement date of FY 2018/19 Result to announcement date of FY 2021/22 Result
68
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Other Notes
For the 52 week period ended 26 January 2020
The fair value of the TSR performance rights have been valued under a variant of the dividend adjusted Binomial Options Pricing
Model (BOPM). The fair value of TSR performance rights, along with the assumptions used to simulate the future share prices
are shown below:
Fair value of TSR performance rights
Current price at grant date
Risk free interest rate
Expected life (years)
Expected share volatility1.
Tranche 1
$18,617
$3.34
1.71%
1.9
16%
Tranche 2
$22,813
$3.30
1.71%
2.8
16%
1. Volatility represents the volatility of the Briscoe Group (BGP) NZD share price over the two-year period to 28 February 2019
The estimated fair value for each tranche of performance rights issued is amortised over the vesting period from the grant date.
The proportion of performance rights subject to the EPS growth hurdle which may vest is dependent on Briscoe Group
Limited’s EPS compound annual growth rate (CAGR) across a 3-year measurement period. For each tranche that vests the rights
are awarded on a straight-line basis dependent on the EPS CAGR achieved. The percentage of EPS related performance rights
vest according to the following performance criteria:
% Vesting
0%
50%
Tranche 1
< 1.9% CAGR
= 1.9% CAGR
Tranche 2
< 0.8% CAGR
= 0.8% CAGR
51% - 99% (Straight-line prorata)
> 1.9%, < 3.0% CAGR
> 0.8%, < 2.6% CAGR
100%
=> 3.0% CAGR
=> 2.6% CAGR
The EPS performance is calculated across the following periods:
Tranche
Performance Period
1
2
FY 2020/21 EPS relative to FY 2017/18 EPS
FY 2021/22 EPS relative to FY 2018/19 EPS
The fair value of the EPS performance rights have been assessed as the Briscoe Group Limited’s share price as at grant date less
the present value of the dividends forecast to be paid prior to each vesting date. The fair value of each EPS performance right
has been calculated to be $3.05 and $2.79 for tranche 1 and tranche 2, respectively.
The estimated fair value for each tranche of performance rights issued is amortised over the vesting period from grant date.
Vesting of performance rights also require the employee to remain in employment with the Company during the performance
period. The Company has expensed in the income statement $104,820 (2019: Nil) in relation to performance rights.
6.2.3 Equity-based remuneration reserve
Balance at beginning of period
Current period amortisation
Options forfeited and lapsed transferred
to retained earnings
Options exercised transferred to share capital
Deferred tax on performance rights
Balance at end of period
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 69
Other Notes
For the 52 week period ended 26 January 2020
Period ended
26 January 2020
Period ended
27 January 2019
$000
1,097
273
(373)
(203)
47
841
$000
1,045
483
(147)
(284)
-
1,097
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.
6.3 Contingent Liabilities
There were no contingent liabilities as at 26 January 2020 (2019: Nil).
6.4 Events After Balance Date
On 16 March 2020 the Directors resolved to provide for a final dividend to be paid in respect of the period ended 26 January
2020. The dividend will be paid at a rate of 12.50 cents per share for all shares on issue as at 23 March 2020, with full imputation
credits attached. (Note 5.3.3)
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 issued to them in 2016 (refer Note 6.2).
Since balance date and up to the date of these financial statements the Kathmandu Holdings Limited (KMD) share price has
decreased from $3.21 per share to $1.88 per share (per NZX closing price). At the date of these financial statements the Group’s
investment in KMD would be $90.3 million
The Directors note the increased significance of the COVID-19 (Coronavirus) issue since balance date. While there is no specific
provision in these statements for the period ended 26 January 2020 for financial impacts in relation to COVID-19, the Group
continues to monitor the situation closely.
These financial statements are those that
were issued and approved on 16 March 2020.
Subsequent to their issue, on 23 March 2020
Briscoe Group announced it had cancelled
payment of the final dividend.
70
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
Other Notes
For the 52 week period ended 26 January 2020
6.5 New Accounting Standards
There was one new standard applied during the period which had a material impact.
• NZ IFRS 16: Leases (effective from annual periods beginning on or after 1 January 2019)
This standard replaces the current guidance in NZ IAS 17.
The Group adopted NZ IFRS 16 Leases on 28 January 2019 and the impacts of this adoption were disclosed in the interim
financial statements of the Group for the period ended 28 July 2019.
Following the adoption there has been significant change in market practice in deriving the incremental borrowing rates. In
preparing the financial statements for the period ended 26 January 2020, incremental borrowing rates have been adopted
which better align to current market practice. The comparatives presented in the interim financial statements of the Group for
the period ending 26 July 2020 will be restated to reflect the transition note included in these accounts.
Transition
For reporting period commencing 28 January 2019 the Group has elected to apply the modified retrospective transition
method. Under this method the Group has not restated comparatives therefore reclassifications and adjustments are recognised
in the opening balance sheet.
Lease liabilities are measured at the present value of remaining lease payments. The weighted average incremental borrowing
rate applied to the lease liabilities on 28 January 2019 was 5.17%.
Leases entered into and identified by the Group are all property leases. The associated right-of-use assets for property leases
were measured on a retrospective basis as if the new rules had always been applied. There were no other adjustments required
to the right-of-use assets at date of initial application.
On transition, the Group applied the following practical expedients:
• The use of hindsight, in relation to stores’ previous performance, to determine the lease term where the lease contains
options to exercise rights of renewal out to the final term of the lease; and
• Non-capitalisation of leases that expire within twelve months from adoption date. Costs relating to these leases have been
recognised in the income statement within store expenses and administration expenses.
The Group has not recognised any right-of-use assets or liabilities for leases that it was committed to but were not yet available
for use by the Group.
In addition to the opening balance sheet lease liabilities and right-of-use assets impact on transition disclosed below, the Group
has recognised $7,494,192 of deferred tax assets and a cumulative net impact to retained earnings of $18,204,939 as a result
of the accounting standard adoption. Included in the net impact of retained earnings is a $1,065,842 reduction of fixed lease
increases and incentives that have been derecognised.
For comparative period analysis purposes, the adoption of the accounting standard has affected the following items of the
income statement and statement of cash flows:
• In the income statement ‘finance costs’ includes interest expense associated with lease liabilities and ‘store expenses’ and
‘administration expenses’ includes depreciation associated with right-of-use assets.
• In the statement of cash flows lease payments are now split between principal repayments classified within ‘financing
activities’ and interest repayments classified within ‘operating activities’. Previously lease payments were included within
‘payments to suppliers’ within operating activities.
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 71
Other Notes
For the 52 week period ended 26 January 2020
The tables below provide further detail in relation to the impacts of NZ IFRS 16 on the consolidated income statement and
consolidated balance sheet:
TABLE 1: CONSOLIDATED INCOME STATEMENT – IMPACTS OF NZ IFRS 16
PERIOD ENDED
26 JANUARY 2020
ACTUAL
PERIOD
ENDED
27 JANUARY
2019
ACTUAL
VARIANCE
January 2020
vs
January 2019
Previous
classification
Adjustments under
NZ IFRS 16
NZ IFRS 16
classification
Previous
classification
NZ IFRS 16
classification
Back out
rental
expense
Include
lease
depreciation
Include
lease
finance cost
$000
$000
$000
$000
$000
Sales revenue
653,017
Cost of goods
sold
Gross profit
Other income
(395,515)
257,502
9,661
-
-
-
-
-
-
-
-
Store expenses
(109,916)
28,813
(19,239)
(70,161)
1,232
(669)
87,086
30,045
(19,908)
724
(131)
593
-
-
-
-
-
-
653,017
$000
631,919
$000
21,098
$000
21,098
(395,515)
(378,564)
(16,951)
(16,951)
257,502
9,661
253,355
6,994
4,147
2,667
4,147
2,667
(100,342)
(103,202)
(6,714)
2,860
(69,598)
(71,152)
991
1,554
97,223
85,995
1,091
11,228
-
-
-
-
-
-
-
-
724
(13,504)
(13,635)
(13,504)
(12,911)
754
(142)
612
(30)
11
(30)
(13,493)
(19)
(13,523)
87,679
30,045
(19,908)
(13,504)
84,312
86,607
1,072
(2,295)
(22,672)
(8,412)
5,574
3,781
(21,729)
(23,214)
542
1,485
65,007
21,633
(14,334)
(9,723)
62,583
63,393
1,614
(810)
Administration
expenses
Earnings before
interest and tax
Finance income
Finance costs
Net finance
income / (costs)
Profit before
income tax
Income tax
expense
Net profit
attributable to
shareholders
72
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements
TABLE 2: CONSOLIDATED BALANCE SHEET – IMPACTS OF NZ IFRS 16
FULL YEAR AS AT 26 JANUARY 2020
Previous
classification
$000
NZ IFRS 16
classification
$000
Difference
$000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Held-for-sale assets
Derivative financial instruments
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Right-of-use assets
Deferred tax
Investment in equity securities
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Taxation payable
Derivative financial instruments
Total current liabilities
Non-current liabilities
Trade and other payables
Lease liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Cashflow hedge reserve
Equity-based remuneration reserve
Other reserves
Retained earnings
TOTAL EQUITY
67,414
3,533
87,414
5,408
269
67,414
3,533
87,414
5,408
269
164,038
164,038
97,265
3,464
-
3,240
154,104
258,073
422,111
82,601
-
4,895
1,014
88,510
852
-
852
89,362
332,749
60,752
(519)
841
66,251
205,424
332,749
97,265
3,464
266,001
11,676
154,104
532,510
696,548
81,260
17,744
4,895
1,014
104,913
852
278,664
279,516
384,429
312,119
60,752
(519)
841
66,251
184,794
312,119
-
-
-
-
-
-
-
-
266,001
8,436
-
274,437
274,437
(1,341)
17,744
-
-
16,403
-
278,664
278,664
295,067
(20,630)
-
-
-
-
(20,630)
(20,630)
73
Briscoe Group Limited Annual Report 2020 Independent Auditor’s Report 74
Briscoe Group Limited Annual Report 2020
Independent Auditor’s Report
75
Briscoe Group Limited Annual Report 2020 Independent Auditor’s Report 76
Briscoe Group Limited Annual Report 2020
Independent Auditor’s Report
77
Briscoe Group Limited Annual Report 2020 Independent Auditor’s Report 78
Briscoe Group Limited Annual Report 2020
Independent Auditor’s Report
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement 79
Corporate
Governance
Statement
Corporate Governance
Briscoe Group is committed to maintaining the highest standards of governance by implementing best practice structures and
policies. This Corporate Governance Statement sets out the corporate governance polices, practices and processes adopted or
followed by Briscoe Group (including the guiding principles, authority, responsibilities, membership and operation of the Board
of Directors) as at 26 January 2020 and has been approved by the Board.
The best practice principles (and underlying recommendations) which Briscoe Group has had regard to in determining its
governance approach, are the principles set out in the NZX Corporate Governance Code (‘NZX Code’). The Board’s view is that
Briscoe Group’s corporate governance policies, practices and processes generally follow the recommendations set by the NZX
Code. This Corporate Governance Statement includes disclosure of the extent to which Briscoe Group has followed each of
the recommendations in the NZX Code (or, if applicable, an explanation of why a recommendation was not followed and any
alternative practices followed in lieu of the recommendation).
Briscoe Group Limited is a company incorporated in New Zealand and is also registered in Australia as a foreign company
under the name Briscoe Group Australasia Limited. It is listed on the NZX and also, as a foreign exempt entity, on the Australian
Securities Exchange (ASX). As such Briscoe Group is exempt from complying with most of the ASX’s Listing Rules and must
undertake to comply with the listing rules of its home exchange (NZX). Briscoe Group also supports the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations.
Further information about Briscoe Group’s corporate governance framework (including the Board and Board committee
charters, and codes and selected policies referred to in this section) is available to view at www.briscoegroup.co.nz.
80
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement
Principle 1 – Code of Ethical Behaviour
Directors should set high standards of ethical behaviour, model this behaviour and hold management
accountable for these standards being followed throughout the organisation.
Code of Values and Conduct and Related Policies
Recommendation 1.1: The Board should document minimum standards of ethical behaviour to which the issuer’s Directors and
employees are expected to adhere (a code of ethics) and comply with the other requirements of Recommendation 1.1 of the
NZX Code.
Briscoe Group expects its Directors, senior management and employees to maintain the highest standards of honesty,
integrity and ethical conduct in day to day behaviour and decision making. The Board has adopted a Code of Conduct which
incorporates the requirements set out in Recommendation 1.1, forms part of the induction process for all new employees and
is available on Briscoe Group’s website. All Directors and employees must provide acknowledgement that they have read and
understood the content. In addition, it is the intention of the Company to incorporate training in relation to the Code of Conduct
into its online training modules.
Trading in Company Securities Policy
Recommendation 1.2: An issuer should have a financial product dealing policy which applies to employees and Directors.
The Trading in Company Securities Policy sets out Briscoe Group’s requirements for all Directors and employees in relation to
trading Briscoe Group shares, and is available on Briscoe Group’s website. In general, Directors and employees are allowed to
trade in Briscoe Group shares during two ‘trading windows’. Trading windows commence on the day after the half-year and full-
year results are announced to the market and run for a period of 60 days. Trading outside these windows is generally prohibited.
Proposed transactions by Directors and employees during the trading windows require approval. The policy also provides that
no Directors or employees can trade shares if they are in possession of price sensitive information that is not publicly available.
The policy also outlines the requirements around the exercise of share options issued by the Company.
Principle 2 – Board Composition and Performance
To ensure an effective Board, there should be a balance of independence, skills, knowledge, experience and
perspectives.
Board Charter
Recommendation 2.1: The Board of an issuer should operate under a written charter which sets out the roles and responsibilities
of the Board. The Board charter should clearly distinguish and disclose the respective roles and responsibilities of the Board and
management.
The Board has adopted a formal Board Charter which sets out the respective roles, responsibilities, composition and structure
of the Board and senior management, and this is available on Briscoe Group’s website. The Board is responsible for overseeing
the management of the Company and its subsidiaries and to direct performance by optimising the short-term and long-term
best interests of the Company and its Shareholders. This includes approving the Company’s objectives, reviewing the major
strategies for achieving them and monitoring the Company’s performance. The focus of the Board is the creation of company
and shareholder value and ensuring the Company is committed to best practice. Responsibility for the day-to-day management
of Briscoe Group has been delegated to the Managing Director and other senior management. Management are responsible
for implementing the objectives and strategies approved by the Board, within the ambit of risk set by the Board. The Company
Secretary provides company secretarial services to the Board and is accountable to the Board through the Chair.
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement 81
Nomination and Appointment of Directors
Recommendation 2.2 and 2.3: Every issuer should have a procedure for the nomination and appointment of Directors to
the Board. An issuer should enter into written agreements with each newly appointed Director establishing the terms of their
appointment.
The Board collectively considers the nomination of Directors. In doing this, the Board’s procedure involves careful
consideration of the composition of the Board in relation to the Company’s needs and operating environment to ensure
relevant skills and experience. This also applies to the consideration of additional or replacement Directors, subject to the
constitutional limitation of the number of Directors. In so doing, as noted above, the priority must be on ensuring the skills,
experience and diversity on the Board, and the skills that are necessary or desirable for the Board to fulfil its governance role
and to contribute to the long-term strategic direction of the company. The Board may engage consultants to assist in the
identification, recruitment and appointment of suitable candidates.
When appointing new Directors, the Board ensures that the constitutional requirements in respect of Directors will continue
to be satisfied. There must be at least three and no more than five Directors, at least two of whom are resident in New Zealand
and also at least two Directors must be determined by the Board to be independent (as defined in the NZX Listing Rules).
The Board also takes into consideration recommendation 2.8 - a majority of the Board should be independent Directors.
The constitution provides that all Directors are elected by Shareholders. Directors may be appointed by the Board to fill
vacancies, but they are then subject to re-election at the next annual Shareholder meeting. In addition to Directors retiring by
rotation and being eligible for re-election, nominations may be made by Shareholders. All new Directors enter into a written
agreement with Briscoe Group setting out the terms of their appointment.
Directors
Recommendation 2.4: Every issuer should disclose information about each Director in its Annual Report or on its website,
including a profile of experience, length of service, independence and ownership interests.
The Board currently comprises four Directors; three independent and one Executive Director. The Board has considered
which of its Directors are deemed to be independent for the purposes of the NZX Listing Rules and has determined that
as at 26 January 2020, three Directors are independent Directors, including the Chair and the Chair of the Audit and Risk
Committee. As at the date of this Annual Report, the Directors are:
Dame Rosanne Meo
Chair, Independent
Appointed in May 2001
Rod Duke
Executive Director
Appointed in March 1992
Tony Batterton
Andy Coupe
Independent
Independent
Appointed in June 2016
Appointed in October 2016
A profile of experience for each Director is available on Briscoe Group’s website.
Directors disclosed the following relevant interests in shares as at 26 January 2020:
Director
Dame Rosanne Meo
Rod Duke
Tony Batterton
Andy Coupe
Number of shares in which a relevant interest is held
100,000 shares
170,920,656 shares
20,000 shares
10,000 shares
82
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement
Diversity
Recommendation 2.5: An issuer should have a written Diversity Policy which includes requirements for the Board or a relevant
committee of the Board to set measurable objectives for achieving diversity (which, at a minimum, should address gender
diversity) and to assess annually both the objectives and the entity’s progress in achieving them. The issuer should disclose the
policy or a summary of it.
We appreciate that our workforce, including potential employees, come from all walks of life. Every individual is unique, having
different skills and experiences including but not limited to educational opportunity and achievement. People come from many
cultures and backgrounds, along with a wide range of other personal attributes including gender, age, disability (mental,
learning, physical), economic background, language(s) spoken, marital/partnered status, physical appearance, race, religious
beliefs and gender identity, or sexual orientation. Briscoe Group has a commitment to attracting, selecting, developing and
retaining the most suitable employees from this diverse range of attributes. The Group’s Diversity and Inclusiveness Policy is
available on Briscoe Group’s website.
We have a very high level of long term employees and a strong “sense of belonging within the Briscoes family”. We acknowledge
that the retail sector has traditionally had high representation of women in its operations and yet has been poorly represented in
senior management.
Similarly, there has been an inadequate retail specific tertiary educational focus, although it has, as a sector, provided a working
environment with good opportunities for family-oriented work place balance through long term part-time participation.
Education is fundamental and we are pleased with the developments in this area in recent years with a number of employees
having recently commenced tertiary study to support their continued development.
The Board and management recognise that diversity without inclusiveness does not result in the balanced workforce desired
in the business. Briscoe Group has in place policies and procedures to encourage and support equitable treatment for all
employees and includes consideration of applicants for jobs with the Group.
We acknowledge that any narrowness in diversity is not sustainable and believe that an increased emphasis on a collaborative
and inclusive culture and focus on developing talent will secure this realignment. Ensuring that all employees at all levels and in
all workplace environments feel secure and safe, confident and appreciated through understanding the importance of diversity
is most important to us.
At Board level, diversity across the spectrum of gender, age, experience and education has been well achieved and well
demonstrates our commitment.
A breakdown of the gender composition of Directors and officers as at the Company’s balance date, including comparative
figures, is shown below:
26 January 2020
27 January 2019
Female
Male
Female
Male
Directors
Officers1,2.
1
-
3
3
2
-
3
3
1. Excludes Managing Director (included in breakdown of Directors).
2. Officers is defined as the members of the senior management team, who report either directly to the Board or to the Group
Managing Director.
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement 83
Director Training
Recommendation 2.6: Directors should undertake appropriate training to remain current on how to best perform their duties as
Directors of an issuer.
The Board expects all Directors to undertake continuous education to remain current on how to best perform their
responsibilities and keep abreast of changes and trends in economic, political, social, financial and legal climates and
governance practices. The Board also ensures that new Directors are appropriately introduced to management and the business,
that all Directors are updated on relevant industry and company issues and receive copies of appropriate company documents
to enable them to perform their roles. The expectation that Directors undergo ongoing training and education is reinforced in
the Board Charter.
Board Evaluation
Recommendation 2.7: The Board should have a procedure to regularly assess director, Board and committee performance.
The Chair of the Board leads an annual performance review and evaluation of the performance of Directors, the Board as a
whole, and of the Board committees against the Board and committee charters, including seeking Director’s views relating to
Board and committee process, efficiency and effectiveness. The Chair of the Board also engages with individual Directors to
evaluate and discuss performance and professional development.
Independent Directors
Recommendation 2.8: A majority of the Board should be independent directors.
The Board currently comprises four Directors; three independent and one executive Director. Further details of the Board
composition are above at Recommendation 2.4.
Separation of Board Chair and CEO
Recommendation 2.9: The Chair and the CEO should be different people.
The Board Charter makes explicit that the Chairman and the Managing Director roles are separate.
Principle 3 – Board Committees
The Board should use committees where this will enhance its effectiveness in key areas, while still retaining
Board responsibility.
Audit and Risk Committee
Recommendation 3.1: An issuer’s audit committee should operate under a written charter. Membership on the audit committee
should be majority independent and comprise solely of non-executive directors of the issuer. The chair of the audit committee
should not also be the Chair of the Board.
The Audit and Risk Committee operates under a written Charter, and this is available on Briscoe Group’s website. The Audit and
Risk Committee comprises Tony Batterton (Chair), Dame Rosanne Meo, Andy Coupe and Rod Duke and met two times during
the year. The Audit and Risk Committee advises and assists the Board in discharging its responsibilities with respect to financial
reporting, compliance and risk management practices of Briscoe Group. The Board considers that the inclusion of the Group
Managing Director as a member of the Committee provides relevant operational insight which greatly assists the Committee.
Recommendation 3.2: Employees should only attend Audit Committee meetings at the invitation of the Audit Committee.
The Chief Financial Officer, Finance Manager and Internal Audit Manager attend Audit and Risk Committee meetings at the
invitation of the Audit and Risk Committee. Briscoe Group’s external auditor also attends meetings at the committee’s invitation.
The Audit and Risk Committee receives reports from the external auditor without management present, concerning any matters
that arise in connection with the performance of management’s role and otherwise as necessary to protect the independence of
the Audit and Risk Committee from undue influence.
84
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement
Remuneration Committee
Recommendation 3.3: An issuer should have a Remuneration Committee which operates under a written charter (unless
this is carried out by the whole Board). At least a majority of the Remuneration Committee should be independent directors.
Management should only attend Remuneration Committee meetings at the invitation of the Remuneration Committee.
The Board operates a Human Resources Committee which incorporates remuneration. The Human Resources Committee
currently comprises Andy Coupe (Chair), Dame Rosanne Meo, and Rod Duke and met three times during the year. It assists the
Board in discharging its responsibilities with respect to the remuneration and performance of the Group Managing Director and
other senior executives, remuneration of Directors and human resources policy and strategy. The Human Resources Committee
operates under the Human Resources Committee Charter, and this is available on Briscoe Group’s website. As for the Audit and
Risk Committee, the Board considers the inclusion of the Managing Director as a member of the Human Resources Committee
provides essential operational insight but also critical insight to executive performance and human resources strategy. The
Managing Director does not participate in discussion of his own performance and remuneration. Other selected management
only attend Human Resource Committee meetings at the invitation of the Human Resources Committee.
Nomination Committee
Recommendation 3.4: An issuer should establish a nomination Committee to recommend Director appointments to the
Board (unless this is carried out by the whole Board), which should operate under a written charter. At least a majority of the
Nomination Committee should be independent Directors.
The Board does not operate a separate Nomination Committee as Director appointments are considered by the Board as a
whole. The Board’s procedure for the nomination and appointment of Directors is summarised under Principle 2 above (under
the heading “Nomination and Appointment of Directors”).
Overview of Board Committees
Recommendation 3.5: An issuer should consider whether it is appropriate to have any other Board committees as standing
Board committees. All committees should operate under written charters. An issuer should identify the members of each of its
committees, and periodically report member attendance.
The Board does not operate any other committees apart from the Audit and Risk Committee and the Human Resources
Committee. Briscoe Group has considered whether any other standing Board committees are appropriate and has determined
not. Each committee operates under a charter which is available on Briscoe Group’s website. Committee members are
appointed from members of the Board and membership is reviewed on an annual basis. Any recommendations made by the
committees are submitted to the full Board for formal approval. Apart from the Managing Director, relevant key executives are
invited to attend Board committee meetings as appropriate.
Attendance at Board and Committee Meetings
for the Year Ended 26 January 2020
Board
Audit and Risk
Human Resources
Number of meetings held
12
2
3
Attended
Attended
Attended
Dame Rosanne Meo
Rod Duke
Mary Devine1.
Tony Batterton
Andy Coupe
12
11
1
12
12
1. Mary Devine resigned as a Director effective from 31 March 2019
2
2
1
2
2
2
3
-
-
3
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement 85
Takeover Protocols
Recommendation 3.6: The Board should establish appropriate protocols that set out the procedure to be followed if there is a
takeover offer for the issuer (amongst other matters).
Given Briscoe Group’s shareholding structure, with the largest Shareholder being a member of the Board, the Board considers
the likelihood of an unanticipated takeover to be low, and so the Board does not consider this recommendation to be necessary.
However, in the event of a takeover offer, the Board has already agreed that a Takeover Response Committee would be
convened comprised of Independent Directors. That committee would consider the Company’s actions in relation to the
takeover offer, including seeking appropriate legal, financial and strategic advice, complying with takeover regulation (including
the appointment of an independent advisor under the Takeovers Code and the preparation of a Target Company Statement) and
determining what additional information (if any) would be provided by the Company to the bidder.
Principle 4 – Reporting and Disclosure
The Board should demand integrity in financial and non-financial reporting, and in the timeliness and balance of
corporate disclosures.
Continuous Disclosure
Recommendation 4.1: An issuer’s Board should have a written Continuous Disclosure Policy.
As a listed company there is an imperative to ensure the market is informed, and the listed securities are being fairly valued by
the market. In addition to statutory disclosures, the company provides ongoing updates of its operations. This material is made
publicly available through releases to the NZX and ASX, in accordance with the relevant Listing Rules. Briscoe Group has a
Continuous Disclosure Policy, and this is available on Briscoe Group’s website. The purpose of this policy is to: ensure Briscoe
Group complies with its continuous disclosure obligations; ensure timely, accurate and complete information is provided to
all Shareholders and market participants; and outline the responsibilities in relation to the identification, reporting, review and
disclosure of material information relevant to Briscoe Group.
Charters and Policies
Recommendation 4.2: An issuer should make its code of ethics, Board and committee charters and the policies recommended
by NZX Code, together with any other key governance documents, available on its website.
Information about Briscoe Group’s corporate governance framework (including Code of Conduct, Board and Board committee
charters, and other selected key governance codes and policies) is available to view on Briscoe Group’s website.
Financial and Non-Financial Reporting
Recommendation 4.3: Financial reporting should be balanced, clear and objective. An issuer should provide non-financial
disclosure at least annually, including considering environmental, economic and social sustainability factors and practices. It
should explain how operational or non-financial targets are measured. Non-financial reporting should be informative, include
forward looking assessments, and align with key strategies and metrics monitored by the Board.
Financial Reporting
The Audit and Risk Committee oversees the quality and integrity of external financial reporting including the accuracy,
completeness and timeliness of financial statements, and ensuring that financial reporting is balanced, clear and objective.
It reviews annual and half year financial statements and makes recommendations to the Board concerning the application
of accounting policies and practice, areas of judgement, compliance with accounting standards, stock exchange and legal
requirements, and the results of the external audit.
Management’s accountability for Briscoe Group’s financial reporting is reinforced by the written confirmation from the
Managing Director and Chief Financial Officer that, in their opinion, financial records have been properly maintained and that
the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position
and performance of Briscoe Group. Such representations are given on the basis of a sound system of risk management and
internal control which is operating effectively in all material respects in relation to financial reporting risk.
86
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement
Non-Financial Reporting - Sustainability
Briscoe Group assesses its exposure to environmental, economic and social sustainability as part of the overall framework for
managing risk (see Principle 6 – Risk Management). Briscoe Group is committed to improving standards of environmental
performance to enable a more efficient and sustainable future. Accordingly, we have the following initiatives which are
incorporated into regular management reporting to the Board.
Being one of New Zealand’s leading retailers encompassing multiple large-format retail outlets, there are many ways we look to
improve our environmental performance.
Currently the Group’s sustainability initiatives cover:
• Waste Management
• Energy Efficiency, and
• Carbon Footprint reporting
WASTE MANAGEMENT
The Group’s waste management strategy recognises that product sourcing is the first step in the supply chain and the best
opportunity in minimising unnecessary packaging. Initiatives have been implemented to:
• work with suppliers to reduce packaging and specify recyclable packaging types at source,
• ensure that the Group is using recyclable packaging materials in efficient quantities, and
• ensure that stores have the adequate tools and services to enable effective landfill minimisation.
ENERGY EFFICIENCY
Specifying energy efficient elements within our building documentation for new stores ensures a high level of energy efficiency
for the entire life-cycle of the building.
Operationally, comparing energy use on a site by site basis enables us to compare similarly sized stores and identify potential
future savings through investment in heating, ventilation, air-conditioning and lighting systems.
CARBON FOOTPRINT
Our current focus is to identify areas of improvement across the business to minimise waste and power consumption.
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement 87
Principle 5 – Remuneration
The remuneration of Directors and executives should be transparent, fair and reasonable.
Directors’ Remuneration
Recommendation 5.1: An issuer should recommend director remuneration to shareholders for approval in a transparent manner.
Actual director remuneration should be clearly disclosed in the issuer’s Annual Report.
In accordance with the Constitution, Shareholder approval is sought for any increase in the pool available to pay Directors’ fees.
Approval was last sought in 2016, when the pool limit was set at $380,000 per annum. The Board has determined the following
allocation from the pool.
Board of Directors
Audit and Risk Committee
Human Resources Committee
Position
Fees (per annum)
Chair
$120,000
Member
$62,500
Chair
$12,000
Member
Chair
Member
$6,000
$8,500
$6,000
Remuneration of Directors in the reporting period is tabulated below:
Board
Fee
Audit and Risk
Committee
Human
Resources
Committee
Total
Fees
Other
Payments/
Benefits
Total
Remuneration
Dame Rosanne Meo
$120,000
$6,000
$6,000
$132,000
-
$132,000
Rod Duke 1.
Mary Devine 2.
Tony Batterton
Andy Coupe
Total
-
$10,417
$62,500
$62,500
-
$1,000
$12,000
$6,000
-
$500
-
$8,500
-
$912,038
$912,038
$11,917
$74,500
$77,000
-
-
-
$11,917
$74,500
$77,000
$255,417
$25,000
$15,000
$295,417
$912,038
$1,207,455
1. No Directors’ fees are paid to Executive Directors. For more information in relation to Executive Director remuneration refer to
“Chief Executive Remuneration” below.
2. Mary Devine resigned from Human Resources Committee 20 February 2019 and as a Director effective from 31 March 2019.
Remuneration Policy
Recommendation 5.2: An issuer should have a Remuneration Policy for remuneration of directors and officers, which outlines
the relative weightings of remuneration components and relevant performance criteria.
Briscoe Group has adopted a Remuneration Policy which sets out the remuneration principles that apply to all Non-Executive
Directors and all employees including senior management, to ensure that remuneration practices are fair and appropriate,
and that there is a clear link between remuneration and performance. A copy of the Remuneration Policy is available on
Briscoe Group’s website. Briscoe Group is committed to applying fair and equitable remuneration and reward practices in
the workplace, taking into account internal and external relativity, the commercial environment, the ability to achieve Briscoe
Group’s business objectives and the creation of Shareholder value. Under Briscoe Group’s remuneration framework, job size
relative to the relevant competitive market for talent as well as individual performance against defined key performance
objectives are key considerations in all remuneration based decisions, balanced by the organisational context. Remuneration
88
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement
for senior management includes a mix of fixed and variable components. Criteria for performance payments which comprise
short, medium and long-term incentives are regularly appraised to ensure they incorporate changing market conditions as well
as the Company’s performance in relation to strategic initiatives that are deemed by the Board to be most relevant in driving
Shareholder value.
Non-Executive Directors are paid fees in accordance with the table provided under 5.1. The levels at which fees are set reflects
the time commitment and responsibilities of the roles of Non-Executive Directors and the figures shown under 5.1 do not
include any performance based payments. The Board uses various sources to inform its decision making on fees and consults
with expert independent advisors where appropriate.
Subsequent to a review conducted with independent external advisors, engaged by the Board, with specialist expertise in
remuneration, changes were recommended in relation to the Company’s short, medium and long-term incentives. This has
resulted in extensive changes to the long-term incentive (LTI) scheme including a change in vehicle (performance rights),
quantum and participation. The first two grants of performance rights under the updated LTI scheme were made during the
2019/20 financial year. A new medium-term incentive scheme has been introduced for senior management who will no longer
participate in the new LTI scheme. In this manner, the various components of remuneration maintain alignment with the interests
of Shareholders, the Company and the individual.
Employee Remuneration
The number of employees and former employees within Briscoe Group (including the Managing Director but excluding any
other Director) receiving remuneration and benefits above $100,000, relating to the 52 week period ending 26 January 2020 is
set out in the table below:
Remuneration
$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
$210,000 - $219,999
$230,000 - $239,999
$240,000 - $249,999
$260,000 - $269,999
$270,000 - $279,999
$300,000 - $309,999
$350,000 - $359,999
$390,000 - $399,999
$420,000 - $429,999
$450,000 - $459,999
$680,000 - $689,999
$910,000 - $919,999
Number of Employees
12
7
7
10
4
4
2
3
3
2
1
1
1
1
1
1
1
1
1
1
1
1
1
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement 89
Chief Executive Officer Remuneration
Recommendation 5.3: An issuer should disclose the remuneration arrangements in place for the CEO in its Annual Report. This
should include disclosure of the base salary, short-term incentives and long-term incentives and the performance criteria used
to determine performance based payments.
The remuneration of the Managing Director for the year ended 26 January 2020 was:
Base Salary
Other Benefits
STI
Subtotal
LTI
Total Remuneration
Period Ended
26 January 2020
$727,245
$91,293
$93,500
$912,038
-
$912,038
The remuneration of the Managing Director comprises fixed and performance payments. Fixed remuneration includes a base
salary and other benefits comprising; contributions to superannuation, life insurance, health insurance and a fuel card. The
Managing Director received a short-term incentive of $93,500. The target value of a STI payment is recommended by the
Human Resources Committee, approved by the Board and linked strongly to company financial performance and performance
against strategic initiatives. Given his shareholding in the Company, the Managing Director does not participate in any Company
Long Term Incentive Scheme.
Senior Management
Briscoe Group’s senior management are appointed by the Managing Director and their key performance indicators (‘KPIs’) are
comprised of specific Briscoe Group financial objectives along with business related individual objectives. Establishing and
monitoring these KPIs is done annually by the Managing Director recommending the KPIs to the Human Resources Committee,
which in turn, makes recommendations to the Board for approval. The performance of the senior management against these
KPIs is evaluated annually and serves as a key determinant of any short-term incentive scheme values and payments.
Short Term Incentive Payments
Short term incentive (STI) payments are at risk cash payments designed to motivate and reward for short term (within each
financial year) performance. The target value of a STI payment is set by the Managing Director with a specified dollar potential
available to each participant in the scheme. The target areas for all employees who are entitled to a STI payment are set
based on a combination of company financial performance, specific financial performance relative to the employee’s areas of
responsibility and individual goals. The weightings applied to each of the target areas will be largely consistent throughout the
company for roles entitled to a STI payment, but may vary depending on specific areas of focus as determined by the Managing
Director. The Board approves the STI payments to be made to senior management at the end of the financial year, and approves
the senior manager targets for the following year.
Medium Term Incentive Payments
Medium term incentive (MTI) payments are at risk cash payments designed to motivate and reward for medium term (crossing
two financial years) performance. A two-year term provides for evaluation of performance over a longer term than used for
purposes of STI and ensures a degree of impact or sustainability thereby avoiding or reducing the risk of “short-termism”.
MTI participants are members of the senior management team who significantly influence achievement of the Company’s
performance. The target value of an MTI payment is recommended by the Managing Director for approval by the Board, with a
specified dollar amount potentially available to each participant in the scheme. Performance is assessed at Company rather than
individual level with measures aligned to those of the LTI scheme, albeit over a slightly lesser timeframe. The Board will review
performance and approve any MTI payments to be made to senior management at the end of the financial year and approve
objectives for the following year.
90
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement
Long Term Incentive Payments
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 or if the employee is no longer employed by the Company. Each option
entitles the holder to one ordinary share in the capital of the Company on payment of the exercise price. 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.
During the financial year the Company did not issue any further share options to employees. (2019: Nil). The only options on
issue are those issued in August 2016. Option holders have until 21 August 2020 to exercise these options, at which time, if they
are not exercised, will lapse.
On 26 March 2019 the Board approved a Senior Executive Incentive Plan under which selected senior employees could be
granted Performance Rights which upon vesting would reward the employees with ordinary shares in the Company. Vesting of
the Performance Rights is subject to the achievement of certain performance hurdles.
Two tranches of Performance Rights were issued during 2019-20. The Performance Rights vest after three years subject to the
Company’s achievement against Total Shareholder Return and Earnings Per Share growth targets.
Principle 6 – Risk Management
Directors should have a sound understanding of the material risks faced by the issuer and how to manage them.
The Board should regularly verify that the issuer has appropriate processes that identify and manage potential
and material risks.
Risk Management
Recommendation 6.1: An issuer should have a risk management framework for its business and the issuer’s Board should
receive and review regular reports. A framework should also be put in place to manage any existing risks and to report the
material risks facing the business and how these are being managed.
The Board is responsible for Briscoe Group’s risk assessment, management and internal control and it believes has carried out a
robust risk assessment process. Through the Audit and Risk Committee, the Board monitors policies and processes that identify
significant business risks and implements procedures to monitor these risks. A management risk committee comprising the
Managing Director, Chief Financial Officer, Chief Operating Officer and Internal Audit Manager meets every quarter to identify
and assess the major risks affecting the business by maintaining a risk matrix which is used to develop strategies to monitor
and mitigate these risks. Risks are assessed against the impact of the risk and the likelihood of it eventuating. The risk matrix is
provided to the Board six monthly. The management risk committee reports to the Audit and Risk Committee. Significant risks
are discussed at Board meetings, or as required. Briscoe Group maintains insurance policies that it considers adequate to meet
insurable risks.
Health and Safety
Recommendation 6.2: An issuer should disclose how it manages its health and safety risks and should report on their health and
safety risks, performance and management.
The Human Resources Committee, the General Manager Human Resources and specialist team members in the Human
Resource function assist the Board in meeting its responsibilities under the Health and Safety at Work Act 2015, other
regulations and policies.
The Human Resources Committee, along with management is responsible for ensuring that Health and Safety has appropriate
focus and is sufficiently resourced to achieve its objectives within Briscoe Group.
Company performance across a range of measures of Health and Safety are a consistent and priority agenda item at all Board
meetings. The Board and senior management are apprised of all notifiable incidents and injuries and the actions taken to ensure
the health and wellbeing of injured persons. Actions taken to prevent incident recurrence are also advised.
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement 91
Management operates and assesses the effectiveness of risk assessment and mitigation, safety processes and systems,
capability of staff and the general culture of the business in relation to safety.
Briscoe Group has implemented a Health and Safety Risk Matrix to identify specific hazards and risks, assess their severity
of impact and likelihood of occurrence, document mitigation strategies and determine the level of residual risk. This matrix is
reviewed at least annually by the Board and annual Health and Safety objectives and KPIs are set for the business based on the
significant risks identified.
The Company operates a continuous system of hazard identification and management along with monthly reviews of
performance to ensure that opportunities for improvement are identified and progressed. In 2019 we continued our focus on
traffic management across our sites along with ensuring that risks of poor customer/shoplifter behaviour were monitored and
managed. The peace of mind provided by the presence of our Loss Prevention Specialists in stores is significant and alongside
our online training in this area goes some way to maintaining a healthy and safe place of work.
Along with monthly updates on safety related incidents as part of regular Board reporting, the Board is apprised of quarterly
performance on a range of measures sourced directly from ACC. Significant measures which contribute to the Briscoe Group’s
Experience Rating continue to show improvement. A wide range of actions across the Group have been part of our journey
to ensuring our team and others go home from work safe each day. Leader led discussions around safety regularly occur
throughout the business alongside inclusion of team member wellbeing and safety as an item in discussions relating to planned
business change. Board and senior management visits to our sites include discussions with team members as to their knowledge
and perspectives on health and safety, further reinforcing the importance of health and safety to the Group. The Group
continually assesses its actual Health and Safety performance rates against independent information provided by ACC to ensure
that improvement in safety outcomes rather than outputs are used in determining true effectiveness.
We continue to see improvements in the number of work-related claims and the number of days of earnings-related
compensation. Reporting of safety related incidents (including those without injuries) continue to serve as opportunities
to prevent incidents that pose risk to our people. We are well progressed with Group implementation of our chosen Saas
health and safety recording, reporting and risk management system, Ecoportal. In 2020 our focus will be on completing
implementation with the Contractor Management module and using the new capabilities in the system to aid in the sustained
reduction of injuries across the business.
Principle 7 – Auditors
The Board should ensure the quality and independence of the external audit process.
External Audit
Recommendation 7.1 and 7.2: The Board should establish a framework for the issuer’s relationship with its external auditors.
This should include procedures prescribed in the NZX Code. The external auditor should attend the issuer’s annual shareholders
meeting to answer questions from shareholders in relation to the audit.
The Audit and Risk Committee is responsible for the oversight of Briscoe Group’s external audit arrangements. These
arrangements include procedures for the matters described in Recommendation 7.1 of the NZX Code.
The Audit and Risk Committee is committed to ensuring Briscoe Group’s external auditor is able to carry out its work
independently so that financial reporting is reliable and credible. Briscoe Group has an External Auditor Independence policy,
which is available on Briscoe Group’s website. The External Audit Independence policy implements the procedures set out in the
NZX Code.
The policy sets out the work that the external auditor is required to do and specifies the services that the external auditor is not
permitted to do unless authorised by the both the Chairman and Chairman of the Audit and Risk Committee and so advised to the
Board. This is so the ability of the auditor to carry out its work is not impaired and could not reasonably be perceived to be impaired.
Briscoe Group’s external auditor is PricewaterhouseCoopers. Total fees paid to PricewaterhouseCoopers in its capacity as
auditor for period ended 26 January 2020 were $108,000 (2019: 128,000).
Total fees paid to PricewaterhouseCoopers for other professional services for the period ended 26 January 2020 were $26,000
(2019: $160,000). The other service fees comprise a half yearly review.
PricewaterhouseCoopers has historically attended the Annual Shareholders’ Meeting, and the lead audit partner is available to
answer relevant questions from Shareholders at that meeting.
92
Briscoe Group Limited Annual Report 2020
Corporate Governance Statement
Internal Audit
Recommendation 7.3: Internal audit functions should be disclosed.
Briscoe Group has an internal audit team that performs assurance and compliance reviews across company operations as part
of a risk-based programme of work approved by the Audit and Risk Committee. In scope are all aspects of the Group’s store
and non-store operations. In addition to the assurance and compliance work, the internal audit team provide advice to improve
both established systems and processes, and during the design and implementation phase of new systems and processes. The
Internal Audit Manager reports functionally to the Audit and Risk Committee and administratively to the Chief Financial Officer.
The Internal Audit Manager provides regular reporting to management as well as to the Board and Audit and Risk Committee.
Principle 8 – Shareholder Rights and Relations
The Board should respect the rights of shareholders and foster constructive relationships with shareholders that
encourage them to engage with the issuer.
Information for Shareholders
Recommendation 8.1: An issuer should have a website where investors and interested stakeholders can access financial and
operational information and key corporate governance information about the issuer.
Briscoe Group is committed to an open and transparent relationship with Shareholders. The Board aims to ensure that all
Shareholders are provided with all information necessary to assess Briscoe Group’s direction and performance.
This is done through a range of communication methods including periodic and continuous disclosures to NZX and ASX, half
year and annual reports and the Annual Shareholders’ Meeting. Briscoe Group’s website provides financial and operational
information, information about its Directors and senior management and copies of its governance documents, for investors and
interested stakeholders to access at any time.
Communicating with Shareholders
Recommendation 8.2: An issuer should allow investors the ability to easily communicate with the issuer, including providing the
option to receive communications from the issuer electronically.
Shareholders have the option of receiving their communications electronically, including by email or through Briscoe Group’s
investor centre. Briscoe Group’s website includes a section for Shareholder communications and the Board has always been
committed to having an open dialogue with Shareholders and welcomes investor enquiries.
Shareholder Voting Rights
Recommendation 8.3 Shareholders should have the right to vote on major decisions which may change the nature of the
company in which they are invested in.
In accordance with the Companies Act 1993, the Company’s Constitution, and the NZX and ASX Listing Rules, Briscoe Group
refers any significant matters to Shareholders for approval at a Shareholder meeting.
Further Capital
Recommendation 8.4: If seeking additional equity capital, an issuer should offer further equity securities to existing
shareholders of the same class on a pro rata basis, and on no less favourable terms, before further equity securities are offered to
other investors.
If the Company seeks additional equity capital, the Board will ensure it considers the interests of existing shareholders and,
where that is reasonable and in the best interests of the Company, permit shareholders to participate on a pro-rata basis.
Notice of Annual Shareholders meeting
Recommendation 8.5: The Board should ensure that the annual shareholders notice of meeting is posted on the issuer’s
website as soon as possible and at least 20 working days prior to the meeting.
Briscoe Group posts any Notices of Shareholder meetings on its website as soon as these are available. The general practice is to
make these available not less than four weeks prior to the Shareholder meeting.
Briscoe Group Limited Annual Report 2020
General Disclosures 93
General
Disclosures
Board of Directors
Dame Rosanne Meo, DNZM, OBE, BA, Dip BIA: Chairman (Non-Executive)
Chairman of AMP Staff Superannuation. Director of realestate.co.nz and Rosanne Meo Consulting. Chartered Fellow of Institute
of Directors.
Rod Duke: Group Managing Director and Deputy Chairman
Group Managing Director since 1991. Director of Kein Geld (NZ) Limited, RA Duke Limited, Briscoe Share Plan Trustee Limited,
RD Golf Investments Limited and New Zealand Golf Masters Limited.
Tony Batterton, BCom, C.A: Director (Non-Executive)
Partner and Executive Director of Evergreen Partners Ltd. Non-Executive Director of Direct Capital Investments Ltd &
Subsidiaries, Direct Capital IV Investments Ltd & Subsidiaries, Direct Capital IV Management Ltd & Subsdiaries, Direct Capital
IV Partners Ltd, Direct Capital IV GP Ltd, Tiger Ventures NZ Ltd, George H Investments Ltd, P F Olsen Group Ltd, PF Olsen Ltd,
Siplow Nominees Ltd, Wright Loan Ltd, Direct Capital Partners Ltd, NZ Fine Touring Group and Evergreen GP Ltd.
Andy Coupe, LLB: Director (Non-Executive)
Chairman of Television New Zealand Ltd and the New Zealand Takeovers Panel. Director of Gentrack Group Ltd, Kingfish Ltd,
Barramundi Ltd, Marlin Global Ltd. Chartered Member of Institute of Directors.
Mary Devine resigned as a Director effective from 31 March 2019.
Subsidiary Companies
No employee of the Group appointed as a Director of Briscoe Group Limited or its subsidiaries receives or retains any
remuneration or other benefits in their capacity as a Director.
The remuneration and other benefits of such employees (received as employees) totalling $100,000 or more during the year
ended 26 January 2020, are included in the relevant bandings for remuneration disclosed as part of the “Remuneration” section
of the Corporate Governance Statement included in this Annual Report (page 90).
The persons who held office as Directors of subsidiary companies at 26 January 2020 are as follows:
Briscoes (New Zealand) Limited
Rod Duke, Geoff Scowcroft, Alaister Wall
The Sports Authority Limited
Rod Duke, Geoff Scowcroft, Alaister Wall
Rebel Sport Limited
Rod Duke, Alaister Wall
Living & Giving Limited
Rod Duke, Alaister Wall
94
Briscoe Group Limited Annual Report 2020
General Disclosures
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.
During the period there were no changes to the nature of Briscoe Group Limited’s business or that of its subsidiaries. There were
also no changes to company structure.
Directors
A. Shareholdings
Beneficially Held
RAB Coupe
Non-Beneficially Held
RA Duke as Trustee of the RA Duke Trust
RPO’L Meo
AD Batterton
As at 20 March 2020
Number of shares
10,000
As at 20 March 2020
Number of shares
170,920,656
100,000
20,000
For further details refer to Substantial Product Holders information below.
B. Share dealings
During the 52 week period ended 26 January 2020 the following directors acquired shares in the Company:
Date of
transaction
Number of shares
acquired
Consideration
R A Duke as trustee of the R A Duke Trust:
25 March 2019
7 May 2019
12,000
30,000
$40,800
$96,000
There were no other changes to Directors’ interests in Briscoe Group Limited during the period.
C. 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.
Briscoe Group Limited Annual Report 2020
General Disclosures 95
D. Interests in contracts
During the 52 week period ended 26 January 2020 the following Directors have declared pursuant to Section 140 (1) of the
Companies Act 1993 that they be regarded as having an interest in the following transactions:
• 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 $645,000 (2019: $645,000), under an agreement to lease premises to The Sports
Authority Limited (trading as Rebel Sport). (Refer to Note 6.1.1 of the financial statements).
• Kein Geld (NZ) Limited, an entity associated with RA Duke, received rental payments of $564,598 (2019: $535,164), under an
agreement to lease premises to Briscoes (NZ) Limited. (Refer to Note 6.1.1. of the financial statements).
E. Directors’ and Officers’ use of Company Information
During the period the Board received no notices pursuant to Section 145 of the Companies Act 1993 relating to use of Company
information.
Shareholders Information
Holding Range at 20 March 2020
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
No. Investors
Total Holdings
991
1,667
624
508
34
655,932
4,845,221
4,948,415
12,273,134
199,495,798
%
0.30
2.18
2.23
5.52
89.77
3,824
222,218,500
100%
Substantial Product Holders
The following information is given pursuant to section 293 of the Financial Markets Conduct Act 2013. As at 26 January 2020,
details of the Substantial Product Holders in the company and their relevant interests in the company’s shares are as follows:
Substantial
Product Holder
R A Duke2.
Holding as at
26 January 20201
170,920,656
1. This information reflects the company’s records and disclosures made under section 280(1)(b) of the Financial Markets Conduct
Act 2013.
2. 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 October 2016, in
respect of 170,081,138 ordinary shares. As at 26 January 2020 this interest was in respect of 170,920,656 ordinary shares.
The total number of ordinary shares on issue (being all of the voting shares of the company) as at 26 January 2020
was 222,188,500
96
Briscoe Group Limited Annual Report 2020
Top 20 Shareholders
Top 20
Shareholders
As at 20 March 2020
Rank
Holder’s Name*
Total
%
1
2=
2=
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
JB Were (NZ) Nominees Limited **
173,043,998
77.87
Gerald Harvey
Harvey Norman Properties (NZ) Ltd
FNZ Custodians Limited
Alaister John Wall, Beverley Ann Wall and Benedict Dougles Tauber as
Trustees of Tunusa Trust established for the benefit of the family of AJ
and BA Wall
5,250,000
5,250,000
3,7 6 1 ,654
2.36
2.36
1.69
1,230,000
0.55
Stuart Hamilton Johnstone and Lorraine Rose Johnstone
1,000,000
Forsyth Barr Custodians Limited
Manhattan Trustee Limited
Citibank Nominees (NZ) Ltd
Peter William Burilin
HSBC Nominees (New Zealand) Limited
Custodial Services Limited
Accident Compensation Corporation
Shu Wen Chiang
789,386
683,000
610,1 8 6
540,839
538,1 8 1
5 1 7,232
512,307
484,592
0.45
0.36
0.31
0.27
0.24
0.24
0.23
0.23
0.22
Investment Custodial Services Limited
446,407
0.20
National Nominees New Zealand Limited
Keith Arthur William Brunt
Carla Ingrid Brockman
Gemscott Limited
400,000
365,000
336,300
335,000
306, 719
0.18
0.16
0.15
0.15
0.14
20
Shih Ting Huang
* A number of the registerd holders listed below hold shares as nominees for, or on behalf of, other parties.
** Includes 170,920,656 shares in relation to holdings associated with R A Duke.
Briscoe Group Limited Annual Report 2020
Directory 97
Directory
Directors
Dame Rosanne PO’L Meo (Chairman)
Rodney A. Duke
Anthony (Tony) D. Batterton
Richard A. (Andy) Coupe
Registered Office
1 Taylors Road, Morningside
Auckland Telephone (09) 815 3737
Facsimile (09) 815 3738
Postal Address
PO Box 884
Auckland Mail Centre
Auckland
Solicitors
Simpson Grierson
Bankers
Bank of New Zealand
Auditors
PwC
Share Registrar
Link Market Services Limited
Deloitte Centre
Level II
80 Queen Street
Auckland 1010
Telephone +64 9 375 5998
Websites
www.briscoegroup.co.nz
www.briscoes.co.nz
www.rebelsport.co.nz
www.livingandgiving.co.nz
98
Briscoe Group Limited Annual Report 2020
Notes
Notes
Briscoe Group Limited Annual Report 2020
Notes 99
Notes
Briscoe Group Limited Annual Report 2020
Consolidated Financial Statements 100
briscoegroup.co.nz