2021
A N N U A L R E P O R T
Contents
Overview
Message from our Chairman and CEO
Board of Directors
City Chic Annual Recap
2022 Outlook
Diversity
Corporate Social Responsibility
Annual Financial Report 2021
References
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 3
0426162820321232425 Annual Financial Report 2021 | City Chic Collective Overview
Global
Plus-size
Customer led
Omni Channel
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 5
We are Annual Financial Report 2021 | City Chic Collective Overview
EVERYDAY ESSENTIAL FASHION
FIERCELY FASHIONABLE
FASHION FOR YOUR SHAPE
A G L O B A L C O L L E C T I V E
O F P L U S - S I Z E B R A N D S
City Chic Collective is a global
retailer specialising in plus-size
women’s apparel and footwear.
Our customer-led offering,
which appeals to fashion-
forward women, has a strong
following in Australia, USA, UK,
Europe and New Zealand.
Our omni-channel model
comprises of multiple websites
in Australasia, USA, UK and
Europe. The collective of
brands are also available
through marketplace and
wholesale partners in the US,
Canada, UK and Europe.
SERIOUS STREET STYLE
LUSTFUL LINGERIE
PREMIUM WIDE-FIT FOOTWEAR
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 7
Annual Financial Report 2021 | 2021 Snapshot
2021 SNAPSHOT
SALES
$258m
1.07m
ACTIVE CUSTOMERS
73%
ONLINE PENETRATION
58m
ANNUAL ONLINE TRAFFIC
3
KEY REGIONS GLOBALLY
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 9
Annual Financial Report 2021 | City Chic Collective Overview
Growing into a Global Digital Retailer
Customer-Centric Operating Model
CONTRIBUTION BY CHANNEL
4%
4%
31%
FY20
61%
1%
2%
26%
FY21
71%
Online Website
Stores
Online Marketplaces
Wholesale
1%
6%
40%
FY20
59%
38%
FY21
56%
ANZ
Americas
EMEA
CONTRIBUTION BY REGION
le
Highly-engaged and
gro wing custo m er base.
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FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 11
Annual Financial Report 2021 | City Chic Collective Overview
Global Business Overview
AMERICAS
$100M REVENUE
EMEA
$14M REVENUE4
AUSTRALIA & NEW ZEALAND
$144M REVENUE
Wholesale
2%
Marketplace
4%
Wholesale
6%
Marketplace
1%
Stores
46%
Online
Websites
94%
• 522k Active Customers1
• 32m Annual Traffic2
• A$180 Avg Annual Spend3
Online
Websites
94%
Online
Websites
54%
120k Active Customers1,4
•
• 7m Evans Traffic Since Acquisition2,4
• A$110 Avg Spend Since Acquisiton3,4
• This does not yet include Navabi
acquired in July 2021
• 428k Active Customers1
19m Annual Traffic2
•
• A$337 Avg Annual Spend
USA fulfilment site in Dallas
Canada fulfilment site in Ontario
Office in New Jersey
UK fulfilment site in Gateshead
European fulfilment site in NW Germany
Office in London
ANZ fulfilment site in Sydney
89 stores at end of June
Head office in Sydney
Please refer to page 123
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 13
Annual Financial Report 2021 | City Chic Collective Overview
Financial Performance
SALES GROWTH
SALES $M
EARNINGS GROWTH
UNDERLYING EBITDA1 $M
$258.5
$139.5
$194.5
$89.7
$104.8
$119.0
$131.9
$61.4
$148.4
$73.0
$70.4
$75.4
$42.4
$19.1
$26.5
$7.4
$19.1
$23.3
$19.9
$6.9
$24.9
$9.1
$13.0
$15.8
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
1H
2H
1H
2H
GLOBAL CUSTOMER BASE GROWTH
INCREASED ONLINE PENETRATION
CUSTOMER NUMBERS2 '000
ROLLING 12-MONTH GLOBAL ONLINE SALES3 $M
+61%
growth
+72%
growth
385
515
1,070
801
663
53%
online
sales
44%
online
sales
93
65
73%
online
sales
73%
online
sales
65%
online
sales
127
151
189
JUN 19
DEC 19
JUN 20
DEC 20
JUN 21
JUN 19
DEC 19
JUN 20
DEC 20
JUN 21
Please refer to page 123
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 15
Annual Financial Report 2021 | Comments by our Chairman and CEO
Message from
Our Chairman and CEO
The COVID-19 pandemic continued throughout the
2021 financial year requiring the Company to adapt
and innovate its business model to ensure ongoing
sustainability and profitable growth. In circumstances
where planning and anticipating the future was
almost impossible, a lot was asked of City Chic team
members. Under the calm, yet determined, leadership
of the executive team, our people performed
superbly. The Company not only recorded strong
profitable growth but also materially diversified its
geographic footprint, expanded its range, invested
in the future and made good progress towards our
vision of leading a world of curves.
Here are some of the highlights:
•
Sales Revenue grew by 32.9% and comparable
sales growth (CSG) was 31.6%
• Underlying EBITDA grew by 59.8% to $42.4m
Pre-AASB16 (16.4% margin) and $50.2m Post-
AASB16
Statutory NPAT from continuing operations was
$21.6m (135.3% growth) and Underlying NPAT
(Pre-AASB16) was $24.9m (80.6% growth)
•
• Normalised operating cash flow of $24.2m (FY20:
$20.9m)
• Global customer base growth of 61% YoY to 1.07m
active customers
• Global customer website traffic growth of 68%
YoY to 58.1m visits
• Online sales growth of 49.3%, with 73% online
penetration
Sales outside of ANZ totalled 44.1% of group
revenue
Signed new partnerships with Next, Curvissa,
Freemans, HBC, Debenhams, Very, Zalando,
Amazon, Walmart, Target, Ebay, David Jones and
The Iconic
Strong balance sheet with net cash of $71.5m
•
•
•
at 27 June 2021 and undrawn debt facility of
$40.0m; completed $111.1m equity raise in July-
August 2020
• Completed strategic acquisitions of plus-size
brand Evans in the UK in December 2020 and
European plus-size online marketplace Navabi in
July 2021Commenced the process of diversifying
our supply chain to offset the concentration risk
in China. We are now sourcing from Bangladesh,
Vietnam, Cambodia and Morocco
• Developed and trialled new product segment and
lifestyle ranges using brands that include Refinity,
Arna York, Societie+, Zim & Zoe and Aveology
• Continued to develop and trail the online “world
of curves” marketplace for plus size, for all our
brands in our four key regions
Further development of our ESG /Ethical Trade
program, including the roll out of worker surveys
and strengthening of our cotton regions ban
•
As can be seen, notwithstanding the complexity
posed by the pandemic, FY21 was a very busy
and productive year for City Chic. Management
has succeeded in simultaneously preserving and
expanding the core of the business whilst also
investing in future income streams. Importantly,
these new developments have the double benefit of
adhering to our strategy of operating purely within the
plus-size market and, at the same time, diversifying
risk, both geographically and from a product
perspective.
COVID-19 demonstrated the benefits of this
innovation and adaptability. Our geographical scope
protected us from rolling lockdowns and economic
disruption as timings were different between
Northern and Southern Hemispheres and as between
individual countries and states. Our increased
CHAIRMAN MICHAEL KAY
CEO & MANAGING DIRECTOR PHIL RYAN
range and efficient supply chain allowed us to pivot
between the products our customers were seeking at
various times during the pandemic. In lockdowns we
could move away from party dresses and work wear
to casual, intimates and “zoom-wear”.
Australian stores suffered during the rolling
lockdowns, particularly in Victoria and later in NSW.
However, each time they reopened, the response
from customers was very strong. In the meantime,
our customers were buying online and our expanded
range allowed us to deliver what she wanted, when
she wanted it and at the right price point.
Avenue has proved to be a very good acquisition.
Not only has it given us a higher profile in our biggest
market, but it has also allowed us to introduce our
other product segments to US customers. This
has been extremely well received and has driven
our strategy to give her the choice of assortment
and offer all of our product streams to all of our
customers globally. We are delighted with the way
our business is developing in the USA. We have only
just begun and we see a substantial runway of growth
opportunities in this USD$49bn market. Continuing
to develop our US business both organically and
inorganically are key priorities for us.
FY21 saw another important milestone in our journey
to lead a world of curves. In December 2020, we
purchased the Evans business in the UK. Evans has
been a retailer of plus sized women’s wear for almost
100 years, both through high street shops and more
recently online. We only acquired the Evans brand,
eCommerce and wholesale businesses, and Evans
stores were closed. The business was somewhat
run-down when we acquired it, having been part of
the Arcadia Group which slid into administration in
November 2020. The second half of FY21 was spent
transitioning the business from Arcadia systems and
warehousing into our City Chic systems and a new
warehouse. We also had to build back inventory
and increase the range available to customers. In
this sense, the task has been very similar to that in
Avenue. The early signs for Evans are promising,
and our success in revitalizing Avenue and getting
customers to accept it as online-only, gives us
confidence we can restore Evans to its former
position and establish ourselves as a leader in the
UK plus size market. We have introduced all of our
product streams and brands to the UK customer
through the Evans ‘world of curves’ website/
marketplace. Evans also had distribution channels
through Europe and the Middle East and we see an
opportunity to grow our business meaningfully in
those locations.
In July 2021 we acquired Navabi, a marketplace
business in Europe, domiciled in Germany and
serving mostly German customers. The Navabi
integration is proceeding ahead of plan and the
initial reads on the loyalty of this customer to the
marketplace have been pleasing. Inventory levels
will take time to rebuild and in the short term we will
re-position global inventory to Europe. Navabi’s loyal
customer base is focused on size, fit and quality.
Navabi’s websites had 5.8m customer visits in 2020,
generating €10.4m (A$16.6m) in sales revenue, and
pre-pandemic annual traffic exceeded 10m visits.
Navabi is an important beachhead for us into Europe
and growing the European business, both organically
and inorganically, is a priority for us. We plan to further
develop this marketplace with all our brand offerings
and seek to expand its predominantly German
geographical scope to cover the rest of Europe.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 17
Annual Financial Report 2021 | Comments by our Chairman and CEO
We now have strong traffic driving digital store fronts
in our 4 key markets. In Australia we have citychic.
com.au, Avenue.com in the USA, Evans.co.uk in
the UK and our most recent addition, Navabi.de
in Europe. Together these drive around 70 million
annual visits globally and give us a strong position in
terms of global digital reach in the USD$180bn plus
size market. This has created a platform for us to
continue to increase market share by delivering our
complete product range to the plus size customer
globally or a “world of curves”.
COVID-19 UPDATE
In FY21, the ANZ store network was impacted
by several periods of closures in response to
government direction. Over the financial year, there
were approximately 3,655 equivalent store days
closed (over 10% of total equivalent store days in
FY21) including 2,910 in Victoria, 177 in NSW, 176 in
Queensland, 147 in Western Australia, 49 days in
Northern Territory, 34 in South Australia, 12 in ACT, 7 in
Tasmania and 143 in New Zealand.
Following the end of the financial year, the ANZ store
network continued to be impacted by varying periods
of temporary closures. During the first 8 weeks of
FY22, there were approximately 1,646 equivalent
store days closed (c.33% of total equivalent store
days over the period) including 764 in NSW, 565 in
Victoria, 178 in Queensland, 40 in Western Australia,
32 in South Australia, 20 in ACT, 7 in Northern
Territory and 40 in New Zealand. Stores in NSW (15),
Victoria (18), ACT (2) and New Zealand (4) remain
temporarily closed as of the date of this report.
Throughout FY21 the US experienced significant
waves of COVID-19 and various extended
government directed restrictions, which caused
disruption to labour, logistics and consumer spending
during the period. There was significant disruption
to labour in warehousing and fulfilment and large
surcharges imposed by freight carriers, in particular
during peak seasonal trade in November 2020 to
January 2021. Aligned with the acceleration of the
vaccine roll-out in early 2021, restrictions were eased
which resulted in a rebound in consumer spending
from March 2021 onwards.
At the time of the acquisition of Evans, the UK was
in heavy government-imposed lockdowns. An
acceleration in vaccinations resulted in an easing of
restrictions from May 2021 and an improvement in
consumer spending. There has been an impact on
logistics and labour in the UK, but less severe than
that experienced in the US in 1H FY21.
COVID-19 continues to cause disruption to logistics
globally and to stores in Australia, as well as causing
uncertainty and volatility in consumer confidence
and spending. Further to this there have been
international shipping delays and price increases
that have impacted global supply chains. With an
increased lead time from the initial COVID-19 supply
issues and higher production volumes we have been
able to offset these delays and costs increases.
With geographic and channel diversification, a strong
cash position, loyal customers who like to buy online,
and a focus on executing on the long-term plans for
the business, we believe City Chic is well positioned
to navigate the conditions and capitalise on the
recovery.
Financial Position and Dividend
City Chic’s net cash position at 27 June 2021 was
$71.5m with no debt drawn under the existing $40m
debt facility which matures in February 2023.
City Chic completed an equity raising of $111.1m in
the first quarter to strengthen the balance sheet and
accelerate the Company’s global growth ambitions.
This comprised of, in July 2020, a fully underwritten
$80.0m Placement of new fully paid ordinary shares
to eligible institutional investors conducted at
$3.05 per share. Following the completion of the
Placement, in August 2020 City Chic offered all
eligible shareholders the opportunity to participate in
a non-underwritten Share Purchase Plan (SPP). City
Chic raised $31.1m through the SPP, also conducted
at $3.05 per share. A total of 36.4 million new shares
were issued through the Placement and SPP.
A cash payment of $40.2m was made for the
acquisition of Evans on 23 December 2020. The cash
payment of $9.6m for the acquisition of Navabi on 23
July 2021, was post FY21 year end and therefore not
reflected in the ending cash balance of $71.5m.
City Chic is well capitalised to deliver on its strong
organic growth pipeline and well positioned for future
value-adding inorganic opportunities that expand
the global customer base. Given the opportunities
to accelerate the growth of the business, as well
as the ongoing uncertainty caused by COVID-19
around the world, the Board decided not to declare
a dividend. The decision whether to pay a dividend
will be reviewed at the interim FY22 results. In view
of the opportunities, City Chic will remain focussed
on sensibly deploying capital to achieve its strategic
intent of gaining a strong global market position in a
sector that, at least for now, is under-served.
•
•
store experiences and store environments
Further develop the World of Curves social
community
Pursue inorganic growth opportunities that add
economic value to the collective.
FY22 OUTLOOK
Australia has been impacted by temporary store
closures with 33% of trading days lost till the end of
August at a cost of $1 million a month in contribution.
However, stores which have been open and the
online channel, have to date delivered growth on
the prior corresponding period and total sales above
last year for ANZ. We are hoping vaccination levels
in Australia are such that stores will be open for the
critical run through Black Friday, Cyber Monday and
into Christmas.
Avenue and Evans are trading strongly above
pre-acquisition levels. Navabi is trading ahead of
expectations and above FY21 levels, although we
note the limited period since acquisition.
In September 2021, a number of marketplace
partnerships went live including Walmart (US) and
Ebay (AU) Marketplace integrations are underway
for Debenhams (UK), Very (UK), Zalando (Germany),
Amazon (UK), Target (US) and The Iconic (AU), which
are all expected to be live in 1H FY22. City Chic
has signed a partnership with David Jones for a
concession in 14 stores and their online marketplace
and has signed a franchise partnership for over 20
Debenhams stores in the Middle East.
In FY22 City Chic is focused on the execution of
various initiatives including:
• Drive market share growth and customer
acquisition in the US
• Gain market share in ANZ through the
introduction of our conservative value product
stream (Evans and Avenue)
Introduce the collective’s full assortment to the
Evans customer base, building on the initial
deliveries in 2H FY21, to drive greater market
penetration
Integrate Navabi and introduce the collective’s
brands to the customer base, as well as to further
develop the current product and lifestyle offering
Expand and execute on marketplace partnerships
in all regions
•
•
•
• Rotate store portfolio into new fit-outs and
conversion to larger format stores; enhance in-
FY21 was a difficult but satisfying year for City
Chic. The Company and its people demonstrated
adaptability, innovation, strategic intent, operational
execution and resilience in a world beset with a virus
that prevented travel, limited social interaction and
impaired the ability to do business. We suspect the
effects of the virus will be ongoing for some time,
even after vaccination rates achieve the required
levels.
Nevertheless, we believe we can continue to grow
profitably, invest for the future and further progress
towards leading a world of curves. This would not be
possible without the wonderful City Chic Collective
team and the customers we serve. Our sincere thanks
for their extraordinary and ongoing support. It gives
us energy and makes us even more determined to
make this Company a global success.
Michael Kay
Chairman
Phil Ryan
CEO & Managing Director
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 19
Annual Financial Report 2021 | Directors
Board of Directors
Chairman and Non-Executive Director
MICHAEL KAY
Michael Kay joined the Board in October 2018 as an
independent non-executive director and was subsequently
appointed Chairman on 9 November 2018. Mr. Kay is a member
of the Audit and Risk Committee and member of the People,
Culture and Remuneration Committee.
Mr. Kay has significant listed company Board experience; he is
the Chairman of Omni Bridgeway, and was previously Chairman
of Lovisa. Mr. Kay has also held a number of senior executive
roles during his career including CEO of McMillan Shakespeare
and CEO of AAMI.
Non-Executive Director
MICHAEL HARDWICK
Michael Hardwick joined the Board in May 2012. Mr. Hardwick
is an independent non-executive director. Mr. Hardwick is also
the Chair of the Audit and Risk Committee and member of the
People, Culture and Remuneration Committee.
Mr. Hardwick is a Chartered Accountant, a member of the AICD
and currently a director and the CFO of the CottonOn Group.
Mr. Hardwick was previously a partner with the New York-
based private equity firm Hudson Valley Capital Partners and
has worked at PwC in both Melbourne and New York.
Non-Executive Director
MEGAN QUINN
Megan Quinn joined the Board in October 2012 as an
independent non-executive director. She is the Chair of the
People, Culture and Remuneration Committee and a member
of the Audit and Risk Committee.
Ms. Quinn is a specialist consultant working across a broad
range of industries including financial and professional services,
healthcare, consumer and digital, and is an international
speaker. Ms Quinn was a co-founder of NET-A-PORTER and is a
non-executive director at Reece and InvoCare.
Chief Executive Officer and Managing Director
PHIL RYAN
Phil Ryan was announced CEO of City Chic Collective in
September 2018 and joined the Board in February 2019 as an
executive director.
Mr. Ryan is the original Brand Director of City Chic. In 2006 Mr.
Ryan led a team of six people that created the City Chic brand.
He is responsible for the strategic direction and operational
leadership that has seen City Chic take a market leading
position in the global plus-size industry.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 21
Annual Financial Report 2021 | Directors
Board of Directors
Introducing in FY2022
The following new members have been appointed to the Board on 5 August 2021
Non-Executive Director (appointed after the reporting period)
NATALIE MCLEAN
Natalie McLean joined the Board in August 2021 as an
independent, non-executive director. She is a member of
the Audit and Risk Committee and a member of the People,
Culture and Remuneration Committee.
Ms. McLean has significant retail experience having worked
in senior positions domestically in Australia and internationally
with companies including Giordano, Rip Curl and the Cotton
On Group. Ms. McLean is currently a director and the Chief
Retail Officer of the Cotton On Group and a director of the
Cotton On Foundation.
Non-Executive Director (appointed after the reporting period)
NEIL THOMPSON
Neil Thompson joined the Board in August 2021 as an
independent, non-executive director. He is a member of the Audit
and Risk Committee and a member of the People, Culture and
Remuneration Committee.
Mr. Thompson has significant financial, operational and strategic
experience from a broad range of senior roles and industries,
including in the freight and logistics, industrial products and
technology sectors. Mr. Thompson was previously Chief Financial
Officer of Ascender HCM (a payroll software and services
company), has worked at Alesco, Amatek, TNT and Elders IXL, and
is currently a director of the Australian World Orchestra.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 23
Annual Financial Report 2021 | City Chic Annual Recap
Annual Financial Report 2021 | 2022 Outlook
City Chic Annual Recap
2022 Outlook
Entry into the UK market with acquisition of Evans; integration complete
and growth strategy launched
Drive market share growth and customer acquisition in the US; execute
on the re-engagement strategy of the Avenue customer base
Implemented strategy to re-engage the Avenue customer base and drive
market share growth in the US
Gain market share in ANZ through the introduction of our conservative
value product stream (Evans and Avenue)
Expanded online offering including casual, basics and sleepwear. New
lifestyles developed and being trialled including Refinity, Arna York,
Societie+, Zim & Zoe and Aveology
Introduced greater assortment to all websites; additional City Chic
product on Avenue.com, and City Chic and Avenue product on
Evans.co.uk
Enhanced store environments
Agreed acquisition of Navabi online marketplace (completed post year
end July 2021), marking entry into the European market.
Launched new marketplace partnerships with leading retailers in the UK,
USA and Canada and commenced wholesale partnership in the Middle
East as a channel to deliver our assortment to a new customer base
Successfully navigated pandemic challenges; product mix adapted, stock
managed across global operations, overcame logistics challenges, and
ongoing store lockdowns
Published our first 2020 Modern Slavery Act Statement, achieved 'Green'
rating in the COVID-19 Fashion Report, rolled out to worker surveys and
strengthened our cotton regions ban
Completed Equity Raise of $111m to support global growth opportunities
Gain market share in the UK through the introduction of the collective’s
full assortment to the Evans customer base, building on the initial
deliveries in 2H FY21
Integration of Navabi and introduction of wider product range to the
European customer base
Expand and execute on marketplace partnerships in all regions
Continue rotation of store portfolio into new fit-outs & conversion to
larger format stores
Further develop the World of Curves social community
Continue to review inorganic opportunities to accelerate global
customer growth
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 25
DIVERSITY SURVEY AND STRATEGY
Objectives established for achieving diversity and progress towards achieving them during the year ended
Annual Financial Report 2021 | Diversity
Diversity
Leading a world of curves means putting her
first, and creating experiences that makes
her feel courageous; feel proud to identify
as female; feel empowered to embrace her
individuality; and to respect and love the skin
she is in.
She is our customer, she is a member of our
team, and she is our leader.
We listen to her. We value the learnings we gain
from her coming from different backgrounds,
experiences, and perspectives. These learnings
enable us to develop beautiful products
and create exceptional customer and work
experiences that understand, respect and meet
the diverse needs, preferences and goals she
has. We endeavour to make her feel good at
every touchpoint and we are committed to
continuing to deliver on this promise, at all
levels of our business, as our global footprint
expands.
These commitments also extend beyond
her. We are a boundaryless organisation that
ensures all team members, regardless of
gender identity or minority group membership,
have equal opportunity to enter, learn and
develop within our business. The CCX Diversity
Policy is underpinned by a suite of policies and
practices that provide the support and structure
needed to facilitate these opportunities for each
individual that enters our workforce.
In FY21 we conducted our first Diversity Survey and
achieved a Sense of Belonging Score of 76%which is
equal to the Culture Amp Global Inclusivity Benchmark.
Our goal is to ensure all gender identities and minority
group members have the same experience in the
workplace. The survey results identified the LGBTQI+
group (13% of workforce) and those that identify
as having a disability or impairment group (15% of
workforce) were areas of opportunity to improve. We
incorporated initiatives into our Culture and Connection
calendar that focused on awareness and inclusion for
these groups, we expanded our EAP offering to offer
specialist hotlines that target the specific support needs
of these groups and our FY22 volunteering program
aligns with NGOs that provide services to these groups.
GENDER BALANCE AND STRATEGY
CCX has an ongoing commitment to reporting on
Diversity in line with the Workplace Gender Equality Act
2012 (WGE Act 2012). In FY21, the proportion of women
employed at different levels across CCX was as follows:
•
•
1 of 4 Board members is a woman;
1 in 3 C suite leaders is a woman (CEO, KMP and
Head of Business); 67% of the Leadership Team
(Other Executives and General Managers) are
women;
84% of our Managers (Senior Managers and Other
Managers) are women and;
97% of our workforce are women.
•
•
1 in 4
Board members
is a woman
1 in 3
C-Suite leaders
is a woman
Following the end of the reporting period, two new
non-executive directors joined our Board. As at the date
of this Annual Report, 2 of 6 Board members (including
non-executive and executive directors) are women. In
FY21 we recognised the underrepresentation of males
in middle management and professional positions in
our support office. Those that identify as male had a
Sense of Belong Score of 95%. While this gives us
the confidence they felt valued in the workplace, we
wanted to increase gender diversity in these workforce
segments. Our FY21 objective was to increase male
headcount by 25% in these areas, and we overachieved
by increasing male headcount by 45%. We aim to see
male headcount increase in these workforce segments
30 June 2021 are set out below:
FY2021 Diversity Strategy
OBJECTIVE
Conduct a Diversity Survey for a new CCX baseline
Develop a FY21 Diversity Strategy underpinned by survey findings
Review Diversity Policy to ensure it aligns with Diversity Strategy
Develop and rollout a workplace volunteering program
ACHIEVEMENT
Completed
Completed
Completed
FY22 Rollout
(due to pandemic)
Use FY20 WGEA Report to set gender-related diversity objectives for FY21
Completed
FY2022 Diversity Strategy
OBJECTIVE
Seek to achieve and maintain gender diversity in the composition of the Board and the C-Suite
Leadership Team of no less than 30% of each gender.
Conduct CCX Annual Diversity Survey
Achieve a Sense of Belonging Score of 75% or above for all groups within the next two years.
Launch Diversity and Inclusivity Committee to lead diversity and inclusivity awareness, process
improvement, education, and initiatives.
Launch FY22 workplace volunteering program.
Reposition employment brand and recruitment activity to increase the attractiveness of the company
to males.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 27
Annual Financial Report 2021 | Corporate Social Responsibility
Corporate Social Responsibility
We believe that creating safe and respectful working environments for all workers in our
WE COMMIT TO SOURCE PRODUCT IN A
WORKING TOGETHER TO EMPOWER OUR
supply chain is the number one priority. Following the acquisition of new brands and with the
diversification of our sourcing regions, we have sought to partner with, and on-board, select new
factories and vendors into our supply chain and our ethical trade policies.
We welcome the new opportunities and challenges that come with the growth of brands and the
diversification of our supply chain. Our goal is to work together with all our global partners for a
more positive impact to people and planet.
People continue to be a focus for our organisation as we aim to improve the
lives of workers in our supply chain.
We consider every worker in our supply chain an extension of our own business and we are
working together with our factories to try and ensure safe and fair working conditions for all
workers. We believe our ethical trade programme holds us to account when it comes to human
rights impacts associated with producing our products.
As we continue to broaden our sourcing regions and reach out to new countries to manufacture
our product, we have taken steps to strengthen our ethical trade policies. Regardless of location,
all suppliers are strictly required to implement and adhere to our high ethical sourcing standards.
Our FY2021 Highlights
1. Published our first 2020 Modern Slavery Act Statement
2. Acheieved ‘Green’ rating in the Covid-19 Fashion Report
3. Rolled out Worker Surveys – Top 24 factories
4. Tracing of tier 2 & 3 suppliers in progress
5. Updated and strengthened our Cotton Region ban
RECOGNISED, RESPONSIBLE, AND TRANSPARENT
WORKERS AND GIVE THEM A VOICE IN THE
SUPPLY CHAIN
SUPPLY CHAIN
The UN predicts there are up to 45.8 million people
As part of our Worker Voice Program, we were
entrapped in slavery, with more slaves today than
excited to launch our worker survey tool out to
in any other time in history. In 2018, the Australian
factory workers as a pilot along side our factory
Government legislated the Modern Slavery Act, which
social audits.
requires business to report on modern slavery risks in
their supply chain.
The survey is in addition to our worker hotline and
grievance mechanism as another channel to talk to
This year we published our first Modern Slavery Act
factory workers.
Statement (for the prior reporting period) in which we
define the risks and highlight the steps we are taking
Phase 1: The survey was rolled out across 24
to help eradicate modern slavery in the supply chain.
factories and touched 4300 workers to seek their
We are committed to educating our business, and
suppliers, on modern slavery and providing practical
tools to identify and remediate issues.
feedback across the following:
WORKER SURVEY SCORECARD
✓ Modern Day Slavery - 93% positive
We continue to act on key issues such as the known
✓ Labour Practices – 89% positive
forced labour risks associated with certain cotton
farming regions.
✓ Health & Safety - 95% positive
✓ Worker Satisfaction – 89% positive
CCX is committing to take steps to try and ensure our
supply chain does not source directly or indirectly
from known regions that openly engage in the use of
forced labour, in line with our responsibilities under
the UN Guiding Principles on Business and
Human Rights.
Enhancing our worker voice tools is a key initiative
to help support us in gaining a more direct line to
workers. It gives us the ability to contact workers
by sending them surveys, training materials, and
information to empower workers to have a voice
about their individual working conditions.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 29
Annual Financial Report 2021 | Corporate Social Responsibility
RESPONDING TO COVID-19
LIVING WAGE
WORKING WITH FACTORIES TO RECOGNIZE THAT
A MINIMUM WAGE DOES NOT ALWAYS EQUAL A
THE RIGHT OF EVERY WORKER IN OUR SUPPLY
CHAIN TO ENJOY SAFE AND HEALTHY WORKING
CONDITIONS IN AN ENVIRONMENT WHERE THEY
WE CARE FOR THE ENVIRONMENT AND THE
ARE NOT EXPLOITED
MANAGEMENT OF WASTE IN OUR SUPPLY CHAIN
“As we navigate through the global COVID-19
We partner with our factories to implement a plan to
Through our third-party auditors and our own team’s
At source we ask vendors, as part of our code of
pandemic, we continue to place great importance on
work towards paying a living wage, so that workers
factory visits, we check that working conditions are
conduct, to manage their waste, water and energy in
all our ethical trade policies and responsible sourcing
practices”
are on a path to earning an income that covers their
basic family living expenses which for many is higher
than what a minimum wage can afford.
Through our internal review process we train and
then ask the factories to establish a living wage
calculation.
clean and safe and workers are not performing any
a responsible manner.
unsafe work.
Following the acquisition of Avenue and along with
all textile processing and waste management is in line
the diversification of sourcing regions, the focus has
with the legislation of the manufacturing country.
been to embed selected new factories and vendors
into our supply chain and our ethical trade policies.
Our audits include Environmental and Waste
As part of our audit program, we seek to ensure that
Our COVID-19 Fashion Commitment Scorecard:
This year CCX was rated as part of the COVID-19
Fashion Report published in October 2020
as GREEN, as evidence of actions in all areas
were covered as part of the COVID-19 Fashion
Commitments.
We believe these commitments are an extension
to the Human Rights and Ethical Trade policies we
already have in place, however, we know we still have
so much more to do, and we are always reviewing
our policies and how we should act and respond in
the future.
Despite the impacts of COVID-19, we continued
to engage and work closely with our factories to
ensure the workers in our supply chain were able
to keep working and to produce our product in safe
conditions.
We believe this empowers factory owners in
All new suppliers have been onboarded into our
Management checks for:
understanding what a living wage is made up of and
ethical trade program and as we audit the factories,
1.
Legal Authorisations – such as the EIA
how the wages paid compare.
we assign a risk rating to help prioritise factory
2. Solid & Hazardous wastes
We also record progress of factories.
corrective actions required.
We understand that not all factories will be at the
3. Wastewater, Air Emissions and Noise
4. Energy & Water reductions
With the introduction of new factories and regions, we
same stage in their ethical trade journey, however we
As we widen our sourcing base, we will continue
know that there is a greater challenge for factories
to pay a living wage due to the wider gap that exists
when comparing back to the legal minimum wage.
are committed to partnering with factories who also
to audit factories against local regulations and the
are committed in coming on this journey with us.
equivalent standards to the EIA in their locations.
We work with factories to help them develop a
roadmap to improving conditions by providing:
• Worker hotlines and Grievance Mechanisms
•
Supporting factories to proactively adopt freedom
of association policy
Promoting a gender equality policy
To respect the rights of workers to collective
•
•
bargaining
MANAGING & REDUCING OUR FOOTPRINT
The efficient use of resources and minimising
negative impacts on the environment needs to be
part of our day to day thinking. We have started
this process by assessing areas of risk to help us
construct medium- and long-term strategies by
priority.
We have started working on the following key areas
which we believe can help us to have a more positive
impact:
• More sustainable packaging options,
•
Sourcing more sustainable / preferred fibres that
can be used in our product
• Reviewing options to extend the life of garments
to work towards a more circular economy.
•
Providing options to reduce micro plastics in our
oceans.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 31
Annual
Financial Report
2021
Directors' Report
Auditor's Independence Declaration
Independent Auditor's Report to the Members
of City Chic Collective Limited
Annual Financial Statements
Corporate Governance Statement
Shareholder Information
Corporate Directory
Directors Report
The directors present their report, together with the financial statements, on the consolidated
entity (referred to hereafter as the 'Group', 'consolidated entity' or 'City Chic') consisting of City
Chic Collective Limited (referred to hereafter as the 'company', 'parent entity' or 'CCX') and the
entities it controlled at the end of, or during, the 52-week period ended 27 June 2021.
Directors
The following persons were directors of City Chic Collective Limited during the whole of the financial period and up
to the date of this report:
Michael Kay
Michael Hardwick
Megan Quinn
Phil Ryan
The following persons were appointed as directors of City Chic Collective Limited after the financial period but prior
to the date of this report:
Neil Thompson (appointed 5 August 2021)
Natalie McLean (appointed 5 August 2021)
Company Secretary and Other Key Management Personnel
Marta Kielich (Company Secretary, appointed 7 July 2020)
Mark Ohlsson (Company Secretary, appointed 10 May 2019 and resigned 6 July 2020)
Munraj Dhaliwal (Chief Financial Officer)
Principal activities
City Chic Collective is a global omni-channel retailer specialising in plus-size women’s apparel, footwear and
accessories. It is a collective of customer-led brands including City Chic, Avenue, Evans, CCX, Hips & Curves and Fox
& Royal. City Chic and CCX appeal to fashion forward women and its omni-channel model comprises of a network of
89 stores across Australia and New Zealand (ANZ) and websites operating in ANZ, the US and the UK. Avenue (US-
based) and Evans (UK-based) target a broad customer base across conservative and fashion segments, both with a
long history and significant online customer following. Hips & Curves in the US, and Fox & Royal in ANZ and the UK
are online intimates brands. City Chic Collective owns European-based online marketplace Navabi (as outlined in the
matters subsequent to the end of the financial period section), and also sells its collective of brands through third-
party marketplace and wholesale partners in the US, Canada, UK and Europe.
There was no significant change in the nature of the activities of the Group during the period.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 33
33122120119575864 Annual Financial Report 2021 | Directors' Report
Dividends
There were no dividends paid, recommended or declared with respect to the current financial period.
In the previous corresponding financial period (in September 2019), a final fully franked ordinary dividend of 1.5 cents
per ordinary share was paid for the 2019 financial year; the total amount paid was $2.9m.
Operating and financial review
The Group achieved revenue from continuing operations of $258.5m (28 June 2020: $194.5m), representing growth
of 32.9%. Net profit after tax for continuing operations was $21.6m (28 June 2020: $9.2m), representing growth of
135.3%.
OTHER
On 24 July 2020, in combination with the equity raise, City Chic also informed the market that it had been nominated
as the Stalking Horse Bidder for the eCommerce assets of Catherines, which was subject to the completion of an
auction process. On 16 September 2020, that auction took place in the United States, and City Chic was not the
highest bidder and therefore unsuccessful in the acquisition. Notwithstanding the strategic merits of the transaction,
the winning bid of US$40.8m (A$55.5m) was above City Chic's assessment of the value of the assets.
During the reporting period, the Group repaid its $17.5m of debt in full, with the $40.0m available debt facility maturing
in February 2023.
FY22 Outlook
The Group ended the year with net cash of $71.5m at 27 June 2021 (28 June 2020: net cash of $3.9m). The cash
In the early part of FY22, City Chic is pleased to advise that the company has continued to deliver strong positive
balance includes the proceeds from the July-August 2020 equity raise net of payment for the acquisition of Evans,
top-line and comparable sales growth.
both as detailed below.
• Australia has been impacted by temporary store closures, however stores which have been open and the online
channel have delivered growth on the prior corresponding period. There continues to be uncertainty relating to
The normalised operating cash flow generated for the year is $24.2m (28 June 2020: $20.9m).
the duration of the lockdowns in Australia and the aggregate impact on FY22
Normalisation adjustments of $9.1m include the reclassification of rental payments to financing cash flows in relation
• Avenue continues to trade strongly, materially above pre-acquisition levels
to AASB 16, JobKeeper grant received relating to the prior year, repayment of deferred tax from the prior year, cash
•
Evans has rebounded strongly and is now trading above pre-acquisition levels
outflows relating to transaction costs incurred for the July-August 2020 equity raise as well as costs incurred for the
• Navabi is trading ahead of expectations and above FY21 levels, although noting the limited period since
Evans acquisition, working capital adjustments and finalisation of income tax associated with the 2018 divestment
acquisition.
and cash outflows for building Evans’ working capital to commercial levels.
The Underlying EBITDA from continuing operations post-AASB 16 was $50.2m (28 June 2020: $38.8m) and pre-
plus-size market through its global digital and physical storefronts. The strategy includes the execution of various
AASB 16 was $42.4m (28 June 2020: $26.5m). The Underlying EBIT from continuing operations post-AASB 16 was
initiatives:
$35.8m (28 June 2020: $21.3m) and pre-AASB 16 was $36.0m (28 June 2020: $20.7m). The Underlying NPAT from
• Drive market share growth and customer acquisition in the US
continuing operations post-AASB 16 was $24.0m (28 June 2020: $13.7m) and pre-AASB 16 was $24.9m (28 June
• Gain market share in ANZ through the introduction of our conservative value product stream (Evans and Avenue)
Heading into FY22, City Chic is focused on the strategy of delivering its significant product range to the global
2020: $13.8m).
EQUITY RAISE
•
Introduce the collective’s full assortment to the Evans customer base, building on the initial deliveries in 2H FY21,
to drive greater market penetration
•
Integrate Navabi (as outlined in the matters subsequent to the end of the financial period section) and introduce
On 24 July 2020, City Chic completed a fully underwritten $80.0m Placement of new fully paid ordinary shares to
the collective’s brands to the customer base, as well as to further develop the current product and lifestyle
eligible institutional investors. The Placement was conducted at $3.05 per share, resulting in 26.2 million new shares
offering
being issued, representing 13.1% of City Chic's existing issued capital. New shares issued under the Placement settled
•
Expand and execute on marketplace partnerships in all regions
on 30 July 2020 and commenced trading on 31 July 2020.
• Rotate store portfolio into new fit-outs and conversion to larger format stores; enhance in-store experiences and
Following the completion of the Placement, City Chic offered all eligible shareholders the opportunity to participate
•
Further develop the World of Curves social community.
store environments
in a non-underwritten Share Purchase Plan (SPP). City Chic raised $31.1m through the SPP, which closed on 18 August
2020. The SPP was conducted at $3.05 per share, resulting in 10.2 million shares being issued. The Placement and
the SPP together raised $111.1m and resulted in 36.4 million new shares being issued.
EVANS ACQUISITION
On 23 December 2020, the Group completed the acquisition of the Evans brand, and the eCommerce and
wholesale businesses for £22.7m (A$40.2m) in cash. Evans is a UK-based retailer of women's plus-size clothing with
a longstanding customer base and strong market position. The acquisition gives the Group an excellent foundation in
a new geography and is part of the Group's strategy to expand the global customer base through the digital channel.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 35
Annual Financial Report 2021 | Directors' Report
Material business risks
The Group operates in an environment of change and uncertainty. There are a range of factors, both specific to the
Group and general in nature which may impact the operating and financial performance of the Group. The impact of
these risks is regularly reviewed for their possible impact.
COVID-19 PANDEMIC
The ongoing COVID-19 pandemic continues to have a significant impact on the global and Australian
economy and the ability of businesses, individuals and governments to operate. Emergency powers and
restrictions have been enacted, which amongst other things, has restricted travel and the ability of many
individuals to leave their homes and travel to places of work.
A number of aspects of City Chic’s business may continue to be directly or indirectly affected by government,
regulatory or health authority actions, work stoppages, lockdowns, quarantines and travel restrictions
associated with COVID-19, including disruption to City Chic’s supply chain and workforce, particularly the
availability of products and logistics (including shipping of products) and government-imposed shutdowns
of manufacturing and distribution centres affecting the supply of products to customers.
Management takes confidence in its ability to trade profitably during the height of the pandemic in 2020,
but continues to closely manage the ongoing uncertainty with lockdowns in Australia and supply chain
impacts globally. This is further supported by the strength of the Group’s business model, with high online
penetration and geographic diversity, and the flexibility of its supply chain, helping manage stock levels
and production times. In addition, having significant liquidity headroom and a strong balance sheet gives
flexibility to continue operating the business, maintaining key relationships with suppliers and ensuring
the right, long term strategic decisions are being made.
COMPETITION AND CONSUMER DISCRETIONARY SPENDING
The Group operates in a retail environment where quality and value for money are critical to the customers
it services. The retail fashion market continues to consolidate and feel the effects of globalisation. City
Chic is in a unique situation of having high online penetration, a global footprint and a nimble and fast
supply chain that adapts to changes within customer buying patterns.
EXCHANGE RATES AND DUTIES
The Group relies significantly on imported products (directly sourced or via local or overseas wholesalers)
and as a result the cost of the product may be subject to movements in the exchange rate of the Australian
dollar. The Group also has significant operations in the USA which provide a natural hedge against currency
movements on purchases. Any additional risk in exchange rate movement is monitored and can be mitigated
through the use of forward hedging. However it is noted that no hedges have been put in place in FY2021.
WORKPLACE HEALTH AND SAFETY (WHS)
The Group has over 640 employees as well as the customers who visit physical stores across ANZ. The
Group has a high focus on WHS with investment in training and development of its employees a high
priority.
ENVIRONMENTAL CHANGES
The Group is exposed to risks arising from environmental changes, scarcity of natural resources and the
continuing global development of legislation and regulations in this area. Many of these risks are greatest
in the Group's supply chain activities and these activities and the related risks are largely managed through
the principals laid out in the Corporate Social Responsibility report. The Group manages environmental
risks, such as droughts and floods by diversifying its vendors and material sourcing. The Group has
dedicated resources to ensure continued compliance across all regulatory requirements in the markets
operated in by the Group.
Significant changes in the state of affairs
COVID-19 PANDEMIC
During the reporting period, the pandemic has had a significant and broad impact across the Group’s global operations.
The health crisis and government-directed restrictions caused disruption to labour, logistics and consumer spending.
The timing of restrictions being eased and the recovery in mobility and activity has varied by region, but broadly ANZ
rebounded in late 2020, the US in early 2021 and the UK in mid-2021. Specific impacts of the pandemic on operations
include:
•
In FY21, the ANZ store network was impacted by several periods of closures in response to government
direction. Over the financial year, there were approximately 3,655 equivalent store days closed (over 10% of total
equivalent store days in FY21) including 2,910 in Victoria, 177 in NSW, 176 in Queensland, 147 in Western Australia,
49 days in Northern Territory, 34 in South Australia, 12 in ACT, 7 in Tasmania and 143 in New Zealand. The Group
also received $3.5m relating to JobKeeper subsidy in Australia for the first three months of the reporting period,
which was paid in its entirety to team members
•
Significant disruption to labour in US warehousing and fulfilment and large surcharges imposed by freight carriers,
in particular during peak seasonal trade in November 2020 to January 2021. Aligned with the acceleration of the
vaccine roll-out in early 2021, restrictions were eased which resulted in a rebound in consumer spending from
March 2021 onwards
• At the time of the acquisition of Evans, the UK was in heavy government-imposed lockdowns. There has been an
impact on logistics and labour, but less severe than that experienced in the US in 1H FY21
• Wholesale and marketplace business was largely paused throughout the period while partners addressed their
own challenges caused by the pandemic.
During the financial reporting period, the Directors continued to monitor COVID-19 related developments and worked
closely with management to assess and navigate through the potential implications for team members, suppliers,
customers and operations.
EVANS ACQUISITION
As noted in the Operating and Financial review section, on 23 December 2020, the Group completed the acquisition
of the Evans brand, and the eCommerce and wholesale businesses for £22.7m (A$40.2m) in cash. Evans is a UK-
based retailer of women's plus-size clothing with a longstanding customer base and strong market position. The
acquisition gives the Group an excellent foundation in a new geography and is part of the Group's strategy to expand
the global customer base through the digital channel.
There were no other significant changes in the state of affairs of the consolidated entity during the financial period.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 37
Annual Financial Report 2021 | Directors' Report
Matters subsequent to the end of the financial period
COVID-19 RELATED MATTERS
The COVID-19 pandemic continues to have an impact globally in the new financial period. The Directors continue
to monitor COVID-19 related developments and are closely working with management to assess and navigate
through the potential implications for team members, suppliers, customers, and operations. The focus is to maintain
production and supply of products and services whilst minimising the risk of spread of COVID-19 amongst our team
members, our customers, and the societies in which the Group operates.
Subsequent to the end of the financial year, the Australian store network was impacted by varying periods of
temporary closures in response to government direction on restrictions and lockdowns. During the first 8 weeks of
FY22, there were approximately 1,646 equivalent store days closed (c.33% of total equivalent store days over the
period) including 764 in NSW, 565 in Victoria, 178 in Queensland, 40 in Western Australia, 32 in South Australia, 20
in ACT, 7 in Northern Territory and 40 in New Zealand. Stores in NSW (18), Victoria (21), ACT (2) and New Zealand (8)
remain temporarily closed as of the date of this report. However, the Group continues to trade profitably with the
Information on directors
MICHAEL KAY
TITLE:
Chairman and non-executive director
QUALIFICATIONS:
B.LLB
EXPERIENCE AND EXPERTISE:
Michael Kay joined the City Chic Collective Board on 1 October 2018 as an
independent non-executive director and was subsequently appointed Chairman on
9 November 2018. Mr. Kay has significant listed company experience, as detailed
more fully below, and is also a non-executive director of Royal Automobile Club
Insurance (WA) and a non-executive director of the Pharmacy Guild of Australia (and
its various subsidiaries). A qualified lawyer, Mr. Kay brings a broad range of commercial
experience to the Board. Mr. Kay was Chief Executive Officer and Managing Director
of McMillan Shakespeare Limited (ASX: MMS) for six years and previously held a
number of senior executive roles at AAMI including Chief Executive Officer. He also
spent 12 years in private legal practice specialising in commercial law.
OTHER CURRENT DIRECTORSHIPS: Mr. Kay is currently Chairman of Omni Bridgeway Ltd (ASX: OBL) (formerly called IMF
benefit of the geographic and channel diversification. City Chic is well capitalised to deliver on its strong organic
Betham Limited (ASX: IMF).
growth pipeline and well positioned for future inorganic opportunities to expand the global customer base.
NAVABI ACQUISITION
On 23 July 2021, the Group signed and completed a share purchase agreement to acquire 100% of the shares in JPC
United GmbH (“Navabi’) for €6.0m (A$9.6m) in cash, from the co-founders of Navabi. Navabi's assets include €2.1m of
cash net of tax liabilities, as well as inventory and immaterial other working capital. In 2009, Navabi was established
as an online marketplace selling hundreds of third-party women’s plus-size brands. Navabi has also developed its
own brands exclusively sold on the marketplace, which have grown to become the majority of sales in recent years.
Navabi’s loyal customer base are focused on size, fit and quality, and are based predominantly in Germany. Navabi’s
websites had 5.8m customer visits in 2020, generating €10.4m (A$16.6m) in sales revenue, and pre-pandemic traffic
exceeded 10m visits.
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
SPECIAL RESPONSIBILITIES:
Mr. Kay was Chairman of Lovisa Holdings Limited (ASX:LOV) until his retirement on 30
October 2018 where he led the Board during a period of substantial growth. He was
previously Chairman and non-executive director of ApplyDirect Limited (ASX:AD1)
until 19 March 2019.
Chairman of the Board; Member of the Audit and Risk Committee (ARC); Member of
the People, Culture and Remuneration Committee (PCRC)
INTERESTS IN SHARES:
700,000 ordinary shares
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
MICHAEL HARDWICK
No other matter or circumstance has arisen since 27 June 2021 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs
TITLE:
Non-executive director
QUALIFICATIONS:
B.Comm
in future financial years.
EXPERIENCE AND EXPERTISE:
Likely developments and expected results of operations
Certain likely developments in the operations of the consolidated entity and the expected results of operations in
financial years subsequent to the period ended 27 June 2021 are referred to in the preceding operating and financial
review and outlook.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or
State law. The Group has dedicated resources to ensure continued compliance across all regulatory requirements in
the markets operated in by the Group.
Michael Hardwick joined the City Chic Collective Limited Board in May 2012. He is
an independent, non-executive director. Mr. Hardwick is a director and the Chief
Financial Officer of the Cotton On Group, and a director of the Cotton On Foundation.
Mr. Hardwick is also a non-executive director of the Grill'd Group of Companies which
includes Australia's largest privately-owned chain of Burger Restaurants and also
Koko Black, a premium branded Australian chocolatier.
Mr. Hardwick is a Chartered Accountant and member of the AICD. He spent 10 years
at PwC in both Melbourne and New York in the transaction advisory practice and
also spent 10 years as a partner with the New-York based private equity firm Hudson
Valley Capital Partners.
OTHER CURRENT DIRECTORSHIPS: Mr. Hardwick does not hold any other listed company directorships.
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
Mr. Hardwick has not held any other listed company directorships in the last three
years.
SPECIAL RESPONSIBILITIES:
Chairman of the ARC; Member of the PCRC
INTERESTS IN SHARES:
504,836 ordinary shares
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 39
Annual Financial Report 2021 | Directors' Report
MEGAN QUINN
TITLE:
Non-executive director
QUALIFICATIONS:
GAICD
EXPERIENCE AND EXPERTISE:
Megan Quinn joined the City Chic Collective Limited Board in October 2012 as an
independent non-executive director. She is a specialist consultant working across a
broad range of industries including financial and professional services, healthcare,
consumer and digital, and is an international speaker. Ms. Quinn has more than
25 years’ experience working internationally with organisations including Harrods,
Dell and Westpac. Ms Quinn was also a Board and National Committee member
of UNICEF Australia. Her strong strategic, operational, supply chain and financial
expertise is complemented by her capabilities around brand, marketing, innovation,
transformation, digital, and customer service and experience across all channels. She
is recognised as a global brand expert for her game-changing role as a co-founder
of NET-A-PORTER. Known for her creative, energetic and disruptive thinking, Ms.
Quinn has the unique ability to define gaps in the market and develop market-leading
business strategies for commercial and creative outcomes.
OTHER CURRENT DIRECTORSHIPS: Ms. Quinn is currently a non-executive director at Reece Limited (ASX:REH) and
InvoCare Limited (ASX:IVC).
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
None
SPECIAL RESPONSIBILITIES:
Chair of the PCRC; Member of the ARC
INTERESTS IN SHARES:
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
None
NEIL THOMPSON
TITLE:
Non-executive director (appointed 5 August 2021)
QUALIFICATIONS:
B.Ec
EXPERIENCE AND EXPERTISE:
Neil Thompson joined the City Chic Collective Limited Board on xx August 2021 as an
independent, non-executive director.
Mr. Thompson has over thirty years of financial, operational and strategic experience
from a broad range of roles and industries with global reach, including freight and
logistics, industrial products and software sectors.
Mr. Thompson was most recently Chief Financial Officer of Ascender HCM (a payroll
software and services company) and is a director of the Australian World Orchestra.
He has previously worked at Alesco, Amatek, TNT and Elders IXL.
OTHER CURRENT DIRECTORSHIPS: Mr. Thompson does not hold any other listed company directorships.
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
Mr. Thompson has not held any other listed company directorships in the last three
years.
SPECIAL RESPONSIBILITIES:
Member of the ARC; Member of the PCRC
INTERESTS IN SHARES:
1000 ordinary shares
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
NATALIE MCLEAN
TITLE:
Non-executive director (appointed 5 August 2021)
QUALIFICATIONS:
B.Bus
EXPERIENCE AND EXPERTISE:
Natalie McLean joined the City Chic Collective Limited Board on xx August 2021 as
an independent, non-executive director.
Mrs. McLean has over 25 years of retail experience having worked in senior positions
domestically in Australia and internationally with companies including Giordano,
Rip Curl and the Cotton On Group. Mrs. McLean has extensive experience across
operations, product, marketing and commercial areas of the retail sector including
partnership strategies and geographic growth. Mrs. McLean is currently a director
and the Chief Retail Officer of the Cotton On Group, a director of the Cotton On
Foundation and is a board member of the Geelong Racing Club.
OTHER CURRENT DIRECTORSHIPS: Mrs. McLean does not hold any other listed company directorships.
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
Mrs. McLean has not held any other listed company directorships in the last three
years.
SPECIAL RESPONSIBILITIES:
Member of the ARC; Member of the PCRC
INTERESTS IN SHARES:
10,900 ordinary shares
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
PHIL RYAN
TITLE:
Chief Executive Officer and Managing Director
QUALIFICATIONS:
MBA, B.Bus
EXPERIENCE AND EXPERTISE:
Phil Ryan is the original Brand Director of City Chic. In 2006, Mr. Ryan led a team of six
people that created the City Chic brand. He is responsible for the strategic direction
and operational leadership that has seen CCX take a market leading position in
the global plus size industry, with a collective of customer-led brands including City
Chic, Avenue, Hips & Curves and Evans. Under Mr. Ryan's leadership, CCX now has
more than 85 stores in Australia and New Zealand with online sales representing
more than 70% of total sales globally and in the US, UK and Europe, CCX trades
exclusively in a digital capacity. Mr. Ryan has driven successful partnerships with
Nordstrom, Macy's, and Bloomingdale's in the USA; ASOS in the UK, Alshaya in the
Middle East and Zalando in Germany. Mr. Ryan is a global authority in the plus size
consumer. He has over 25 years’ experience in senior and strategic retail apparel
management. Mr. Ryan's family had a fashion manufacturing, wholesale and retail
business called Ambition in the 1980’s and 1990’s and from this he knows all areas
of a rag trade business; from the cutting table to the retail shop floor.
OTHER CURRENT DIRECTORSHIPS: None
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
None
SPECIAL RESPONSIBILITIES:
Chief Executive Officer; Managing Director
INTERESTS IN SHARES:
133,836 ordinary shares
INTERESTS IN OPTIONS:
2,161,235 ordinary shares issued under CCX's 2019 Employee Share Plan and
escrow provisions
INTERESTS IN RIGHTS:
2,640,740 performance rights over ordinary shares
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships
of all other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 41
Annual Financial Report 2021 | Directors' Report
Company secretary
Marta Kielich joined City Chic as General Counsel and Company Secretary on 7 July 2020. Ms. Kielich has held
company secretarial and senior legal positions for several ASX-listed companies. Ms. Kielich also has broad
international experience across various sectors.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during
the period ended 27 June 2021, and the number of meetings attended by each director were:
Full Board
PCRC
ARC
Attended
Held
Attended
Held
Attended
Held
Michael Kay
Michael Hardwick
Megan Quinn
Phil Ryan1
28
28
28
28
28
28
28
28
4
4
4
4
4
4
4
4
4
4
4
4
N/A
N/A
N/A
N/A
Held: represents the number of meetings held during the time the director held office or was a member of the
relevant committee.
Neil Thompson and Natalie McLean joined the Board after the end of the reporting period.
Retirement, election and continuation in office of directors
At the 20 November 2020 Annual General Meeting ("AGM"), 99.88% of the votes received supported the re-election
of director Megan Quinn as part of the company's constitution that specifies all directors must stand for re-election
every three years.
Remuneration report (audited)
The remuneration report, which has been audited as required by section 308(3C) of the Corporations
Act 2001, outlines the key management personnel remuneration arrangements for the Group, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
The remuneration report is set out under the following main headings:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Introduction
Remuneration strategy and policy
Remuneration framework
Remuneration outcomes for key management personnel
Service agreements
Disclosures relating to share options and performance rights
Additional disclosures relating to key management personnel
a. Introduction
This report outlines the remuneration strategy, framework, and other conditions of employment for key management
personnel and details the role and accountabilities of the Board and relevant Committees that support the Board on
these matters. Key management personnel (KMP) are those persons having authority and responsibility for planning,
directing and controlling the activities of the entity, directly or indirectly, including all directors.
Key management personnel of the consolidated entity were also the key management personnel of City Chic
Collective Limited (the parent entity) for the years ended 27 June 2021 and 28 June 2020. The key management
personnel consisted of the following directors and senior executives of City Chic Collective Limited:
Name
Role
Non-executive directors:
Michael Kay
Michael Hardwick
Megan Quinn
Executive directors:
Phil Ryan
Chairman and non-executive director
Non-executive director
Non-executive director
Chief Executive Officer and Managing Director
Other key management personnel:
Munraj Dhaliwal
Chief Financial Officer
1 Phil Ryan is not a member of either the PCRC or the ARC, but was invited to attend these meetings and his attendance was noted in the
minutes.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 43
Annual Financial Report 2021 | Directors' Report
b. Remuneration strategy and policy
The People, Culture and Remuneration Committee (referred to hereafter as the “PCRC” or the ‘Committee’) is
responsible for assisting and advising the Board in relation to remuneration arrangements for its directors and
executives. The performance of the consolidated entity depends on the quality of its directors and executives. The
remuneration philosophy is to attract and retain talented and motivated executives who can enhance the Group’s
performance through their contributions and leadership.
PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
PRINCIPLE 1
PRINCIPLE 2
PRINCIPLE 3
The objectives of the Group’s
The reward framework is
Alignment to program
executive remuneration
designed to align executive
participants' interests:
framework are as follows:
reward with the Company's
•
rewards capability and
• competitiveness and
interests. The Board have
experience
sustainability;
considered that it should
•
reflects competitive
• acceptability to the
seek to enhance the
reward for profitable
Group's strategic and
Company's interests by:
growth; and
business objectives
and the creation of
shareholder value;
•
including economic profit
• provides a clear structure
as a core component of
for earning rewards.
plan design; and
• performance linkage/
• attracting and retaining
alignment of executive
high calibre executives.
compensation;
•
transparency and
acceptability to
shareholders.
c. Remuneration framework
In accordance with best practice corporate governance, the structures of non-executive directors and executive
remuneration are separate.
(i) NON-EXECUTIVE DIRECTORS' REMUNERATION
Non-executive directors receive fees and do not receive share-based payments or other incentives. The
Chairman's fees are determined independently to the fees of other non-executive directors and are based
on comparable roles in the external market. The Chairman does not participate in any discussions relating to
determination of his own remuneration. The PCRC review non-executive directors’ fees and payments annually.
The PCRC may, from time to time, receive advice from independent remuneration consultants to ensure non-executive
directors' fees and payments are appropriate and in line with the market.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the Annual General Meeting held on 21 November 2019, where the
shareholders approved a maximum annual aggregate remuneration of $1,000,000. The PCRC has reviewed the fee
and deemed the maximum annual aggregate remuneration is still appropriate.
Non-executive chairman and non-executive directors’ fees increased with effect from 1 April 2021 as reflected
below:
Role
Base fee for Non-Executive Chairman
Base fee for Non-Executive Director
Additional fee for Chair of the ARC
Additional fee for Chair of the PCRC
Remuneration (per annum,
exclusive of superannuation)
$
240,000
120,000
20,000
10,000
Remuneration policies are developed to provide market competitive remuneration arrangements that support the
commitment required, scale, complexity and growth of the business and was undertaken in conjunction with
attraction, engagement and retention of talented team members, and that are aligned with the Company's interests.
the search for new non-executive directors in order to attract the appropriate calibre of candidates.
The increase followed a review of benchmarking data and considered a range of factors including the time
(ii) EXECUTIVE DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration
that has both fixed and variable components, as well as a blend of short and long-term incentives. Executive
remuneration comprises base pay and benefits, short-term incentives, long-term incentives, and superannuation
contributions.
FIXED REMUNERATION
Executives receive a base pay and benefits which reflect their roles, experience and level of responsibility.
This is reviewed annually to ensure the executive’s pay is competitive with the market. Other benefits
include car and travel allowances.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 45
Annual Financial Report 2021 | Directors' Report
SHORT-TERM INCENTIVES
The PCRC reviews the short-term incentives (STI) for executives and employees annually. If the PCRC
determines that STI should be made available for executives and/or employees, the cash incentives (bonuses)
are payable should the Group achieve pre-determined targets following finalisation and announcement of
the full year audited results. Using value creation targets ensures variable awards are only available when
value has been created for shareholders and when profit is consistent with the business plan.
The PCRC considers the appropriate targets and KPIs to link the STI plan and the level of payout if targets
are met. This includes setting any maximum payout under the STI plan, and minimum levels of performance
to trigger payment of STI.
For the year ended 27 June 2021, the PCRC determined that executives will not be eligible for the STI plan,
as their incentives would be solely in relation to the long term incentives, detailed below.
LTIP TRANCHES
Vesting conditions of the LTIP tranches are set out below.
Tranche 1
Vesting Condition 1
Continued service to 27 August 2021, with no holding lock on resulting shares;
Vesting Condition 2
Compound annual growth rate (CAGR) in the Group's earnings per share before tax (EPS) during
the three years to June 2021 in accordance with the following schedule:
EPS CAGR across the Tranche 1
Proportion of Tranche 1 Performance Rights held that will
Performance Period
satisfy Vesting Condition 2
Below 5.0%
5.0%
Nil
25%
5.0% ≤ EPS CAGR ≤ 20.0%
Straight line pro-rata vesting between 25% and 100% (inclusive)
LONG-TERM INCENTIVES
Tranche 2A
The Group's long-term incentives rewards executives for high performance and ongoing commitment over
a three to five-year horizon and recognises the important role executives play in delivering the long-term
growth of the Group.
LONG TERM INCENTIVES
The Group's long-term incentives are comprised of the Long Term Incentive Plan (LTIP) and the Loan Funded Share
Plan (LFSP). The following share-based payment arrangements were in existence during the current year:
Tranche Grant Date Performance
period end
date
Share
price at
grant date
Expected
volatility
%
Dividend
yield %
Risk-free
interest
rate %
Balance at
the start of
the period
Granted Vested Expired/
forfeited
1
2A
2B
2C
13/11/2018
13/11/2018
13/11/2018
13/11/2018
30/06/2021
30/06/2021
30/06/2021
30/06/2023
$1.17
$1.17
$1.17
$1.17
35.00%
35.00%
35.00%
35.00%
3.50%
3.50%
3.50%
3.50%
781,848
2.12%
1,237,500
2.12%
1,237,500
2.12%
2.12% 2,475,000
Total Performance Rights
5,731,848
-
-
-
-
-
3
3
3
21/11/2019
03/03/2020
16/09/2020
30/06/2024
30/06/2024
30/06/2024
$2.68
$2.79
$3.33
35.00%
35.00%
35.00%
N/A
N/A
N/A
2.12%
2.12%
2.12%
7,533,448
667,464
-
-
-
474,576
Total Loan Funded Shares
8,200,912
474,576
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
the end of
the period
781,848
1,237,500
1,237,500
2,475,000
5,731,848
7,533,448
667,464
474,576
8,675,488
Vesting Condition
Continued service to 27 August 2021, with no holding lock on resulting shares.
Tranche 2B
Vesting Condition 1
Continued service to 27 August 2021, with no holding lock on resulting shares.
Vesting Condition 2
Group EPS performance in accordance with the following schedule:
Group EPS for the year to 30 June 2021
Proportion of Tranche 2B Performance Rights
held that will satisfy Vesting Condition 2
Below $0.0975 (1.3 x FY202018 EPS)
$0.0975 ≤ EPS < $0.1050 (1.4 x FY202018 EPS)
EPS ≥ $0.1050
Nil
50%
100%
Tranche 2C
Vesting Condition 1
Continued service to August 2023, with no holding lock on resulting shares.
Vesting Condition 2
Group EPS performance in accordance with the following schedule:
Group EPS for the year to 30 June 2023
Proportion of Tranche 2C Performance Rights held that will satisfy
Vesting Condition 2
Below $0.1125 (1.5 x FY202018 EPS)
$0.1250 ≤ EPS < $0.1200 (1.6 x FY202018 EPS)
$0.1200 ≤ EPS < $0.1275 (1.7 x FY202018 EPS)
EPS ≥ $0.1275
Nil
50%
75%
100%
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 47
Annual Financial Report 2021 | Directors' Report
LFSP TRANCHE
The key terms of the LFSP are listed as follows:
•
•
•
Loan Funded ("LF") shares are issued at the Company's share price on the ASX at the time of issue.
The Company advances money to pay for the subscription price of the LF Shares (Loan).
The Loan has an interest payable of 1.9% and is repayable on the earlier of cessation of employment (6 or 12
month grace periods may be applied) or 7 years from the agreement by the Board to issue LF Shares under the
Plan (Vesting Period is 5 years to 30 June 2024).
•
The Company's recourse in the event it seeks to recover the Loan is limited to the LF Shares. Where a Participant
does not repay the Loan by the repayment date, the Participant is deemed to have agreed to sell to the Company
pursuant to an employee share scheme buy-back, that number of LF shares required to repay the Loan to the
Company.
•
The Company will apply the after-tax amount of any dividends payable in respect of a Participant's LF Shares
towards repayment of the outstanding balance of the Loan.
•
The LF Shares offered are subject to Vesting Conditions, which if not met, the unvested LF Shares will be
forfeited and bought back by the Company at the issue price and the Loan will be deemed repaid.
Vesting conditions of the LF Shares are set out below:
Tranche 3
Vesting Condition 1
Continued service to 30 June 2024.
Vesting Condition 2
Compound annual growth rate (CAGR) in the Group's earnings per share after tax (AEPS) prescribed
by the Board over the 3 year period commencing on 1 July 2019, in which case (subject to satisfaction
of Vesting Period Condition), the LF shares held will vest in accordance with the following scale:
AEPS 3-year CAGR from 1 July 2019
Proportion of Tranche 3 LF shares that will satisfy Vesting Condition 2
12.5%
20%
25%
100%
12.5% ≤ EPS CAGR ≤ 20.0%
Straight-line pro rata vesting between 25% and 100% (inclusive)
The LF shares issued under the Plan have been treated as 'in substance options' which have been valued using
a Modified Binomial Lattice option pricing model which allows for varying exercise price. The resulting value is
amortised over the vesting period on a probability adjusted basis. The probability is assessed with consideration of
management's expectation of future earnings and the financial hurdles for vesting.
Use of remuneration consultants
There were no remuneration consultants engaged by the Group during the financial period, through the PCRC, to
review existing remuneration policies for the current reporting period.
Voting and comments made at the company's 20 November 2020 AGM
At the 20 November 2020 AGM, 99.00% of the votes received supported the adoption of the remuneration report
for the year ended 28 June 2020. The Company did not receive any specific feedback at the AGM regarding its
remuneration practices.
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FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 49
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e. Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Phil Ryan
Title:
Chief Executive Officer and Managing Director
Term of agreement:
None
Details:
• Notice period of 6 months • Remuneration review at board discretion • Eligible for short-
term incentives • Eligible for long-term incentives • No severance period • No termination
benefits (except for statutory entitlements) • No other benefits
Munraj Dhaliwal
Title:
Chief Financial Officer
Term of agreement:
None
Details:
• Notice period of 3 months • Remuneration review period every 12 months • Eligible
for short-term incentives • Eligible for long-term incentives • No severance period • No
termination benefits (except for statutory entitlements) • No other benefits
All non-executive directors stand for re-election at least every 3 years and have no notice period, no annual
remuneration review, no eligibility for short-term incentives, no eligibility for long-term incentives, no severance
period, no termination benefits and no other benefits.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
f. Disclosures relating to share options and performance rights
ISSUE OF SHARE OPTIONS AND PERFORMANCE RIGHTS
There were no options issued to key management personnel as part of compensation during the period ended 27
June 2021.
There were no performance rights issued to key management personnel as part of compensation during the periods
ended 28 June 2020 and 27 June 2021.
There were no loan funded shares issued to key management personnel as part of compensation during the periods
ended 27 June 2021. The number of loan funded shares issued as part of the Company's 2019 Employee Share Plan
to key management personnel as part of compensation during the period ended 28 June 2020 is set out below:
Name
Phil Ryan
Munraj Dhaliwal
Total
LOAN FUNDED SHARES
Granted during the period
Vested during the period
2021
2020
2021
2020
-
-
-
2,161,235
1,234,991
3,396,226
-
-
-
-
-
-
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 51
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Annual Financial Report 2021 | Directors' Report
The number of performance rights over ordinary shares and loan funded shares held by key management personnel
PERFORMANCE RIGHTS HOLDING
as at 27 June 2021 are shown below:
The number of performance rights over ordinary shares in the company held during the financial period by each
director and other members of key management personnel of the consolidated entity, including their personally
Performance rights
Loan funded shares
related parties, is set out below:
Tranche Name
1
2A
2B
2C
Total
3
Phil Ryan
Munraj Dhaliwal
Total
240,740
133,333
374,073
600,000
87,500
687,500
600,000
87,500
687,500
1,200,000
175,000
1,375,000
2,640,740
483,333
3,124,073
2,161,235
1,234,991
3,396,226
ADDITIONAL INFOMATION
The following earnings information reflects the basis for which financial hurdles are considered for the share-based
payments and measure executive performance in delivering long term growth of the Group:
Phil Ryan
Munraj Dhaliwal
Total
Balance at
the start of
the period
2,640,740
483,333
3,124,073
Granted
Vested
Expired/
forfeited
Balance at
the end of
the period
-
-
-
-
-
-
-
-
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2,640,740
483,333
3,124,073
LOAN FUNDED SHAREHOLDING
The number of loan funded shares in the company held during the financial period by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set
Profit before income tax for continuing underlying operations
$35.6m
$20.1m
$21.3m
$14.4m
EPS (underlying before income tax) - Tranche 1
15.8 cents
10.5 cents
11.1 cents
7.5 cents
2021
2020
2019
2018
out below:
Profit before income tax for continuing underlying operations
$38.8m
$22.9m
$22.4m
(before share-based payments)
EPS (underlying before income tax and share-based payments)
17.3 cents
11.9 cents
11.6 cents
- Tranches 2B and 2C
Profit after income tax for continuing underlying operations
$24.9m
$11.6m
$15.7m
EPS (underlying after income tax) - Tranche 3
11.1 cents
7.2 cents
8.2 cents
g. Additional disclosures relating to key management personnel
SHAREHOLDING
The number of shares in the company held during the financial period by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Directors
Michael Kay
Michael Hardwick
Phil Ryan
Other key management personnel
Munraj Dhaliwal
Total
Balance at the
start of the
period
Received
as part of
renumeration
Net Additions
Balance at the
end of
the period
609,914
495,000
124,000
80,000
1,308,914
-
-
-
-
-
90,086
9,836
9,836
700,000
504,836
133,836
19,672
99,672
129,430
1,438,344
Phil Ryan
Munraj Dhaliwal
Total
Balance at
the start of
the period
2,161,235
1,234,991
3,396,226
Granted
Vested
Expired/
forfeited
Balance at
the end of
the period
-
-
-
-
-
-
-
-
-
2,161,235
1,234,991
3,396,226
Other transactions with key management personnel and their related parties
The following transactions occurred with key management personnel and their personally related parties:
Payment for other expenses:
Services provided by Southern Cross Shopfitting, a company that is associated with
the Cotton on Group, of which Michael Hardwick is a Director and the CFO2
Services provided by International Southern Cross Shopfitting (NZ), a company that is
associated with the Cotton On Group, of which Michael Hardwick is a Director and the
CFO3
Consolidated
2021
$'000
2020
$'000
2,356,173
2,552,160
9,360
67,386
Total related party transactions
2,365,533
2,619,546
All transactions were made on normal commercial terms and conditions and at market rates.
2 Michael Hardwick was not involved in the decision making relating to Southern Cross Shopfitting and its dealings with the Group.
3 Michael Hardwick was not involved in the decision making relating to International Southern Cross Shopfitting (NZ) and its dealings with
the Group.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 53
Annual Financial Report 2021 | Directors' Report
RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables
Trade payables to Southern Cross Shopfitting, a company that is associated with the
Cotton Group, of which Michael Hardwick is a Director and the CFO2
Consolidated
2021
$'000
2020
$'000
841,580
-
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of City Chic Collective Limited under option outstanding at the date of this
report.
Shares under performance rights
There were no unissued ordinary shares of City Chic Collective Limited under performance rights outstanding at the
date of this report.
Shares issued on the exercise of options
There were no ordinary shares of City Chic Collective Limited issued on the exercise of options during the period
ended 27 June 2021 and up to the date of this report.
Shares issued on the exercise of performance rights
There were no ordinary shares of City Chic Collective Limited issued on the exercise of performance rights during
the period ended 27 June 2021 and up to the date of this report.
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial period, the company paid a premium in respect of a contract to insure the directors and executives
of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial period, indemnified or agreed to indemnify the auditor
of the company or any related entity against a liability incurred by the auditor.
During the financial period, the company has not paid a premium in respect of a contract to insure the auditor of the
company or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
2 Michael Hardwick was not involved in the decision making relating to Southern Cross Shopfitting and its dealings with the Group.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 55
Annual Financial Report 2021 | Directors' Report
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial period by
the auditor are outlined in Note 27 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial period, by the auditor (or by
another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
Officers of the company who are former partners of
Deloitte Touche Tohmatsu
There are no officers of the company who are former partners of Deloitte Touche Tohmatsu.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this directors' report.
Auditor's independence declaration
Deloitte Touche Tohmatsu continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
On behalf of the directors
MICHAEL KAY
Chairman
26 August 2021
Sydney
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Eclipse Tower
60 Station Street
Parramatta
Sydney, NSW, 2150
Australia
Phone: +61 2 9840 7000
www.deloitte.com.au
The Board of Directors
City Chic Collective limited
151-163 Wyndham Street
Alexandria, NSW 2015
26 August 2021
Dear Board Members
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
of independence to the directors of City Chic Collective Limited and its subsidiaries.
As lead audit partner for the audit of the financial report of report City Chic Collective Limited and the entities it
controlled for the 52 week period ended 27 June 2021, I declare that to the best of my knowledge and belief,
there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Annalisa Amiradakis
Partner
Chartered Accountants
PHIL RYAN
Chief Executive Officer and Managing Director
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
23
57
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Eclipse Tower
60 Station Street
Parramatta
Sydney, NSW, 2150
Australia
Phone: +61 2 9840 7000
www.deloitte.com.au
KKeeyy AAuuddiitt MMaatttteerr
EEvvaannss AAccqquuiissiittiioonn
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Our procedures included, but were not limited to:
Independent Auditor’s Report
to the Members of City Chic Collective Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report City Chic Collective Limited (the "Company") and the entities it controlled
(the "Group") which comprises the consolidated statement of financial position as at 27 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the 52 week period then ended, and notes
to the financial statements, including a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 27 June 2021 and of its financial
performance for the 52 week period then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
58
On 23 December 2020, the Group completed the
acquisition of the Evans brand, and the e-
commerce and wholesale businesses ("Evans
Assets")
for cash consideration of £23.1m
(A$40.2m) in cash.
During the 52-week period ending 27 June 2021,
the accounting for the acquisition of Evans assets
was finalised. In accordance with Australian
Accounting Standards the assets and liabilities of
the acquired business are initially recognised at
fair value. The fair value of the net assets acquired
is $17.1m with a residual goodwill balance
identified of $23.1m.
Accounting for the acquisition of a business
includes the determination of whether the
transaction is the acquisition of a business or the
acquisition of assets in accordance with AASB 3
Business Combinations as
the accounting
consequences are different.
Identifying and
determining the fair value of acquired assets,
particularly intangible assets, can be complex and
involves the significant use of assumptions. In
finalising
the business
combination, management engaged an external
valuation expert to assist.
the accounting
for
Management’s accounting for the acquisition
included:
• Determining that the transaction
is the
•
acquisition of a business.
Identification of all assets acquired, and
liabilities assumed.
•
• Appropriate measurement at fair value of
the assets acquired, and liabilities assumed
at acquisition.
The appropriate recognition of deferred tax
consequences relating to the assets acquired
and liabilities assumed.
The expensing of
associated with the business combination.
transaction
costs
•
• Reading the Purchase Agreement to understand the
terms and conditions of the transaction and identify
the date that CCX acquired control of Evans.
Evaluating management's assessment
the
acquisition should be accounted for as the acquisition
of a business in accordance with the requirements of
the accounting standards.
that
•
• Assessing the completeness of the assets acquired and
liabilities assumed
in management’s workings,
including the recognition of assets and liabilities that
had not previously been recognised by Evans, including
customer relationships and brand.
• Assessing
the competence,
independence and
objectivity of the external valuation expert engaged by
management.
•
• Obtaining, reading, and understanding the finalised
Purchase Price Allocation (PPA) report as prepared by
management’s external valuation expert.
In conjunction with our own
internal valuation
specialists, assessing management's procedures and
assumptions in determining the fair value of the assets
acquired and liabilities assumed. This was done by
performing a benchmark analysis over assumptions
long term growth rates,
including discount rate,
contributory asset charges and royalty relief rates by
comparing management’s assumptions to data from
other
the
appropriateness of key financial assumptions applied in
the PPA. This permitted an independent challenge to
the assumptions in the PPA.
independent
sources
assess
to
• Assessment of the cash flows included within the
valuation model for customer relationships and brand,
by considering the cash flows previously incurred by
the seller, evaluating City Chic management ability to
achieve the forecast cash flows since acquisition and
considering cash flows subsequent to year end, to form
an independent assessment over the reasonability of
management’s ability to forecast.
• Considering the tax consequences of the various assets
acquired and liabilities assumed and recalculating the
deferred tax balances as part of the net assets
acquired.
the difference between
• Recalculating the goodwill recognised as the residual
balance, being
the
consideration paid and the fair value of the net assets
acquired; and
Testing
the
incurred were
appropriately expensed and valid by selecting a sample
of invoices.
acquisition
costs
•
We also assessed the appropriateness of the disclosures in
Notes 1, 2, 12 and 32 to the financial statements.
59
59
KKeeyy AAuuddiitt MMaatttteerr
VVaalluuaattiioonn ooff iinnvveennttoorryy oobbssoolleesscceennccee aalllloowwaannccee
As at 27 June 2021, the carrying value of
inventory totalled $66.9m and represents 25% of
total assets. Inventory is located in retail stores
and also at central warehouses for distribution
through online website, online marketplace and
is subject to risk of
wholesale.
obsolescence.
Inventory
Management establishes
an obsolescence
allowance by reference to recent sales, ageing of
inventories, seasonal ageing, and other factors
such as product category.
Of particular attention in the current year, for
Evans and Avenue inventory, was:
•
•
•
•
understanding
through of
the sell
inventory acquired at-acquisition and
post-acquisition and reasonability of
management’s obsolescence allowance
for inventory.
significant
understanding
judgments
applied by management due to limited
historical sales information available.
understanding management’s ability to
optimise margins using various sales
channels.
understanding discounting strategies
being applied during a volatile retail
environment
in the prior year and
current year which have resulted in
judgement and estimation
significant
being
the
appropriateness of the allowance for
obsolescence at year end.
required
assess
to
information
In all cases, including assessment over the net
for the CC brand, where
realisable value
contradictory
identified from
multiple data points across the business and
externally, this information creates uncertainty
thereby
judgement
required to evaluate the appropriateness of the
Group’s net realisable valuation policy.
increasing the extent of
is
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Our procedures for all inventory unless stated otherwise,
included but were not limited to:
•
Understanding the processes relating to inventory
valuation.
Performing tests to evaluate the design and
effectiveness of controls over the existence and
valuation of inventory.
Assessing the performance of each brand relative to
each season in the financial year by inspecting sales
listing and margin analysis per month.
•
•
• Making inquiries of the Chief Executive Officer,
finance team and product planners to validate the
assumptions applied in estimating the allowances and
to understand the current market conditions and
strategy of the relevant brands that impacts the
inventory on hand available to sell. Where possible
inspected to validate
supporting evidence was
explanations regarding sell through, discounting and
decisions taken by management.
Recalculating the mathematical accuracy of the
inventory obsolescence and net realisable value
allowances.
•
•
In respect of Evans and Avenue related inventory:
o Obtaining an understanding of the various
o
categories of inventory.
Evaluating management’s analysis over the
ageing of the inventory and challenging the
inputs and assumptions used to further
support and justify the allowance percentages
used.
stores
through
clearance
o Understanding the sell through of the stock
since acquisition and the clearance rates of
inventory which can no longer be sold online.
o Understanding the cost vs benefit to sell the
inventory
in
Australia, global wholesale partners or by
marketing campaigns online.
Selecting a sample of items for testing and
understanding the discount rates applied to
sale prices; and
independent estimate of
Developing an
inventory obsolescence allowance using sell
through trends and consideration of costs to
sell.
o
o
•
In respect of City Chic related inventory:
o
Performing a retrospective review of the
allowance balance from FY20 to FY21 to assess
the historical accuracy of management’s
inventory
ability
obsolescence allowance.
determine
the
to
KKeeyy AAuuddiitt MMaatttteerr
VVaalluuaattiioonn ooff iinnvveennttoorryy oobbssoolleesscceennccee aalllloowwaannccee
((ccoonntt))
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Developing
independent estimates of the
inventory obsolescence allowance, including:
o
▪
▪
actual inventory losses incurred
in the current financial year, and
the net realisable value with
reference to the last selling price
of inventory on hand.
We also assessed the appropriateness of the disclosures in
Notes 1, 2 and 9 to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the 52-week period ended 27 June 2021 but does not include the
financial report (excluding Directors’ Report therein which is other information) and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not and will not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
60
61
61
In our opinion, the Remuneration Report of City Chic Collective Limited for the 52-week period ended 27 June
2021, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Other Matters
This audit report has been re-issued subsequent to 26 August 2021 due to the issuance of the annual report
amending the page numbers of the Remuneration Report from page numbers 11 to 20 as per the financial report
signed on that date (26 August 2021) to the revised page numbers 43 to 54 in this annual report.
DELOITTE TOUCHE TOHMATSU
Annalisa Amiradakis
Partner
Chartered Accountants
Parramatta, 17 September 2021
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group’s audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 43 to 54 of the Directors’ Report for the 52-week
period ended 27 June 2021.
62
63
63
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr ccoommpprreehheennssiivvee iinnccoommee
FFoorr tthhee ppeerriioodd eennddeedd 2277 JJuunnee 22002211
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr ccoommpprreehheennssiivvee iinnccoommee
FFoorr tthhee ppeerriioodd eennddeedd 2277 JJuunnee 22002211
NNootteess
CCeennttss
CCeennttss
EEaarrnniinnggss ppeerr sshhaarree ffoorr pprrooffiitt ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss aattttrriibbuuttaabbllee ttoo
tthhee oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Basic earnings per share
Diluted earnings per share
23
23
EEaarrnniinnggss ppeerr sshhaarree ffoorr pprrooffiitt ffrroomm ddiissccoonnttiinnuueedd ooppeerraattiioonnss aattttrriibbuuttaabbllee
ttoo tthhee oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Basic earnings per share
Diluted earnings per share
EEaarrnniinnggss ppeerr sshhaarree ffoorr pprrooffiitt aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss ooff CCiittyy CChhiicc
CCoolllleeccttiivvee LLiimmiitteedd
Basic earnings per share
Diluted earnings per share
23
23
23
23
9.6
9.4
-
-
9.6
9.4
4.8
4.7
0.3
0.3
5.1
5.0
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
RReevveennuuee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
Interest and other revenue
EExxppeennsseess
Purchase and inbound-related costs of inventory4
Fulfilment costs4
Cost of sales
Employee benefits expense
Depreciation, amortisation and impairment expense
Rental-related recoveries, concessions and expenses
Other expenses
Finance costs
PPrrooffiitt bbeeffoorree iinnccoommee ttaaxx eexxppeennssee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
NNoottee
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
4
4
5
5
5
5,13
5
5,13,18
258,477
194,492
1,386
934
(98,694)
(30,657)
(129,351)
(82,155)
(18,864)
(101,019)
(37,345)
(14,379)
(3,551)
(42,418)
(1,347)
(30,340)
(17,568)
(1,173)
(27,298)
(1,336)
31,472
16,692
Income tax expense
6
(9,916)
(7,532)
PPrrooffiitt aafftteerr iinnccoommee ttaaxx eexxppeennssee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
21,556
9,160
Profit after income tax expense from discontinued operations
-
497
PPrrooffiitt aafftteerr iinnccoommee ttaaxx eexxppeennssee ffoorr tthhee ppeerriioodd aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss
ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
22
21,556
9,657
OOtthheerr ccoommpprreehheennssiivvee iinnccoommee
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the period, net of tax
TToottaall ccoommpprreehheennssiivvee iinnccoommee ffoorr tthhee ppeerriioodd aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss ooff
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Total comprehensive income for the period is attributable to:
Continuing operations
Discontinued operations
(4,967)
(4,967)
(369)
(369)
16,589
9,288
16,589
-
8,791
497
16,589
9,288
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
4 Cost of goods sold represents the purchase and inbound-related costs of inventory. Fulfilment costs (net) represent warehousing and
freight costs to deliver online sales. In the prior period, Cost of goods sold and Fulfilment costs were together presented as Cost of sales.
The additional disclosure in the current period and going forward is appropriate with the growth of the online business.
27
28
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 65
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff ffiinnaanncciiaall ppoossiittiioonn
AAss aatt 2277 JJuunnee 22002211
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff cchhaannggeess iinn eeqquuiittyy
FFoorr tthhee ppeerriioodd eennddeedd 2277 JJuunnee 22002211
AAsssseettss
CCuurrrreenntt aasssseettss
Cash and cash equivalents
Trade and other receivables
Inventories
Other
TToottaall ccuurrrreenntt aasssseettss
NNoonn--ccuurrrreenntt aasssseettss
Plant and equipment
Right-of-use assets
Intangibles
Deferred tax
TToottaall nnoonn--ccuurrrreenntt aasssseettss
TToottaall aasssseettss
LLiiaabbiilliittiieess
CCuurrrreenntt lliiaabbiilliittiieess
Trade and other payables
Lease liabilities
Income tax
Provisions
Other
TToottaall ccuurrrreenntt lliiaabbiilliittiieess
NNoonn--ccuurrrreenntt lliiaabbiilliittiieess
Lease liabilities
Provisions
Borrowings
Other
TToottaall nnoonn--ccuurrrreenntt lliiaabbiilliittiieess
TToottaall lliiaabbiilliittiieess
NNeett aasssseettss
EEqquuiittyy
Issued capital
Reserves
Retained profits
TToottaall eeqquuiittyy
NNoottee
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
7
8
9
10
11
13
12
6
14
13
6
16
17
13
16
15
17
71,457
5,606
66,996
6,870
150,929
10,191
22,442
75,602
7,808
116,043
21,382
5,073
38,073
2,262
66,790
8,944
22,252
39,193
8,661
79,050
266,972
145,840
41,896
9,286
1,818
8,070
3,072
64,142
18,768
459
-
701
19,928
37,528
9,193
2,530
6,350
77
55,678
17,998
775
17,500
-
36,273
84,070
91,951
182,902
53,889
20
21
22
158,368
417
24,117
49,139
2,189
2,561
182,902
53,889
CCoonnssoolliiddaatteedd
Balance at 1 July 2019
IIssssuueedd
ccaappiittaall
$$''000000
SShhaarree--bbaasseedd
ppaayymmeennttss
rreesseerrvvee
$$''000000
FFoorreeiiggnn
ccuurrrreennccyy
ttrraannssllaattiioonn
rreesseerrvvee
$$''000000
((AAccccuummuullaatteedd
lloosssseess))//
RReettaaiinneedd
pprrooffiittss
$$''000000
TToottaall eeqquuiittyy
$$''000000
49,139
1,141
(1,389)
(4,625)
44,266
Adjustment for change in accounting policy
(AASB 16)
-
-
-
413
413
Balance at 1 July 2019 - restated
49,139
1,141
(1,389)
(4,212)
44,679
Profit after income tax expense for the period
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
Transactions with owners in their capacity as owners:
Share-based payments (Note 19)
Issue of loan funded shares (Note 20)
Loan funded shares held in trust (Note 20)
Dividends paid (Note 24)
-
-
-
-
22,052
(22,052)
-
-
-
-
2,806
-
-
-
-
(369)
(369)
-
-
-
-
9,657
-
9,657
(369)
9,657
9,288
-
-
-
(2,884)
2,806
22,052
(22,052)
(2,884)
BBaallaannccee aatt 2288 JJuunnee 22002200
49,139
3,947
(1,758)
2,561
53,889
CCoonnssoolliiddaatteedd
Balance at 29 June 2020
IIssssuueedd
ccaappiittaall
$$''000000
SShhaarree--bbaasseedd
ppaayymmeennttss
rreesseerrvvee
$$''000000
FFoorreeiiggnn
ccuurrrreennccyy
ttrraannssllaattiioonn
rreesseerrvvee
$$''000000
RReettaaiinneedd
pprrooffiittss
$$''000000
TToottaall eeqquuiittyy
$$''000000
49,139
3,947
(1,758)
2,561
53,889
Profit after income tax expense for the period
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
-
-
-
-
-
-
-
(4,967)
21,556
-
21,556
(4,967)
(4,967)
21,556
16,589
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (Note 20)
Share-based payments (Note 19)
Issue of loan funded shares (Note 20)
Loan funded shares held in trust (Note 20)
109,229
-
1,580
(1,580)
-
3,195
-
-
-
-
-
-
-
-
-
-
109,229
3,195
1,580
(1,580)
BBaallaannccee aatt 2277 JJuunnee 22002211
158,368
7,142
(6,725)
24,117
182,902
Note reference
20
19
21
22
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
29
30
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 67
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff ccaasshh fflloowwss
FFoorr tthhee ppeerriioodd eennddeedd 2277 JJuunnee 22002211
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
GGeenneerraall iinnffoorrmmaattiioonn
2277 JJuunnee 22002211
The financial statements cover City Chic Collective Limited as a consolidated entity consisting of City Chic
Collective Limited and the entities it controlled at the end of, or during, the period. The financial statements are
presented in Australian dollars, which is City Chic Collective Limited's functional and presentation currency.
City Chic Collective Limited is a listed public company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is:
151-163 Wyndham Street
Alexandria, NSW 2015
Sydney, Australia
Telephone: (+61) 2 9059 4300
A description of the nature of the consolidated entity's operations and its principal activities are included in the
directors' report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 26 August
2021. The directors have the power to amend and reissue the financial statements.
CCaasshh fflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Government grants received
Interest received
Other revenue
Interest and other finance costs paid
Income taxes paid
NNoottee
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
281,722
(262,258)
4,964
243
352
(638)
(9,232)
208,984
(181,540)
2,510
55
246
(590)
(4,440)
NNeett ccaasshh ffrroomm ooppeerraattiinngg aaccttiivviittiieess
18
15,153
25,225
CCaasshh fflloowwss ffrroomm iinnvveessttiinngg aaccttiivviittiieess
Payments for plant and equipment
Payments for intangibles
Payment for purchase of business
NNeett ccaasshh uusseedd iinn iinnvveessttiinngg aaccttiivviittiieess
CCaasshh fflloowwss ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
Net proceeds from the issue of shares
Repayment of lease liabilities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
NNeett ccaasshh ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
11
12
32
(5,034)
(1,542)
(40,208)
(3,283)
(2,247)
(25,658)
(46,784)
(31,188)
20
24
108,618
(7,845)
-
(17,500)
-
-
(11,588)
22,500
(5,000)
(2,884)
83,273
3,028
NNeett iinnccrreeaassee//((ddeeccrreeaassee)) iinn ccaasshh aanndd ccaasshh eeqquuiivvaalleennttss ffrroomm ccoonnttiinnuuiinngg
ooppeerraattiioonnss
Net increase in cash and cash equivalents from discontinued operations
Cash and cash equivalents at the beginning of the financial period
Effects of exchange rate changes on cash and cash equivalents
51,642
-
21,382
(1,567)
(2,935)
1,072
23,214
31
((55,,883355))
-
28,929
120
Cash and cash equivalents at the end of the financial period
7
71,457
21,382
23,214
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
31
32
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 69
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess
BBaassiiss ooff pprreeppaarraattiioonn
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the
Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable,
the valuation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value
through other comprehensive income.
CCrriittiiccaall aaccccoouunnttiinngg eessttiimmaatteess aanndd jjuuddggeemmeennttss
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the consolidated entity's accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed in Note 2. Critical accounting judgements,
estimates and assumptions.
OOffffsseettttiinngg ffiinnaanncciiaall aasssseettss aanndd lliiaabbiilliittiieess
Financial assets and financial liabilities have been offset and the net amount presented in the statement of
financial position where the consolidated entity currently has a legally enforceable right to set off the recognised
amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in Note 31. Parent entity disclosures.
PPrriinncciipplleess ooff ccoonnssoolliiddaattiioonn
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of City Chic
Collective Limited ('company' or 'parent entity') as at 27 June 2021 and the results of all subsidiaries for the
period then ended. City Chic Collective Limited and its subsidiaries together are referred to in these financial
statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity 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 to direct the activities
of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated
entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated
entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference
between the consideration transferred and the book value of the share of the non-controlling interest acquired
is recognised directly in equity attributable to the parent.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities, and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair
value of any investment retained together with any gain or loss in profit or loss.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
FFoorreeiiggnn ccuurrrreennccyy ttrraannssllaattiioonn
The financial statements are presented in Australian dollars, which is City Chic Collective Limited's functional
and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at financial period-end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at
the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using
the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All
resulting foreign exchange differences are recognised in other comprehensive income through the foreign
currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is
disposed of.
CCuurrrreenntt aanndd nnoonn--ccuurrrreenntt ccllaassssiiffiiccaattiioonn
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to
be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted
from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other
assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
FFiinnaanncciiaall aasssseettss
Financial assets are initially measured at fair value. Financial assets and financial liabilities are recognised in the
Group’s statement of financial position when the Group becomes a party to the contractual provisions of the
instrument. Transaction costs are included as part of the initial measurement, except for financial assets at fair
value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value
depending on their classification. Classification is determined based on both the business model within which
such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is
no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.
33
34
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 71
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
CCoommppaarraattiivvee aammoouunnttss
Where management has considered appropriate to achieve more relevant and reliable presentation of the
entity's financial performance, the presentation of certain items in the financial statements has changed since
the prior year. Where this re-presentation of results requires reclassification of comparative amounts, the
comparatives have been re-presented to achieve more relevant and reliable presentation and comparability.
The principle accounting policies adopted are consistent with those of the previous financial year and
corresponding current reporting period, except for the policies stated below.
AAmmeennddmmeennttss ttoo AAccccoouunnttiinngg SSttaannddaarrddss tthhaatt aarree mmaannddaattoorriillyy eeffffeeccttiivvee ffoorr tthhee ccuurrrreenntt rreeppoorrttiinngg ppeerriioodd
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are relevant to their operations and effective for the current year.
New and revised Standards and amendments thereof and interpretations effective for the current year that are
relevant to the Group include:
• AASB 2020-4 Amendments to Australian Accounting Standards - COVID-19-Related Rent Concessions
• AASB 2021-3 Amendments to Australian Accounting Standards - COVID-19-Related Rent Concessions beyond
30 June 2021
• AASB 2018-6 Amendments to Australian Accounting Standards - Definition of a Business
• AASB 2018-7 Amendment to Australian Accounting Standards - Definition of Material
• AASB 2019-3 Amendments to Australian Accounting Standards - Interest Rate Benchmark Reform
• AASB 2019-1 Amendments to Australian Accounting Standards - References to the Conceptual Framework
• AASB 2019-5 Amendments to Australian Accounting Standards - Disclosure of the Effect of New IFRS
Standards Not Yet Issued in Australia
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held
within a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the
contractual terms of the financial asset represent contractual cash flows that are solely payments of principal
and interest. The amortised cost of a financial asset is the amount at which the financial asset is measured at
initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest
method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance.
The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any
loss allowance.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are
either measured at amortised cost or fair value through other comprehensive income. The measurement of the
loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to
whether the financial instrument's credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain. Refer to Note
8. Trade and other receivables for detail.
IImmppaaiirrmmeenntt ooff nnoonn--ffiinnaanncciiaall aasssseettss
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment, or more frequently if events or changes in circumstances indicate that they
might be impaired. Other non-financial assets are reviewed for impairment 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 the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-
use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate
specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent
cash flows are grouped together to form a cash-generating unit.
FFiinnaannccee ccoossttss
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
GGooooddss aanndd SSeerrvviicceess TTaaxx ((''GGSSTT'')) aanndd ootthheerr ssiimmiillaarr ttaaxxeess
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
tax authority.
RRoouunnddiinngg ooff aammoouunnttss
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities
and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in
accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest
dollar.
35
36
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 73
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
IImmppaacctt ooff tthhee iinniittiiaall aapppplliiccaattiioonn ooff aammeennddeedd SSttaannddaarrddss aanndd aaggeennddaa ddeecciissiioonnss ppuubblliisshheedd bbyy tthhee IIFFRRSS
IInntteerrpprreettaattiioonnss CCoommmmiitttteeee ((““IIFFRRIICC””)) tthhaatt aarree eeffffeeccttiivvee ffoorr tthhee ccuurrrreenntt ppeerriioodd
During the current reporting period, the Group had transactions which were affected by the following newly
effective standards and IFRIC agenda decisions:
AAmmeennddmmeenntt SSttaannddaarrddss // IIFFRRIICC
AAggeennddaa DDeecciissiioonnss
DDeessccrriippttiioonn
AASB 2020-4 Amendments to
Australian Accounting Standards
- COVID-19-Related Rent
Concessions
The Group early adopted the AASB 2020-4 amendment in the prior reporting period, with its adoption
having a material impact on the disclosures and amounts reported in these financial statements and the
prior period's financial statements. The amendments introduce a practical expedient into AASB 16. The
practical expedient permits a lessee not to assess whether a COVID-19-related rent concession is a lease
modification. A lessee that makes this election does account for any change in lease payments resulting
from the COVID-19-related rent concession the same way it would account for the change applying
AASB 16 if the change were not a lease modification. The practical expedient applies only to rent
concessions occurring as a direct consequence of COVID-19 and only if all of the following conditions
are met:
-The change in lease payments results in revised consideration for the lease that is substantially the same
as, or less than, the consideration for the lease immediately preceding the change
-Any reduction in lease payments affects only payments originally due on or before 30 June 2021
-There is no substantive change to other terms and conditions of the lease.
The impact on accounting for changes in lease payments as a result of applying the exemption has been
disclosed in Note 13. Right-of-use assets and Lease Liabilities. Given this amendment was early adopted
in the prior reporting period, the Group did not have to apply the practical expedient retrospectively to
all rent concessions that meet the conditions in AASB16.46B, and therefore has not had to restate prior
period figures.
AASB 2018-6 Amendments to
Australian Accounting Standards
- Definition of a Business
This Standard amends AASB 3 Business Combinations. The Group has adopted the amendments for the
first time in the current reporting period. The amendments clarify that while businesses usually have
outputs, outputs are not required for an integrated set of activities and assets to qualify as a business.
To be considered a business, an acquired set of activities and assets, must include, at a minimum, an
input and a substantive process that together significantly contribute to the ability to create outputs.
The amendments remove the assessment of whether market participants are capable of replacing any
missing inputs or processes and continuing to produce outputs. The amendments also introduce
additional guidance that helps determine whether a substantive process has been acquired.
The amendments introduce an optional concentration test that permits a simplified assessment of
whether an acquired set of activities and assets is not a business. Under the optional concentration test,
the acquired set of activities and assets is not a business if substantially all of the fair value of the gross
assets acquired is concentrated in a single identifiable asset or group of similar assets. The amendments
are applied prospectively to all business combinations and asset acquisitions for which the acquisition
date is on or after 1 January 2020.
The Group has applied this amendment to business combinations whose acquisition dates are on or after
1 January 2020 in assessing whether it had acquired a business or a group of assets. Refer to Note 32.
Business Combinations for details of the Group's acquisition of a business during the current reporting
period and for details of the Group's accounting policies in relation to business combinations.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
AAmmeennddmmeenntt SSttaannddaarrddss // IIFFRRIICC
AAggeennddaa DDeecciissiioonnss
DDeessccrriippttiioonn
Software-as-a-Service
arrangements
The IFRS Interpretations Committee has published two agenda decisions clarifying how arrangements
in respect of a specific part of cloud technology, Software-as-a-Service (SaaS), should be accounted for.
The agenda decisions do not address the accounting for other components of cloud technology such as
Infrastructure-as-a-Service and Platform-as-a-Service:
• The first agenda decision, published in March 2019, concludes that SaaS arrangements are likely to be
service arrangements, rather than intangible or leased assets. This is because the customer typically only
has a right to receive future access to the supplier’s software running on the supplier’s cloud
infrastructure and therefore the supplier controls the intellectual property (IP) of the underlying software
code
• The second agenda decision, published in April 2021, deals with specific circumstances in relation to
configuration and customisation costs incurred in implementing SaaS:
-
-
In limited circumstances, certain configuration and customisation activities undertaken in
implementing SaaS arrangements may give rise to a separate asset, where the customer
controls the IP of the underlying software code. For example, the development of bridging
modules to existing on-premise systems or bespoke additional software capability
In all other instances, configuration and customisation costs will be an operating expense. They
are generally recognised in profit or loss as the customisation and configuration services are
performed or, in certain circumstances, over the SaaS contract term when access to the cloud
application software is provided.
The Group has assessed the implications of the recent agenda decisions on its SaaS arrangements which
were in place during the current financial reporting period and where relevant and applicable, has
recognised configuration and customisation costs incurred in implementing SaaS arrangements over the
SaaS contract term when access to the cloud application software is provided. Refer to Note. 12
Intangibles for details of the Group’s accounting policies in relation to intangible assets.
The other new or revised amendments did not have any impact on the amounts recognised in prior periods and
are not expected to significantly affect current or future periods.
NNeeww AAccccoouunnttiinngg SSttaannddaarrddss aanndd IInntteerrpprreettaattiioonnss nnoott yyeett mmaannddaattoorryy oorr eeaarrllyy aaddoopptteedd
Australian Accounting Standards (AASs) and Interpretations that have recently been issued or amended but
are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period
ended 27 June 2021.
SSttaannddaarrddss iinn iissssuuee bbuutt nnoott yyeett eeffffeeccttiivvee
NNeeww oorr rreevviisseedd rreeqquuiirreemmeenntt
AASB 2020-8 Amendments to Australian Accounting Standards –
Interest Rate Benchmark Reform – Phase 2
WWhheenn eeffffeeccttiivvee
Effective for annual reporting periods beginning on or after 1
January 2021
AASB 2020-1 Amendments to Australian Accounting Standards –
Classification of Liabilities as Current or Non-current and AASB 2020-
6 Amendments to Australian Accounting Standards – Classification
of Liabilities as Current or Non-current – Deferral of Effective Date
Effective for annual reporting periods beginning on or after 1
January 2023
AASB 2020-3 Amendments to Australian Accounting Standards –
Annual Improvements 2018-2020 and Other Amendments
Effective for annual reporting periods beginning on or after 1
January 2022
AASB 17 Insurance Contracts and AASB 2020-5 Amendments to
Australian Accounting Standards – Insurance Contracts
Effective for annual reporting periods beginning on or after 1
January 2023
AASB 2021-2 Amendments to Australian Accounting Standards –
Disclosure of Accounting Policies and Definition of Accounting
Estimates
Effective for annual reporting periods beginning on or after 1
January 2023
AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2
addresses issues that may affect financial reporting during the interest rate benchmark reform, including the
effect of changes to contractual cash flows or hedging relationships resulting from the replacement of an interest
rate benchmark with an alternative benchmark rate. The amendments complement AASB 2019-3 Amendments
to Australian Accounting Standards – Interest Rate Benchmark Reform and focus on the effects on financial
statements when an entity replaces the existing interest rate benchmark with an alternative benchmark rate as
37
38
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 75
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
a result of the reform. The amendments are effective for annual periods beginning on or after 1 January 2021,
with early application permitted. The Group has completed a preliminary assessment of the impact of this
amendment and does not anticipate that it will have a material impact on the Group.
The Group has not yet assessed the impact of the remaining new or amended Accounting Standards and
Interpretations.
NNoottee 22.. CCrriittiiccaall aaccccoouunnttiinngg jjuuddggeemmeennttss,, eessttiimmaatteess aanndd aassssuummppttiioonnss
The preparation of the financial statements requires management to make judgements, estimates, judgement
in accounting policy and assumptions that affect the reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue,
and expenses. Management bases its judgements, estimates and assumptions on historical experience and on
other various factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results.
The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Additional considerations have been made at 27 June 2021, surrounding the impact of COVID-19 on all areas of
critical accounting judgements, estimates and assumptions by considering conservative scenarios to assess
sensitivity of judgements and estimations. These have been incorporated into all of the below areas and the
corresponding notes to the financial statements.
Allowance for impairment of inventories
The allowance for impairment of inventories assessment requires a degree of estimation and judgement. The
level of the provision is assessed by considering the recent sales experience, the ageing of inventories and other
factors such as end of life or terminal inventory, that affect inventory obsolescence. Refer to Note 9. Inventories
for further information.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate
impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in
accordance with the accounting policy stated in Note 12. Intangibles. The recoverable amounts of cash-
generating units have been determined based on value-in-use calculations. These calculations require the use
of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the
estimated future cash flows. The recoverable amount of brands is determined independently using the Relief
from Royalty valuation method. The calculations reflect a five-year revenue forecast and requires the use of
assumptions, including estimated royalty rates, tax rate, estimated discount rates and expected useful life. Refer
to Note 12. Intangibles for further information.
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement
is required in determining the provision for income tax. There are many transactions and calculations undertaken
during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated
entity recognises liabilities for anticipated tax audit issues based on the consolidated entity's current
understanding of the tax law. Where the final tax outcome of these matters is different from the carrying
amounts, such differences will impact the current and deferred tax provisions in the period in which such
determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity
considers it is probable that future taxable amounts will be available to utilise those temporary differences and
losses.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 22.. CCrriittiiccaall aaccccoouunnttiinngg jjuuddggeemmeennttss,, eessttiimmaatteess aanndd aassssuummppttiioonnss ((ccoonnttiinnuueedd))
Determining the lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease or the ability of staying on past lease expiry date (in holdover) if it is
reasonably certain to be exercised. The Group has historically always had several lease contracts in holdover.
The Group applies judgement in evaluating whether it is reasonably certain whether leases will be extended
beyond the contracted period. Refer to Note 13. Right-of-use assets and Lease liabilities for further information.
Holdover leases
The Group has historically always had several lease contracts in holdover. The Group applies judgement in
evaluating whether it is reasonably certain whether leases will be extended beyond the contracted period. A
range of 2 to 5 years extension is estimated based on average lease terms. Refer to Note 13. Right-of-use assets
and Lease liabilities for further information.
NNoottee 33.. OOppeerraattiinngg sseeggmmeennttss
Identification of reportable operating segments
The Group’s overall strategy remains to operate as a global omni-channel retailer, focused on the plus-size
market and as such the consolidated entity is organised into one operating segment, being fashion retail.
Despite having numerous brands and geographies, the Chief Executive Officer (who is identified as the Chief
Operating Decision Makers ('CODM')) assesses the performance and determines the allocation of resources at
a single segment, consolidated level with each part of the business exhibiting similar long-term financial
performance and economic characteristics.
The CODM assess the performance of the operating segment based on a measure of EBITDA (Earnings before
interest, tax, depreciation, amortisation and impairment, and other adjustments). The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on at least a monthly basis, including daily and weekly reporting on
key metrics.
Major customers
There is no revenue that is significant from any particular customer. Segment revenue from external parties,
assets and liabilities are all reported to the CODM in a manner consistent with the financial statements.
Revenue by geographical area
The Group operates in the following geographical regions:
• Asia Pacific (APAC) – current operations in Australia and New Zealand. Both regions serviced by stores
and website
• Americas – current operations in United States and Canada. US sales are comprised of online (website
and marketplace) and wholesale; Canadian business is wholesale and online (marketplace only)
• Europe, Middle East and Africa (EMEA) – current operations in UK and Europe. UK sales are comprised
of online (website only) and wholesale; European business is solely wholesale.
Refer to Note 4. Revenue for details on revenue by geographical area.
39
40
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 77
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 33.. OOppeerraattiinngg sseeggmmeennttss ((ccoonnttiinnuueedd))
Reconciliation of net profit to Underlying EBITDA
Reconciliation of net profit after income tax from continuing operations to Underlying EBITDA (Earnings
before interest, taxation, depreciation, amortisation, impairment, and other adjustments) from continuing
operations is provided as follows:
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 44.. RReevveennuuee ((ccoonnttiinnuueedd))
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Net profit after tax from continuing operations
Net interest expense (excluding AASB 16 impact)
Tax expense from continuing operations
Depreciation, amortisation and impairment expense (excluding AASB 16 impact)
Transition costs5
US logistics consolidation6
Transaction costs7
Share issue costs8
Other9
Net AASB 16 impact10
UUnnddeerrllyyiinngg EEBBIITTDDAA ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss -- pprree--AAAASSBB1166
Redemption/Repayment of lease liabilities
UUnnddeerrllyyiinngg EEBBIITTDDAA ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss -- ppoosstt--AAAASSBB1166
AASB 16 accounts
Depreciation on right-of-use assets
Interest expense on lease liabilities and make good provisions
Redemption/repayment of lease liabilities
NNeett AAAASSBB 1166 iimmppaacctt
NNoottee 44.. RReevveennuuee
From continuing operations
Sale of goods
Interest revenue
Other revenue
Revenue
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
21,556
395
9,916
6,405
2,298
-
1,008
184
(233)
838
42,367
9,160
535
7,532
5,845
778
921
1,599
-
-
149
26,519
7,845
12,320
50,212
38,839
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
7,974
709
(7,845)
11,723
746
(12,320)
838
149
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
258,477
194,492
243
1,143
1,386
55
879
934
259,863
195,426
5 FY2021 Transition costs related to costs to integrate Evans; FY2020 Transition costs related to costs to integrate Avenue.
6 These prior year costs are in relation to the consolidation of the US logistics operations.
7 FY2021 Transaction costs related to executing the acquisition of Evans; FY2020 costs related to executing the acquisition of Avenue.
8 Current year share issue costs relate to the July-August 2020 equity raise, to the extent not allocated to equity.
9 Includes realised foreign currency gains from settling intercompany balances within the Group and the settlement and subsequent release
of provision for cure costs previously recognised in respect of the acquisition of Avenue.
10 Net impact of the AASB 16 Lease adjustments to reflect pre-AASB 16 rent expense in Underlying EBITDA.
Timing of revenue recognition
Goods transferred at a point in time
Geographical regions
APAC
Americas
EMEA
Channel
Online website
Stores
Online marketplace
Wholesale
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
258,477
194,492
144,460
99,600
14,417
113,685
78,532
2,275
258,477
194,492
184,624
66,990
4,461
2,402
118,671
60,232
7,970
7,619
258,477
194,492
Accounting policy for revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected
to be entitled in exchange for transferring goods to a customer. For each contract with a customer, the
consolidated entity: identifies the contract with a customer; identifies the performance obligations in the
contract; determines the transaction price which takes into account estimates of variable consideration and the
time value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when
or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods
or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent
events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The
measurement of variable consideration is subject to a constraining principle whereby revenue will only be
recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur. The measurement constraint continues until the uncertainty associated with the
variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle
are recognised as a refund liability.
Contract liabilities for vendor funded markdown provision
In determining the level of vendor funded markdown provision required, the consolidated entity makes
judgements in respect of the expected vendor discounting and the likelihood of the vendor achieving their
guaranteed margin. The provision is based on estimates from historical margin achieved by the vendor. As at
27 June 2021, there were no provisions required for vendor funded markdowns.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the
goods, which is generally at the time of delivery.
41
42
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 79
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 44.. RReevveennuuee ((ccoonnttiinnuueedd))
Retail sales
Revenue is recognised at the point of sale, which is where the customer has taken delivery of the goods.
Amounts disclosed as revenue are net of sales returns, trade discounts and commission paid. Return policy on
sale of goods range from 30 to 90 days and provision is made based on historical return percentage. Please
refer to Note 16. Provisions on sales return raised and Note 10. Other assets on corresponding right-of-return
assets recognised.
Wholesale revenue
Revenue is recognised at time of delivery less an allowance for estimated customer returns, rebates, and other
similar allowances.
NNoottee 55.. EExxppeennsseess
Purchase and inbound-related costs of inventory11
Fulfilment costs11
Depreciation, amortisation, and impairment expense (excluding AASB16 charges)
Depreciation on ROU assets
Rental-related expenses
Rent concessions
Employee benefits expense excluding superannuation
Defined contribution superannuation expenses
Share-based payments expense
Government grants
Other expenses
Utility and maintenance expenses
Transactional fees and charges
Marketing expenses
Advertising expenses
Professional, consulting and insurance
Other
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
98,694
30,657
6,405
7,974
4,595
(1,043)
35,433
2,267
3,196
(3,551)
184,627
5,292
6,048
5,979
15,432
5,888
3,779
42,418
82,155
18,864
5,845
11,723
2,495
(1,322)
29,441
2,026
2,805
(3,932)
150,100
5,470
4,172
3,183
4,332
4,412
5,729
27,298
TToottaall
227,045
177,398
The Group has benefitted from the following significant government support packages as a result of COVID-19
during the period:
SSuuppppoorrtt rreecceeiivveedd
DDeessccrriippttiioonn
JobKeeper Scheme (Australia)
Due to the impact of COVID-19 on the Group's turnover, government subsidies of $3.5m were received
relating to the current reporting period (2020: $3.9m) under the Australian Federal Government's
JobKeeper Scheme. The entity became eligible for the Scheme from its inception in March 2020.
The amounts were paid in full to employees in line with the government's objective of helping businesses
to continue paying employees to keep them in their jobs so that businesses can re-start when business
conditions improve, for example during the period of Victorian store closures.
The grants have been deducted in the reporting period against employee benefits expense. The
Australian JobKeeper was paid monthly in arrears in the first three months of the reporting period and
concluded on 27 September 2020, after which the Group was no longer eligible.
11 Cost of goods sold represents the purchase and inbound-related costs of inventory. Fulfilment costs (net) represent warehousing and
freight costs to deliver online sales. In the prior period, Cost of goods sold and Fulfilment costs were together presented as Cost of sales.
The additional disclosure in the current period and going forward is appropriate with the growth of the online business.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 55.. EExxppeennsseess ((ccoonnttiinnuueedd))
Accounting policy for government grants
Government grants that become receivable as compensation for expenses or losses already incurred or for the
purpose of giving immediate financial support to the entity with no future related costs are recognised in profit
or loss of the period in which it becomes receivable, on a systematic basis over the periods in which the Group
recognises as expenses the related costs for which the grants are intended to compensate.
Accounting policy for rent concessions
Refer to Note 13. Right-of-use assets and Lease liabilities.
Accounting policy for Advertising and Marketing expenses
Advertising and Marketing expenses have been disclosed separately in the current financial reporting period,
with the corresponding balances for the prior financial reporting period updated for comparative purposes.
Advertising Expenses include costs associated with driving customer acquisition and re-engagement, such as
digital advertising and direct mail campaigns. All other marketing costs, such as photoshoots and content
development, are reflected in Marketing Expenses.
NNoottee 66.. IInnccoommee ttaaxx
a) Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Prior year current tax over/ (under) provisions
Foreign exchange
Aggregate income tax expense
Income tax expense is attributable to:
Profit from continuing operations
Profit from discontinued operations (Note 6(c))
Aggregate income tax expense
b) Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax from continuing operations
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
LTIP and LFSP
Sundry items
Difference in overseas tax rates
Prior year deferred tax over/(under) provisions
Prior year current tax over/(under) provisions
Adjustment in US effective tax rate
Foreign exchange
Income tax expense from continuing operations
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
8,344
1,508
88
(24)
9,916
9,916
-
9,916
2,152
5,261
46
73
7,532
7,532
2,143
9,675
31,472
16,692
9,442
5,007
-
958
-
10,400
6
(356)
88
-
(222)
9,916
2
841
264
6,114
(489)
46
-
1,861
-
7,532
43
44
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 81
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 66.. IInnccoommee ttaaxx ((ccoonnttiinnuueedd))
c) Capital losses
Unused tax losses related to capital losses of $147.2m (2020: $147.2m) carried forward for which no deferred
tax asset has been recognised. These tax losses can only be utilised in the future if the continuity of ownership
test is passed, or failing that, the same business test is passed. The settlement of the NBL divestment in February
2020 has crystalised the tax revenue and capital gains in the prior year. The NBL settlement did not have any
impact in the current financial period from a taxation perspective.
d) Income tax losses
As at 27 June 2021, the consolidated entity had carried forward income tax losses of $10.8m from its US, UK
and New Zealand businesses (2020: $12.3m).
e) Tax consolidation legislation
City Chic Collective Limited and its wholly owned Australian controlled entities implemented the tax
consolidation legislation as of 1 July 2003.
f) Deferred tax assets
Deferred tax asset comprises temporary differences attributable to:
Tax losses
Property, plant and equipment
Employee benefits
Leases
Other provisions and accruals
Inventories
Other
Amounts recognised in equity
Deferred tax asset
Movements:
Opening balance
Foreign exchange on opening balance
(Charged)/Credited to profit or loss - continuing
(Charged)/Credited to profit or loss – discontinued
(Charged)/Credited to Business Combination and Retained Earnings
Closing balance
Provision for income tax
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
1,687
(2,615)
1,253
2,154
3,995
696
26
7,196
612
2,733
(630)
857
1,543
4,144
(3)
17
8,661
-
7,808
8,661
8,661
(353)
(1,508)
-
1,008
12,057
111
(5,261)
(836)
2,590
7,808
8,661
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
1,818
2,530
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 66.. IInnccoommee ttaaxx ((ccoonnttiinnuueedd))
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the
same taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
City Chic Collective Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an
income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the
tax consolidated group continue to account for their own current and deferred tax amounts. The tax
consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate
amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from
each subsidiary in the tax consolidated group.
The amount receivable/payable under the tax funding agreement is due upon receipt of the funding advice
from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity
may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
amounts receivable from or payable to other entities in the tax consolidated group. The tax funding
arrangement ensures that the intercompany charge equals the current tax liability or benefit of each tax
consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries nor a
distribution by the subsidiaries to the head entity.
45
46
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 83
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 77.. CCaasshh aanndd ccaasshh eeqquuiivvaalleennttss
Current assets
Cash at bank
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
71,457
21,382
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
NNoottee 88.. TTrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables
TToottaall ttrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Past due but not impaired
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
2,432
(202)
3,376
5,606
2,670
(354)
2,757
5,073
As at 27 June 2021, trade receivables of $0.3m (2020: $0.6m) were past due but not impaired. These relate to
a number of independent customers for whom there is no recent history of default.
The ageing analysis of these trade receivables is as follows:
30 to 60 days
60 to 90 days
90 days and over
TTrraaddee rreecceeiivvaabblleess -- ppaasstt dduuee bbuutt nnoott iimmppaaiirreedd
Current
TToottaall ttrraaddee rreecceeiivvaabblleess
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
133
-
150
283
2,149
2,432
278
300
60
638
2,032
2,670
Allowance for expected credit losses
The Group has recognised a gain of $0.1m (2020: loss of $0.3m) in profit of loss in respect of the expected
credit losses for the year ended 27 June 2021. The recoverability of trade and other receivables at 27 June 2021
has been assessed to consider the impact of the COVID-19 pandemic and no material recoverability issues were
noted. The Group determines the expected credit losses on these items by using a provision matrix, estimated
based on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate
to reflect current conditions and estimates of future economic conditions.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 88.. TTrraaddee aanndd ootthheerr rreecceeiivvaabblleess ((ccoonnttiinnuueedd))
Current
30 to 60 days
60 to 90 days
90 days and over
AAlllloowwaannccee ffoorr eexxppeecctteedd ccrreeddiitt lloossss
Movement of allowance for expected credit loss
Carrying amount at the start of the period
Additional allowance recognised
Allowance derecognised
Amount used
Carrying amount at the end of the period
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
83
44
-
75
220022
12
30
252
60
335544
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
354
-
(118)
(34)
202
82
324
-
(52)
354
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days. Other receivables are recognised at amortised cost, less any allowance for expected
credit losses.
NNoottee 99.. IInnvveennttoorriieess
Current assets
Inventories on hand at lower of cost and net realisable value
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
66,996
38,073
The increase in inventory is aligned with the growth of the business globally and is driven primarily by the
acquisition of Avenue and Evans in the prior year and current year respectively.
Accounting policy for inventories
Finished goods are stated at the lower of cost and net realisable value. Cost is determined on a weighted
average cost method and include purchase and delivery costs, net of rebates and discounts received or
receivable. Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
fulfilment and the estimated costs necessary to make the sale. The allowances against inventory are recognised
to account for obsolescence, the expected sales below cost and inventory expected to be lost through
shrinkage. In recognising the allowance for inventory, judgement has been applied by considering a range of
factors including historical loss-making sales, historical inventory shrinkage trends, inventory ageing,
seasonality, and product lifecycle.
47
48
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 85
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1100.. OOtthheerr aasssseettss
Current assets
Prepayments
Right of return assets
TToottaall ootthheerr aasssseettss
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
5,564
1,306
6,870
800
1,462
2,262
Accounting policy for right of return assets
Right of return assets represents the right to recover inventory sold to customers and is based on an estimate
of customers who may exercise their right to return the goods and claim a refund. Such rights are measured at
the value at which the inventory was previously carried prior to sale, less expected recovery costs and any
impairment.
NNoottee 1111.. PPllaanntt aanndd eeqquuiippmmeenntt
Non-current assets
Plant and equipment - at cost
Less: Accumulated depreciation
TToottaall ppllaanntt aanndd eeqquuiippmmeenntt
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
24,508
(14,317)
23,070
(14,126)
10,191
8,944
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period
are set out below:
CCoonnssoolliiddaatteedd
BBaallaannccee aatt 11 JJuullyy 22001199
Additions
Depreciation expense
Accelerated depreciation
Exchange differences
Impairment write-back
BBaallaannccee aatt 2288 JJuunnee 22002200
Additions
Depreciation expense
Accelerated depreciation
Exchange differences
BBaallaannccee aatt 2277 JJuunnee 22002211
TToottaall ppllaanntt aanndd
eeqquuiippmmeenntt
$$''000000
9,306
3,283
(2,966)
(948)
(14)
283
8,944
5,034
(2,926)
(976)
115
10,191
Accelerated depreciation
During the current and prior reporting periods, the Group closed a number of stores. The carrying value of these
stores was extinguished to nil through accelerated depreciation.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1111.. PPllaanntt aanndd eeqquuiippmmeenntt ((ccoonnttiinnuueedd))
Accounting policy for property, plant and equipment
Plant and equipment are stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a
straight-line basis to write off the net cost of each item of plant and equipment (excluding land) over their
expected useful lives, which range from 2 to 10 years.
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to
the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss.
Impairment of assets
Plant and equipment is reviewed for impairment 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 the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair
value less costs of disposal and value in use.
Management has performed an impairment assessment on all stores (excluding clearance outlets, new stores
and newly refurbished stores per the Group’s impairment methodology) at year-end and the calculations
confirmed that there was no impairment (2020: nil).
NNoottee 1122.. IInnttaannggiibblleess
Non-current assets
Goodwill - at cost
Brand Value - at cost
Other intangible assets - at cost
Less: Other intangible assets - accumulated amortisation
Customer relationships - at cost
Less: Customer relationships - accumulated amortisation
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
45,199
26,001
7,421
(4,795)
2,626
2,757
(981)
1,776
22,466
12,691
6,085
(3,154)
2,931
1,453
(348)
1,105
TToottaall iinnttaannggiibblleess
75,602
39,193
49
50
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 87
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1122.. IInnttaannggiibblleess ((ccoonnttiinnuueedd))
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period
are set out below:
CCoonnssoolliiddaatteedd
BBaallaannccee aatt 11 JJuullyy 22001199
Additions through business combinations (Note 32)
Additions
Amortisation expense
Exchange differences
BBaallaannccee aatt 2288 JJuunnee 22002200
Additions through business combinations (Note 32)
Additions
Amortisation expense
Exchange differences
GGooooddwwiillll
$$''000000
BBrraanndd VVaalluuee
$$''000000
OOtthheerr
iinnttaannggiibblleess
$$''000000
CCuussttoommeerr
rreellaattiioonnsshhiippss
$$''000000
TToottaall
$$''000000
10,095
12,601
-
-
(230)
22,466
23,087
-
-
(354)
2,547
10,319
-
-
(175)
12,691
14,007
-
-
(697)
2,511
-
2,247
(1,867)
40
2,931
-
1,542
(1,834)
(13)
-
1,453
-
(348)
-
1,105
1,418
-
(669)
(78)
15,153
24,373
2,247
(2,215)
(365)
39,193
38,512
1,542
(2,503)
(1,142)
BBaallaannccee aatt 2277 JJuunnee 22002211
45,199
26,001
2,626
1,776
75,602
Accounting policy for intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their
fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost.
Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment.
Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains
or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the
difference between net disposal proceeds and the carrying amount of the intangible asset. The method and
useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption
or useful life are accounted for prospectively by changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually
for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired and
is carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss
and are not subsequently reversed.
Brand
Brand is recognised on acquisition of brand assets. Brand assets have been determined to be indefinite life
intangibles and is not amortised. Brand is tested annually for impairment, or more frequently if events or
changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment
losses. Impairment losses on brand are taken to profit or loss and are not subsequently reversed.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1122.. IInnttaannggiibblleess ((ccoonnttiinnuueedd))
Customer relationships
Acquired customer relationships are carried at original cost based on independent valuation obtained at the
date of acquisition less accumulated amortisation. They are amortised on a straight-line basis over a useful life
of 3 years. The estimated useful life and amortisation period is reviewed at the end of each annual reporting
period.
Other intangible assets
Significant costs associated with the development of the revenue generating aspects of the website, including
the capacity of placing orders, are deferred and amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 4 years.
Significant costs associated with software are deferred and amortised on a diminishing value basis over the
period of their expected benefit, being their finite life of 2-4 years.
Configuration and customisation costs incurred in implementing SaaS arrangements are recognised in profit
or loss as the customisation and configuration services are performed, or, in certain circumstances, over the
SaaS contract term when access to the cloud application software is provided.
Impairment
Intangible assets are reviewed for impairment when events or changes in circumstances indicate that the
carrying amount may not be recoverable. Intangible assets that have an indefinite useful life, including
goodwill, are not subject to amortisation and are tested annually for impairment irrespective of whether there
are any indicators of impairment. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value
less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash generating units.
Goodwill assessment
Determining whether goodwill is impaired requires an estimation of the value-in-use of the cash-generating
units (CGUs) to which the goodwill has been allocated. These calculations reflect an estimated cash flow
projection based on a five-year forecast and requires the use of assumptions, including estimated discount
rates; growth rates of estimated future cash flows; and terminal growth rates. The CGU for goodwill is
assessed at a consolidated Group level, in line with the one operating segment used in its reporting. This is
consistent with the prior year assessment.
The discounted cash flow valuations were calculated using projected five-year future cash flows based on Board
approved business plans. Business plans are modelled assuming like for like sales growth based on historical
performance considering changing market conditions.
51
52
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 89
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1122.. IInnttaannggiibblleess ((ccoonnttiinnuueedd))
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1122.. IInnttaannggiibblleess ((ccoonnttiinnuueedd))
The key assumptions used by management in setting the financial budgets for the initial five-year period were
as follows:
assuming like for like sales growth based on historical performance taking into account changing market
conditions. The royalty rates used in the valuation model were based on rates observed in the market.
Determining whether brand is impaired requires an estimation of the value-in-use of the CGUs to which the
brand has been allocated. These calculations reflect an estimated cash flow projection based on a five-year
forecast and requires the use of assumptions, including estimated discount rates; growth rates of estimated
future cash flows; and terminal growth rates.
The discount rates used in the value-in-use calculations are pre-tax and reflect management's estimate of the
time value of money, as well as the risks specific to the CGUs. The discount rates have been determined using
the average weighted cost of capital and the current market risk-free rate, adjusted for relevant business risks.
Discount rate applied in the current year value-in-use model: 10.7% (2020: 9.7%). A terminal growth rate of 2.5%
(2020: 2.0%) has been assumed in the value-in-use calculation and reflects the long-term growth expectations
beyond the five-year forecast horizon.
The calculation confirmed that there was no impairment of any of the Brands (2020: nil), with excess headroom
remaining when performing sensitivity analysis. In performing the sensitivity analysis, management considered
a stressed scenario due to the uncertainty of COVID-19, and no impairment was identified. Based on what is
known at the time of this report including the current volatility in economic conditions, management believes
that any reasonably possible change in the key assumptions used in the calculations, would not cause the
carrying amount to exceed its recoverable amount. The expected continued promotion and marketing of the
various brands supports the assumption that each brand has an indefinite life.
(i)
Forecast sales growth rates
Forecast sales growth rates are based on past experience adjusted for sales/market trends and the strategic
decisions made in respect of the CGU.
(ii)
Operating profits
Operating profits are forecast based on historical experience of operating margins, adjusted for the impact of
changes to product and fulfilment costs and cost saving initiatives.
(iii)
Cash conversion
Cash conversion is the ratio of operating cash flow to operating profit. Management forecasts cash conversion
rates based on historical experience.
The discount rates used in the value-in-use calculations are pre-tax and reflect management's estimate of the
time value of money, as well as the risks specific to the CGU. The discount rates have been determined using
the average weighted cost of capital and the current market risk-free rate, adjusted for relevant business risks.
Discount rate applied in the current year value-in-use model: 10.7% (2020: 9.7%). A terminal growth rate of
2.5% (2020: 2.0%) has been assumed in the value-in-use calculation and reflects the long-term growth
expectations beyond the five-year forecast horizon.
The calculations confirmed that there was no impairment of goodwill (2020: nil), with excess headroom
remaining when performing sensitivity analysis. In performing the sensitivity analysis, management considered
a stressed scenario due to the uncertainty of COVID, and no impairment was identified. Based on what is
known at the time of this report including the current volatility in economic conditions, management believes
that any reasonably possible change in the key assumptions used in the calculations, would not cause the
carrying amount to exceed its recoverable amount.
Brand assessment
(i) Avenue Brand
The recoverable amount of the Avenue Brand was determined independently using the Relief from Royalty
(‘RFR’) valuation method. The calculations reflect a five-year revenue forecast and requires the use of
assumptions, including estimated royalty rates, tax rate, estimated discount rates and an assumed indefinite
useful life.
(ii) Hips & Curves Brand
The other Brand intangible is related to Hips & Curves. In FY2019 the Group acquired select assets of CMI
Enterprises LLC trading as Hips & Curves, a US based plus-size online retailer, for cash consideration of
US$2.0m. Brand value of A$2.5m was recognised per management assessment. The recoverable amount of the
Hips & Curves brand was determined independently using the RFR valuation method. The calculations reflect a
five-year revenue forecast and requires the use of assumptions, including estimated royalty rates, tax rate,
estimated discounted rates and an assumed indefinite useful life.
(iii) Evans Brand
In the current financial year, the Group completed the acquisition of the Evans brand, and the e-commerce and
wholesale businesses, for cash consideration of $40.2m. Brand value of $14.0m was recognised per
management assessment. The recoverable amount of the Evans brand was determined independently using
the RFR valuation method. The calculations reflect a five-year revenue forecast and requires the use of
assumptions, including estimated royalty rates, tax rate, estimated discount rates and an assumed indefinite
useful life.
(iv) Assessment process
The five-year revenue forecast used in independently determining the recoverable amount of each brand
using the RFR valuation method was based on Board approved business plans. Business plans are modelled
53
54
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 91
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1133.. RRiigghhtt--ooff--uussee aasssseettss aanndd LLeeaassee lliiaabbiilliittiieess
Non-current assets
Right-of-use assets
Less: Accumulated depreciation
TToottaall RRiigghhtt--ooff--uussee aasssseettss
Current liabilities
Lease liabilities
Non-current liabilities
Lease liabilities
TToottaall lleeaassee lliiaabbiilliittiieess
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
34,620
(12,178)
31,535
(9,283)
22,442
22,252
9,286
9,193
18,768
17,998
28,054
27,191
The consolidated entity leases land and buildings for its office and retail outlets under agreements of between
1 to 10 years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the
terms of the leases are renegotiated.
The Group has applied practical expedient per COVID-19-Related Rent Concessions (Amendment to AASB 16)
and recognised the effect of the rent concession in the profit and loss statement where applicable and have not
accounted for COVID-19 related rent concessions as lease modifications. Rent concessions received for the
current reporting period amounted to $1.0m (2020: $1.3m).
The lease liability recognised by the Group represents the present value of future lease payments owing to the
lessor.
The Group leases office equipment under agreements of less than 5 years. These leases are either short-term
or low value, so have been expensed as incurred and not capitalised as ROU assets.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period
are set out below:
CCoonnssoolliiddaatteedd
BBaallaannccee aatt 11 JJuullyy 22001199
Additions
Disposals
Depreciation expense
Accumulated depreciation on disposals
BBaallaannccee aatt 2288 JJuunnee 22002200
Additions
Disposals
Accumulated depreciation on disposals
Depreciation expense
Exchange differences
BBaallaannccee aatt 2277 JJuunnee 22002211
TToottaall
rriigghhtt--ooff--uussee
aasssseett
$$''000000
30,129
6,638
(5,232)
(11,723)
2,440
22,252
14,692
(11,578)
5,125
(7,974)
(75)
22,442
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1133.. RRiigghhtt--ooff--uussee aasssseettss aanndd LLeeaassee lliiaabbiilliittiieess ((ccoonnttiinnuueedd))
Amounts recognised in profit and loss
Depreciation expense on right-of-use assets
Interest expense on lease liabilities
Expenses relating to leases not recognised under AASB 16
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
7,974
692
2,292
11,723
733
-
Some of the property leases in which the Group is the lessee contain variable lease payment terms that are
linked to sales generated from the leased stores. Variable payment terms are used to link rental payments to
store cash flows and reduce the fixed component of the store cost base.
Accounting policy for right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received, any initial direct costs incurred,
and, except where included in the cost of inventories, an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease
payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any
anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are
expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
NNoottee 1144.. TTrraaddee aanndd ootthheerr ppaayyaabblleess
Current liabilities
Trade creditors
Sundry creditors
Other payables
TToottaall ttrraaddee aanndd ootthheerr ppaayyaabblleess
Refer to Note 25 for further information on financial instruments.
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
13,395
11,744
16,757
7,388
8,349
21,791
41,896
37,528
55
56
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 93
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1144.. TTrraaddee aanndd ootthheerr ppaayyaabblleess ((ccoonnttiinnuueedd))
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end
of the financial period and which are unpaid. Due to their short-term nature they are measured at amortised
cost and are not discounted. The amounts are unsecured and are usually paid within 60 days of recognition.
NNoottee 1155.. BBoorrrroowwiinnggss
Non-current liabilities
Bank loans
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
-
17,500
Refer to Note 25. Financial Instruments for further information.
During the reporting period, the Group repaid its $17.5m of debt in full, with the $40.0m available debt facility
maturing in February 2023.
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Corporate credit card
Bank loans
Letter of credit
Used at the reporting date
Corporate credit card
Bank loans
Letter of credit
Unused at the reporting date
Corporate credit card
Bank loans
Letter of credit
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
944
39,950
50
40,944
463
-
50
513
481
39,950
-
40,431
1,007
40,000
-
41,007
72
17,500
-
17,572
935
22,500
-
23,435
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1166.. PPrroovviissiioonnss
Current liabilities
Employee benefits
Lease make good
Onerous contracts
Sales return provision
Restructuring provision
TToottaall pprroovviissiioonnss -- ccuurrrreenntt
Non-current liabilities
Employee benefits
Onerous contracts
TToottaall pprroovviissiioonnss -- nnoonn--ccuurrrreenntt
TToottaall pprroovviissiioonnss
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
2,899
731
267
3,476
697
2,203
501
559
3,087
-
88,,007700
66,,335500
459
-
445599
339
436
777755
88,,552299
77,,112255
Movements in provisions
Movements in provisions during the current financial period, other than employee benefits and restructuring
provision, are set out below:
CCoonnssoolliiddaatteedd -- 22002211
Current provisions
CCaarrrryyiinngg aammoouunntt aatt tthhee ssttaarrtt ooff tthhee ppeerriioodd
Recognised on business combination (Note 32)
Additional provisions recognised
Amounts used
CCaarrrryyiinngg aammoouunntt aatt tthhee eenndd ooff tthhee ppeerriioodd
Non-current provisions
CCaarrrryyiinngg aammoouunntt aatt tthhee ssttaarrtt ooff tthhee ppeerriioodd
Recognised on business combinations (Note 32)
Additional provisions recognised
Amounts used
CCaarrrryyiinngg aammoouunntt aatt tthhee eenndd ooff tthhee ppeerriioodd
LLeeaassee
mmaakkeeggoooodd
$$''000000
OOnneerroouuss
ccoonnttrraaccttss
$$''000000
SSaalleess rreettuurrnn
pprroovviissiioonn
$$''000000
TToottaall
$$''000000
501
-
510
(280)
731
-
-
-
-
-
559
258
83
(633)
267
436
-
-
(436)
-
3,087
1,091
32,256
(32,958)
3,476
-
-
-
-
-
4,147
1,349
32,849
(33,871)
4,474
436
-
-
(436)
-
Accounting policy for provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a
result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation at the reporting date, taking into account the risks
and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted
using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of
time is recognised as a finance cost.
Lease makegood
The provision represents the present value of the estimated costs to make good the premises leased by the
consolidated entity at the end of the respective lease terms.
Onerous contracts
Current year balance represents onerous contracts entered into on the acquisition of the Evans brand and, e-
commerce and wholesale businesses. The prior year balance represented onerous contracts entered into on the
acquisition of Avenue online assets.
57
58
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 95
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1166.. PPrroovviissiioonnss ((ccoonnttiinnuueedd))
Sales return provision
The sales return provision represents managements' best estimate of the future outflow of economic benefits
in respect of products sold. The provision is estimated based on historical sales claim information, sales levels
and any recent trends that may suggest future claims could differ from historical amounts.
Restructuring provision
A restructuring provision is recognised when the Group has developed a detailed formal plan for the
restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by
starting to implement the plan or announcing its main features to those affected by it.
Accounting policy for employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected
to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid
when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on high quality corporate bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1177.. OOtthheerr lliiaabbiilliittiieess ((ccoonnttiinnuueedd))
Accounting policy for deferred income
Deferred income relates mainly to unredeemed gift cards, income received in advance from customers and
deferred lease incentives.
Gift cards are considered a prepayment for goods and services to be delivered in the future. The Group has an
obligation to transfer the goods or services in the future, creating a performance obligation. The Group
recognises deferred revenue for the amount of the prepayment and recognises revenue when the customer
redeems the gift card and the Group fulfils the performance obligation related to the transaction or when the
likelihood of the gift card being redeemed by the customer is deemed remote.
Income received in advance from customers are recognised as revenue at the point of delivery of the goods to
the customer. Customer orders are typically completed within a few days and income received in advance is
therefore considered short term in nature and is not discounted.
Deferred lease incentives represents operating lease incentives received for those leases not accounted for
under AASB 16 Leases. The incentives are allocated to profit or loss on a straight-line bases over the lease term.
NNoottee 1188.. CCaasshh ffllooww iinnffoorrmmaattiioonn
Reconciliation of profit after income tax to net cash from continuing operating activities
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
NNoottee 1177.. OOtthheerr lliiaabbiilliittiieess
Profit after income tax expense from continuing operations
21,556
9,160
Current liabilities
Deferred income
Deferred revenue - customer loyalty points
Non-current liabilities
Deferred income
TToottaall ootthheerr lliiaabbiilliittiieess
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
3,040
32
3,072
701
3,773
-
77
77
-
77
Accounting policy for contract liabilities – customer loyalty points
The Group operates a loyalty programme where retail customers accumulate points for purchases made which
entitle them to convert points into gift certificates to use on future purchases. A contract liability for the award
points is recognised at the time of the sale. Revenue is recognised when the points are redeemed when they
expire after 12 months.
Adjustments for:
Depreciation, amortisation, and impairment
Share-based payments
Discontinued operations
Finance costs on lease liabilities and make good provision
Business combinations
Foreign exchange and other differences
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in inventories
Increase in other assets
Decrease in deferred tax assets
Increase in trade and other payables
Decrease in provision for income tax
Increase in other provisions
Increase/(decrease) in other liabilities
14,379
3,195
-
709
1,696
(1,927)
(533)
(28,923)
(4,608)
853
4,368
(712)
1,404
3,696
17,568
2,805
3,102
746
1,285
774
(499)
(18,720)
(939)
3,396
12,007
(3,014)
113
(2,559)
NNeett ccaasshh ffrroomm ccoonnttiinnuuiinngg ooppeerraattiinngg aaccttiivviittiieess
15,153
25,225
Reconciliation of liabilities arising from financing activities:
Long-term borrowings
Lease liabilities
22002200
CCaasshh fflloowwss
NNoonn--ccaasshh
cchhaannggeess
NNoonn--ccaasshh
cchhaannggeess
AAccqquuiissiittiioonnss NNeeww lleeaasseess
22002211
17,500
27,191
(17,500)
(7,845)
44,691
(25,345)
-
-
-
-
8,708
-
28,054
8,708
28,054
59
60
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 97
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1199.. SShhaarree--bbaasseedd ppaayymmeennttss
The Group’s long-term incentives rewards executives for high performance and ongoing commitment over a
three to five-year horizon and recognises the important role executives play in delivering the long-term growth
of the Group.
The Group’s long-term incentives are comprised of the Long-Term Incentive Plan (LTIP) and the Loan Funded
Share Plan (LFSP). The following share-based payment arrangements were in existence during the current year:
TTrraanncchhee
GGrraanntt ddaattee PPeerrffoorrmmaannccee
11
22AA
22BB
22CC
TToottaall PPeerrffoorrmmaannccee RRiigghhttss
13/11/2018
13/11/2018
13/11/2018
13/11/2018
ppeerriioodd eenndd
ddaattee
30/06/2021
30/06/2021
30/06/2021
30/06/2023
SShhaarree pprriiccee
aatt ggrraanntt
ddaattee
$1.17
$1.17
$1.17
$1.17
EExxppeecctteedd
vvoollaattiilliittyy
%%
35.00%
35.00%
35.00%
35.00%
DDiivviiddeenndd
yyiieelldd
%%
3.50%
3.50%
3.50%
3.50%
BBaallaannccee aatt
RRiisskk--ffrreeee
tthhee ssttaarrtt ooff
iinntteerreesstt rraattee
tthhee ppeerriioodd
%%
781,848
2.12%
1,237,500
2.12%
2.12%
1,237,500
2.12% 2,475,000
55,,773311,,884488
-
-
-
-
--
GGrraanntteedd
VVeesstteedd
33
33
33
TToottaall LLooaann FFuunnddeedd SShhaarreess
21/11/2019
30/06/2024
03/03/2020 30/06/2024
16/09/2020 30/06/2024
$2.68
$2.79
$3.33
35.00%
35.00%
35.00%
N/A
N/A
N/A
2.12% 7,533,448
667,464
2.12%
-
2.12%
88,,220000,,991122
-
-
474,576
447744,,557766
BBaallaannccee aatt
EExxppiirreedd//
tthhee eenndd ooff
ffoorrffeeiitteedd//
tthhee ppeerriioodd
ootthheerr
778811,,884488
-
11,,223377,,550000
-
11,,223377,,550000
-
- 22,,447755,,000000
55,,773311,,884488
--
- 77,,553333,,444488
666677,,446644
-
447744,,557766
-
-- 88,,667755,,448888
-
-
-
-
--
-
-
-
--
LLTTIIPP TTrraanncchheess
Vesting conditions of the LTIP tranches are set out below:
Tranche 1
Vesting Condition 1
Vesting Condition 2
Continued service to 27 August 2021, with no holding lock on resulting shares;
Compound annual growth rate (CAGR) in the Group's earnings per share before tax (EPS) during the
three years to June 2021 in accordance with the following schedule:
EEPPSS CCAAGGRR aaccrroossss tthhee TTrraanncchhee 11 PPeerrffoorrmmaannccee
PPeerriioodd
Below 5.0%
5%
5.0% ≤ EPS CAGR ≤ 20.0%
Nil
PPrrooppoorrttiioonn ooff TTrraanncchhee 11 PPeerrffoorrmmaannccee RRiigghhttss hheelldd tthhaatt wwiillll ssaattiissffyy VVeessttiinngg
CCoonnddiittiioonn 22
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1199.. SShhaarree--bbaasseedd ppaayymmeennttss ((ccoonnttiinnuueedd))
Tranche 2C
Vesting Condition 1
Vesting Condition 2
Continued service to August 2023, with no holding lock on resulting shares;
Group EPS performance in accordance with the following schedule:
GGrroouupp EEPPSS ffoorr tthhee yyeeaarr ttoo 3300 JJuunnee 22002233
PPrrooppoorrttiioonn ooff TTrraanncchhee 22CC PPeerrffoorrmmaannccee RRiigghhttss hheelldd tthhaatt wwiillll ssaattiissffyy
Below $0.1125 (1.5 x FY202018 EPS)
$0.1250 ≤ EPS ≤ $0.1200 (1.6 x FY202018 EPS)
$0.1200 ≤ EPS ≤ $0.1275 (1.7 x FY202018 EPS)
EPS ≥ $0.1275
VVeessttiinngg CCoonnddiittiioonn 22
Nil
50%
75%
100%
LLFFSSPP TTrraanncchheess
During the period, 474,576 loan funded shares were issued as part of the LFSP. As at 27 June 2021, the Loan
Funded (LF) shares issued under the LFSP have been treated as 'in-substance' options which have been valued
using a Modified Binomial Lattice option pricing model which allows for varying exercise price. The resulting
value is amortised over the vesting period on a probability adjusted basis.
The key terms of the LFSP are listed as follows:
●
●
●
LF Shares are issued at the Company's share price on the ASX at the time of issue.
The Company advances money to pay for the subscription price of the LF Shares (Loan).
The Loan has an interest payable of 1.9% and is repayable on the earlier of cessation of employment (6 or
12 month grace periods may be applied) or 7 years from the agreement by the Board to issue LF Shares
under the Plan (Vesting Period is 5 years to 30 June 2024).
The Company's recourse in the event it seeks to recover the Loan is limited to the LF Shares. Where a
Participant does not repay the Loan by the repayment date, the Participant is deemed to have agreed to
sell to the Company pursuant to an employee share scheme buy-back, that number of LF Shares required
to repay the Loan to the Company.
The Company will apply the after-tax amount of any dividends payable in respect of a participant's LF
Shares towards repayment of the outstanding balance of the Loan.
The LF Shares offered are subject to Vesting Conditions, which if not met, the unvested LF Shares will be
forfeited and bought back by the Company at the issue price and the Loan will be deemed repaid.
●
●
●
25%
Straight line pro-rata vesting between 25% and 100% (inclusive)
Vesting conditions of the LF Shares are set out below:
Tranche 2A
Vesting Condition
Continued service to 27 August 2021, with no holding lock on resulting shares
Tranche 2B
Vesting Condition 1
Vesting Condition 2
Continued service to 27 August 2021, with no holding lock on resulting shares;
Group EPS performance in accordance with the following schedule:
GGrroouupp EEPPSS ffoorr tthhee yyeeaarr ttoo 3300 JJuunnee 22002211
Below $0.0975 (1.3 x FY202018 EPS)
$0.0975 ≤ EPS ≤ $0.1050 (1.4 x FY202018 EPS)
EPS ≥ $0.1050
PPrrooppoorrttiioonn ooff TTrraanncchhee 22BB PPeerrffoorrmmaannccee RRiigghhttss hheelldd tthhaatt wwiillll ssaattiissffyy VVeessttiinngg
CCoonnddiittiioonn 22
Nil
50%
100%
TTrraanncchhee 33
Vesting Condition 1
Vesting Condition 2
Continued service to 30 June 2024.
Compound annual growth rate (CAGR) in the Group's earnings per share after tax (AEPS)
prescribed by the Board over the 3 year period commencing on 1 July 2019, in which case
(subject to satisfaction of Vesting Period Condition) the LF Shares held will vest in
accordance with the following vesting scale:
AAEEPPSS 33--yyeeaarr CCAAGGRR ffrroomm 11 JJuullyy 22001199
12.5%
20%
12.5% ≤ AEPS CAGR ≤ 20.0%
PPrrooppoorrttiioonn ooff TTrraanncchhee 33 LLFF sshhaarreess tthhaatt wwiillll ssaattiissffyy VVeessttiinngg CCoonnddiittiioonn 22
25%
100%
Straight-line pro rata vesting between 25% and 100% (inclusive)
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees.
61
62
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 99
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 1199.. SShhaarree--bbaasseedd ppaayymmeennttss ((ccoonnttiinnuueedd))
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using either the Binomial model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the consolidated entity receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the
vesting period. The probability is assessed with consideration of management's expectation of future earnings
and the financial hurdles for vesting. The amount recognised in profit or loss for the period is the cumulative
amount calculated at each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to
market conditions are considered to vest irrespective of whether or not that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification that
increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy
the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over
the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
NNoottee 2200.. IIssssuueedd ccaappiittaall
Ordinary shares - fully paid
Less: Loan funded shares
TToottaall iissssuueedd ccaappiittaall
22002211
SShhaarreess
22002200
SShhaarreess
22002211
$$''000000
22002200
$$''000000
CCoonnssoolliiddaatteedd
237,338,726
(8,675,488)
200,437,033
(8,200,912)
183,000
(23,632)
71,191
(22,052)
228,663,238
192,236,121
159,368
49,139
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2200.. IIssssuueedd ccaappiittaall ((ccoonnttiinnuueedd))
Movements in ordinary share capital
DDeettaaiillss
DDaattee
SShhaarreess
IIssssuuee pprriiccee
$$''000000
BBaallaannccee
Issue of Loan funded shares
Issue of Loan funded shares
Loan funded shares held in trust
BBaallaannccee
Institutional Placement
Share Purchase Plan
Share issue expenses (net of tax)
Issue of Loan funded shares
Loan funded shares held in trust
11 JJuullyy 22001199
21 November 2019
3 March 2020
2288 JJuunnee 22002200
30 July 2020
24 August 2020
16 September 2020
BBaallaannccee
2277 JJuunnee 22002211
192,236,121
7,533,448
667,464
(8,200,912)
192,236,121
26,229,509
10,197,608
-
474,576
(474,576)
228,663,238
$2.68
$2.78
$0.00
$3.05
$3.05
$0.00
$3.33
$0.00
49,139
20,190
1,862
(22,052)
49,139
80,000
31,103
(1,874)
1,580
(1,580)
158,368
In July 20, City Chic completed a fully underwritten $80.0m Placement of new fully paid ordinary shares to
eligible professional and sophisticated institutional investors. The Placement was conducted at $3.05 per share,
resulting in 26.2 million new shares being issued, representing 13.1% of City Chic's issued capital at the time. New
shares issued under the Placement settled on 30 July 2020 and commenced trading on 31 July 2020.
Following the completion of the Placement, City Chic offered all eligible shareholders the opportunity to
participate in a non-underwritten Share Purchase Plan (SPP). City Chic raised $31.1m through the SPP, which
closed on 18 August 2020. The SPP was conducted at $3.05 per share, resulting in 10.2 million new shares being
issued. The Placement and SPP together raised $111.1m and resulted in 36.4 million new shares being issued.
Net proceeds of $109.2m were recorded in the share capital account, after taking into account costs of $1.9m
(net of tax of $0.8m). Net cash proceeds of $108.6m was received during the current period and recorded in
cash and cash equivalents. A total of 36,427,117 shares were issued and commenced trading on 31 July 2020
and 25 August 2020.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the
Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares
have no par value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Loan funded shares
Under the LFSP, the participants are granted a loan by the company to purchase the beneficial interest in shares.
These are limited recourse loans to the participants and any dividends received in respect of the loan funded
shares are used to reduce the loan balance net of tax payable. Participants are required to meet service
requirements and performance conditions before being entitled to acquire full title to these shares and are
required to repay the loan in order to do so. The shares held by the company have been deducted from equity
as shares are held in trading lock until vesting in line with accounting standards.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an
optimum capital structure to reduce the cost of capital.
63
64
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 101
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2200.. IIssssuueedd ccaappiittaall ((ccoonnttiinnuueedd))
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt
is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was
seen as value adding relative to the current company's share price at the time of the investment.
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given
priority in all capital risk management decisions. There have been no events of default on the financing
arrangements during the financial period.
Accounting policy for issued capital
Ordinary shares are classified as equity.
NNoottee 2211.. RReesseerrvveess
Foreign currency reserve
Share-based payments reserve
TToottaall rreesseerrvveess
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
(6,725)
7,142
(1,758)
3,947
417
2,189
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements
of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net
investments in foreign operations.
Share-based payments reserve
The reserve is used to recognise the cost of share-based payments on the Group's employee incentive schemes.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2222.. RReettaaiinneedd pprrooffiittss
Retained profits/(accumulated losses) at the beginning of the financial period
Adjustment for implementation of AASB 16
Retained profits/(accumulated losses) at the beginning of the financial period – adjusted for the impact
of AASB 16
Profit after income tax expense for the period
Dividends paid (Note 24)
RReettaaiinneedd pprrooffiittss aatt tthhee eenndd ooff tthhee ffiinnaanncciiaall ppeerriioodd
Retained earnings at the end of the financial period comprises
Loss reserve12
Retained earnings
NNoottee 2233.. EEaarrnniinnggss ppeerr sshhaarree
Earnings per share for profit from continuing operations
Profit after income tax attributable to the owners of City Chic Collective Limited
Basic earnings per share
Diluted earnings per share
Movements in reserves
Movements in each class of reserve during the current and previous financial period are set out below:
Earnings per share for profit from discontinued operations
Profit after income tax attributable to the owners of City Chic Collective Limited
CCoonnssoolliiddaatteedd
BBaallaannccee aatt 11 JJuullyy 22001199
Foreign currency translation
Share-based payments expense
BBaallaannccee aatt 2288 JJuunnee 22002200
Foreign currency translation
Share-based payments expense
BBaallaannccee aatt 2277 JJuunnee 22002211
SShhaarree--bbaasseedd
ppaayymmeennttss
rreesseerrvvee
$$''000000
FFoorreeiiggnn
ccuurrrreennccyy
ttrraannssllaattiioonn
rreesseerrvvee
$$''000000
1,141
-
2,806
3,947
-
3,195
(1,389)
(369)
-
(1,758)
(4,967)
-
TToottaall
$$''000000
(248)
(369)
2,806
2,189
(4,967)
3,195
7,142
(6,725)
417
Basic earnings per share
Diluted earnings per share
Earnings per share for profit
Profit after income tax attributable to the owners of City Chic Collective Limited
Basic earnings per share
Diluted earnings per share
65
66
12 Accumulated losses as at 1 July 2018 of $(11.0m) were transferred to a Loss Reserve.
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
2,561
-
(4,625)
413
2,561
21,556
-
(4,212)
9,657
(2,884)
2244,,111177
22,,556611
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
(10,991)
35,108
(10,991)
13,552
24,117
2,561
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
21,556
9,160
CCeennttss
CCeennttss
9.6
9.4
4.8
4.7
22002211
$$''000000
22002200
$$''000000
-
497
CCeennttss
CCeennttss
-
-
0.3
0.3
22002211
$$''000000
22002200
$$''000000
21,556
9,657
CCeennttss
CCeennttss
9.6
9.4
5.1
5.0
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 103
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2233.. EEaarrnniinnggss ppeerr sshhaarree ((ccoonnttiinnuueedd))
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Adjustments for performance rights
Adjustments for loan funded shares
NNuummbbeerr
NNuummbbeerr
224,648,407
192,236,121
4,578,118
569,838
2,812,659
-
Weighted average number of ordinary shares used in calculating diluted earnings per share
229,796,363
195,048,780
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of City Chic Collective
Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued
during the financial period.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
NNoottee 2244.. DDiivviiddeennddss
Dividends
Dividends paid during the financial period and prior period were as follows:
Final dividend for the period (2019: 1.5 cents per ordinary share)
-
2,884
Franking credits
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
Franking credits available at the reporting date based on a tax rate of 30%
Franking credits that will arise from the payment of the amount of the provision for income tax at the
reporting date based on a tax rate of 30%
Franking credits available for subsequent financial years based on a tax rate of 30%
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
58,143
49,083
1,888
2,464
60,031
51,547
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
Franking credits available for subsequent financial years based on a tax rate of 30%
60,031
51,547
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2244.. DDiivviiddeennddss ((ccoonnttiinnuueedd))
The above amounts represent the balance of the franking account as at the end of the financial period, adjusted
for:
●
franking credits that will arise from the payment of the amount of the provision for income tax at the
reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
●
●
Accounting policy for dividends
Dividends are recognised when declared during the financial period and no longer at the discretion of the
company.
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss
FFiinnaanncciiaall AAsssseettss aanndd LLiiaabbiilliittiieess::
Amounts are accounted for at amortised cost and shown at approximate fair values below:
FFiinnaanncciiaall aasssseettss
Cash and cash equivalents
Trade and other receivables
FFiinnaanncciiaall lliiaabbiilliittiieess
Trade and other payables
Borrowings
Other liabilities
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
71,457
5,606
77,063
41,896
-
3,773
45,669
21,382
5,073
26,455
37,528
17,500
77
55,105
FFiinnaanncciiaall rriisskk mmaannaaggeemmeenntt oobbjjeeccttiivveess
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency
risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk
management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the consolidated entity. The consolidated entity uses different
methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in
the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk.
The current disruptions to the market caused by the COVID-19 outbreak have also been taken into account
while assessing these risks.
Risk management is carried out by senior finance executives ('Finance') under policies approved by the Board.
These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the
consolidated entity's operating units where necessary. Finance reports to the Board on a monthly basis.
67
68
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 105
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an
optimum capital structure to reduce the cost of capital. The capital risk management policy remains unchanged
from the 2020 Annual Report.
In order to maintain or adjust the capital structure, the consolidated entity manages the level of cash and debt
that is prudent in light of the operational plan and the growth opportunities for the business.
The consolidated entity is subject to certain financing arrangement covenants and meeting these is given
priority in all capital risk management decisions. There have been no events of default on the financing
arrangements during the financial year. Formal notification of this compliance is confirmed on a quarterly basis.
The capital structure of the consolidated entity consists of net cash (cash and cash equivalents as detailed in
Note 7. Cash and cash equivalents, less borrowings as detailed in Note 15. Borrowings) and equity of the
consolidated entity (comprising issued capital, reserves and accumulated losses as detailed in Note 20. Issued
capital, Note 21. Reserves and Note 22. Retained profits.
MMaarrkkeett rriisskk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to
foreign currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting.
In FY2021 approximately 40% of Group revenue was in USD from its US operations and the consolidated entity
was able to source a similar corresponding amount of its inventory in USD. This natural hedge meant the Group
was not required to hedge its foreign exchange exposure. Management monitors his natural hedge on an
ongoing basis to ensure that the exposure to foreign exchange is acceptable.
In December 2020 the Group acquired UK-based Evans, with revenues received and operating expenses in GBP
and stock purchases in both GBP and USD. The first six months from acquisition was a period of low revenue
due to the rebuild of inventory and UK-government imposed lockdowns due to COVID-19, as well as elevated
expenses due to a transition services agreement. The GBP exposure was therefore not material and no hedge
was put in place for the FY2021.
In FY2022 the Group expects the UK business to generate more GBP inflows than outflows, and will put in place
appropriate hedges to manage this FX exposure. There is significant ongoing work on the diversification of the
supply chain, which will inform whether any material USD exposure exists in FY2022 and thereafter. If the natural
hedge for USD the Group has enjoyed to date is no longer in place, the USD exposure will be hedged
appropriately.
For the current financial period, if AUD to foreign currency rates had changed by +/- 10% from the year-end
rates with all other variables held constant, the impact on pre-tax profit for the year would have been $0.3m
lower/higher.
Price risk
The consolidated entity is not exposed to any significant price risk.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
Interest rate risk
The Group has exposure to interest rate risk on the long-term borrowings. Borrowings issued at variable rates
expose the Group to interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest
rate risk.
As at the reporting date, the consolidated entity had the following variable rate borrowings:
CCoonnssoolliiddaatteedd
Cash and cash equivalents
Borrowings
Net exposure to cash flow interest rate risk
22002211
22002200
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
BBaallaannccee
$$''000000
BBaallaannccee
$$''000000
0.229%
2.732%
71,457
-
71,457
0.790%
2.886%
21,382
(17,500)
3,882
For the current financial period, if interest rates had changed by +/- 100 basis points from the year-end rates
with all other variables constant, the impact on post-tax profit for the year would have been $0.6m higher/lower
(2020: $0.1m higher/lower), relating to the interest income on the cash at bank.
CCrreeddiitt rriisskk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency
credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains
guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date
to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements. The consolidated entity
does not hold any collateral.
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based
on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an
overall expected credit loss rate for each group. These assumptions include recent sales experience and
historical collection rates.
The consolidated entity has a credit risk exposure with trade debtors, which as at 27 June 2021 owed the
consolidated entity $2.4m (2020: $2.7m). There are no guarantees against this receivable but management
closely monitors the receivable balance on a monthly basis and is in regular contact with its customers to
mitigate risk. The Group has recognised a gain of $0.1m (2020: loss of $0.3m) in profit or loss in respect of the
expected credit losses for the year ended 27 June 2021. The recoverability of trade and other receivables at 27
June 2021 has been assessed to consider the impact of the COVID-19 pandemic and no material recoverability
issues were noted.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of
this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure
to make contractual payments for a period greater than 1 year.
69
70
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 107
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
LLiiqquuiiddiittyy rriisskk
Prudent liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly
cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become
due and payable. The consolidated entity manages liquidity risk by maintaining adequate cash reserves and
available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the
maturity profiles of financial assets and liabilities. Inventory management methods and established supplier
relationships assist management to prepare rolling forecasts of the consolidated entity's cash flow requirements
to monitor the liquidity position and optimise its cash return on investments. Typically the consolidated entity
ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing
of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be
predicted, such as natural disasters.
At balance date, the bank loan facility totalling $40.0m was available to the Group (28 June 2020: $40.0m).
Management monitors rolling forecasts of the consolidated entity’s liquidity reserve (comprising the undrawn
borrowing facilities below) and cash and cash equivalents based on expected cash flows. This is generally
carried out at local level in the operating companies of the consolidated entity in accordance with practice and
limits set by the consolidated entity. These limits vary by location to consider the liquidity of the market in which
the entity operates. In addition, the consolidated entity’s liquidity management policy involves projecting cash
flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance
sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
Financing arrangements
Unused borrowing facilities at the reporting date:
Corporate credit card
Bank loans
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
481
39,950
40,431
935
22,500
23,435
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the financial liabilities are required to be paid. The tables include both interest and
principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from
their carrying amount in the statement of financial position.
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
11 yyeeaarr oorr lleessss
$$''000000
BBeettwweeeenn 11 aanndd
22 yyeeaarrss
$$''000000
BBeettwweeeenn 22 aanndd
55 yyeeaarrss
$$''000000
OOvveerr 55 yyeeaarrss
$$''000000
RReemmaaiinniinngg
ccoonnttrraaccttuuaall
mmaattuurriittiieess
$$''000000
CCoonnssoolliiddaatteedd -- 22002211
NNoonn--ddeerriivvaattiivveess
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Undiscounted lease liabilities
Total non-derivatives
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
CCoonnssoolliiddaatteedd -- 22002200
NNoonn--ddeerriivvaattiivveess
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Bank loans
Undiscounted lease liabilities
Total non-derivatives
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
11 yyeeaarr oorr lleessss
$$''000000
BBeettwweeeenn 11 aanndd
22 yyeeaarrss
$$''000000
BBeettwweeeenn 22 aanndd
55 yyeeaarrss
$$''000000
OOvveerr 55 yyeeaarrss
$$''000000
RReemmaaiinniinngg
ccoonnttrraaccttuuaall
mmaattuurriittiieess
$$''000000
-
37,528
-
-
-
37,528
2.886%
3.000%
-
9,310
46,838
-
7,364
7,364
17,500
10,669
28,169
-
1,072
1,072
17,500
28,415
83,443
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
The lease liabilities include holdover assumptions in addition to contractually obligated periods, as disclosed in
Note. 13 Right-of-use assets and Lease liabilities.
FFaaiirr vvaalluuee ooff ffiinnaanncciiaall iinnssttrruummeennttss
This note provides information about how the consolidated entity determines fair values of various financial
assets and financial liabilities.
Fair values of financial instruments are categorised by the following levels:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
- Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices)
- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The consolidated entity has financial assets and liabilities which are measured at fair value at the end of each
reporting period.
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying
amounts of receivables, trade and other payables are assumed to approximate their fair values due to their
short term nature. The fair value of financial liabilities is estimated by discounting the remaining contractual
maturities at the current market interest rate that is available for similar financial instruments.
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying
amounts of receivables, trade and other payables are assumed to approximate their fair values due to their
short-term nature. The fair value of financial liabilities is estimated by discounting the remaining contractual
maturities at the current market interest rate that is available for similar financial instruments.
-
41,896
-
-
-
41,896
NNoottee 2266.. KKeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell
3.00%
9,393
51,289
7,231
7,231
11,686
11,686
1,413
1,413
29,723
71,619
Directors
The following persons were directors of City Chic Collective Limited during the financial period:
Michael Kay
Michael Hardwick
Megan Quinn
Phil Ryan
Chairman and non-executive director
Non-executive director
Non-executive director
Chief Executive Officer and Managing Director
71
72
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 109
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2266.. KKeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell ((ccoonnttiinnuueedd))
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major
activities of the consolidated entity, directly or indirectly, during the financial period:
Munraj Dhaliwal
Chief Financial Officer
Compensation
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
CCoonnssoolliiddaatteedd
22002211
$$
22002200
$$
1,471,565
78,689
105,075
1,400,127
1,401,013
69,741
90,834
1,314,982
3,055,456
2,876,570
Shareholding
The number of shares in the parent entity held during the financial year by each director and other members of
key management personnel of the consolidated entity, including their personally related parties, is set out below:
Directors' shareholding
Ordinary shares:
Michael Kay
Michael Hardwick
Phil Ryan
Total
OOtthheerr kkeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell sshhaarreehhoollddiinngg
Ordinary shares:
Munraj Dhaliwal
TToottaall
BBaallaannccee aatt tthhee
ssttaarrtt ooff tthhee
ppeerriioodd
NNeett AAddddiittiioonnss
dduurriinngg tthhee
ppeerriioodd
BBaallaannccee aatt tthhee
eenndd ooff tthhee
ppeerriioodd
609,914
495,000
124,000
1,228,914
90,086
9,836
9,836
109,758
700,000
504,836
133,836
1,338,672
80,000
80,000
19,672
19,672
99,672
99,672
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2277.. RReemmuunneerraattiioonn ooff aauuddiittoorrss
During the financial period the following fees were paid or payable for services provided by Deloitte Touche
Tohmatsu, the auditor of the company, and its network firms:
AAuuddiittoorr ooff tthhee ppaarreenntt eennttiittyy
Audit services - Deloitte Touche Tohmatsu
Audit or review of the financial statements
Other services - Deloitte Touche Tohmatsu
Agreed upon procedures including review of covenant calculations
TToottaall rreemmuunneerraattiioonn -- aauuddiittoorr ooff ppaarreenntt eennttiittyy
NNeettwwoorrkk ffiirrmmss ooff tthhee ppaarreenntt eennttiittyy aauuddiittoorr
Audit services - network firms
Audit or review of the financial statements
Other services - network firms
Tax compliance services including review of company income tax returns
Tax advisory services
TToottaall rreemmuunneerraattiioonn -- nneettwwoorrkk ffiirrmmss ooff tthhee ppaarreenntt eennttiittyy aauuddiittoorr
TToottaall rreemmuunneerraattiioonn
CCoonnssoolliiddaatteedd
22002211
$$
22002200
$$
508,578
390,044
5,460
10,920
5,460
10,920
514,038
400,964
62,160
62,160
5,380
-
-
-
8,260
8,740
67,540
17,000
581,578
417,964
It is the consolidated entity's policy to employ Deloitte on assignments additional to their statutory audit duties
where Deloitte's expertise and experience with the consolidated entity are important. These assignments are
principally tax advice and other advisory services, or where Deloitte is awarded assignments on a competitive
basis. It is the consolidated entity's policy to seek competitive tenders for all major consulting projects.
NNoottee 2288.. CCoonnttiinnggeenntt lliiaabbiilliittiieess
The consolidated entity had contingent liabilities at 27 June 2021 in respect of:
Cross guarantees by and between City Chic Collective Limited and Specialty Fashion Group No.5 Pty Limited.
These are described in Note 34. Deed of cross guarantees. No deficiencies of assets exist in any of these
companies.
No material losses are anticipated in respect of any of the above contingent liabilities.
73
74
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 111
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 2299.. CCoommmmiittmmeennttss
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
TToottaall lleeaassee ccoommmmiittmmeennttss -- ooppeerraattiinngg
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Plant and equipment
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
743
2,765
844
4,352
166
-
-
-
-
-
Lease commitments includes contracted amounts for a small number of retail outlets considered short term
(expiring within less than one year) and not accounted for under AASB 16 Leases as of 27 June 2021 and
contracted amounts for leases not yet commenced as of 27 June 2021 to which the Group is committed.
Lease commitments for the leases not yet commenced includes contracted amounts for a small number of retail
outlets under non-cancellable operating leases expiring within 1 to 10 years. The leases have various escalation
clauses. On renewal, the terms of the leases are renegotiated. The lease commitments do not include rental
payments which may arise in the event that sales revenue exceeds a pre-determined amount.
Capital commitments includes contracted amounts for fit-out costs (net of landlord fit-out contributions) relating
to retail outlets for which the leases have not yet commenced as of 27 June 2021 but to which the Group is
committed.
NNoottee 3300.. RReellaatteedd ppaarrttyy ttrraannssaaccttiioonnss
Parent entity
City Chic Collective Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 33.
Key management personnel
Disclosures relating to key management personnel are set out in Note 26. Key management personnel and the
remuneration report included in the directors' report.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 3300.. RReellaatteedd ppaarrttyy ttrraannssaaccttiioonnss ((ccoonnttiinnuueedd))
Transactions with related parties
The following transactions occurred with related parties:
Payment for other expenses:
Services provided by Southern Cross Shopfitting, a company that is associated with the Cotton on
Group, of which Michael Hardwick is a Director and the CFO13
Services provided by International Southern Cross Shopfitting (NZ), a company that is associated with
the Cotton on Group, of which Michael Hardwick is a Director and the CFO14
TToottaall rreellaatteedd ppaarrttyy ttrraannssaaccttiioonnss
CCoonnssoolliiddaatteedd
22002211
$$
22002200
$$
2,356,173
2,552,160
9,360
67,386
2,365,533
2,619,546
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
Current payables
Trade payables to Southern Cross Shopfitting, a company that is associated with the Cotton Group, of
which Michael Hardwick is a Director and the CFO13
841,580
-
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates. Proposals are
sought from various suppliers and awarded to the best proposal, i.e. a number of suppliers were engaged for
shopfitting services for the period.
NNoottee 3311.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn
Set out below is the supplementary information about the parent entity
Statement of profit or loss and other comprehensive income
Revenue
Expenses
Profit before income tax
Income tax expense
Profit after income tax from discontinued operations
Total profit after income tax for the year from parent entity
Other comprehensive income / (loss)
Total comprehensive income from parent entity
CCoonnssoolliiddaatteedd
22002211
$$''000000
22002200
$$''000000
136,282
(104,054)
32,228
105,877
(100,164)
5,713
(9,772)
(2,712)
-
22,456
(198)
22,258
369
3,370
(369)
3,001
75
76
13 Michael Hardwick was not involved in decision making related to Southern Cross Shopfitting and its dealings with the Group
14 Michael Hardwick was not involved in decision making related to International Southern Cross Shopfitting (NZ) and its dealings with the
Group.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 113
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 3311.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Foreign currency reserve
Share-based payments reserve
Dividends paid
Retained profits/(accumulated losses)
Total equity
PPaarreenntt
22002211
$$''000000
22002200
$$''000000
88,089
19,307
245,675
120,847
40,397
33,770
59,296
69,151
158,368
(205)
7,142
(2,884)
23,958
49,139
(7)
3,947
(2,884)
1,502
186,379
51,697
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The same guarantee disclosure applies to both parent and consolidated accounts, refer to Note 34. Deed of
cross guarantee.
As at 27 June 2021, the parent entity has net current assets of $47.7m (2020: net current liabilities of $14.5m).
The net current liabilities position in the prior financial reporting period had arisen due to the classification of
intercompany receivables/payables as current/non-current with wholly-owned subsidiaries of the parent entity
in accordance with AASB 132 Financial Instruments: Presentation. These intercompany balances eliminate on
consolidation. In the prior year, it was noted that notwithstanding the classification of these balances, the parent
entity is able to control the timing of the payment of these balances by virtue of its control of the respective
subsidiary entities. In addition, the parent entity has raised $80m in capital in the current financial reporting
period (Refer to Note 20. Issued capital for further information).
Contingent liabilities
The above disclosure does not include contingent rental payments which may arise in the event that sales
revenue exceeds a predetermined amount.
Capital commitments - Property, plant and equipment
The parent entity had capital commitments for plant and equipment as at 27 June 2021 of $0.17m (2020: $nil).
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in
Note 1, except for the following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt
may be an indicator of an impairment of the investment.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 3322.. BBuussiinneessss ccoommbbiinnaattiioonnss
On 23 December 2020, the Group completed the acquisition of the Evans brand, and the e-commerce and
wholesale businesses ("Evans Assets") for cash consideration of £23.1m (A$41m) in cash.
During the 52-week period ending 27 June 2021, the provisional accounting for the acquisition of the Evans
Assets was finalised, with the final cash consideration paid for the acquisition being revised down to £22.7m
(A$40.2m).
Details of the purchase consideration, and finalised fair values of the net assets acquired and goodwill at the
date of acquisition are as follows:
Inventory
Customer relationships
Brand
Deferred tax asset
Provisions and payables
Gift cards liabilities
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Amount settled in cash on acquisition
Acquisition costs expensed to profit or loss
FFaaiirr vvaalluuee
$$’’000000
3,042
1,418
14,007
384
(1,447)
(283)
17,121
23,087
40,208
40,208
1,008
The goodwill is attributable to the profitability of the acquired business. It will not be deductible for tax purposes.
Revenue and profit contributions
The acquired business contributed revenues of $14.0m to the Group for the period from 23 December 2020
to 27 June 2021.
Accounting policy for business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether
equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of
any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the
acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets.
All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms, economic
conditions, the consolidated entity’s operating or accounting policies and other pertinent conditions in existence
at the acquisition-date.
Business combinations were initially accounted for on a provisional basis and subsequently finalised for the 52-
week period ended 27 June 2021. The acquirer retrospectively adjusts the provisional amounts recognised and
also recognises additional assets or liabilities during the measurement period, based on new information
obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of acquisition or (ii) when the acquirer receives all the
information possible to determine fair value.
77
78
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 115
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 3333.. IInntteerreessttss iinn ssuubbssiiddiiaarriieess
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in Note 1:
NNaammee
Specialty Fashion Group No. 5 Pty Limited
City Chic Collective No. 1 Pty Limited
City Chic Collective No. 2 Pty Limited
Specialty Fashion Group No. 6 Pty Limited
City Chic International Pty Limited
City Chic Collective New Zealand Limited
Specialty Fashion Group South Africa (Pty) Ltd
City Chic Collective USA Incorporated
Avenue Online LLC15
City Chic Collective UK Limited
NNoottee 3344.. DDeeeedd ooff ccrroossss gguuaarraanntteeee
PPrriinncciippaall ppllaaccee ooff bbuussiinneessss //
CCoouunnttrryy ooff iinnccoorrppoorraattiioonn
Australia
Australia
Australia
Australia
Australia
New Zealand
South Africa
United States
United States
England and Wales
OOwwnneerrsshhiipp iinntteerreesstt
22002211
%%
22002200
%%
100.0%
80.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
-
100.0%
100.0%
80.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
-
The following entities are party to a deed of cross guarantee under which each company guarantees the debts
of the others:
City Chic Collective Limited
Specialty Fashion Group No.5 Pty Limited
The above companies (where incorporated in Australia) represent a 'Closed Group' for the purposes of the
Corporations Instrument, and as there are no other parties to the deed of cross guarantee that are controlled
by City Chic Collective Limited, they also represent the 'Extended Closed Group'.
All companies in the Closed Group are dormant, except for City Chic Collective Limited. The financial results of
the Closed Group are the same as the financial results of the parent entity which are disclosed in Note 31. Parent
entity information.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
2277 JJuunnee 22002211
NNoottee 3355.. EEvveennttss aafftteerr tthhee rreeppoorrttiinngg ppeerriioodd
Covid-19 related matters
The Covid-19 pandemic continues to have an impact globally in the new financial period. The Directors continue
to monitor COVID-19 related developments and are closely working with management to assess and navigate
through the potential implications for team members, suppliers, customers, and operations. The focus is to
maintain production and supply of products and services whilst minimising the risk of spread of COVID-19
amongst our team members, our customers, and the societies in which the Group operates.
Subsequent to the end of the financial year, the Australian store network was impacted by varying periods of
temporary closures in response to government direction on restrictions and lockdowns. During the first 8 weeks
of FY22, there were approximately 1,646 equivalent store days closed (c.33% of total equivalent store days over
the period) including 764 in NSW, 565 in Victoria, 178 in Queensland, 40 in Western Australia, 32 in South
Australia, 20 in ACT, 7 in Northern Territory and 40 in New Zealand. Stores in NSW (18), Victoria (21), ACT (2)
and New Zealand (8) remain temporarily closed as of the date of this report. However, the Group continues to
trade profitably with the benefit of the geographic and channel diversification. City Chic is well capitalised to
deliver on its strong organic growth pipeline and well positioned for future inorganic opportunities to expand
the global customer base.
Navabi acquisition
On 23 July 2021, the Group signed and completed a share purchase agreement to acquire 100% of the shares
in JPC United GmbH (“Navabi’) for €6.0m (A$9.6m) in cash, from the co-founders of Navabi. Navabi’s assets
include €2.1m of cash net of tax liabilities, as well as inventory and immaterial other working capital. In 2009,
Navabi was established as an online marketplace selling hundreds of third-party women’s plus-size brands.
Navabi has also developed its own brands exclusively sold on the marketplace, which have grown to become
the majority of sales in recent years. Navabi’s loyal customer base are focused on size, fit and quality, and are
based predominantly in Germany. Navabi’s websites had 5.8m customer visits in 2020, generating €10.4m
(A$16.6m) in sales revenue, and pre-pandemic traffic exceeded 10m visits.
No other matter or circumstance has arisen since 27 June 2021 that has significantly affected, or may
significantly affect the consolidated entity's operations, the results of those operations, or the consolidated
entity's state of affairs in future financial years.
15 Avenue Online LLC was merged into City Chic Collective USA Incorporated, and no longer exists as a standalone entity.
79
80
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 117
Annual Financial Report 2021 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
DDiirreeccttoorrss’’ ddeeccllaarraattiioonn
2277 JJuunnee 22002211
In the directors' opinion:
●
●
●
●
●
the attached financial statements and Notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and Notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in Note 1 to the financial statements;
the attached financial statements and Notes give a true and fair view of the consolidated entity's financial
position as at 27 June 2021 and of its performance for the financial period ended on that date;
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Closed
Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue
of the deed of cross guarantee described in Note 34 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the directors
Michael Kay
Chairman
26 August 2021
Sydney
Phil Ryan
Chief Executive Officer and Managing Director
Annual Financial Report 2021 | Corporate Governance Statement
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoorrppoorraattee GGoovveerrnnaannccee SSttaatteemmeenntt
2277 JJuunnee 22002211
The directors are committed to the principles underpinning best practice in corporate governance, applied in a
manner which is best suited to the Group and its controlled entities and to best addressing the directors'
accountability to shareholders and other stakeholders.
In formulating the governance principles that guide the operations of the Group, the directors have taken into
account the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice
Recommendations (4th edition).This is supported by an overriding organisation wide commitment to the
highest standards of legislative compliance and financial and ethical behaviour.
the Board
Details of the Group’s Corporate Governance Statement as well as key policies and practices and the charters
the Group’s website
for
(https://www.citychiccollective.com.au/corporate-governance), including performance against measurable
objectives. The Corporate Governance Statement will be lodged with ASX at the same time that this Annual
Report is lodged with ASX.
available on
committees
each of
and
are
its
The Corporate Governance Statement outlines the Group's main corporate governance practices and policies
in place during the 52-week period ended 27 June 2021 (unless otherwise stated) and are current as at 17
September 2021 and have been approved by the Board. The Board is comfortable that the practices are
appropriate for a Company of City Chic Collective Limited’s size.
81
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 119
Annual Financial Report 2021 | Annual Financial Statements
Annual Financial Report 2021 | Shareholder information
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
SShhaarreehhoollddeerr iinnffoorrmmaattiioonn
The shareholder information set out below was applicable as at 27 August 2021.
DDiissttrriibbuuttiioonn ooff eeqquuiittaabbllee sseeccuurriittiieess
Analysis of the number of ordinary shareholders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
NNuummbbeerr ooff
hhoollddeerrss ooff
oorrddiinnaarryy
sshhaarreess
%% ooff eeqquuiittyy
sseeccuurriittiieess iinn
tthhiiss ccllaassss
NNuummbbeerr ooff
sseeccuurriittiieess
1,938
1,991
529
491
61
5,010
147
918,686
5,019,234
3,955,224
11,523,002
207,247,092
228,663,238
0.40
2.20
1.73
5.04
90.63
100
1,432
Analysis of the number of shareholders, holding restricted and unquoted fully Loan Funded (LF) paid ordinary
shares issued pursuant to an employee incentive scheme, by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
NNuummbbeerr ooff
hhoollddeerrss ooff
uunnqquuootteedd
oorrddiinnaarryy
sshhaarreess
%% ooff eeqquuiittyy
sseeccuurriittiieess iinn
tthhiiss ccllaassss
NNuummbbeerr ooff
sseeccuurriittiieess
-
-
-
-
9
9
-
-
-
-
100.0
100.0
-
-
-
-
8,675,488
8,675,488
Analysis of the number of holders, holding restricted and unquoted performance rights issued under an
employee incentive scheme, by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
NNuummbbeerr ooff
hhoollddeerrss ooff
ppeerrffoorrmmaannccee
rriigghhttss
%% ooff eeqquuiittyy
sseeccuurriittiieess iinn
tthhiiss ccllaassss
NNuummbbeerr ooff
sseeccuurriittiieess
-
-
-
1
6
7
-
-
-
0.97
99.03
100.00
-
-
-
55,556
5,676,296
5,731,852
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
SShhaarreehhoollddeerr iinnffoorrmmaattiioonn
EEqquuiittyy sseeccuurriittyy hhoollddeerrss
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Name
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
T BATSAKIS PTY LTD
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
HENOCH INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
LANDPEAK PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
ONE MANAGED INVT FUNDS LTD
UBS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
ONE FUND SERVICES LTD
SANDHURST TRUSTEES LTD
WARBONT NOMINEES PTY LTD
BRISPOT NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
TOWER HOLDINGS PTY LIMITED
A/C designation
Ordinary shares
Number held
55,286,126
% of total
shares issued
24.18
41,611,355
29,794,168
25,709,572
7,230,000
5,946,634
5,798,916
4,000,000
3,665,141
3,010,000
2,099,748
1,997,122
1,474,343
1,367,650
1,263,051
1,033,620
1,021,536
786,639
782,209
686,485
119944,,556644,,331155
18.20
13.03
11.24
3.16
2.60
2.54
1.75
1.60
1.32
0.92
0.87
0.64
0.60
0.55
0.45
0.45
0.34
0.34
0.30
85.09
Unquoted equity securities
The Company has unquoted fully paid ordinary shares issued pursuant to an employee incentive scheme, and
unquoted performance rights on issue, as detailed more fully above.
SSuubbssttaannttiiaall hhoollddeerrss
Substantial holders in the company are set out below:
AUSTRALIANSUPER PTY LTD
VVoottiinngg rriigghhttss
The voting rights attached to ordinary shares are set out below:
Ordinary shares
Number held
% of total
shares issued
17,045,752
7.20
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Performance Rights
Performance rights carry no voting rights.
There are no other classes of equity securities.
2
3
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 121
Annual Financial Report 2021 | Company Directory
Annual Financial Report 2021 | References
References
PAGE 12, GLOBAL BUSINESS OVERVIEW
1Active customers includes customers who have shopped in online, stores and omni-channel in the last 12 months;
excludes wholesale and marketplace (at Jun 2021)
2Traffic to our own websites in the 12 months to Jun 2021; excludes stores and partner marketplace websites
3Average annual spend excludes wholesale and marketplace customers
4Includes Evans revenue (in AUD) and metrics for 6 months since acquisition (acquired on 23 Dec 2020)
PAGE 14, FINANCIAL PERFORMANCE
1 Underlying EBITDA excludes non-recurring costs (e.g. relating to acquisitions and equity raise) and is presented on
a pre-AASB16 basis
2 Active customers include customers who have shopped in online, stores and omni-channel in the last 12 months;
excludes wholesale and marketplace customers
3 Defined as transacted and sales in last 12 months. Online represents websites and online marketplace sales
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoorrppoorraattee ddiirreeccttoorryy
Directors
Michael Kay - Chairman and non-executive director
Michael Hardwick - Non-executive director
Megan Quinn - Non-executive director
Phil Ryan - Chief Executive Officer and Managing Director
Natalie McLean – Non-executive director (appointed 5 August 2021)
Neil Thompson – Non-executive director (appointed 5 August 2021)
Company secretary
Marta Kielich
Registered office
Principal place of business
Share register
Auditor
Solicitors
Bankers
151-163 Wyndham Street
Alexandria, NSW 2015
Telephone: (02) 9059 4300
151-163 Wyndham Street
Alexandria, NSW 2015
Telephone: (02) 9059 4300
Link Market Services Limited
Level 12, 680 George Street
Sydney, NSW 2000
Telephone: (02) 8280 7111
Facsimile: (02) 9287 0303
Deloitte Touche Tohmatsu
Chartered Accountants
60 Station Street
Parramatta, NSW 2150
Thomson Greer
Level 25, 1 O’Connell Street
Sydney, NSW 2000
National Australia Bank
255 George Street
Sydney, NSW 2000
Stock exchange listing
City Chic Collective Limited shares are listed on the Australian Securities
Exchange (ASX code: CCX)
Website
http://www.citychiccollective.com.au
Corporate Governance
Statement
https://www.citychiccollective.com.au/corporate-governance
ABN
43 057 569 169
4
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 123
CITY CHIC COLLECTIVE
151–163 Wyndham Street,
Alexandria NSW 2015
Australia
ABN 43 057 569 169
P +61 2 9059 4300