2022
ANNUAL
REPORT
Contents
Overview
Message from our Chairman and CEO
Board of Directors
City Chic Annual Recap & Outlook
Our People
Environmental, Social and Corporate Governance
Annual Financial Report 2022
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 3
04281634202224 Annual Report 2022 | City Chic Collective Overview
WORL D OF CURVE S
Global
Plus-size
Customer led
Omni Channel
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 5
We are... Annual Report 2022 | City Chic Collective Overview
EVERYDAY ESSENTIAL FASHION
FIERCELY FASHIONABLE
FASHION FOR YOUR SHAPE
THE LAGEN LOOK
A GLOBAL COLLECTIVE OF PLUS-SIZE BRANDS
City Chic Collective is a global omni-channel retailer specialising in plus-size women’s apparel,
the USA, the UK and Europe. The collective of brands are also available through third-party
footwear and accessories. It is a collective of customer-led brands and has a strong following
marketplace and wholesale partners in Australia, New Zealand, US, Canada, UK, Europe and
in Australia, USA, UK, Europe and New Zealand. Our omni-channel model comprises of a
the Middle East.
network of stores across Australia and New Zealand (ANZ) and websites operating in ANZ,
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 7
Annual Report 2022 | 2022 Snapshot
2022 Snapshot
SALES
$369.2m
1.4m
ACTIVE CUSTOMERS
82%
ONLINE PENETRATION
78.6m
ANNUAL ONLINE TRAFFIC
3
KEY REGIONS GLOBALLY
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 9
Annual Report 2022 | City Chic Collective Overview
Building a Global Omni -Business
Customer-Centric Operating Model
CONTRIBUTION BY CHANNEL
1%
2%
26%
FY21
1%
7%
17%
FY22
71%
75%
Online Website
Stores
Online Marketplaces
Wholesale
CONTRIBUTION BY REGION
6%
12%
Highly-engaged and
gro wing custo m er base.
O
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OUR CUSTOMERS
ARE AT THE HEART OF
EVERYTHING WE DO!
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Longstanding
Leadership Tea m.
38%
FY21
56%
44%
FY22
44%
1.4
m Active Custo m e r s G l o
a ll y
b
ANZ
Americas
EMEA
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 11
Annual Report 2022 | City Chic Collective Overview
Global Business Overview
AMERICAS
$162.4M REVENUE
EMEA
AUSTRALIA & NEW ZEALAND
$45.1M REVENUE
$161.8M REVENUE
Wholesale
3%
Marketplace
12%
Wholesale
2%
Marketplace
9%
Online
62%
Stores
38%
Online
85%
Online
89%
• 579k Active Customers
• 35.9m Annual Traffic
• A$237 Avg Annual Spend
• 295k Active Customers
19.0m Annual Traffic
•
(includes 11 months since Navabi acquisition)
• A$135 Avg Annual Spend
• 521k Active Customers
• 23.6m Annual Traffic
• A$310 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
90 stores as at 3 July 2022
Head office in Sydney
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 13
Annual Report 2022 | City Chic Collective Overview
Financial Performance
SALES GROWTH
SALES $M
3 5 . 2 % C A G R
EARNINGS GROWTH
UNDERLYING EBITDA1 $M
2 3 . 7 % C A G R
EARNINGS GROWTH
UNDERLYING EBIT1 $M
2 4 . 3 % C A G R
$369.2
$265.6
$42.4
$47.1
$149.5
$199.7
$24.9
$26.5
$36.0
$40.1
$20.9
$20.6
FY19
FY20
FY21
FY222
FY19
FY20
FY21
FY222
FY19
FY20
FY21
FY222
Strong Execution of Digital Growth Strategy
GLOBAL CUSTOMER BASE3
ONLINE PENETRATION4
ONLINE CUSTOMER ENGAGEMENT5
CUSTOMER NUMBERS '000
GLOBAL REVENUE $M
TRAFFIC '000
R
G
A
% C
3 . 6
5
R
G
A
% C
7
6
1,395
1,070
663
385
44%
Online
Sales
65
196
127
82%
Online
Sales
303
R
G
A
4 .1 % C
8
78.6
58.1
34.6
12.6
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
FY19
FY20
FY21
FY22
1,2,3,4,5 Please refer to page 125
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 15
Annual Report 2022 | Comments by our Chairman and CEO
Message from
Our Chairman and CEO
The 2022 financial year was another period of
for City Chic, notwithstanding
profitable growth
challenging global economic conditions, geopolitical
uncertainty and the ongoing Covid-19 pandemic. The
Company continued to execute its strategy to build a
global business, adapted to changing conditions and
uncertainty, and continued to build further resilience
into its operations, in order to support our vision to
lead a world of curves.
Here are some of the financial and operational
performance highlights for FY2022:
•
Sales Revenue grew by 39% to $369.2m and
comparable sales growth (CSG) was up 25.5%
• Underlying EBITDA grew by 11.3% to $47.1m,
•
representing a 12.8% margin
Statutory NPAT was $22.3m
Underlying NPAT was $28.5m (up 14.5%)
(up 4.7%) and
• Our global customer base grew 30% YoY to 1.4m
active customers, with growth in all regions
• Global customer website traffic grew by 35% YoY
to 78.6m visits
• Online comparable sales grew by 33.8%, with
82% online penetration
• Continuing geographic diversification of revenue,
with 56% of revenue from Northern Hemisphere
• Ongoing diversification of revenue channels;
Partner generated revenue grew to $30m, with
$22m generated in the second half
Our performance was driven and supported by a
range of operational and strategic initiatives as we
continue to build a truly global omni-channel business,
focussed exclusively on the plus size market.
Here are some of the key initiatives:
•
• Continued
development
of
geographies,
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channels and lifestyles. In particular, City Chic:
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expanded into new growth markets in Europe,
Canada and the Middle East
continued to grow strongly our digital channel
continued upsizing high performing stores,
increasing ‘gold’ look design stores and
closing old or poor performing stores
continued implementation of the partnership
strategy globally
expanded our global range to over 8,000
styles and 15 lifestyle brands; we launched the
conservative product stream in Australia and
expanded the range of styles and lifestyles
offered in the USA and UK
• Continued to invest in bench-strength across
planning and
logistics. We will continue to
strengthen the team with global experience to
ensure our capability stays ahead of the growth
curve
• Made a strategic investment in inventory to
manage global supply chain volatility and support
continuing growth with season appropriate stock
now in-market, in all regions
• Continued
to diversify
the supply chain
geographically and with a shift to in-country
sourcing to support global growth and offset
future impacts of volatility; we now ship from 6
sourcing origins to 7 destination ports and have
expanded our factory network to ~100 tier 1
factories to reduce reliance on any single vendor
or country
Integrated strategic acquisitions of European plus-
size online marketplace Navabi (acquired in July
2021) and USA plus-size marketplace CoEdition
(acquired in December 2021)
CHAIRMAN MICHAEL KAY
CEO & MANAGING DIRECTOR PHIL RYAN
• Continued execution of our ESG priorities; we
have continued to make progress against our
Modern Slavery roadmap, strengthened bans
on high-risk cotton regions, commenced the
introduction of preferred fibres into a small
number of our products and developed more
sustainable packaging options which we will roll
out globally.
We remain focussed on our three strategic pillars; first,
we are exclusively plus-size; second, we focus on the
digital channel; and third, global customer acquisition.
This has seen us achieve revenue and EBITDA CAGR
in the 3 years from FY2019 to FY2022 of 35.2% and
23.7% respectively. This has been achieved during a
period of acute global uncertainty and volatility which
speaks to the quality of the City Chic franchise.
During FY2022, supply chains continued to be
impacted by geopolitical and pandemic related
issues, resulting in disruptions, delays and cost
pressures. As was flagged by Management, during
the year we continued to invest in inventory, both to
support our organic and inorganic growth and to help
mitigate the impacts of these supply chain constraints
and accompanying inflation.
The strategic decisions we made in relation to
sourcing included:
•
Temporarily buying core ranges two seasons in
advance to help achieve unit cost savings; our
core ranges sell consistently across seasons and
both hemispheres, leading to low obsolescence
risk
two-month buffer
• Adding a
purchases
Shifting production to origin ownership (FOB
terms), which had the effect of increasing the
inventory
for
•
‘goods in transit’ inventory level. However, this
enabled us to geographically diversify our supply
chain into new countries and factories
Taking early receipt of inventory that had been
planned for FY2023, in late FY2022.
•
Our investment in inventory resulted in a carrying
value of $195.9m at the end of the reporting period,
with 52% of this inventory secured for sale in future
periods. We have ensured that the stock is seasonally
relevant which means we will have stock in market
for key event periods. We believe these measures
will conclude our requirement to accelerate future
inbounding of inventory as supply issues normalise
and accordingly, City Chic expects inventory to
reduce to more normal levels over FY2023. We are
targeting an inventory balance of $125-135m at the
end of FY2023, with strong cash generation expected
to deliver a positive net cash position in the second
half of the current financial year.
During the 2022 financial year, 13.4% of store trading
days were lost in ANZ due to mandated store closures
related to Covid-19, with our overall revenue growth of
11% in ANZ contributing $161.8m in revenue, supported
by strong online sales as our customer continued to
shop our expanded range.
As noted last year, Avenue has proved to be a very
good acquisition, raising our profile in our biggest
market and providing opportunities to offer our
collective of brands and range of lifestyles across our
entire US customer base. Revenue in the Americas
was $162.4m, up 53.9% with organic growth in all
channels, due to a combination of website traffic
being up 31%, 42% growth in customer numbers and
strong partner growth.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 17
Annual Report 2022 | Comments by our Chairman and CEO
Logistics issues that were affecting our EMEA business
were ameliorated in the second half. These supply
chain and logistics challenges impacted sales in the
first half of the financial year and through to the start
of the summer trading period, in particular in the UK.
With improvements in product supply and logistics in
the second half, the EMEA business delivered sales
over the year of $45.1m and was profitable in the
second half.
As noted above, the partner business globally saw
substantial growth, in particular in the second half
of the financial year and delivered revenue of $30m
(which is included in the regional sales revenue
numbers above). This growth was driven by existing
partners ‘resuming’ normal operations and improved
demand post the peak of Covid-19 related impacts
as well as new partners that have been onboarded.
This demonstrates our product range and lifestyle mix
across all our assortment has global appeal.
As at 3 July 2022, our net debt position was $4m with
$14m drawn under our expanded $60m debt facility.
In light of ongoing macroeconomic and consumer
spending uncertainty, and in considering the company’s
capital allocation priorities, the Board decided not to
declare a dividend for FY2022. As noted below, we
expect strong free cash flows as inventory unwinds
over the current financial year (FY2023) and expect to
be in a positive net cash position during the second
half of FY2023. Consequently, capital management
decisions will be reviewed as this working capital is
released.
FY2023 KEY INITIATIVES AND OUTLOOK
In FY2023 City Chic is focussed on the execution of
various initiatives including:
•
in
the Americas by
Expanding market share and driving customer
acquisition
increasing
customer purchase frequency and spend through
personalised marketing
Expanding market share in ANZ through the
continued expansion of our conservative lifestyle
product offering
Expanding market share in the UK and Europe
with seasonally relevant product in-market, across
a range of brands in our collective
•
•
•
Expanding and executing on marketplace
partnerships in all regions
• Continuing the rotation of our store portfolio into
new fit-outs & conversion to larger format stores
• Reviewing our
retail price architecture, as
appropriate across geographies and channels
• Continuing to develop the World of Curves social
community
• Continuing to review inorganic opportunities to
accelerate global customer growth
• Continuing to execute against our ESG priorities
We are acutely aware of the impacts of the evolving
global economic conditions and geopolitical
uncertainty, and just as the Company had to adapt
over the last two and a half years, we remain focussed
on remaining agile, building resilience and managing
the business to traverse the current conditions in
order to continue to deliver profitable growth.
We believe our expanded market penetration across
geographies and channels, our category leadership
globally with stock available in market for key sale
periods during the year, and our investment in
distribution infrastructure provides a strong foundation
and will support us in our efforts to continue to grow
the business and ultimately, to lead a world of curves.
Our sincere thanks to the City Chic team and our
customers for their ongoing support over another
challenging year. Throughout these two and a half
Covid-19 affected years, the City Chic team hasn’t
faltered for a moment and throughout, has maintained
its energy, enthusiasm and ambition. With the prospect
of another volatile and uncertain year ahead, we
are fortunate indeed to have such a talented and
motivated team to serve our loyal customers around
the world.
Michael Kay
Chairman
Phil Ryan
CEO & Managing Director
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 19
Annual Report 2022 | 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.
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.
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, InvoCare
and The Lottery Corporation.
Non-Executive Director
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.
Mrs 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. Mrs 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
NEIL THOMPSON
Neil Thompson joined the Board in August 2021 as an
independent, non-executive director. He is the Chair 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 is currently
a Finance Operating Partner at private equity firm Potentia
Capital and was previously the Chief Financial Officer of
Ascender HCM (a payroll software and services company). He
is also a director of the Australian World Orchestra.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 21
Annual Report 2022 | City Chic Annual Recap & Outlook
City Chic Annual Recap
OPERATIONAL AND STRATEGIC HIGHLIGHTS
• Continued global range expansion to over 8,000 styles and 15 lifestyle brands
• Partnership strategy implemented globally with $30m global partner business
• ANZ store network invested in with 12 Premium Flagship stores
• Conservative product stream launched in Australia
• Expansion into new growth markets in Europe, Canada and the Middle East
• Strategic acquisitions of Navabi in July 2021 and CoEdition in December 2021
• Diversified supply chain with shift to in-country sourcing to support global growth
and offset future impacts of volatility
•
Infrastructure and cost base in place to support global scalability
• Expanded $60m, 3-year debt facility provides flexibility to drive growth
2023 Key Initiatives
• Expand market share and drive customer acquisition in the Americas; increase
frequency and spend through personalised marketing
• Expand market share in ANZ through the continued expansion of our
conservative lifestyle product offering
• Expand market share in the UK and Europe with seasonally relevant product in-
market, across a range of brands in our collective
• Expand and execute on marketplace partnerships in all regions
• Continue rotation of store portfolio into new fit-outs & conversion to larger format
stores
• Continue to develop the World of Curves social community
• Continue to review inorganic opportunities to accelerate global customer growth
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 23
Annual Report 2022 | Our People
Our People
Who we are and How we do
things
Our ‘Core Capabilities’ are at the foundation
Leading a world of curves means putting her first,
of our culture; they support our goal and
and creating experiences that makes her feel
Gender diversity
The proportion of women employed at different levels across the Group globally as at the end of the reporting
period was as follows:
purpose to “lead a world of curves.” Our Core
courageous; feel proud to identify as female; feel
BOARD
C-SUITE
Capabilities are the skills and behaviours we
empowered to embrace her individuality; and to
use as guiding principles to lead, grow and
respect and love the skin she is in.
deliver exceptional experiences for her, our
customer. The core capabilities are:
She is our customer, she is a member of our team,
and she is our leader. We listen to her.
WE PUT HER FIRST
We value the learnings we gain from her coming
She is at the heart of every decision;
from different backgrounds, experiences, and
WE ARE PASSIONATE CONNECTORS
and work experiences that understand, respect and
We love what we do, and we work as one team;
meet the diverse needs, preferences and goals she
perspectives. These learnings enable us to develop
beautiful products and create exceptional customer
WE KNOW IT, OWN IT, DO IT
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,
We are knowledgeable, we are accountable,
as our global footprint expands.
and we get it done;
WE MOVE FAST AND KEEP IT SIMPLE
We think quickly, act decisively, and keep things
on point;
WE ARE FEARLESS AGILE THINKERS
We express ideas, take calculated risks, and
embrace change.
Diversity and Inclusion
Our commitments also extend beyond her. We seek
to be 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.
We know that true workplace diversity recognises
and values the contribution of people from different
backgrounds, experiences and perspectives. 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.
2 of 4 non-executive directors on the Board are
1 in 3 C-Suite leaders (CEO, KMP and Head of
women; 2 of 5 Board members (including non-
Business) is a woman
executive and executive directors) are women
LEADERSHIP TEAM
MANAGERS
WORKFORCE
67% of the Leadership Team
79% of our Managers
94% of our workforce are
(Other Executives and General
(Senior Managers and Other
women
Managers) are women
Managers) are women
33%
21%
6%
67%
79%
94%
In FY22 we sought to increase the attractiveness of the CCX brand to the male sector of the labour market
and there was a 40% increase in male head count in our support office during the year. In FY23 we will seek to
continue to increase gender diversity in middle management and professional positions in our support office
workforce segments while being mindful of our ongoing objective to achieve a Sense of Belonging Score of 75%
or above for all groups by the end of FY23.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 25
Annual Report 2022 | Our People
Objectives established for achieving diversity (including gender diversity) and progress towards achieving them
during the year ended 3 July 2022 are set out below:
Supporting Our People
Engagement and Flexible Working Conditions
FY2022 Diversity Objectives
OBJECTIVE
ACHIEVEMENT
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 Diversity Survey annually
Achieve a Sense of Belonging Score of 75% or above for all groups1 within the
next two years (FY22 and FY23)
Launch Diversity and Inclusivity Committee to lead diversity and inclusion
awareness, process improvement, education, and initiatives
Reposition employment brand and recruitment activity to increase the
attractiveness of the company to males
Achieved
Achieved
On track
Achieved
Achieved
Launch FY22 workplace volunteering program
Discontinued
Due to the ongoing impact of COVID-19 related lockdowns, work from home arrangements and safety
considerations during the reporting period, our objective to launch our workplace volunteering program was
discontinued (having been originally rescheduled from FY21 to FY22). Although restrictions eased during the
reporting period, a significant reduction in available volunteering opportunities remained reflecting health and
safety concerns, including with respect to vulnerable populations and members of the community.
Our diversity strategy is supported by the following objectives established for FY2023:
FY2023 Diversity Objectives
OBJECTIVE
Seek to maintain gender diversity in the composition of the Board and the C-Suite Leadership Team of
no less than 30% of each gender.
Achieve a Sense of Belonging Score of 75% or above for all groups2 by FY23
Introduce a Gender Affirmation Policy
Undergo an end-to-end ‘Job Access’ assessment to ensure optimal access to employees with a
disability or impairment
Employee engagement is measured annually, with quarterly ‘pulse’ checks, to provide regular and granular
feedback to HR and leaders on all factors of employment experience which in turn inform P&C initiatives and
priorities.
During periods of Covid-related lock-downs and/or work from home arrangements, we sought to maintain
connection and engagement via a range of virtual social and connection activities.
To further support our employees, we provide our team with access to flexible working conditions, which based
on their role and location may involve flexibility in start and finish times, casual or part time work, job sharing and/
or for support office staff, hybrid working arrangements.
Safety
We care about the physical and psychological safety and health of our people and we are committed to creating a
safe work environment.
As part of our HSE initiatives during the year, we, amongst other things:
•
provided regular Covid-safety updates and associated training to ensure compliance with evolving
government guidelines
conducted regular covid-safety audits
provided employees with access to vaccination leave to encourage the uptake of vaccinations
continued to offer general first aid and mental health first aid to retail operations leaders, HR and other
•
•
•
interested employees; and
•
all employees have access to a multi-faceted EAP service
FY22 LTIFR3
FY22 TRIFR4
DOWN FROM 15.7 IN FY21
DOWN FROM 70.5 IN FY21
15.7
FY21
8.6
FY22
70.5
62.87
FY21
FY22
1, 2 Groups include LGBTQI+, Disability/Impairment, Parents, Carer responsibilities, ESL, Gender Identity, over 45 age bracket
3,4 Please refer to page 125
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 27
Annual Report 2022 | Acting Ethically & Responsibly
Environmental, social and
corporate governance
ESG across our supply chain
Seeking to create safe and respectful working environments for all workers in our supply
chain has long been, and remains, an overarching priority and focus. 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 comes with the growth of brands,
our geographical reach and the diversifying supply chain. Our goal is to work together
with all our global partners to have 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 ensure safe and fair working conditions for
all of their employees. Our Ethical Trade program, developed and refined by our long
serving team committed to improving practices, outlines our expectations for ourselves
and our partners in our supply chain and seeks to hold us to account when it comes to
human rights impacts associated with producing our product.
Social Responsibility
Our FY2022 Highlights
• Continued to make progress against our Modern Slavery Act roadmap
•
•
Strengthened bans on high-risk cotton regions
Piloted DNA / fingerprint testing on cotton product
• Continued tracing of all tiers of our supply chain
We commit to source product in a recognised, responsible, and transparent supply chain
It is important for us to continue to map all levels of our supply chain to understand all potential supply chain risks.
As we continue to trace through these layers, we are committed to publishing our supplier list with regular
updates.
101
Tier 1 Factories
6
Sourcing Countries
43,236
Workers in Tier 1
56%
Female Workers
MODERN SLAVERY UPDATE
As part of our modern slavery risk assessment, we identified that cotton production right back to farming was a
high-risk issue that we need to better understand and address.
CCX is committed to taking 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.
In addition to strengthening our ban on known regions that endorse the use of forced labour, we have
implemented a more diligent tracing program and associated plan for remediation. We worked closely with key
suppliers to educate them on key indicators and documentation required to comply with a robust chain of custody
process. It is important for us to monitor and validate our processes to assess their effectiveness. As a result,
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 29
Annual Report 2022 | Acting Ethically & Responsibly
we piloted cotton DNA testing, to help validate the origins and audit products that are part of our supply chain.
The right of every worker in our supply chain to enjoy safe and healthy working conditions in an
Testing across a randomly selected collection of products from the supply chain was conducted by accredited 3rd
environment where they are not exploited
Parties and our team also worked closely on validating chain of custody documentation received from vendors as
part of our due diligence.
We seek to partner with the vendors in our supply chain to ensure working conditions are clean and safe and
workers are not performing any unsafe work.
Working together to empower workers and give them a voice in the supply chain
As part of our Worker Voice Program, we were excited to roll out our worker survey tool to more factories and
As we expand and further diversify our sourcing regions, and manage Covid-related risks and travel restrictions,
we seek to check and monitor the working environment of workers in our supply chain through the use of our 3rd
party auditors.
new regions such as Bangladesh. The worker surveys are conducted alongside our factory social audits and are
New suppliers are onboarded into our Ethical Trade Program and as we audit factories, we assign a risk rating to
in addition to our worker hotline and grievance mechanisms, as another channel to talk to factory workers about
help prioritise corrective actions. Our audit program is one part of our vendor onboarding and it supports and sits
key themes such as:
• Modern Day Slavery
•
Labour Practices
• Health & Safety
• Worker Satisfaction
alongside our other ethical trade initiatives.
We understand that not all factories will be at the same stage in their ethical trade journey, however, we seek to
partner with factories who also are committed in coming on this journey with us. Our overall audit risk ratings and
tracker have been updated to reflect our scorecard across our total group of factories and we are pleased to see
Enhancing our worker voice tools is a key initiative to help support us in gaining a more direct line to all workers.
our average audit score improve.
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.
AUDIT RISK RATINGS
Working with factories to recognize that a minimum wage does not always equal a living wage
GREEN
79.2%
We commit to do our part in closing the gap between living wage and minimum wage. We recognise that multi
stakeholder initiatives are the best way to drive change and we look to global benchmarking to help determine a
basic living wage by region.
Through our audit process we train and then ask our factories to establish a living wage calculation. We believe
this empowers all factory owners in understanding what a living wage is made up of and how their wages paid
compare. It is important for us to monitor progress of all factories and as a result we have developed our living
wage tracker by recording factories that are:
•
Paying living wage
• On track to living wage = Paying above minimum wage
•
Paying minimum wage (but does not equal living wage)
AMBER
13.9%
RED
6.9%
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 31
Annual Report 2022 | Acting Ethically & Responsibly
Environmental Sustainability
Our FY2022 Highlights
•
Introduced preferred fibres into select range of product
• Developed more sustainable packaging options
• Continued to build knowledge & capacity for future climate strategies
Preferred Materials
FIBRES
The fibres and materials we choose to use in our supply chain contribute to our overall impact and footprint. We
recognize that we need to work towards understanding where there is opportunity to use more sustainable fibres.
As a first step, we have initially introduced into a small amount of our product ranges a selection of “better” choice
fibres in which we have conducted diligent chain of custody processes to help certify that these fibres were
sourced responsibly and were used in our product.
• Organic cotton
•
•
•
Supima cotton
FSC approved viscose
FSC approved bamboo
• Recycled polyester
We care for the environment and the management of waste in our
supply chain
PACKAGING
As part of our audit program, we seek to ensure that all textile processing and
waste management is in line with the legislation of the manufacturing country.
Our audits include environmental and waste management checks for
1.
Legal Authorisations – such as the EIA
2. Solid & Hazardous wastes
3. Wastewater, Air Emissions and Noise
4. Energy & Water reductions
We have been working with our distribution partners to develop satchels for eCommerce sales that have a high
recycled plastics content. Our distribution centres in Australia and the UK are currently transitioning their satchels
to a minimum of 65% made from recycled materials. We are working towards sourcing similar solutions for our
USA and European warehouses.
This initiative will help contribute to reducing our footprint and driving a more positive impact on our planet.
We request factories only use Oeko-tex 100 certified mills, which forms part of
EXTENDED PRODUCER RESPONSIBILITY (EPR)
our Tier 2 onboarding.
Implementing Initiatives to help Manage & Reduce our Footprint
Our current focus is on those areas where we believe we can help create
a more positive and immediate impact on our planet, while continuing to
offer affordable product to our customers. These areas include assessing
opportunities to utilise preferred materials across product and packaging.
As part of our global supply chain distribution responsibilities, we have registered under the relevant Extended
Producer Responsibility schemes (EPR) in the UK, Germany and France.
Extended Producer Responsibility (EPR) for packaging aims to reduce the environmental and economic burdens
of plastic waste management for municipalities by extending producer responsibility to the end-of-life stage.
As part of this commitment, we have established a process to comply with EPR requirements across Europe and
UK for packing and textiles wastes and recycling.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 33
Annual Financial
Report 2022
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 53-week period ended 3 July 2022.
Directors
The following persons were directors of City Chic Collective Limited during the financial period and up to the
date of this report (unless otherwise stated):
Michael Kay
Megan Quinn
Phil Ryan
Neil Thompson (appointed 5 August 2021)
Natalie McLean (appointed 5 August 2021)
Michael Hardwick (resigned 17 November 2021)
Key Management Personnel
Peter McClelland (Chief Financial Officer, appointed 10 November 2021)
Munraj Dhaliwal (Chief Financial Officer, resigned 10 December 2021)
Company Secretary
Marta Kielich
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,
Fox & Royal and Navabi. City Chic and CCX are better dressing for plus women and its omni-channel model
comprises; of a network of 90 stores across Australia and New Zealand (ANZ) and websites operating in ANZ,
the US, the UK and Europe. Navabi (Germany-based), Avenue (US-based) and Evans (UK-based) target a broad
customer base across the conservative segment, both with a long history and significant online customer
following. Hips & Curves and Fox & Royal are online intimate brands. City Chic Collective acquired Europeanbased
online marketplace Navabi in the current year and also sells its collective of brands through third-party
marketplace and wholesale partners in Australia, New Zealand, US, Canada, UK, Europe and the Middle East.
There was no significant change in the nature of the activities of the Group during the period.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 35
Annual Financial Report 2022 | Directors Report36124122121626368 Dividends
There were no dividends paid, recommended or declared with respect to the current financial period.
There were no dividends paid, recommended or declared with respect to the previous corresponding financial
period.
Operating and financial review
The Group achieved revenue from continuing operations of $369.2m (27 June 2021: $265.6m), representing
growth of 39%. Net profit after tax for continuing operations was $22.3m (27 June 2021: $21.6m), representing
growth of 3.3%. Underlying EBITDA1 – pre AASB 16 was $47.1m (27 June 2021: $42.4m), representing growth
of 11.3%. Underlying EBITDA – post AASB 16 was $55.2m (27 June 2021: $50.2m), representing growth of 9.9%.
The revenue and profitability of the business are not directly comparable between the periods due to the
impacts of the pandemic (including various state and territory store lockdowns) and acquisitions. Changes in
geography and sales channel mix, while delivering margin growth has had a negative impact on the gross margin
ratios. These changes were in part a consequence of; strategic investments in EMEA; expansion of strategic
partnerships; and due to the growth in online revenue. The government directed store closures, had an
approximately $4m impact on EBITDA in the current period. The prior period result also benefitted from nonrecurring
COVID-19 related austerity measures of $10m, predominantly in marketing and other operating
expenditure, as well as Government subsidies which are reported against employee benefits expense.
Gross Margin was also impacted by higher inbound logistics costs which were in part offset by lower product
costs as a result of strategic changes implemented by the business. During the year the company completed a
strategic change of its product sourcing and inbound supply chain to support the rapid growth and
globalisation of the business. This resulted in greater direct country of origin sourcing, diversification of
supplier base (both number of suppliers and countries of sourcing) and improved product margins. As part of
this change the company took control of the product earlier in the process which contributed to an increase
in the inventory balances, along with the strategic decision to invest in additional inventory to protect the
business growth opportunities from supply chain volatilities. This investment in inventory is seasonably
relevant for current and future seasons sales.
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 was
established in 2009 as an online marketplace selling hundreds of third-party women’s plus-size brands. 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. Post the acquisition, Navabi was restructured to
be in line with the operating model of the rest of the group. This restructuring has largely been completed
during FY22.
COEDITION ACQUISITION
On 28 December 2021, the Group completed the asset acquisition of USA plus-size marketplace CoEdition’s
customer list, brand and URL for US$0.639m (A$0.9m). City Chic previously traded on CoEdition as a
marketplace partner. The CoEdition platform was integrated into its City Chic USA platform in January 2022.
The Group ended the year with net debt of $4.0m at 3 July 2022 (27 June 2021: net cash of $71.5m). The net
debt balance includes the payments for the acquisitions of Navabi and CoEdition, and also as a consequence of
the strategic investment in inventory. There has also been capital investments in 8 new store fit outs and 11 refits
for pre-existing stores, as well as spend on a new Head Office fit out.
The Underlying EBITDA from continuing operations pre-AASB 16 was $47.1m (27 June 2021: $42.4m) and post-
AASB 16 was $55.1m (27 June 2021: $50.2m). The Underlying EBIT from continuing operations pre-AASB 16 was
$40.1m (27 June 2021: $36.0m) and post-AASB 16 was $39.9m (27 June 2021: $35.8m). The Underlying NPAT
from continuing operations pre-AASB 16 was $28.5m (27 June 2021: $24.9m) post-AASB 16 was $27.3m (27
June 2021: $24.0m).
LOAN FUNDED SHARE BUYBACK
As disclosed to the market, the Company bought back and cancelled 1,234,991 loan funded shares on
12 January 2022. The buy-back and cancellation have had no further impact beyond the reversal of the
accrual that has already been disclosed and reported in the statement of profit or loss in the current period.
The year-end inventory balance has also been impacted by foreign exchange rates, with USD held inventory
OTHER
presented significantly higher in AUD reporting currency than the prior year. The inventory balance is
expected to unwind and return to more normalised balances as supply chain disruptions normalise over the
next 12 months.
On 22 June 2022, a new 3 year $60.0m multicurrency debt facility came into effect replacing the existing
$40.0m facility that was due to mature in February 2023. At year end the group had borrowings of $14.0m
and net debt of $4.0m.
The acquisitions in EMEA (Evans and Navabi) generated revenue of $43.9m and became EBITDA positive in
the second half of the year. This is pleasing as these business continue to grow and COVID-19 and supply chain
issues are addressed.
1 Underlying EBITDA (earnings before interest, income tax expense, depreciation and amortisation) is a financial measure which is not
prescribed by Australian Accounting Standards (‘AAS’) Reconciliation between the statutory profit/(loss) and underlying EBITDA is setout
in note 3 to the financial statements.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 37
Annual Financial Report 2022 | Directors Report
FY23 Update and Outlook
Material business risks
In FY23 City Chic expects to deliver another year of profitable growth notwithstanding ongoing global
The Group operates in an environment of change. The level of macro-economic and geopolitical uncertainty
economic and geopolitical uncertainty. This is underpinned by City Chic’s expanded market penetration across
globally is currently higher than usual. There are a range of factors, both general in nature and specific to the
geographies and channels, category leadership globally and investment in its distribution infrastructure.
Group which may impact the operating and financial performance of the Group. The impact of these risks is
Trading in the first seven weeks of FY23 has been broadly in line with the prior corresponding period and
regularly reviewed for their possible impact.
improving through August.
Regional and channel performance for the first 7 weeks of FY23 is outlined below:
• AU stores are trading above expectations and ahead of last year given the impact of store closures in FY22.
COVID-19 PANDEMIC
• AU online was below last year in the first two weeks of July but has performed well since, trading above last
The COVID-19 pandemic has had a significant impact on the business in FY21 and FY22. It continues to
year.
have direct impacts on the global economy and the ability of businesses, individuals and governments
•
The US market was volatile with the City Chic website trading above last year as better dressing demand
to operate. There is also significant uncertainty surrounding how the pandemic will evolve and how
remains strong and the Avenue website trading below last year but showing week on week improvements.
consumers, businesses, employees and consumers will respond.
•
•
The UK has continued to show growth and is cycling logistical issues in H1 FY22.
The Partner business has continued to perform well across multiple geographies and is expected to drive
A number of aspects of City Chic’s business may continue to be directly or indirectly affected by
incremental revenue growth through FY23.
government, regulatory or health authority actions, work stoppages, lockdowns, quarantines
To hedge against anticipated promotional activity within the plus market globally, City Chic is leveraging its
and travel restrictions associated with COVID-19, including disruption to City Chic’s supply chain
unique market position to implement, where appropriate, retail price increases to manage inflationary risks and
and workforce, particularly the availability of products and logistics (including shipping of products)
margin.
and government-imposed shutdowns of manufacturing and distribution centres affecting the supply of
The company’s growth in FY23 will be supported by strong in-market inventory that was received in advance
products to customers.
to help protect against supply chain inflation and volatility. Shipping availability, rates and transit times are
improving. However, costs are still above pre pandemic levels and origin supply chain inflation and uncertainty
Management continues to closely monitor and manage the ongoing impacts and uncertainty. Management
continues.
take confidence in its ability to trade profitably in FY21 and FY22 and is supported by the strength of
City Chic expects inventory to normalise and is targeting $125-135 million at the end of FY23, with strong cash
the Group’s business model, with high online penetration along with geographic and channel diversity.
generation delivering a positive net cash position in the second half.
The business has diversified its supply chain and will make strategic decisions to invest in inventory to
give greater certainty over product availability where appropriate. In addition, having 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 and financial performance is sensitive to the current state
of, and future changes in, the retail environment in the countries in which it operates. The retail fashion
market also continues to consolidate and feel the effects of globalisation. City Chic will continue to offer
customers quality and value for money and maintain a 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 FY22.
WORKPLACE HEALTH AND SAFETY (WHS)
The Group has approximately 790 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.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 39
Annual Financial Report 2022 | Directors Report TECHNOLOGY AVAILABILITY & CYBERSECURITY
The Group operates in an increasing complex environment in regard to reliance on technology and the
increasing threat to cyber security. This increasing reliance and the changing regulatory landscape
means that the related risk of any disruptions to systems, networks and data also continues to grow. Any
events or cyber security breaches could cause significant business and reputational damage, adverse
regulatory action (including legal proceedings) and financial impacts on the business.
Management is actively working to reduce these risks by continuing to enhance our cyber control
environment, following the Australian Cyber Security Centre’s “Essential Eight” and the NIST Cybersecurity
Framework. Cyber security is overseen by our Board, Audit and Risk Committee and Group Executives,
and external cyber security consultants are used to test and validate cyber security procedures that have
been implemented.
ETHICAL SOURCING AND MODERN SLAVERY
The Group is exposed to reputational and regulatory risk with regards to ethical sourcing and modern
slavery. CCX is committed to sourcing product in a recognised, responsible and transparent supply
chain, including taking 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.
ENVIRONMENTAL CHANGES
The Group is exposed to risks arising from environmental changes, including climate change, 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 principles laid out in our corporate social responsibility
disclosures. 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.
NAVABI ACQUISITION
As noted in the Operating and Financial review, 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 was established in 2009 as an online marketplace selling hundreds of
third-party women’s plus-size brands. 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.
COEDITION ACQUISITION
On 28 December 2021, the Group completed the asset acquisition of USA plus-size marketplace CoEdition’s
customer list, brand and URL for US$0.639m (A$0.9m). City Chic previously traded on CoEdition as
marketplace partner. The CoEdition platform was integrated into its City Chic USA platform in January 2022.
There were no other significant changes in the state of affairs of the consolidated entity during the financial
period.
Matters subsequent to the end of the financial period
No matter or circumstance has arisen since 3 July 2022 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.
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 3 July 2022 are referred to in the preceding operating and
financial review and outlook.
Significant changes in the state of affairs
Environmental regulation
COVID-19 PANDEMIC
During the current reporting period, the pandemic has continued to have an impact across the Group’s global
operations, particularly in the first half of FY22. The ANZ store network was impacted by extended periods of
store closures in response to government-imposed restrictions with 13.4% of store trading days being lost
over the period. Significant disruption to labour and logistics in the UK impacting the Group’s ability to build
seasonally appropriate stock in the first half however this was largely overcome in the second half of FY22.
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.
STRATEGIC INVESTMENT IN INVENTORY
As noted in the Operating & Financial Review, there has been a strategic investment in inventory during the
current period as the Group decided to take greater control of its supply chain in light of the abovementioned
continued global supply chain pressures and volatilities, including freight capacity shortages.
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.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 41
Annual Financial Report 2022 | Directors Report Information on directors
MICHAEL KAY
TITLE:
Chairman and non-executive director
QUALIFICATIONS:
B.LLB
EXPERIENCE AND EXPERTISE:
Michael Kay joined the City Chic Collective Limited 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
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
SPECIAL RESPONSIBILITIES:
IMF Betham Limited (ASX: IMF).
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:
800,000 ordinary shares
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
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), InvoCare
Limited (ASX:IVC) and The Lottery Corporation (ASX: TLC).
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 (APPOINTED 5 AUGUST 2021)
TITLE:
Non-executive director (appointed 5 August 2021)
QUALIFICATIONS:
B.Ec
EXPERIENCE AND EXPERTISE:
Neil Thompson joined the City Chic Collective Limited Board on 5 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 is currently a Finance Operating Partner at private equity firm Potentia
Capital and was previously the Chief Financial Officer of Ascender HCM (a payroll
software and services company). He is also a director of the Australian World
Orchestra.
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:
Chair of the ARC; Member of the PCRC
INTERESTS IN SHARES:
21,000 ordinary shares
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
NATALIE MCLEAN (APPOINTED 5 AUGUST 2021)
TITLE:
Non-executive director (appointed 5 August 2021)
QUALIFICATIONS:
B.Bus
EXPERIENCE AND EXPERTISE:
Natalie McLean joined the City Chic Collective Limited Board on 5 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 and a director of the
Cotton On Foundation.
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
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 43
Annual Financial Report 2022 | Directors Report 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 90 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, Bloomingdale's, Target and Hudson’s Bay in
the USA; ASOS, The Very Group and Next 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:
337,576 ordinary shares
INTERESTS IN OPTIONS:
2,161,235 ordinary shares issued under CCX's 2019 Employee Share Plan and
escrow provisions
INTERESTS IN RIGHTS:
1,200,000 performance rights over ordinary shares
MICHAEL HARDWICK (RESIGNED 17 NOVEMBER 2021)
TITLE:
Non-executive director
QUALIFICATIONS:
B.Comm
EXPERIENCE AND EXPERTISE:
Michael Hardwick joined the City Chic Collective Limited Board in May 2012. He
was 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 as at date of retirement
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of
all other types of entities, unless otherwise stated.
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 3 July 2022, 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
Natalie McLean
Neil Thompson
Phil Ryan2
28
9
29
25
26
29
29
9
29
27
27
29
5
3
5
4
4
5
3
5
4
4
5
3
5
4
5
5
3
5
5
5
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.
Retirement, election and continuation in office of directors
At the 2021 Annual General Meeting ("AGM") held on 17 November 2021, 99.80% of the votes received supported
the re-election of director Michael Kay as part of the company's constitution that specifies all directors must stand for
re-election at least every three years. 99.99% and 99.94% of the votes received supported the election of Natalie
McLean and Neil Thompson respectively.
Michael Hardwick, who had been on the board since 2012, retired with effect from the conclusion of City Chic’s
Annual General Meeting on 17 November 2021.
'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.
2 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.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 45
Annual Financial Report 2022 | Directors Report 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.
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.
The remuneration report is set out under the following main headings:
USE OF REMUNERATION CONSULTANTS
(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 3 July 2022 and 27 June 2021. The key management
personnel consisted of the following directors and senior executives of City Chic Collective Limited:
Name
Non-executive directors:
Michael Kay
Megan Quinn
Natalie McLean (appointed 5 August 2021)
Neil Thompson (appointed 5 August 2021)
Role
Chairman and non-executive director
Non-executive director
Non-executive director
Non-executive director
Michael Hardwick (resigned 17 November 2021)
Non-executive director
Executive directors:
Phil Ryan
Chief Executive Officer and Managing Director
Other key management personnel:
Peter McClelland (appointed 10 November 2021)
Chief Financial Officer
Munraj Dhaliwal (resigned 10 December 2021)
Chief Financial Officer
The Board and / or the PCRC may, from time to time, appoint and engage independent advisors directly in relation
to remuneration matters. During the reporting period, remuneration consultants were engaged by the Group,
through the PCRC and provided a range of independent advice and information relevant to a range of remuneration
matters, in particular incentive structures for executives. The Board did not, however, receive any remuneration
recommendations from a remuneration consultant as defined by the Corporations Act 2001 (Cth).
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
designed to align executive
participants' interests:
reward to the Company’s
•
rewards capability and
interests. The Board have
experience
considered that it should
•
reflects competitive
seek to enhance the
Company’s interests by:
reward for profitable
growth; and
•
including economic profit
• provides a clear structure
as a core component of
for earning rewards.
plan design; and
• attracting and retaining
high calibre executives.
executive remuneration
framework are as follows:
• competitiveness and
sustainability;
• acceptability to the
Group's strategic and
business objectives
and the creation of
shareholder value;
• performance linkage/
alignment of executive
compensation;
•
transparency and
acceptability to
shareholders.
Remuneration policies are developed to provide market competitive remuneration arrangements that support the
attraction, engagement and retention of talented team members, and that are aligned with the Company’s interests.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 47
Annual Financial Report 2022 | Directors Report
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 maximum aggregate non-executive directors' remuneration be determined 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 for FY22 are reflected below:
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 3 July 2022, the PCRC had determined that KMP-level executives would be eligible
for an STI plan of up to 20% of fixed remuneration, in addition to their long-term incentive, specifically if
hurdles were met in relation to the acquisition of Evans.
As Peter McClelland joined the Company as CFO after the commencement of the financial period, as part
of his ‘sign on’ remuneration package and in lieu of a grant of long-term incentives for FY22, Peter was
eligible for a STI valued at up to 50% of fixed remuneration, subject to a Company financial performance
hurdle based on FY22 underlying EBITDA.
The relevant hurdles for all KMP-level executives was not met and no amount is payable with respect to
the financial period.
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)
LONG-TERM INCENTIVES
$
240,000
120,000
20,000
10,000
The Group's long-term incentives (LTI) 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.
No grants were made under the Group’s LTI plans (referred to as the LTIP and the LFSP below) during the
financial period. If grants are made in FY23, it is expected that the grants will utilise the structure of the
existing LTI plans.
(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
LONG TERM INCENTIVES
that has both fixed and variable components, as well as a blend of short and long-term incentives. Executive
The Group's long-term incentives are comprised of the Long-Term Incentive Plan (LTIP) and the Loan Funded Share
remuneration comprises base pay and benefits, short-term incentives, long-term incentives, and superannuation
Plan (LFSP). The following share-based payment arrangements were in existence during the current year:
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.
Tranche Grant Date Performance
period end
date
1
2A
2B
2C
30/06/2021
13/11/2018
30/06/2021
13/11/2018
13/11/2018
30/06/2021
13/11/2018 30/06/2023
Total Performance Rights
Share
price at
grant
date
$1.17
$1.17
$1.17
$1.17
35.00%
35.00%
35.00%
40.00%
3.50%
3.50%
3.50%
3.50%
781,848
2.12%
1,237,500
2.12%
2.12%
1,237,500
2.33% 2,475,000
5,731,848
Expected
volatility
%
Dividend
yield %
Risk-free
interest
rate %
Balance at
the start of
the period
Granted
Vested
Expired/
forfeited
3
3
3
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%
40.00%
N/A
N/A
N/A
0.81%
0.81%
0.29%
7,533,448
667,464
474,576
Total Loan Funded Shares
8,675,488
Balance at
the end of
the period
-
-
-
2,300,000
-
-
-
-
-
-
-
-
-
(781,848)
(1,237,500)
(1,237,500)
-
-
-
-
(175,000)
(3,256,848)
(175,000)
2,300,000
-
-
-
-
(1,234,991)
-
-
6,298,457
667,464
474,576
-
7,440,497
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 49
Annual Financial Report 2022 | Directors Report
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 underlying 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%
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.
5.0% ≤ EPS CAGR ≤ 20.0%
Straight line pro-rata vesting between 25% and 100% (inclusive)
•
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.
Based on EPS CAGR for the three years to June 2021, 100% of Tranche 1 Performance Rights vested for eligible
participants.
Tranche 2A
Vesting conditions of the LF Shares are set out below:
Tranche 3
Vesting Condition
Continued service to 27 August 2021, with no holding lock on resulting shares.
Vesting Condition 1
Continued service to 30 June 2024.
Tranche 2B
Vesting Condition 1
Continued service to 27 August 2021, with no holding lock on resulting shares.
Vesting Condition 2
Group underlying EPS (before income tax and share-based payments) 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 FY18 EPS)
$0.0975 ≤ EPS < $0.1050 (1.4 x FY18 EPS)
EPS ≥ $0.1050
Nil
50%
100%
Based on Group EPS for the year ended June 2021, 100% of Tranche 2B Performance Rights vested for eligible
participants.
Tranche 2C
Vesting Condition 1
Continued service to August 2023, with no holding lock on resulting shares.
Vesting Condition 2
Group EPS (underlying before income tax and share-based payments) 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 FY18 EPS)
$0.1250 ≤ EPS < $0.1200 (1.6 x FY18 EPS)
$0.1200 ≤ EPS < $0.1275 (1.7 x FY18 EPS)
EPS ≥ $0.1275
Nil
50%
75%
100%
Vesting Condition 2
Compound annual growth rate (CAGR) in the Group's earnings per share after tax (ADEPS)
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.
Voting and comments made at the company's 2021 AGM
At the 2021 AGM held on 17 November 2021, 98.40% of the votes received supported the adoption of the
remuneration report for the year ended 27 June 2021. The Company did not receive any specific feedback at the
AGM regarding its remuneration practices.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 51
Annual Financial Report 2022 | Directors Report
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FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 53
Annual Financial Report 2022 | Directors Report
e. Service agreements
ADDITIONAL INFOMATION
The following earnings information reflects the basis for which financial hurdles are considered for the share-based
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
payments and measure executive performance in delivering long term growth of the Group:
Details of these agreements are as follows:
Phil Ryan
Title:
Chief Executive Officer and Managing Director
operations
Profit before income tax for continuing underlying
$39.5m
$35.6m
$20.1m
$21.3m
$14.4m
2022
2021
2020
2019
2018
Term of agreement:
None
EPS (underlying before income tax) - Tranche 1
17.1 cents
15.8 cents
10.5 cents
11.1 cents
7.5 cents
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
Profit before income tax for continuing underlying
$35.8m
$38.8m
$22.9m
$22.4m
benefits (except for statutory entitlements) • No other benefits
operations (before share-based payments)
Peter McClelland
Title:
Chief Financial Officer
Term of agreement:
None
EPS (underlying before income tax and share-based
15.5 cents
17.3 cents
11.9 cents
11.6 cents
payments) - Tranches 2B and 2C
Profit after
income
tax
for continuing underlying
$29.0m
$24.9m
$13.8m
$15.7m
Details:
• Notice period of 6 months • Remuneration review period every 12 months • Eligible
operations
for short-term incentives • Eligible for long-term incentives • No severance period • No
termination benefits (except for statutory entitlements) • No other benefits
ADEPS (underlying after income tax) - Tranche 3
12.5 cents
11.1 cents
7.2 cents
8.2 cents
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
g. Additional disclosures relating to key management personnel
period, no termination benefits and no other benefits.
SHAREHOLDING
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
management personnel of the consolidated entity, including their personally related parties, is set out below:
The number of shares in the company held during the financial period by each director and other members of key
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 3
July 2022 (FY21: nil).
There were no performance rights issued to key management personnel as part of compensation during the
periods ended July 2022 (FY21: nil).
There were no loan funded shares issued to key management personnel as part of compensation during the period
ended 3 July 2022 (FY21: nil).
Directors
Phil Ryan
Michael Kay
Neil Thompson
Natalie McLean
Other key management personnel
Peter McClelland*
Munraj Dhaliwal**
Total
Balance at the
start of the
period
Received
as part of
renumeration
Net Movement
Balance at the
end of
the period
133,836
700,000
-
-
3,284
99,672
1,440,740
(1,237,000)
-
-
-
-
100,000
21,000
10,900
7,000
308,333
(250,000)
337,576
800,000
21,000
10,900
10,284
N/A
936,792
1,749,073
(1,348,100)
1,179,760
Tranche
Phil Ryan
Peter McClelland
Munraj Dhaliwal
Total
Performance rights
Loan funded shares
*The number of shares that are held at the start/end of the period, or, where the holder is key management personnel
1
2A
2B
2C
Total
3
for part-year only, on the relevant start/end dates of holding key management personnel office.
-
-
-
-
-
-
-
-
-
-
-
-
1,200,000
1,200,000
2,161,235
-
-
-
-
-
-
1,200,000
1,200,000
2,161,235
** Munraj Dhaliwal (resigned 10 December 2021) had ordinary share holdings of 158,005 at date of resignation.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 55
Annual Financial Report 2022 | Directors Report
PERFORMANCE RIGHTS HOLDING
RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES
The number of performance rights over ordinary shares in the company held during the financial period by each
The following balances are outstanding at the reporting date in relation to transactions with related parties:
director and other members of key management personnel of the consolidated entity, including their personally
related parties, is set out below:
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
-
-
-
(1,440,740)
-
1,200,000
(308,333)
(175,000)
-
(1,749,073)
(175,000)
1,200,000
Current payables
Trade payables to Southern Cross Shopfitting, a company that is associated with the Cotton
Group, of which Natalie McLean is Director and Chief Retail Officer. Michael Hardwick is a
Director and the CFO of the Cotton on Group5
Consolidated
2022
$'000
2021
$'000
6,557
841,580
Trade payables to International Southern Cross Shopfitting (NZ), a company that is associated
with the Cotton on Group, of which Natalie McLean is Director and Chief Retail Officer. Michael
Hardwick is a Director and the CFO of the Cotton on Group6
534
-
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
This concludes the remuneration report, which has been audited.
out below:
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)
(1,234,991)
-
2,161,235
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 Natalie McLean is Director and Chief Retail Officer. Michael Hardwick is a
Director and the CFO of the Cotton on Group3
Services provided by International Southern Cross Shopfitting (NZ), a company that is
associated with the Cotton On Group, of which Natalie McLean is Director and Chief Retail
Officer. Michael Hardwick is a Director and the CFO of the Cotton on Group4
Consolidated
2022
$'000
2021
$'000
1,642,070
2,356,173
9,790
9,360
Total related party transactions
1,651,860
2,365,533
All transactions were made on normal commercial terms and conditions and at market rates
3 Natalie McLean and Michael Hardwick were not involved in the decision making relating to Southern Cross Shopfitting and its dealings with
the Group. Michael Hardwick resigned as director on 17 November 2021
4 Natalie McLean and Michael Hardwick were not involved in the decision making relating to International Southern Cross Shopfitting (NZ)
and its dealings with the Group. Michael Hardwick resigned as director on 17 November 2021
5 Natalie McLean and Michael Hardwick were not involved in the decision making relating to Southern Cross Shopfitting and its dealings with
the Group. Michael Hardwick resigned as director on 17 November 2021
6 Natalie McLean and Michael Hardwick were not involved in the decision making relating to International Southern Cross Shopfitting (NZ)
and its dealings with the Group. Michael Hardwick resigned as director on 17 November 2021
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 57
Annual Financial Report 2022 | Directors Report Shares under option
Non-audit services
There were no unissued ordinary shares of City Chic Collective Limited under option outstanding at the date of this
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial period by
report.
the auditor (EY) and previous auditor (Deloitte Touche Tohmatsu) are outlined in Note 27 to the financial statements.
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 3 July 2022 and up to the date of this report.
Shares issued on the exercise of performance rights
During the financial period 3,256,848 ordinary shares of City Chic Collective Limited were issued upon the vesting
of 3,256,848 performance rights.
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.
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 Ernst & Young
There are no officers of the company who are former partners of Ernst & Young.
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.
During the financial period, the company paid a premium in respect of a contract to insure the directors and
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations
executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of
Act 2001.
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
On behalf of the directors
Indemnity and insurance of auditor
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young Australia during or since the financial year.
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.
Change of Auditor
The Company appointed Ernst & Young (EY) as auditor of the Company, effective 27 April 2022.
MICHAEL KAY
Chairman
25 August 2022
Sydney
PHIL RYAN
Chief Executive Officer and Managing Director
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 59
Annual Financial Report 2022 | Directors Report
Ernst & Young
200 George Street
Sydney NSW 2000 Aust ralia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Ernst & Young
200 George Street
Sydney NSW 2000 Aust ralia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Audit or’s independence declarat ion t o t he direct ors of Cit y Chic Collect ive
Limit ed
As lead auditor for the audit of the financial report of City Chic Collective Limited for the financial year
ended 3 July 2022, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit.
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of City Chic Collective Limited and the entities it controlled during the
financial year.
Ernst & Young
Yvonne Barnikel
Partner
25 August 2022
Independent audit or’s r epor t t o t he members of Cit y Chic Collect ive Limit ed
Report on t he audit of t he financial report
Opinion
We have audited the financial report of City Chic Collective Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 3 July 2022, the
consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, notes to the financial statements, including a summary of
significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 3 July 2022 and of its
consolidated financial performance for the year ended on that date; and
b.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit mat t ers
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial report of the current year. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report
section of our repor t, including in relation to these matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the risks of material misstatement of the financial report.
The results of our audit procedures, including the procedures performed to address the matters below, provide
the basis for our audit opinion on the accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
61
Inventory valuat ion
Why significant
At 3 July 2022 the Group’s consolidated statement of
financial position includes inventories with a carrying
value of $195.9 million, representing 55.1% of total
assets.
Inventory is held at geographically diverse locations
at various third-party distribution centres and retail
stores.
As detailed in Note 9 of the financial repor t,
inventories are valued at the lower of cost and net
realisable value. There is judgment involved in
determining the cost of inventories and in assessing
net realisable value.
The cost of inventories includes elements relating to
the cost of freight, customs duties and certain
warehousing charges. Judgements were involved in
the process of allocating these costs to inventories.
There is judgement exercised in estimating the value
of inventor y which may be sold below cost and
determining the net realisable value of this inventor y.
Such judgements include the expectations of future
sales price, future sales volumes and inventory
clearance plans, including the cost to dispose of any
excess inventory.
Inventory valuation was a key audit matter due to the
value of the inventory balance relative to total assets
and the various judgements required in determining
its valuation.
How our audit addr essed t he key audit mat t er
Our audit procedures included the following:
(cid:377) Assessed whether the Group’s inventory
costing methodologies, specifically in
relation to freight, customs duties and
warehousing charges, was consistent with
Australian Accounting Standar ds.
(cid:377) Assessed the effectiveness of relevant
controls in relation to the inventory costing
process and assessed the accuracy of the
Group’s inventory valuation methodology, on
a sample basis.
(cid:377) Assessed the basis by which the Group
determined that inventory was recor ded at
the lower of cost and net realisable value,
including the rationale for recor ding specific
adjustments to value inventory below cost,
where required.
(cid:377) Examined sales margins achieved, the
Group’s process for identifying specific slow-
moving inventories, historical inventory
turnover and expected future sales and
assessed other considerations made by the
Group over aged inventories.
Impairment assessment of brand int angible asset s
Why significant
How our audit addr essed t he key audit mat t er
At 3 July 2022 the Group’s consolidated statement of
financial position includes brand intangible assets
with a carrying value of $28.1 million, representing
7.9% of total assets.
As disclosed in Note 12 of the financial statements,
the assessment of the impairment of the Group’s
brand intangible assets incorporated significant
judgments and estimates, based upon conditions
existing as at 3 July 2022, specifically concerning
factors such as forecast revenues, royalty rates,
discount rates, terminal growth rates and the
application of tax amortisation benefits.
The judgments and assumptions relate to the
sustainability of future performance, mar ket and
economic conditions. Significant assumptions used in
the impairment testing referred to above are
inherently subjective.
The disclosures in the financial report provide
impor tant information about the assumptions made in
the impairment testing and the market conditions at 3
July 2022.
Accordingly, we considered the impairment testing of
brand intangible assets and the related disclosures in
the financial report to be a key audit matter.
Our audit procedures included the following:
(cid:377) Assessed whether the Group’s impairment
assessment process was in accor dance with
Australian Accounting Standar ds.
(cid:377) Assessed the revenue forecasts used in the
impairment assessment by considering the
reliability of the Group’s historical forecasts,
our knowledge of the business and
corroborating assumptions with external
information, where possible.
(cid:377) Assessed royalty rates, discount rates and
terminal growth rates applied in the
impairment model with involvement from our
valuation specialists.
(cid:377) Considered whether the application of tax
amortisation benefits were in accordance
with the deductibility rules of brands held in
various jurisdictions with involvement from
our taxation specialists.
(cid:377) Tested the mathematical accuracy of the
brand impairment testing models and
assessed whether the models were
consistent with the latest Board approved
forecasts.
(cid:377) Performed sensitivity analysis on key
assumptions including discount rates, royalty
rates, and revenue forecasts for each of the
Group’s brand intangibles.
(cid:377) Assessed the adequacy of the financial
report disclosures contained in Note 12.
Informat ion ot her t han t he financial report and audit or’s report t hereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s 2022 Annual Report other than the financial repor t and our auditor’s report thereon. We
obtained the directors’ report that is to be included in the Annual Report, prior to the date of this auditor’s report,
and we expect to obtain the remaining sections of the Annual Report af ter the date of this auditor’s report.
Our opinion on the financial repor t does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance
opinion.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
63
Responsibilit ies of t he direct ors for t he financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accor dance 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 repor t, the directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters relating 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 have no realistic
alternative but to do so.
Audit or’s responsibilit ies for t he audit of t he 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 judgment and
maintain professional scepticism throughout the audit. We also:
(cid:377) Identify and assess the risks of material misstatement of the financial repor t, whether due to fraud or error,
design and perfor m 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.
(cid:377) 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.
(cid:377) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
(cid:377) 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 modif y 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.
(cid:377) Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial repor t represents the underlying transactions and events in a manner that
achieves fair presentation.
(cid:377) 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 repor t. We are responsible for the direction,
supervision and performance of the Group 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 to the directors, we determine those matters that were of most significance in
the audit of the financial report of the current year and are therefore the key audit matters. We describe these
matters in our auditor’s repor t 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.
Report on t he audit of t he Remunerat ion Report
Opinion on t he Remunerat ion Report
We have audited the Remuneration Report included in pages 13 to 23 of the directors’ report for the year ended
3 July 2022.
In our opinion, the Remuneration Repor t of City Chic Collective Limited for the year ended 3 July 2022, complies
with section 300A of the Corporations Act 2001.
Responsibilit ies
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.
Ernst & Young
Yvonne Barnikel
Partner
Sydney
25 August 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
65
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr ccoommpprreehheennssiivvee iinnccoommee
FFoorr tthhee ppeerriioodd eennddeedd 33 JJuullyy 22002222
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr ccoommpprreehheennssiivvee iinnccoommee
FFoorr tthhee ppeerriioodd eennddeedd 33 JJuullyy 22002222
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
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
9.5
9.6
9.5
9.6
9.4
9.6
9.4
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 inventory
Fulfilment costs
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
22002222
$$''000000
22002211
$$''000000
4
4
5
5
5
5
5,13
5
369,247
265,588
605
1,386
(148,050)
(65,167)
(213,217)
(98,694)
(37,768)
(136,462)
(45,398)
(15,204)
(3,792)
(57,923)
(1,583)
(37,345)
(14,379)
(3,551)
(42,418)
(1,347)
32,735
31,472
Income tax expense
6
(10,458)
(9,916)
PPrrooffiitt aafftteerr iinnccoommee ttaaxx eexxppeennssee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
22,277
21,556
PPrrooffiitt aafftteerr iinnccoommee ttaaxx eexxppeennssee ffoorr tthhee ppeerriioodd aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss
ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
22
22,277
21,556
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
5,581
(4,967)
5,581
(4,967)
27,858
16,589
27,858
16,589
27,858
16,589
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
32
33
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 67
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff ffiinnaanncciiaall ppoossiittiioonn
AAss aatt 33 JJuullyy 22002222
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff cchhaannggeess iinn eeqquuiittyy
FFoorr tthhee ppeerriioodd eennddeedd 33 JJuullyy 22002222
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
22002222
$$''000000
22002211
$$''000000
7
8
9
10
11
13
12
6
14
13
6
16
17
13
16
15
17
9,953
11,011
195,936
4,845
221,745
15,355
26,255
84,666
7,330
133,606
71,457
5,606
66,996
6,870
150,929
10,191
22,442
75,602
7,808
116,043
355,351
266,972
80,325
9,090
3,284
8,788
4,304
105,791
24,176
422
14,000
385
38,983
41,896
9,286
1,818
8,070
3,072
64,142
18,768
459
-
701
19,928
144,774
84,070
210,577
182,902
20
21
22
182,167
(28,975)
57,385
182,000
(34,206)
35,108
210,577
182,902
CCoonnssoolliiddaatteedd
SShhaarree--
bbaasseedd
ppaayymmeennttss
$$''000000
FFoorreeiiggnn
ccuurrrreennccyy
ttrraannssllaattiioonn
rreesseerrvvee
$$''000000
IIssssuueedd
ccaappiittaall
$$''000000
LLoossss rreesseerrvvee
$$''000000
RReettaaiinneedd
pprrooffiittss
$$''000000
TToottaall eeqquuiittyy
$$''000000
Balance at 29 June 2020
71,191
(18,105)
(1,758)
(10,991)
13,552
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
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)
-
-
-
-
-
-
-
(4,967)
(4,967)
109,229
1,580
-
-
3,195
-
(1,580)
-
-
-
-
-
-
-
-
-
-
-
21,556
21,556
-
(4,967)
21,556
16,589
-
-
-
-
109,229
3,195
1,580
(1,580)
BBaallaannccee aatt 2277 JJuunnee 22002211
182,000
(16,490)
(6,725)
(10,991)
35,108
182,902
CCoonnssoolliiddaatteedd
IIssssuueedd
ccaappiittaall
$$''000000
SShhaarree--
bbaasseedd
ppaayymmeennttss
$$''000000
FFoorreeiiggnn
ccuurrrreennccyy
ttrraannssllaattiioonn
rreesseerrvvee
$$''000000
LLoossss rreesseerrvvee
$$''000000
RReettaaiinneedd
pprrooffiittss
$$''000000
TToottaall eeqquuiittyy
$$''000000
Balance at 28 June 2021
182,000
(16,490)
(6,725)
(10,991)
35,108
182,902
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 21)
Performance rights over ordinary shares (Note
20)
Loan funded shares held in trust (Note 20)
Refund of loan funded shares held in trust
-
-
-
-
-
-
-
3,477
(3,310)
-
(183)
(3,477)
-
3,310
-
5,581
5,581
-
-
-
-
-
-
-
-
-
-
-
22,277
22,277
-
5,581
22,277
27,858
-
-
-
-
(183)
-
(3,310)
3,310
BBaallaannccee aatt 33 JJuullyy 22002222
182,167
(16,840)
(1,144)
(10,991)
57,385
210,577
Note reference
20
21
21
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.
34
35
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 69
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff ccaasshh fflloowwss
FFoorr tthhee ppeerriioodd eennddeedd 33 JJuullyy 22002222
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
GGeenneerraall iinnffoorrmmaattiioonn
33 JJuullyy 22002222
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 25 August
2022. The directors have the power to amend and reissue the financial statements.
NNoottee
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
CCaasshh fflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess
Receipts from customers (inclusive of GST, VAT and sales tax)
Payments to suppliers and employees (inclusive of GST, VAT and sales tax)
Government grants received
Interest received
Other revenue
Interest and other finance costs paid
Income taxes paid
401,804
(443,809)
21
34
452
(1,583)
(8,813)
288,833
(268,677)
4,964
243
352
(1,330)
(9,232)
NNeett ccaasshh ffrroomm ooppeerraattiinngg aaccttiivviittiieess
18
(51,894)
15,153
CCaasshh fflloowwss ffrroomm iinnvveessttiinngg aaccttiivviittiieess
Payments for plant and equipment
Payments for intangibles
Payment for purchase of business (net of cash acquired)
NNeett ccaasshh uusseedd iinn iinnvveessttiinngg aaccttiivviittiieess
CCaasshh fflloowwss ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
Net proceeds from the issue of shares
Repayment of lease liabilities
Proceeds from / (repayment of) borrowings
NNeett ccaasshh ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
NNeett ((ddeeccrreeaassee))//iinnccrreeaassee iinn ccaasshh aanndd ccaasshh eeqquuiivvaalleennttss ffrroomm ccoonnttiinnuuiinngg
ooppeerraattiioonnss
Cash and cash equivalents at the beginning of the financial period
Effects of exchange rate changes on cash and cash equivalents
11
12
32
20
15
(9,077)
(2,468)
(4,254)
(5,034)
(1,542)
(40,208)
(15,799)
(46,784)
-
(8,040)
14,000
108,618
(7,845)
(17,500)
5,960
83,273
(61,733)
71,457
229
51,642
21,382
(1,567)
Cash and cash equivalents at the end of the financial period
7
9,953
71,457
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
36
37
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 71
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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 and financial assets at fair value
through other comprehensive income.
FFiinnaanncciiaall rreeppoorrttiinngg ppeerriioodd
The company reports within a retail financial period. The current financial year represents a 53 week period
ended 3 July 2022 (2021: 52 week period ended 27 June 2021). This treatment is consistent with s323D
Corporations Act 2001.
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 3 July 2022 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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
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.
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.
38
39
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 73
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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 2021-3 Amendments to Australian Accounting Standards –Covid-19-Related Rent Concessions beyond
30 June 2021
• AASB 2020-8 Amendments to Australian Accounting Standards –Interest Rate Benchmark Reform –Phase 2
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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.
40
41
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 75
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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 2021-3 Amendments to
Australian Accounting Standards
–Covid-19-Related Rent
Concessions beyond 30 June
2021
The Group early adopted the AASB 2021-3 amendment in FY20, with its adoption having a material
impact on the disclosures and amounts reported in the FY20 and prior period's financial statements.
AASB 2021-3 extends the practical expedient introduced by AASB 2020-4 Amendments to Australian
Accounting Standards –COVID-19 –Related Rent Concessions by a further 12 months –permitting
lessees to apply the relief to rent concessions for which reductions in lease payments were originally
due on or before 30 June 2022.
If a lessee elected to apply AASB 2020-4, then the AASB 2021-3 amendments are mandatory. This is
because a lessee applies the practical expedient consistently to eligible contracts that share similar
characteristics and in similar circumstances, irrespective of when the rent concession became eligible.
This means that lessees may be required to reverse previous lease modification accounting if a rent
concession did not qualify for the practical expedient under the AASB 2020-4 amendment, but does
qualify as a result of the AASB 2021-3 extension.
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 FY20, 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 2020-8 Amendments to
Australian Accounting Standards
–Interest Rate Benchmark Reform
–Phase 2
AASB 2020-8 amends AASB 9 Financial Instruments, AASB 7 Financial Instruments: Disclosures, AASB
4 Insurance Contracts, AASB 16 Leases and AASB 139 Financial Instruments: Recognition and
Measurement to introduce practical expedients in relation to accounting for modification of financial
contracts and/or leases if a change results directly from IBOR reform. Amendments also allow a series
of exemptions from the regular hedge accounting rules and introduce additional disclosure
requirements.
AASB 2020-9 amends AASB 1060 to relieve entities from disclosing the financial effects of changing
accounting policies in response to interest rate benchmark reform, and other editorial corrections.
The standard 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 a result of the reform. The Group has adopted the
amendment with no impact on the Group.
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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
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 3 July 2022.
SSttaannddaarrddss iinn iissssuuee bbuutt nnoott yyeett eeffffeeccttiivvee
NNeeww oorr rreevviisseedd rreeqquuiirreemmeenntt
AASB 2020-3 Amendments to Australian Accounting Standards –
Annual Improvements 2018-2020 and Other Amendments
WWhheenn eeffffeeccttiivvee
Effective for annual reporting periods beginning on or after 1
January 2022
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 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 2021-5 Amendments to Australian Accounting Standards–
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
Effective for annual reporting periods beginning on or after 1 January
2023
AASB 2015-10 Amendments to Australian Accounting Standards –
Effective Date of Amendments to AASB 10 and AASB 128
Effective for annual reporting periods beginning on or after 1 January
2025
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.
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.
42
43
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 77
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 22.. CCrriittiiccaall aaccccoouunnttiinngg jjuuddggeemmeennttss,, eessttiimmaatteess aanndd aassssuummppttiioonnss ((ccoonnttiinnuueedd))
NNoottee 33.. OOppeerraattiinngg sseeggmmeennttss ((ccoonnttiinnuueedd))
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.
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 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:
(cid:120) Asia Pacific (APAC) – current operations in Australia and New Zealand. Both regions serviced by stores,
website and marketplace
(cid:120) 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)
(cid:120) Europe, Middle East and Africa (EMEA) – current operations in UK and Europe. UK sales are comprised
of online (website and marketplace) and wholesale; Europe is online (website) only; Middle East
business is solely wholesale.
Refer to Note 4. Revenue for details on revenue by geographical area.
Reconciliation of net profit to Underlying EBITDA21
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:
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 costs15
Strategic logistics review16
Transaction costs17
Share issue costs18
Other19
Net AASB 16 impact20
UUnnddeerrllyyiinngg EEBBIITTDDAA ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss -- pprree--AAAASSBB116621
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
Repayment of lease liabilities
NNeett AAAASSBB 1166 iimmppaacctt
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
22,277
622
10,458
7,041
2,277
321
2,334
-
731
1,085
47,146
21,556
395
9,916
6,405
2,298
-
1,008
184
(233)
838
42,367
8,040
7,845
55,186
50,212
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
8,163
962
(8,040)
7,974
709
(7,845)
1,085
838
15 FY22 Transition costs related to costs to integrate Evans and Navabi, including restructuring and consulting fees; FY21 Transition costs
related to costs to integrate Evans.
16 Strategic review of northern hemisphere logistics
17 FY22 Transaction costs related to executing the acquisition of Navabi and costs associated with other acquisition opportunities; FY21
costs related to executing the acquisition of Evans.
18 FY21 share issue costs relate to the July-August 2020 equity raise, to the extent not allocated to equity.
19 FY22 costs related mainly to the impact of additional on-costs in respect of the vesting of the performance rights over ordinary shares
during the current reporting period and the outstanding performance rights and loan funded shares at the end of the reporting period;
these costs are net of a favourable impact from the forfeiture of performance rights and loan funded shares in FY22. FY21 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.
20 Net impact of the AASB16 Lease adjustments to reflect pre-AASB16 rent expense in Underlying EBITDA.
21 Underlying EBITDA (earnings before interest, income tax expense, depreciation and amortisation) is a financial measure which is not
prescribed by Australian Accounting Standards (‘AAS’)
44
45
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 79
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 44.. RReevveennuuee
From continuing operations
Sale of goods
Delivery fee income
RReevveennuuee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
Interest revenue
Other revenue
RReevveennuuee
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
359,413
9,834
369,247
34
571
605
258,477
7,111
265,588
243
1,143
1,386
369,852
266,974
Reclassification of delivery fee income
The Group charges a delivery fee to customers for certain online sales. Historically this recovery from
customers has been less significant and was previously recognised in fulfilment costs as an offset to fees
incurred from a third party to provide this service. With the continued growth of the online business this
balance has become more significant and management have concluded that under AASB 15, the delivery fee
income should be disclosed as part of revenue. This is because the delivery fee income is not considered an
independent rendering of services, but rather part of the Sale of Goods. As such the prior year has been
restated to include delivery fee income of $7,111,000 as part of revenue and remove from fulfilment costs as
outlined below.
Revenue from continuing operations
Purchase of inbound related costs of inventory
Fulfilment costs
Cost of Sales
BBaallaannccee pprreevviioouussllyy rreeppoorrtteedd
RReeccllaassssiiffiiccaattiioonn
BBaallaannccee ccuurrrreennttllyy
rreeppoorrtteedd
$$’’000000
258,477
(98,694)
(30,657)
(129,351)
$$’’000000
7,111
-
(7,111)
(7,111)
$$’’000000
265,588
(98,694)
(37,768)
(136,462)
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Timing of revenue recognition
Goods transferred at a point in time
Geographical regions
APAC
Americas
EMEA
Channel
Online website
Stores
Online marketplace
Wholesale
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
369,247
265,588
161,757
162,388
45,102
145,751
105,855
13,983
369,247
265,588
278,222
61,030
24,494
5,501
191,735
66,990
4,461
2,402
369,247
265,588
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 44.. RReevveennuuee ((ccoonnttiinnuueedd))
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 3
July 2022, 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.
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.
46
47
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 81
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 55.. EExxppeennsseess
Purchase and inbound-related costs of inventory
Fulfilment costs22
Depreciation, amortisation, and impairment expense (excluding AASB16 charges)
Depreciation on ROU assets
Rental-related expenses
Rent concessions
Employee benefits expense excluding superannuation and share-based payments
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
22002222
$$''000000
22002211
$$''000000
148,050
65,167
7,041
8,163
3,818
(26)
41,501
3,164
754
(21)
277,611
5,142
7,982
9,832
19,457
7,983
7,527
57,923
98,694
37,768
6,405
7,974
4,595
(1,043)
35,433
2,267
3,196
(3,551)
191,738
5,292
6,048
5,979
15,432
5,888
3,779
42,418
TToottaall
335,534
234,156
In the current period City Chic New Zealand Limited benefitted from AUD $21K from the New Zealand
government related to New Zealand store lockdowns. In the prior year the following significant government
support packages were received as a result of COVID-19 during the period:
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 were deducted in the prior reporting period against employee benefits expense. The
Australian JobKeeper was paid monthly in arrears in the first three months of the prior reporting period
and concluded on 27 September 2020, after which the Group was no longer eligible.
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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 55.. EExxppeennsseess ((ccoonnttiinnuueedd))
Accounting policy for rent concessions
Refer to Note 13. Right-of-use assets and Lease liabilities.
Accounting policy for Advertising and Marketing expenses
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
Aggregate income tax expense
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
LTIP and LFSP
Unrealised foreign exchange loss (gain)
Other non-deductible expenses
Difference in overseas tax rates
Prior year deferred tax (under)/over provisions
Prior year current tax over/(under) provisions
Foreign exchange
US state tax payable
DTA recognised on prior year tax losses
Income tax expense from continuing operations
c) Capital losses
Unused tax losses related to capital losses of $147.2m (2021: $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.
d) Income tax losses
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
10,159
506
(104)
(103)
10,458
10,458
10,458
8,344
1,508
88
(24)
9,916
9,916
9,916
32,735
31,472
9,821
9,442
42
602
573
11,038
(203)
614
(104)
95
171
(1,153)
10,458
958
-
-
10,400
6
(356)
88
(222)
-
-
9,916
SSuuppppoorrtt rreecceeiivveedd
DDeessccrriippttiioonn
b) Numerical reconciliation of income tax expense and tax at the statutory rate
JobKeeper Scheme (Australia)
Due to the impact of COVID-19 on the Group's turnover, government subsidies of $3.5m were received
in the prior year under the Australian Federal Government's JobKeeper Scheme. The entity became
eligible for the Scheme from its inception in March 2020.
Profit before income tax from continuing operations
Tax at the statutory tax rate of 30%
22 Fulfilment costs represent warehousing and freight costs to deliver online sales. Previously fulfilment costs (net) included delivery fee
income recovered from customers (FY22: $9.8m and FY21: $7.1m). In the current year this has been reclassified to revenue from continuous
operations, refer to note 4.
48
49
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 83
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 66.. IInnccoommee ttaaxx ((ccoonnttiinnuueedd))
As at 3 July 2022, the consolidated entity had carried forward income tax losses of $20.7m from its US, UK and
EU businesses (2021: $10.8m). 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.
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. The accounting policy in relation to this legislation is set out below.
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 initially recognised in equity
Deferred tax asset
Movements:
Opening balance
Foreign exchange on opening balance
Prior year under/over
(Charged)/Credited to profit or loss - continuing
(Charged)/Credited to Business Combination and Equity
Closing balance
Provision for income tax
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
1,687
2,448
(2,615)
(4,914)
1,253
1,181
2,154
2,222
4,702
3,995
1,398 696
26
7,196
(74)
6,963
367
612
7,330
7,808
7,808
752
(636)
(506)
(88)
7,330
8,661
(353)
-
(1,508)
1,008
7,808
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
3,284
1,818
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
33 JJuullyy 22002222
NNoottee 66.. IInnccoommee ttaaxx ((ccoonnttiinnuueedd))
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.
NNoottee 77.. CCaasshh aanndd ccaasshh eeqquuiivvaalleennttss
Current assets
Cash at bank
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
9,953
71,457
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
(cid:404)
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
(cid:404)
50
51
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 85
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 88.. TTrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables
TToottaall ttrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Past due but not impaired
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
8,252
(306)
3,065
11,011
2,432
(202)
3,376
5,606
As at 3 July 2022, trade receivables of $0.7m (2021: $0.3m) were past due but not impaired. These relate to a
number of independent customers for whom there is no recent history of default.
The ageing analysis of these trade receivables is as follows:
30 to 60 days
60 to 90 days
90 days and over
TTrraaddee rreecceeiivvaabblleess -- ppaasstt dduuee bbuutt nnoott iimmppaaiirreedd
Current
TToottaall ttrraaddee rreecceeiivvaabblleess
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
460
59
161
680
7,572
8,252
133
-
150
283
2,149
2,432
Allowance for expected credit losses
The Group has recognised a loss of $0.1m (2021: gain of $0.1m) in profit of loss in respect of the expected credit
losses for the year ended 3 July 2022. The recoverability of trade and other receivables at 3 July 2022 has been
assessed to consider the impact of the COVID-19 pandemic and no material recoverability issues were noted.
The Group determines the expected credit losses on these items by using a provision matrix, estimated based
on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to
reflect current conditions and estimates of future economic conditions.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue.
Current
30 to 60 days
60 to 90 days
90 days and over
AAlllloowwaannccee ffoorr eexxppeecctteedd ccrreeddiitt lloossss
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
219
66
-
21
83
44
-
75
330066
220022
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 88.. TTrraaddee aanndd ootthheerr rreecceeiivvaabblleess ((ccoonnttiinnuueedd))
Movement of allowance for expected credit loss
Carrying amount at the start of the period
Additional allowance recognised
Allowance derecognised
Amount used
Carrying amount at the end of the period
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
202
149
-
(45)
306
354
-
(118)
(34)
202
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days. Other receivables are recognised at amortised cost, less any allowance for expected
credit losses.
NNoottee 99.. IInnvveennttoorriieess
Current assets
Inventories on hand at lower of cost and net realisable value
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
195,936
66,996
The inventory balance as of 3 July 2022 includes $23.3m of Goods in Transit (27 June 2021: $5.1m). The increase
in inventory is aligned with the growth of the business globally, the acquisition of Navabi and Evans in the
current year and prior year respectively, the restructure of the global sourcing structures and the strategic
investment in inventory to counter the impact of global supply chain volatility. A significant amount of the
groups’ inventory is located in the United States and purchased and maintained in USD. At 3 July 2022 this
translates to a significantly higher AUD reporting balance at a group level than at 27 June 2021.
Accounting policy for inventories
Finished goods are stated at the lower of cost and net realisable value. Cost is determined on a weighted
average cost method and includes purchase and delivery costs, net of rebates and discounts received or
receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
fulfilment and the estimated costs necessary to make the sale. The allowances against inventory are recognised
to account for obsolescence, the expected sales below cost and inventory expected to be lost through
shrinkage. In recognising the allowance for inventory, judgement has been applied by considering a range of
factors including historical loss-making sales, historical inventory shrinkage trends, inventory ageing,
seasonality, and product lifecycle.
52
53
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 87
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 1100.. OOtthheerr aasssseettss
Current assets
Prepayments
Right of return assets
TToottaall ootthheerr aasssseettss
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
3,248
1,597
4,845
5,564
1,306
6,870
Accounting policy for right of return assets
Right of return assets represents the right to recover inventory sold to customers and is based on an estimate
of customers who may exercise their right to return the goods and claim a refund. Such rights are measured at
the value at which the inventory was previously carried prior to sale, less expected recovery costs and any
impairment.
NNoottee 1111.. PPllaanntt aanndd eeqquuiippmmeenntt
Non-current assets
Plant and equipment - at cost
Less: Accumulated depreciation
TToottaall ppllaanntt aanndd eeqquuiippmmeenntt
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
30,505
(15,150)
24,508
(14,317)
15,355
10,191
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period
are set out below:
CCoonnssoolliiddaatteedd
BBaallaannccee aatt 2288 JJuunnee 22002200
Additions
Depreciation expense
Accelerated depreciation
Exchange differences
BBaallaannccee aatt 2277 JJuunnee 22002211
Additions
Depreciation expense
Accelerated depreciation
Exchange differences
BBaallaannccee aatt 33 JJuullyy 22002222
TToottaall ppllaanntt aanndd
eeqquuiippmmeenntt
$$''000000
8,944
5,034
(2,926)
(976)
115
10,191
9,077
(3,921)
(409)
417
15,355
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
33 JJuullyy 22002222
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 indicators of impairment 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 at year-end and the calculations confirmed
that there was no impairment (2021: nil).
NNoottee 1122.. IInnttaannggiibblleess
Non-current assets
Goodwill - at cost
Brand assets - at cost
Customer relationships - at cost
Less: Customer relationships - accumulated amortisation
Other intangible assets - at cost
Less: Customer relationships - accumulated amortisation
TToottaall iinnttaannggiibblleess
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
52,153
28,116
45,199
26,001
3,871
2,757
(2,145) (981)
1,776
1,726
9,071
(6,400)
2,671
7,421
(4,795)
2,626
84,666
75,602
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 89
54
55
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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 2288 JJuunnee 22002200
Additions through business combinations (Note 32)
Additions
Amortisation expense
Exchange differences
BBaallaannccee aatt 2277 JJuunnee 22002211
Additions through business combinations (Note 32)
Additions
Amortisation expense
Exchange differences
GGooooddwwiillll
$$''000000
BBrraanndd aasssseettss
$$''000000
CCuussttoommeerr
rreellaattiioonnsshhiippss
$$''000000
OOtthheerr
iinnttaannggiibblleess
$$''000000
TToottaall
$$''000000
22,466
23,087
-
-
(354)
45,199
6,942
-
-
12
12,691
14,007
-
-
(697)
26,001
1,347
-
-
768
11,,110055
1,418
-
(669)
(78)
11,,777766
164
936
(1,147)
(3)
11,,772266
2,931
-
1,542
(1,834)
(13)
2,626
-
1,532
(1,564)
77
39,193
38,512
1,542
(2,503)
(1,142)
75,602
8,453
2,468
(2,711)
854
2,671
84,666
BBaallaannccee aatt 33 JJuullyy 22002222
52,153
28,116
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 assets
Brand assets are recognised on the acquisition date. Brand assets have been determined to be indefinite life
intangibles and are 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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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 websites development
and enhancements, 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 with a finite life 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 impairment 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.
56
57
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 91
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 1122.. IInnttaannggiibblleess ((ccoonnttiinnuueedd))
The key assumptions used by management in setting the financial budgets for the initial five-year period were
as follows:
(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.
The discount rate is applied in the current year value-in-use model: 15.8% (2021: 10.7%). The higher current
year rate reflects the increased cost of capital and higher risk in the current market conditions. A terminal
growth rate of 2.5% (2021: 2.5%) 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 (2021: 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 diminishing macro-economic conditions, 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 key assumptions used by management in setting the financial budgets for the initial five-year period were
as follows:
(iv)
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.
(v)
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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 1122.. IInnttaannggiibblleess ((ccoonnttiinnuueedd))
(vi)
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: 15.8% (2021: 10.7%). The higher current year rate
reflects the increased cost of capital and higher risk in the current market conditions. A terminal growth rate of
2.5% (2021: 2.5%) 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 (2021: 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 diminishing macro-economic conditions, 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
On 16 October 2019, the Group acquired the e-commerce assets of Avenue Stores LLC for cash consideration
of US$16.5m. Brand assets of $10.3m was recognised. 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
On 29 April 2019, 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 assets of A$2.5m was recognised. 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
On 23 December 2020, the Group completed the acquisition of the Evans brand, and the e-commerce and
wholesale businesses, for cash consideration of $40.2m. Brand assets of $14.0m was recognised. 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) Navabi Brand
On 23 July 2021, the Group acquired the Navabi brand, an online marketplace, for the cash consideration of for
€6.0m (A$9.6m). Brand assets of $1.3m, Customer Relationships of $0.2m and Goodwill of $6.9m were
recognised. The recoverable amount of the Navabi 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. Refer
to Note 32 for further information on the acquisition of the Navabi business.
(v) Brand asset impairment assessment
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
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 various
markets, ranging from 2% - 8%.
58
59
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 93
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 1122.. IInnttaannggiibblleess ((ccoonnttiinnuueedd))
Determining whether a brand is impaired requires an estimation of the fair value 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 fair value 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. The
discount rate applied in the current year fair value model is 15.8% (2021: 10.7%). A terminal growth rate of 2.5%
(2021: 2.5%) has been assumed in the fair value calculation and reflects the long-term growth expectations
beyond the five-year forecast horizon.
The calculations confirmed that there was no impairment of any of the Brands (2021: 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 diminishing macro-economic conditions, 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 amounts to exceed their recoverable amount. The expected
continued promotion and marketing of the various brands supports the assumption that each brand has an
indefinite life.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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
22002222
$$''000000
22002211
$$''000000
39,560
(13,305)
34,620
(12,178)
26,255
22,442
9,090
9,286
24,176
18,768
33,266
28,054
The consolidated entity leases land and buildings for its office and retail outlets under agreements of between
1 to 10 years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the
terms of the leases are renegotiated.
The Group has applied the practical expedient per COVID-19-Related Rent Concessions (Amendment to AASB
16)
and recognised the effect of rent concessions received from landlords as a result of COVID-19 in the profit and
loss statement where applicable and have not accounted for these related rent concessions as lease
modifications. Rent concessions received for the current reporting period amounted to $0.02m (2021: $1.0m).
The lease liability recognised by the Group represents the present value of future lease payments owing to the
lessor.
The Group leases office equipment under agreements of less than 5 years. These leases are either short-term
or low value, so have been expensed as incurred and not capitalised as ROU assets.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period
are set out below:
CCoonnssoolliiddaatteedd
BBaallaannccee aatt 2288 JJuunnee 22002200
Additions
Disposals
Accumulated depreciation on disposals
Depreciation expense
Exchange differences
BBaallaannccee aatt 2277 JJuunnee 22002211
Additions
Disposals
Accumulated depreciation on disposals
Depreciation expense
Exchange differences
BBaallaannccee aatt 33 JJuullyy 22002222
60
61
TToottaall
rriigghhtt--ooff--uussee
aasssseett
$$''000000
22,252
14,692
(11,578)
5,125
(7,974)
(75)
22,442
15,477
(10,450)
7,032
(8,163)
(83)
26,255
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 95
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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
22002222
$$''000000
22002211
$$''000000
8,163
962
3,286
7,974
692
2,292
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 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
Total trade and other payables
Refer to Note 25 for further information on financial instruments.
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
37,815
23,655
18,855
13,395
11,744
16,757
80,325
41,896
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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
22002222
$$''000000
22002211
$$''000000
14,000
-
On 22 June 2022, the company commenced a new, multicurrency, revolving debt facility of $60.0m, maturing
on 22 June 2025, including both working capital and acquisition tranches. The covenants entered by the Group
require specified calculations regarding the Groups Fixed Charge Cover Ratio and Net Leverage Ratio. The
group was in compliance with all covenants during the financial year. The interest rate is BBSY plus an agreed
margin.
Refer to Note 25. Financial Instruments for further information.
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
22002222
$$''000000
22002211
$$''000000
1,163
59,888
112
61,163
227
14,000
112
14,339
936
45,888
-
46,824
944
39,950
50
40,944
463
-
50
513
481
39,950
-
40,431
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.
62
63
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 97
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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
TToottaall pprroovviissiioonnss -- nnoonn--ccuurrrreenntt
TToottaall pprroovviissiioonnss
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
3,560
564
660
3,718
286
2,899
731
267
3,476
697
88,,778888
88,,007700
422
442222
459
445599
99,,221100
88,,552299
Movements in provisions
Movements in provisions during the current financial period, are set out below:
CCoonnssoolliiddaatteedd –– 22002222
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
EEmmppllooyyeeee
bbeenneeffiittss
$$''000000
SSaalleess rreettuurrnn
pprroovviissiioonn
$$''000000
OOtthheerr
pprroovviissiioonnss
$$''000000
TToottaall
$$''000000
2,899
76
1,022
(437)
3,560
459
-
61
(98)
422
3,476
488
24,425
(24,671)
3,718
1,695
856
553
(1,594)
1,510
-
-
-
-
-
-
-
-
-
-
8,070
1,420
26,000
(26,702)
8,788
459
-
61
(98)
422
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 Navabi brand. The
prior year balance represented onerous contracts entered into on the acquisition of Evans online assets.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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
Current 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.
Non-current employee benefits
The liability for 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.
NNoottee 1177.. OOtthheerr lliiaabbiilliittiieess
Current liabilities
Deferred income
Deferred revenue - customer loyalty points
Non-current liabilities
Deferred income
TToottaall ootthheerr lliiaabbiilliittiieess
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
4,268
36
4,304
3,040
32
3,072
385
701
4,689
3,773
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.
64
65
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 99
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 1177.. OOtthheerr lliiaabbiilliittiieess ((ccoonnttiinnuueedd))
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.
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 or when they
expire after 12 months.
NNoottee 1188.. CCaasshh ffllooww iinnffoorrmmaattiioonn
Reconciliation of profit after income tax to net cash from continuing operating activities
Profit after income tax expense from continuing operations
Adjustments for:
Depreciation, amortisation, and impairment
Share-based payments
Foreign exchange and other differences
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in inventories
Decrease/(Increase) in other assets
Increase/(Decrease) in deferred tax assets
Increase in trade and other payables
Increase/(Decrease) in provision for income tax
Increase in other provisions
Increase in other liabilities
Business combinations (opening balances)
NNeett ccaasshh ffrroomm ccoonnttiinnuuiinngg ooppeerraattiinngg aaccttiivviittiieess
Reconciliation of liabilities arising from financing activities:
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
22,277
21,556
15,204
185
5,043
(5,405)
(128,940)
2,024
478
38,430
1,466
681
917
14,379
3,195
(1,218)
(533)
(28,923)
(4,608)
853
4,368
(712)
1,404
3,696
(4,254)
1,696
(51,894)
15,153
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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%
40.00%
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
2.33% 2,475,000
55,,773311,,884488
GGrraanntteedd
VVeesstteedd
(781,848)
-
(1,237,500)
-
(1,237,500)
-
-
-
-- ((33,,225566,,884488))
EExxppiirreedd//
ffoorrffeeiitteedd//
ootthheerr
-
-
-
BBaallaannccee aatt
tthhee eenndd ooff
tthhee ppeerriioodd
--
--
--
(175,000) 22,,330000,,000000
((117755,,000000)) 22,,330000,,000000
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%
40.00%
N/A
N/A
N/A
0.81%
0.81%
0.29%
7,533,448
667,464
454,576
88,,667755,,448888
-
-
-
--
(1,234,991) 66,,229988,,445577
-
666677,,446644
-
-
-
447744,,557766
-
-- ((11,,223344,,999911)) 77,,444400,,449977
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 underlying 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% (cid:148) EPS CAGR (cid:148) 20.0%
Nil
PPrrooppoorrttiioonn ooff TTrraanncchhee 11 PPeerrffoorrmmaannccee RRiigghhttss hheelldd tthhaatt wwiillll ssaattiissffyy VVeessttiinngg
CCoonnddiittiioonn 22
25%
Straight line pro-rata vesting between 25% and 100% (inclusive)
Tranche 2A
Vesting Condition
Continued service to 27 August 2021, with no holding lock on resulting shares
Long-term borrowings
Lease liabilities
22002211
CCaasshh fflloowwss
NNoonn--ccaasshh
cchhaannggeess
NNoonn--ccaasshh
cchhaannggeess
AAccqquuiissiittiioonnss NNeeww lleeaasseess
22002222
$$''000000
-
28,054
$$''000000
14,000
(8,040)
28,054
5,960
$$''000000
$$''000000
$$''000000
-
-
-
-
13,252
14,000
33,266
13,252
47,266
Tranche 2B
Vesting Condition 1
Vesting Condition 2
Continued service to 27 August 2021, with no holding lock on resulting shares;
Group underlying EPS (before income tax and share-based payments) performance in acco
with
the following schedule:
GGrroouupp EEPPSS ffoorr tthhee yyeeaarr ttoo 3300 JJuunnee 22002211
Below $0.0975 (1.3 x FY18 EPS)
$0.0975 (cid:148) EPS (cid:148) $0.1050 (1.4 x FY18 EPS)
EPS (cid:149) $0.1050
PPrrooppoorrttiioonn ooff TTrraanncchhee 22BB PPeerrffoorrmmaannccee RRiigghhttss hheelldd tthhaatt wwiillll ssaattiissffyy VVeessttiinngg
CCoonnddiittiioonn 22
Nil
50%
100%
66
67
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 101
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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 underlying EPS (before income tax and share-based payments) performance in acco
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 FY18 EPS)
$0.1250 (cid:148) EPS (cid:148) $0.1200 (1.6 x FY18 EPS)
$0.1200 (cid:148) EPS (cid:148) $0.1275 (1.7 x FY18 EPS)
EPS (cid:149) $0.1275
LLFFSSPP TTrraanncchheess
VVeessttiinngg CCoonnddiittiioonn 22
Nil
50%
75%
100%
During the period, 1,234,991 loan funded shares were forfeited, bought back and subsequently cancelled in
accordance with the terms of the LFSP. As at 3 July 2022, 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:
(cid:404)
(cid:404)
(cid:404)
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.
(cid:404)
(cid:404)
(cid:404)
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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.
Any market-based performance 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.
Vesting conditions of the LF Shares are set out below:
NNoottee 2200.. IIssssuueedd ccaappiittaall
TTrraanncchhee 33
Vesting Condition 1
Vesting Condition 2
Continued service to 30 June 2024.
Compound annual growth rate (CAGR) in the Group's Adjusted Diluted Earnings Per Share
(ADEPS) 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:
Ordinary shares - fully paid
TToottaall iissssuueedd ccaappiittaall
22002222
SShhaarreess
22002211
SShhaarreess
22002222
$$''000000
22002211
$$''000000
CCoonnssoolliiddaatteedd
239,360,583
237,338,726
182,167
182,000
239,360,583
237,338,726
182,167
182,000
AADDEEPPSS 33--yyeeaarr CCAAGGRR ffrroomm 11 JJuullyy 22001199
12.5%
20%
12.5% (cid:148) ADEPS CAGR (cid:148) 20.0%
PPrrooppoorrttiioonn ooff TTrraanncchhee 33 LLFF sshhaarreess tthhaatt wwiillll ssaattiissffyy VVeessttiinngg CCoonnddiittiioonn 22
25%
100%
Straight-line pro rata vesting between 25% and 100% (inclusive)
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees.
68
69
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 103
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2200.. IIssssuueedd ccaappiittaall ((ccoonnttiinnuueedd))
Movements in ordinary share capital
DDeettaaiillss
DDaattee
SShhaarreess
IIssssuuee pprriiccee
$$''000000
BBaallaannccee
Institutional Placement
Share Purchase Plan
Share issue expenses (net of tax)
Issue of Loan funded shares
2288 JJuunnee 22002200
30 July 2020
24 August 2020
16 September 2020
BBaallaannccee
Performance rights over ordinary shares (net of cost)
Cancellation of Loan funded shares
2277 JJuunnee 22002211
30 August 2021
12 January 2022
BBaallaannccee
33 JJuullyy 22002222
200,437,033
26,229,509
10,197,608
-
474,576
237,338,726
3,256,848
(1,234,991)
239,360,583
$3.05
$3.05
$0.00
$3.33
71,191
80,000
31,103
(1,874)
1,580
182,000
$1.07 3,477
(3,310)
$2.68
182,167
During the current reporting period, the Company issued 3,256,848 ordinary shares on the exercise of 3,256,848
performance rights issued under its LTIP. These performance rights had a fair value at grant date of $1.067 per
performance right. As a result of this share issue, $3.477m (net of cost) was transferred from the share-based
payments reserve to issued capital.
As disclosed to the market, the Company also bought back and cancelled 1,234,991 loan funded shares on 12
January 2022. There were no other movements in the ordinary share capital or other issued share capital of
the Company in the current reporting period.
In the previous reporting period, the Company completed a fully underwritten $80.0m Placement of new fully
paid ordinary shares to eligible institutional investors. The Placement was conducted at $3.05 per share,
resulting in 26.2 million new shares. 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 the SPP together raised $111.1 and resulted
in 36.4 million new shares being issued.
In the prior year Issued Capital was disclosed net of Loan Funded Shares. These have been disclosed as part
of Reserves (Note 21) in the current year, to align with the Share Based Payment Reserve.
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.
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.
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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2200.. IIssssuueedd ccaappiittaall ((ccoonnttiinnuueedd))
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
Loan funded shares held in trust
Loss Reserve
TToottaall rreesseerrvveess
CCoonnssoolliiddaatteedd
22002222
$$’’000000
22002211
$$’’000000
(1,144)
3,482
(20,322)
(10,991)
(6,725)
7,142
(23,632)
(10,991)
(28,975)
(34,206)
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.
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.
70
71
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 105
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2211.. RReesseerrvveess ((ccoonnttiinnuueedd))
Movements in reserves
Movements in each class of reserve during the current and previous financial period are set out below:
CCoonnssoolliiddaatteedd
Balance at 28 June 2020
Issue of loan funded shares held in trust
Foreign currency translation
Share-based payments expense
BBaallaannccee aatt 2277 JJuunnee 22002211
Cancelation of loan funded shares held in trust
Foreign currency translation
Transferred to issued capital (upon vesting)
Share-based payments expense / (gain)
LLooaann
ffuunnddeedd
sshhaarreess hheelldd
iinn ttrruusstt
$$''000000
(22,052)
(1,580)
-
-
(23,632)
3,310
-
-
-
LLoossss
RReesseerrvvee
$$''000000
SShhaarree--bbaasseedd
ppaayymmeennttss
rreesseerrvvee
$$''000000
FFoorreeiiggnn
ccuurrrreennccyy
ttrraannssllaattiioonn
rreesseerrvvee
$$''000000
(10,991)
-
-
-
(10,991)
-
-
-
-
3,947
-
-
3,195
7,142
-
-
(3,477)
(183)
(1,758)
-
(4,967)
-
(6,725)
-
5,581
-
-
TToottaall
$$''000000
(30,854)
(1,580)
(4,967)
3,195
(34,206)
3,310
5,581
(3,477)
(183)
BBaallaannccee aatt 33 JJuullyy 22002222
(20,322)
(10,991)
3,482
(1,144)
(28,975)
NNoottee 2222.. RReettaaiinneedd pprrooffiittss
Retained profits at the beginning of the financial period
Profit after income tax expense for the period
RReettaaiinneedd pprrooffiittss aatt tthhee eenndd ooff tthhee ffiinnaanncciiaall ppeerriioodd
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
35,108
13,552
22,277
21,556
57,385
35,108
Previously the Loss Reserve was disclosed as part of Retained Earnings however this is now presented in
Reserves (Note 21).
NNoottee 2233.. EEaarrnniinnggss ppeerr sshhaarree
Earnings per share for profit from continuing operations
Profit after income tax attributable to the owners of City Chic Collective Limited
Basic earnings per share
Diluted earnings per share
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
22,277
21,556
CCeennttss
CCeennttss
9.6
9.5
9.6
9.4
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2233.. EEaarrnniinnggss ppeerr sshhaarree ((ccoonnttiinnuueedd))
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Adjustments for performance rights
Adjustments for loan funded shares
NNuummbbeerr
NNuummbbeerr
231,358,258
224,648,407
1,536,236
1,215,110
4,578,118
569,838
Weighted average number of ordinary shares used in calculating diluted earnings per share
234,109,604
229,796,363
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of City Chic Collective
Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued
during the financial period.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
NNoottee 2244.. DDiivviiddeennddss
Dividends
Dividends paid during the financial period and prior period were as follows:
Final dividend for the period (2021: 0 cents per ordinary share)
-
-
Franking credits
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
Franking credits available at the reporting date based on a tax rate of 30%
Franking credits that will arise from the payment of the amount of the provision for income tax at the
reporting date based on a tax rate of 30%
Franking credits available for subsequent financial years based on a tax rate of 30%
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
66,826
58,143
946
1,888
67,772
60,031
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
Franking credits available for subsequent financial years based on a tax rate of 30%
67,772
60,031
72
73
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 107
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2244.. DDiivviiddeennddss ((ccoonnttiinnuueedd))
The above amounts represent the balance of the franking account as at the end of the financial period, adjusted
for:
(cid:404)
franking credits that will arise from the payment of the amount of the provision for income tax at the
reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
(cid:404)
(cid:404)
Accounting policy for dividends
Dividends are recognised when declared during the financial period and no longer at the discretion of the
company.
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss
FFiinnaanncciiaall AAsssseettss aanndd LLiiaabbiilliittiieess::
Amounts are accounted for at amortised cost and shown at fair values below:
FFiinnaanncciiaall aasssseettss
Cash and cash equivalents
Trade and other receivables
FFiinnaanncciiaall lliiaabbiilliittiieess
Trade and other payables
Other liabilities
Lease liabilities - current
Lease liabilities – non-current
Borrowings
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
9,953
11,011
20,964
80,325
4,689
9,090
24,176
14,000
132,280
71,457
5,606
77,063
41,896
3,773
9,286
18,768
-
73,723
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.
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.
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 2021 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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
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 FY22 approximately 44% 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. In July 2021 the Group also acquired EU-based Navabi, with revenues
received and operating expenses in EUR and stock purchases largely in USD.
In H1 FY22 the two EMEA based businesses were breakeven and H2 began to generate a small profit. As such,
while management has been building these businesses, the cash flows have been neutral and the groups’
exposure to GBP and EUR has been minimal.
Management continue to assess the future cash flows of the international business and if the natural hedge for
USD the Group has enjoyed to date is no longer in place and the GBP and EUR become more material, exposure
will be hedged appropriately.
For the current financial period, if AUD to USD 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 $0.6m lower/higher
(2021: $0.3m higher/lower).
Price risk
The consolidated entity is not exposed to any significant price risk.
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
22002222
22002211
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
BBaallaannccee
$$''000000
BBaallaannccee
$$''000000
0.17%
1.84%
9,953
(14,000)
(4,047)
0.229%
2.732%
71,457
-
71,457
74
75
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 109
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
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 $0.1m higher/lower
(2021: $0.6m higher/lower), relating to the interest income on the cash at bank and interest expense on the
borrowings.
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 3 July 2022 owed the
consolidated entity $8.3m (2021: $2.4m). 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 loss of $0.1m (2021: gain of $0.1m) in profit or loss in respect of the
expected credit losses for the year ended 3 July 2022. The recoverability of trade and other receivables at 3
July 2022 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.
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 $60.0m, comprising of both working capital and acquisition
tranches, was available to the Group (27 June 2021: $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 a 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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
Financing arrangements
Unused borrowing facilities at the reporting date:
Corporate credit card
Bank loans
CCoonnssoolliiddaatteedd
22002222
$$''000000
22002211
$$''000000
936
45,888
46,824
481
39,950
40,431
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the financial liabilities are required to be paid. The tables include both interest and
principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from
their carrying amount in the statement of financial position.
CCoonnssoolliiddaatteedd -- 22002222
NNoonn--ddeerriivvaattiivveess
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Bank loans
Undiscounted lease liabilities
Total non-derivatives
CCoonnssoolliiddaatteedd -- 22002211
NNoonn--ddeerriivvaattiivveess
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Undiscounted lease liabilities
Total non-derivatives
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
11 yyeeaarr oorr lleessss
$$''000000
BBeettwweeeenn 11 aanndd
22 yyeeaarrss
$$''000000
BBeettwweeeenn 22 aanndd
55 yyeeaarrss
$$''000000
OOvveerr 55 yyeeaarrss
$$''000000
RReemmaaiinniinngg
ccoonnttrraaccttuuaall
mmaattuurriittiieess
$$''000000
-
80,325
-
-
-
80,325
1.84%
3.00%
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
-
8,969
89,294
-
8,039
8,039
14,000
16,977
30,977
-
593
593
14,000
34,578
128,903
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
-
41,896
-
-
-
41,896
3.00%
9,393
51,289
7,231
7,231
11,686
11,686
1,413
1,413
29,723
71,619
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.
76
77
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 111
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2255.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
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.
NNoottee 2266.. KKeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell
Directors
The following persons were directors of City Chic Collective Limited during the financial period:
Michael Kay
Megan Quinn
Neil Thompson (appointed 5 August 2021)
Natalie McLean (appointed 5 August 2021)
Phil Ryan
Michael Hardwick (resigned 17 November 2021)
Chairman and non-executive director
Non-executive director
Non-executive director
Non-executive director
Chief Executive Officer and Managing Director
Non-executive director
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:
Peter McClelland (appointed 10 November 2021)
Munraj Dhaliwal (resigned 10 December 2021)
Chief Financial Officer
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
Short-term benefits
Long-term benefits
Share-based payments
CCoonnssoolliiddaatteedd
22002222
$$
22002211
$$
2,116,598
124,594
100,954
51,341
(157,633)
1,471,565
78,689
84,525
20,550
1,400,127
2,235,854
3,055,456
Directors' shareholding
Ordinary shares:
Michael Kay
Neil Thompson
Natalie McLean
Phil Ryan
Total
Other key management personnel shareholding
Ordinary shares:
Peter McClelland
Munraj Dhaliwal (resigned 10 December 2021)*
700,000
-
-
133,836
833,836
100,000
21,000
10,900
203,740
335,640
800,000
21,000
10,900
337,576
1,169,476
3,284
99,672
102,956
7,000
(250,000)
(243,000)
10,284
N/A
10,284
400,400
62,400
-
-
120,965
-
508,578
62,160
583,765
570,738
3,120
-
11,743
10,840
14,863
10,840
598,628
581,578
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 113
78
79
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 2277.. RReemmuunneerraattiioonn ooff aauuddiittoorrss ((ccoonnttiinnuueedd))
It is the consolidated entity's policy to engage Ernst & Young on assignments additional to their statutory audit
duties where Ernst & Young's expertise and experience with the consolidated entity are important. These
assignments are principally assurance related and other advisory services, or where Ernst & Young 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 3 July 2022 in respect of:
The Group recognised a contingent liability of $0.1m (FY21: $50k) in the course of a letter of credit (see Note
15).
No material losses are anticipated in respect of any of the above contingent liabilities.
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
22002222
$$''000000
22002211
$$''000000
115
448
-
563
743
2,765
844
4,352
4,118
166
Lease commitments includes contracted amounts for a small number of retail outlets considered short term
(expiring within less than one year) and contracted amounts for leases not yet commenced as of 3 July 2022
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 5 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 3 July 2022 but to which the Group
is committed.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
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.
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 Natalie McLean is Director and Chief Retail Officer. Michael Hardwick is a Director and
the CFO of the Cotton on Group23
Services provided by International Southern Cross Shopfitting (NZ), a company that is associated with
the Cotton on Group, of which Natalie McLean is Director and Chief Retail Officer. Michael Hardwick is a
Director and the CFO of the Cotton on Group24
TToottaall rreellaatteedd ppaarrttyy ttrraannssaaccttiioonnss
CCoonnssoolliiddaatteedd
22002222
$$
22002211
$$
1,642,070
2,356,173
9,790
9,360
1,651,860
2,365,533
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables
Trade payables to Southern Cross Shopfitting, a company that is associated with the Cotton Group, of
which Natalie McLean is Director and Chief Retail Officer. Michael Hardwick is a Director and the CFO of
the Cotton on Group 23
Trade payables to International Southern Cross Shopfitting (NZ), a company that is associated with the
Cotton on Group, of which Natalie McLean is Director and Chief Retail Officer. Michael Hardwick is a
Director and the CFO of the Cotton on Group24
TToottaall rreellaatteedd ppaarrttyy ttrraannssaaccttiioonnss
CCoonnssoolliiddaatteedd
22002222
$$
22002211
$$
6,557
841,580
511
-
7,068
841,580
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date. Refer to note 19 on
information on loan funded share plan.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates. Proposals are
sought from various suppliers and awarded to the best proposal, i.e. a number of suppliers were engaged for
shopfitting services for the period.
23 Natalie McLean and Michael Hardwick was not involved in decision making related to Southern Cross Shopfitting and its dealings with
the Group.
24 Natalie McLean and Michael Hardwick was not involved in decision making related to International Southern Cross Shopfitting (NZ) and
its dealings with the Group.
80
81
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 115
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 3311.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn
Set out below is the supplementary information about the parent entity
Statement of profit or loss and other comprehensive income
Revenue
Expenses
Profit before income tax
Income tax expense
Profit after income tax from discontinued operations
Total profit after income tax for the year from parent entity
Other comprehensive income / (loss)
Total comprehensive income from parent entity
Statement of financial position
PPaarreenntt
22002222
$$''000000
22002211
$$''000000
146,411
(121,916)
24,495
133,064
(100,836)
32,228
(8,467)
(9,772)
-
16,028
-
16,028
-
22,456
(198)
22,258
PPaarreenntt
22002222
$$''000000
22002211
$$''000000
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Intercompany
TToottaall ccuurrrreenntt aasssseettss
Plant and equipment
Investments in subsidiaries
Right-of-use assets
Intangibles
Deferred tax
TToottaall nnoonn--ccuurrrreenntt aasssseettss
TToottaall aasssseettss
Trade and other payables
Lease liabilities
Income tax
Provisions
Other
TToottaall ccuurrrreenntt lliiaabbiilliittiieess
Lease liabilities
Provisions
Borrowings
Other
TToottaall nnoonn--ccuurrrreenntt lliiaabbiilliittiieess
TToottaall lliiaabbiilliittiieess
NNeett AAsssseettss
Issued capital
Loss reserve
Share-based payments reserve
Retained profits
TToottaall eeqquuiittyy
2,013
1,028
60,366
1,734
39,273 18,564
2,361
5,064
88,089
2,833
86,015
131,162
14,263
130,132
23,842
3,021
2,161
173,419
9,840
120,501
21,150
3,208
2,887
157,586
304,581
245,675
50,188
8,708
946
4,574
1,413
65,829
21,724
422
14,000
384
36,530
25,090
8,804
1,888
4,008
607
40,397
17,740
459
-
700
18,899
102,359
59,296
202,222
186,379
182,000
182,167
(10,991)
(10,991)
(16,840) (16,490)
31,860
47,886
202,222
186,379
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 3311.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The guarantee disclosures of the parent entity is referred to in Note 34. Deed of cross guarantee.
Contingent liabilities
The above disclosure does not include contingent rental payments which may arise in the event that sales
revenue exceeds a predetermined amount.
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.
Capital commitments - Property, plant and equipment
The parent entity had capital commitments for plant and equipment as at 3 July 2022 of $0.5m (2021: $0.17m).
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:
(cid:404)
(cid:404)
(cid:404)
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.
NNoottee 3322.. BBuussiinneessss ccoommbbiinnaattiioonnss
On 23 July 2021, the Group completed the acquisition of the Navabi business, where CCX acquired all the assets
and liabilities of Navabi for cash consideration of €6.0m (A$9.6m) in cash.
During the 53-week period ending 3 July 2022, the provisional accounting for the acquisition of the Navabi
Assets was finalised.
Details of the purchase consideration, and finalised fair values of the net assets acquired and goodwill at the
date of acquisition are as follows:
Cash
Inventory
Prepaid deposits and other assets
Customer relationships
Brand
Deferred tax asset
Deferred tax liability
Provisions and payables
Tax 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
5,377
904
608
164
1,347
190
(453)
(3,545)
(1,903)
2,689
6,942
9,631
9,631
486
82
83
The goodwill is attributable to the profitability of the acquired business. It will not be deductible for tax purposes.
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 117
Annual Financial Report 2022 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 3322.. BBuussiinneessss ccoommbbiinnaattiioonnss ((ccoonnttiinnuueedd))
Revenue contributions
The acquired business contributed revenues of $6.4m to the Group for the period from 23 July 2021 to 3 July
2022. For the 53 weeks ending 3 July 2022 revenue was $6.6m.
Prior year business combinations
In the prior year, 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 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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
33 JJuullyy 22002222
NNoottee 3322.. BBuussiinneessss ccoommbbiinnaattiioonnss ((ccoonnttiinnuueedd))
Business combinations were initially accounted for on a provisional basis and subsequently finalised for the 53-
week period ended 3 July 2022. 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.
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
City Chic Collective UK Limited
Specialty Fashion Group South Africa (Pty) Ltd
JPC United GmbH
City Chic Collective USA Incorporated
PPrriinncciippaall ppllaaccee ooff bbuussiinneessss //
CCoouunnttrryy ooff iinnccoorrppoorraattiioonn
Australia
Australia
Australia
Australia
Australia
New Zealand
England and Wales
South Africa
Germany
United States
22002222
%%
OOwwnneerrsshhiipp iinntteerreesstt
22002211
%%
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%
100.0%
NNoottee 3344.. DDeeeedd ooff ccrroossss gguuaarraanntteeee
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.
NNoottee 3355.. EEvveennttss aafftteerr tthhee rreeppoorrttiinngg ppeerriioodd
No other matter or circumstance has arisen since 3 July 2022 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.
84
85
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 119
Annual Financial Report 2022 | Annual Financial Statements
Annual Financial Report 2022 | Corporate Governance Statement
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoorrppoorraattee GGoovveerrnnaannccee SSttaatteemmeenntt
33 JJuullyy 22002222
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
for
the Group’s website
(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 53-week period ended 3 July 2022 (unless otherwise stated) 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.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
DDiirreeccttoorrss’’ ddeeccllaarraattiioonn
33 JJuullyy 22002222
In the directors' opinion:
(cid:404)
(cid:404)
(cid:404)
(cid:404)
(cid:404)
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 3 July 2022 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
25 August 2022
Sydney
Phil Ryan
Chief Executive Officer and Managing Director
86
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 121
Annual Financial Report 2022 | Annual Financial Statements
Annual Financial Report 2022 | Shareholder information
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
SShhaarreehhoollddeerr iinnffoorrmmaattiioonn
33 JJuullyy 22002222
The shareholder information set out below was applicable as at 1 September 2022.
DDiissttrriibbuuttiioonn ooff eeqquuiittaabbllee sseeccuurriittiieess
Analysis of the number of ordinary shareholders by size of holding:
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
SShhaarreehhoollddeerr iinnffoorrmmaattiioonn
33 JJuullyy 22002222
EEqquuiittyy sseeccuurriittyy hhoollddeerrss
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
oorrddiinnaarryy
sshhaarreess
%% ooff eeqquuiittyy
sseeccuurriittiieess iinn
tthhiiss ccllaassss
NNuummbbeerr ooff
sseeccuurriittiieess
2,299
2,350
650
663
62
6,062
0.46
2.57
2.12
7.31
87.54
100
1,069,406
5,952,584
4,910,260
16,955,240
203,032,596
231,920,086
Holding less than a marketable parcel
884
141,213
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
-
-
-
-
8
8
-
-
-
-
100.0
100.0
-
-
-
-
7,440,497
7,440,497
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
-
-
-
-
5
5
-
-
-
-
100.00
100.00
-
-
-
-
2,300,000
2,300,000
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
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
T BATSAKIS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
HENOCH INVESTMENTS PTY LTD
SANDHURST TRUSTEES LTD
LANDPEAK PTY LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
BNP PARIBAS NOMS PTY LTD
TOWER HOLDINGS PTY LIMITED
ONE FUND SERVICES LTD
BNP PARIBAS NOMINEES PTY LTD
SANDHURST TRUSTEES LTD
TDA SECURITIES PTY LTD
HENOCH INVESTMENTS PTY LTD
A/C designation
Ordinary shares
Number held
% of total shares
issued
46,808,697
45,275,523
33,297,984
19,752,294
7,564,213
7,230,000
4,777,885
4,067,643
4,000,000
3,968,291
3,050,000
2,945,176
2,794,638
2,356,243
1,595,272
1,315,051
833,096
823,528
600,000
523,447
20.18
19.52
14.36
8.52
3.26
3.12
2.06
1.75
1.72
1.71
1.32
1.27
1.21
1.02
0.69
0.57
0.36
0.36
0.26
0.23
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.
193,578,981
83.47
SSuubbssttaannttiiaall hhoollddeerrss
Substantial holders in the company are set out below:
AUSTRALIANSUPER PTY LTD
BENNELONG FUNDS MANAGEMENT GROUP PTY LTD (AND RELATED ENTITIES)
VVoottiinngg rriigghhttss
The voting rights attached to ordinary shares are set out below:
Ordinary shares
Number held
23,852,382
14,762,219
% of total
shares issued
10.28
6.37
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
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 123
Annual Financial Report 2022 | Company Directory
Annual Financial Report 2022 | References
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoorrppoorraattee ddiirreeccttoorryy
33 JJuullyy 22002222
Directors
Michael Kay - Chairman and 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)
Michael Hardwick - Non-executive director (resigned 17 November 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
Ernst & Young
200 George Street
Sydney, NSW 2000
Thomson Geer
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
References
PAGES 14-15, FINANCIAL PERFORMANCE
See Note 3 Operating Segments on page 79 for reconciliation of net profit to underlying EBITDA.
1 Underlying excludes non-recurring costs (e.g. relating to acquisitions and equity raise) and is presented on a pre-
AASB16 basis
2 Week 53 impact in FY22 of ~$5.4m of revenue
PAGES 14-15, STRONG EXECUTION OF DIGITAL GROWTH STRATEGY
3 Active customers include customers who have shopped in online, stores and omni-channel in the last 12 months;
excludes wholesale and marketplace customers
4 Online represents websites and online marketplace sales; based on last 12 months revenue to remove seasonality
impacts
5 Traffic to Online excludes traffic to Online Marketplaces
PAGE 27, SUPPORTING OUR PEOPLE
3 LTIFR - total number of incidents recorded in the financial year that resulted in an injury that caused the employee
to lose time from work against the total number of hours worked by our employees during that financial year
4 TRIFR - total number of incidents recorded in the financial year against the total number of hours worked by
employees during that financial year
FY2022 CITY CHIC COLLECTIVE ANNUAL REPORT 125
CITY CHIC COLLECTIVE
151–163 Wyndham Street,
Alexandria NSW 2015
Australia
ABN 43 057 569 169
P +61 2 9059 4300