ANNUAL REPORT
2022
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HIGHLIGHTS 2022
3,972,000
Group Active Customers1
$18.9m
$1.180b
209.7%
Adjusted EBITDA2
GROSS SALES3
YOY GROWTH
OF KOGAN FIRST
SUBSCRIBERS4
TO 372,000
1
2
3
4
The number of unique customers who have purchased on the Kogan.com or Mighty Ape platform in the past twelve months from
30 June 2022, rounded to the nearest thousand.
Adjusted EBITDA, Adjusted EBIT, Adjusted NPAT and Adjusted EPS are measures of the underlying performance of the Business, they remove
non‑cash items including the unrealised gain/(loss), equity‑based compensation and one‑off non‑recurring items. Refer to page 23 of this
Annual Report for a detailed reconciliation of adjusting items.
Non‑IFRS measure.
Kogan First Subscribers excludes Kogan First customers who are in a trial period, and includes only non‑trial subscribers.
$61.8m
RETURN TO POSITIVE
OPERATING ACTIVITIES
CASH FLOWS
STRONG
PERFORMANCE
THROUGH
KEY INITIATIVES:
KOGAN MARKETPLACE
KOGAN FIRST
LOYALTY PROGRAM
MIGHTY APE
COST OF DOING
BUSINESS
SIGNIFICANT PROGRESS
MADE TO RECALIBRATE
OPERATING COSTS AND
DRIVE EFFICIENCIES
CONTENTS
2 Chairman’s Letter
4 Founder & CEO’s Report
7 Operating & Financial Review
25 Directors’ Report
32 Remuneration Report
48 Environmental, Social
and Governance
51 Auditor’s Independence Declaration
52 Financial Report
57 Notes to the Financial Statements
102 Directors' Declaration
103 Independent Auditor’s Report
108 Shareholder Information
111 Corporate Directory
Annual Report 2022
1
I am pleased to present the Kogan.com
Ltd (Kogan.com) Annual Report for the
financial year ended 30 June 2022 (FY22).
This year the Business showed its true
strength and resilience through the
continued disruptions and volatility driven
by the ongoing COVID-19 pandemic. The
Business achieved its highest ever Gross
Sales3, returned to positive operating cash
flows and successfully met the needs of
millions of shoppers in Australia and New
Zealand, culminating in multiple awards.
Through the challenges we have stayed true
to our mission and values, and maintained
focus on our long-term strategies.
We enjoyed our first full year with Mighty Ape as part
of the Group. Mighty Ape achieved strong results
in FY22 and delivered on some exciting projects, as
we continued to work together to achieve synergies
across the Group. As we look to the future with
Mighty Ape, it was with great pleasure that we
appointed Gracie MacKinlay to CEO – Mighty Ape,
having been their Chief Marketing and Sales Officer
for the past 10 years. Simon Barton, the Founder of
Mighty Ape, will continue as Chief Financial Officer
– Mighty Ape, as he assists with Gracie’s transition.
In FY22 we operated with a majority independent
Board, Audit & Risk Committee and Remuneration
and Nomination Committee, following the
appointments of Janine Allis and James Spenceley
as Non‑Executive Directors towards the end of FY21.
As always, we value robust governance practices and
sound risk management at all levels of our Company
and our new Directors have brought further insight
and experience to our strategic leadership.
Our Corporate Governance Statement and other
policies and charters are available on the Company’s
corporate website, www.kogancorporate.com.
STRATEGIC OPPORTUNITIES
Our Company is always looking for ways to improve
and operate more efficiently. We do this in order to
deliver on our mission of making the most in‑demand
products and services more affordable and
accessible for all.
We see significant opportunities in Kogan
Marketplace and the Kogan First loyalty program.
We anticipate a return to growth for our Exclusive
Brands Division as we consolidate our product
offerings in the Division. We also look forward
to rolling out enhancements across our Verticals
including Kogan Mobile, our largest Vertical.
CHAIRMAN’S LETTER
Dear Kogan.com Shareholders,
Our FY22 result demonstrates the strength of our
Business and team. Throughout the year, we have
been open and transparent about the operational
difficulties we have faced. By implementing a clear
and precise strategy guided by our core values, we
unwound our excess inventory, achieved operational
cost efficiencies and continued to grow key areas
of the Business – Kogan Marketplace and our Kogan
First loyalty Program. All of this has ensured that
we continue to put the customer at the heart of
the Business.
It has been another exceptional year for our
Kogan Marketplace, which continued to go from
strength‑to‑strength. The number of Marketplace
Sellers on our platform increased by 49.1% year‑on‑year
as Marketplace Gross Sales3 increased by 20.3%
on FY21. We continued to drive innovation and
improvements on our proprietary platform, being
recognised during the year at a leading industry
awards night as the Top Australian Marketplace 2022.
We now offer millions of products to our customers
in partnership with thousands of Kogan Marketplace
Sellers, allowing the Business to deliver more choice
to our customers without the need for additional
capital investment.
Our Kogan First loyalty program grew rapidly in
FY22 as more and more smart shoppers learn of the
exceptional value being delivered. Our Kogan First
Subscribers4 more than tripled year‑on‑year, to over
372,000 at 30 June 2022. Revenues generated
from Kogan First subscriptions increased by 73.4%
year‑on‑year to $15.5 million. As we keep our sights
on our medium‑term goal of one million Kogan First
Subscribers4, we were also delighted to have achieved
an improving renewal rate, of 84.7% in FY22.
2
kogan.com
OUR TEAM
Our team has been relentless in delivering on our
strategy each and every day. On behalf of the Board,
I would like to thank each and every one of our
fantastic team members for their hard work
throughout a very difficult year.
CASH BEING CONSERVED
Our Business has already started to see the results of
cost efficiency endeavours and strategies beginning
to materialise. During this period of consolidation, the
Kogan.com Board has decided to not declare a FY22
Dividend. We look forward to returning to positive
operating leverage in the coming periods, consistent
with our historical performance.
LOOKING AHEAD
The Board is excited about the opportunities ahead
and we look forward to continuing to deliver our
long‑term strategy for the benefit of our customers
and shareholders into FY23 and beyond.
Greg Ridder
Chairman
Annual Report 2022
3
I’m pleased to confirm that we returned
to positive operating cash flow this year,
by driving our growth initiatives in Kogan
Marketplace, Kogan First and Mighty Ape,
while also undertaking a number of
initiatives to right-size our inventory
levels and cost of doing business.
Whilst successfully rebalancing the
Business, we have continued to remain
focused on our primary goal of delivering
unbeatable value for our customers.
FOUNDER & CEO’S REPORT
Dear Kogan.com Shareholders,
The challenges our Company has faced throughout
FY22 has proven many things – but one in particular
– how resilient and robust our Business is. Through
the many lockdowns, supply chain interruptions
and logistics issues, we continued to deliver the
most in-demand products and services at affordable
prices, ensuring we were there when our millions
of Australian and New Zealand customers needed us.
In the year of our sweet 16th, we achieved our highest
ever Gross Sales3, won our 5th consecutive Australia
Post People’s Choice Award, and were awarded the
Top Australian Marketplace at a leading industry
awards night. These achievements are a result of our
loyal customers placing their trust in us, and turning
to Kogan.com time‑and‑time again for the products
they need at market leading prices.
Millions of customers are discovering the benefits of
shopping from any device and location they choose.
It’s amazing to think that more Australians and
New Zealanders will be online shoppers tomorrow
than today – the opportunities for us are endless,
and we’re just getting started.
Our Kogan First Loyalty program delivers incredible
value to so many of our customers. It rewards our
most loyal customers by providing free shipping,
exclusive deals, everyday discounts, Kogan First
Rewards Credits and priority Customer Care. In
FY22 our loyalty program delivered over $20.5 million
in subscriber benefits. Kogan First Subscribers4
have stronger loyalty and repeat purchase behaviour
because they get such great deals. As of September
2022, we now have over 380,000 Kogan First
Subscribers4 taking advantage of these
amazing benefits.
We are working hard to continue delighting our
Kogan First Subscribers4 with the ongoing increase
and evolution of subscriber benefits. Owing to this,
along with inflationary pressures, the price of Kogan
First is increasing to $79.00/year. The price increase
will allow Kogan.com to continue to deliver the best
experience for Kogan First Subscribers4 and offer
even greater rewards to our loyal customers. These
new benefits include the doubling of Kogan Reward
Credits and expanding the reach of the program to
the Dick Smith platform.
BUILDING THE KOGAN.COM PORTFOLIO
At Kogan.com we are obsessed with delighting our
millions of customers. We do this by delivering on our
promise to make the most in‑demand products and
services more accessible and affordable. Kogan.com
has become synonymous with value and trust,
enabling us to leverage the brand to build a portfolio
of products and services with market‑leading offers.
This diversification of income makes us a more
resilient business, and allows us to always find new
and exciting ways to delight our customers.
In the past 12 months to 30 June 2022, just under
four million customers have transacted with our
retail platform, and a significant amount of our traffic
continues to come from owned & earned sources.
The convenience and value we offer has our
customers delighted and returning for more. With
a huge range, great value and first class service,
Kogan.com and Mighty Ape are well positioned
to continue delighting customers in Australia and
New Zealand.
4
kogan.com
As more of these savvy shoppers engage with our
platform for the first time, our marketing investment
is also expected to have ongoing long‑term benefits
to our Business, through repeat purchasing from
these incremental Active Customers and growth
in Kogan First membership.
Kogan Marketplace has gone from strength to
strength, as we focused on growing and improving
our proprietary marketplace platform. This included
the expansion of the platform to New Zealand.
Kogan Marketplace Gross Sales3 increased by 20.3%
year‑on‑year, reflecting a CAGR5 of 51.6% since FY20.
Sellers on the platform also increased, by 49.1% this
year, and there continues to be a strong pipeline of
new sellers about to be onboarded.
There is still so much more to do, and our
proposed improvements to the platform include
the implementation of an advertising platform
for marketplace sellers to gain further reach within
the Kogan.com website. The growth of Kogan
Marketplace means that customers have more
choice than ever and the Company can become
more efficient, without reliance on ongoing
investment in inventory to drive sales.
The Mighty Ape team and operations are continuing
to integrate into the Kogan Group. Trading in FY22
was strong, with Revenue of $163.4 million6, Gross
Profit of $39.1 million6, Adjusted EBITDA2 of
$12.3 million6 and Adjusted EBIT of $10.5 million6,
respectively. Active Customers grew to 783,000
as at 30 June 2022, a 2.5% increase year‑on‑year.
The year also included the appointment of Gracie
MacKinlay to Chief Executive Officer – Mighty Ape,
following 10 successful years as their Chief Sales
and Marketing Officer. As part of the transition,
Simon Barton, Mighty Ape’s Founder, is continuing
as the Chief Financial Officer – Mighty Ape.
PRODUCT OFFERING AND PERFORMANCE
This year we have navigated volatile market
conditions and uncertainty. As the online retail
industry now returns to a some‑what steady state
of growth, we are entering a period of consolidation.
Our Exclusive Brands Division offers the best
value products available anywhere. This Division
is one of the pillars of our Business as it is the most
efficient way to get a product from a manufacturer
to our customers – by cutting out all the middlemen
usually associated with the retail supply chain. As part
of our initiatives to reduce our cost of doing business,
we are performing ongoing range reviews to ensure
we are offering the most in‑demand products at the
most affordable prices. We continue to see a bright
future for our Exclusive Brands division, as we control
the entire supply chain which enables us to deliver
customers incredible value across the most
in‑demand products.
The Group had $159.9 million of inventory at the end
of the period, representing a significant unwinding
of excess inventory (30 June 2021: $227.9 million).
The Group continues to be focused on reducing
inventory levels further over the coming period,
while also offering a huge range of products
in combination with our Kogan Marketplace.
The unwinding of excess inventory has resulted
in lower operating costs, and a return to positive
operating cash flows, of $61.8 million in FY22.
Our net cash position (total cash less loans
& borrowings) increased to $31.2 million from
$12.8 million at 30 June 2021.
Kogan Verticals also continue to be a key part of
the Business. This year we worked with our partners
to develop, improve and review our Kogan Verticals
offerings. In doing so, we returned to growth in Active
Customers for Kogan Mobile Australia, which is our
largest Vertical. During the year we launched eSims
and the trial of 5G on all Large and Extra‑Large plans.
Moving into FY23, we’re extremely excited about the
proposed integration with Telstra’s rural towers, which
will allow broader mobile connectivity throughout
Australia. We also look forward to welcoming more
international travellers, students and holiday makers
back to our shores, many of whom will likely
experience the great value of Kogan Mobile.
5
Compound Annual Growth Rate (CAGR) between FY20 and FY22 is an informative metric to consider the underlying growth
of the Business, given the volatility over the COVID impacted period.
6 Values stated in AUD using the AUD/NZD average rate from 1 July 2021 to 30 June 2022.
Annual Report 2022
5
FOUNDER & CEO’S REPORT CONTINUED
“We are pioneers and leaders in a market that continues
to grow. IBIS World has reported that the online retail
market in Australia was worth $52.7 billion in FY22,
and it will grow to $56.2 billion next year. It puts into
perspective the opportunity we have in front of us,
as more and more Aussies and Kiwis turn to the
convenience of online shopping.”
FY23 & BEYOND
As we now focus on FY23, we have many reasons
to be excited. The Business has made great progress
in driving operating efficiencies, with the key goal of
returning to positive operating leverage. We expect
our Business to be driven by the continued strong
growth of Kogan First as we move towards our
medium‑term goal of one million subscribers. We will
be rolling out further improvements to continue
developing the Kogan Marketplace, including the
implementation of a new advertising platform.
We also expect strong contribution from our Exclusive
Brands Division, continued growth of Mighty Ape
and realisation of further synergies, and a roll out
of enhancements to our Verticals.
Kogan.com is a diversified portfolio of businesses
driven by our core values to delight and win
customers for life. Our team is dedicated to this
mission, and we look forward to delivering on this
in FY23, and beyond.
Ruslan Kogan
Founder & CEO
6
kogan.com
OPERATING & FINANCIAL REVIEW
ORGANISATIONAL OVERVIEW & BUSINESS MODEL
OUR BUSINESS MODEL
Kogan.com is a portfolio of retail and services businesses that includes Kogan Retail,
Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel,
Kogan Money, Kogan Cars, Kogan Energy, Dick Smith, Matt Blatt and Mighty Ape.
Kogan.com is a leading Australian consumer brand renowned for price leadership
through digital efficiency. The Company is focused on making in-demand products
and services more affordable and accessible.
We have created a business model that allows us to be agile, bold and innovative.
We can leverage our platform to seize opportunities like the expansion of Kogan
Marketplace and acquisition of leading online New Zealand retailer Mighty Ape
to drive future growth, bringing best in market offers to our customer base.
Our aim is to continue to build our portfolio of businesses synonymous with
great value, service and compelling offerings.
WHO WE ARE
We have built a vertically integrated eCommerce business across
Australia and New Zealand – providing incredible value to a loyal
and large community of smart shoppers.
At 30 June 2022, we had 3,972,000 Group Active Customers7.
Kogan.com had 3,189,000 Active Customers8 as at 30 June 2022,
representing a CAGR5 of 20.9% since 30 June 2020. Mighty Ape
Active Customers8 grew by 2.5% year‑on‑year9 to 783,000 at
30 June 2022.
Kogan Retail & Kogan Marketplace
Kogan.com’s technology and sourcing driven business model
is more than just a disruptive, low cost distribution platform. In
combining the data analytics, systems and culture with the deep
technological expertise of its management and team, Kogan.com has
created a vertically integrated business model with a market leading
Exclusive Brands capability. This is complemented by a compelling
range of in demand Third‑Party Brands, supporting website traffic
and cash generation.
Kogan Marketplace partners with select sellers and distributors,
giving them access to our Kogan Community, in addition to our
marketing and online distribution capability. Our curated marketplace
works with sellers and distributors who generate incremental sales
with exposure on the Kogan.com platform and marketing initiatives
to the Kogan Community.
7 Group Active Customers refers to unique customers who have purchased in the last twelve months from reference date on
either the Kogan.com or Mighty Ape platforms, rounded to the nearest thousand.
8 Active Customers refers to unique customers who have purchased in the last twelve months from reference date, rounded
to the nearest thousand.
9 Mighty Ape was purchased on 1 December 2020. As a result, the CAGR of Mighty Ape Active Customers is not applicable
to the Kogan Group.
Annual Report 2022
7
OPERATING & FINANCIAL REVIEW CONTINUED
Kogan First
Kogan First loyalty program was launched in the last quarter of FY19,
and grew to over 372,000 subscribers at 30 June 2022, representing
209.7% growth year‑on‑year.
Kogan First Subscribers4 are offered exclusive deals on top of everyday
discounts on the platform, Kogan First Reward Credits, free shipping
and priority Customer Care.
Kogan Mobile
Kogan Mobile launched in October 2015 offering pre‑paid mobile phone
plans online. We partner with TPG to deliver this amazing vertical. The
strong commercial relationship with TPG has translated into a return
to growth in Active Customers for Kogan Mobile in FY22. The unique
model means that TPG is responsible for operations, while Kogan
is responsible for branding, marketing and customer acquisition.
Kogan Travel
Kogan Travel launched in May 2015 and offers directly sourced holiday
packages and travel bookings. Kogan Travel was particularly impacted
by the COVID‑19 pandemic. A relaunch of this Vertical with a new
partner is planned for FY23.
Kogan Insurance
Kogan Insurance launched in August 2017 to offer general insurance,
covering home, contents, landlord, car and travel insurance, with a focus
on value for money. In April 2022 a new agreement was entered into with
QBE. QBE will underwrite our general insurance policies, with Kogan.com
earning commission on the sale of all insurance policies. Similar to Kogan
Mobile and Kogan Internet, Kogan.com provides branding, marketing
and customer acquisition for all insurance offerings.
Kogan Internet
Under an expanded partnership with part of TPG that was announced
in June 2017, Kogan Internet launched in April 2018, providing fixed line
NBN plans. NBN has an estimated market size of 8.7 million services
in operations.
Kogan Money Super
In partnership with Mercer Australia, Kogan.com offers a no frills,
ultra low fee Australian superannuation fund, Kogan Super. Kogan Super
leverages Kogan.com’s digital efficiency as one of Australia’s lowest fee
superannuation options and aims to manage a share of the 23.2 million
Aussie superannuation accounts, which represent a combined total of
more than $3.4 trillion in assets10.
10 Source: https://www.finder.com.au/superannuation‑statistics
8
kogan.com
Kogan Mobile New Zealand
Kogan Mobile New Zealand launched in 1HFY20 in partnership
with Vodafone New Zealand offering telecommunications services
in New Zealand. Vodafone NZ is New Zealand’s largest mobile
network operator.
Kogan Energy
Kogan Energy offers competitive power and gas deals and was launched in
September 2019 in partnership with part of Shell Energy Operations Pty Ltd.
Kogan Money Credit Cards
Kogan Credit Cards, in partnership with NAB, is a credit card with
uncapped Kogan reward points, no annual fee, complimentary Kogan
First membership, and competitive rates and fees. It was launched in
October 2019.
Dick Smith
In 2016, Kogan.com acquired Dick Smith, one of Australia’s premier
consumer electronics brands and a pioneer of the consumer electronics
industry in Australia.
Matt Blatt
In May 2020, Kogan.com acquired Matt Blatt, one of Australia’s premier
furniture and homewares brands and a pioneer of the online furniture
industry in Australia.
Mighty Ape
In December 2020, Kogan.com acquired Mighty Ape, one of New
Zealand’s largest online retailers with a focus on gaming, toys and
other entertainment categories.
HOW WE DELIVER VALUE TO OUR CUSTOMERS:
Compelling offering:
We aim to bring market leading prices to our customers on in‑demand products and services across our
portfolio of businesses.
We achieve this by leveraging our 16+ years’ experience in Exclusive Brands, Third‑Party Brands offering.
We also use the strength of the Kogan platform to partner with thousands of Marketplace sellers and
industry leaders across our many Kogan Verticals.
We are able to pass on savings to customers by streamlining and minimising overheads in our supply
chains and marketing.
Customer-centric approach:
We are customer obsessed. Understanding and servicing our customers’ needs is central to what
we do. Our customers have high expectations and we aim to offer a seamless shopping experience.
Our analytics capability ensures we know what our customers want and when they want it. Our investment
in automation has driven faster fulfilment of products and services and happier customers.
Our portfolio of retail and services businesses is focused on making in‑demand products and services
more affordable and accessible.
Annual Report 2022
9
OPERATING & FINANCIAL REVIEW CONTINUED
Industry leading IT platform & data driven culture:
The Kogan.com platform is renowned for price leadership through digital efficiency. We believe ‘There is
always a better way’ and our vision is to harness the power of technology and personalisation to change the
way our customers shop online.
We understand our customers, what inspires them and what interests them. We leverage this understanding,
driven by data analytics and long‑term investments in systems to continue to reach and inspire our customers
in new and exciting ways.
We use machine learning and A.I. to ensure that our customers get the tailored shopping experience they
deserve. Our proprietary algorithms and A.I. technology means that we are communicating the right product
or service to the right person at the right time. We have also created proprietary systems to reduce fraud, and
optimise marketing spend, making Kogan.com smarter and stronger as a business and leading to the best
deals for customers ensuring we stay ahead of the curve in offering price leading goods and services in
Australia and New Zealand.
SIGNIFICANT MARKET CHALLENGES
For more than 10 years, eCommerce grew in Australia at a consistent and stable rate. This enabled Kogan.com
to plan for growth in a measured and precise way.
The consistency of this growth was rocked by the onset of the COVID‑19 pandemic, when customers turned
to online shopping, and we found that – almost overnight – our business started to double in sales.
This acceleration of sales continued for many months in the first year of the pandemic, and – like many others
– we predicted that the trend was not going to stop, or slow. We increased both our range and volume of
inventory, as well as our logistics footprint to match this expected level of growth.
As the true volatility of the situation settled in – caused by stay‑at‑home orders and lockdown ambiguity
– eCommerce did not continue to grow as anticipated. This led to our holding excess inventory, and an
associated increase in variable costs and marketing costs to sell through the inventory. As a result,
profitability in FY22 was impacted.
Figure 1.1 Non‑Food Online Penetration (seasonally adjusted)11
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Source: Australian Bureau of Statistics, Retail Trade, Australia April 2022
10
kogan.com
BUILDING THE KOGAN.COM PLATFORM
At 30 June 2022, we had 3,972,000 Group Active Customers. Kogan.com had 3,189,000 Active Customers
as at 30 June 2022, representing a CAGR5 of 20.9% since 30 June 2020. Mighty Ape Active Customers grew
by 2.5% year‑on‑year to 783,000 at 30 June 2022.
We continued to strategically invest in marketing to reach new customers and unwind excess inventory.
By increasing our marketing activity to address fluctuating customer demand throughout the year, our return
on investment was impacted. As our inventory levels right‑sized, marketing costs progressively reduced in
the fourth quarter of FY22.
Despite this increase in marketing activity, our platform and loyal customer base continued to drive most
of our traffic. Owned & Earned traffic sources12 still represent the vast majority of the visits to our websites,
which demonstrates that satisfied customers continue to return to Kogan.com. This is a key metric for the
platform we have built.
The Company places great emphasis on customer experience. Data for Kogan.com (excluding Mighty Ape),
shows that over 50% of orders are coming from customers who have previously shopped with us over the
last 12 months. This is a strong endorsement of the value we provide to our customers.
Figure 1.2 Group Active Customers13
Figure 1.3 Repeat buying activity14
Repeat Customers15
Repeat Orders16
)
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4,000
3,000
2,000
1,000
0
3,971
3,972
6,000,000
4,000,000
2,000,000
2,183
1,609
FY19
FY20
FY21
FY22
0
FY19
FY20
FY21
FY22
Including direct website & app traffic, brand & other organic searches and email‑based direct marketing.
12
13 Active Customers of both Kogan.com and Mighty Ape. Mighty Ape was purchased on 1 December 2020, thus being incorporated
into FY21 and FY22 figures.
14 Chart reflects Kogan.com only (excludes Mighty Ape).
15 Repeat Customers refers to customers who have purchased more than once with Kogan.com (excluding Mighty Ape).
16 Repeat Orders refers to orders placed during the period by Kogan.com Active Customers (excluding Mighty ape) who have
previously transacted with the Business at the time of their order.
Annual Report 2022
11
OPERATING & FINANCIAL REVIEW CONTINUED
Figure 1.4 Traffic – Owned & earned
vs paid marketing17
Figure 1.5 12 month return on investment
in marketing18
Paid
35%
Owned & Earned
65%
$51
$46
$38
$29
Gross Profit per
Group Active Customer
Market spend per new
Group Active Customer
FY21
FY22
PERFORMANCE REVIEW & OUTLOOK
RESULTS SUMMARY
Over the past year, the Company has worked hard to respond to changing levels of demand, while navigating
a high starting inventory position, a large logistics network, and the ongoing integration of Mighty Ape.
Despite all the challenges of the pandemic, the effects of which are ongoing, we achieved our highest ever
Gross Sales3 of $1.180 billion, and are proud to have exited the financial year with a strong trajectory of
improving Adjusted EBITDA2.
The long‑term health of the Business is evident, with the compound annual growth rate from FY20 to FY22
of Gross Sales3 and Gross Profit being 23.6% and 20.7%, respectively.
17 Chart reflects Kogan.com excluding Mighty Ape.
18
12 month Gross Profit/Active Customers; marketing costs/sum of new customers in FY22.
12
kogan.com
Table 1.1 FY22 Kogan Group Results compared to FY21 & FY20
$m
Gross Sales3
Revenue19
Cost of sales
Gross Profit
Gross margin
Other income
Variable costs
Marketing costs
Contribution profit
Contribution margin
People costs
Other costs
Total operating costs
Unrealised gain/(loss)
EBITDA3,20
EBITDA margin
Unrealised gain/(loss)
Equity‑based compensation
Donations
COVID‑19 related stock provision
COVID‑19 related logistics costs
Bitbuy.com domain sale
Mighty Ape Tranche 3 & 4
and acquisition costs
Adjusted EBITDA2
Depreciation & amortisation
EBIT
Adjusted EBIT
Interest
Profit/(Loss) before tax
Income tax expense
NPAT20
Adjusted NPAT2
EPS
Adjusted EPS2
FY20
772.3
497.9
(371.4)
126.5
25.4%
0.0
(20.1)
(27.6)
78.8
15.8%
(20.2)
(10.6)
(78.6)
(1.4)
46.5
9.3%
(1.4)
(1.0)
(0.7)
0.0
0.0
0.0
0.0
49.7
(7.4)
39.1
42.3
(0.2)
38.9
(12.0)
26.8
30.0
0.29
0.32
FY21
1,179.0
780.7
(577.0)
203.7
26.1%
0.0
(44.9)
(58.7)
100.1
12.8%
(59.6)
(19.4)
(85.5)
(19.9)
(182.7)
(204.0)
1.4
22.5
2.9%
1.4
(15.6)
(2.5)
(2.2)
(7.7)
0.0
(12.8)
61.8
(10.9)
11.5
50.9
(0.3)
11.3
(7.7)
3.5
42.9
0.03
0.41
(2.2)
(21.8)
(3.0%)
(2.2)
(26.6)
0.0
0.0
0.0
5.1
(17.0)
18.9
(19.2)
(41.0)
(0.3)
(1.7)
(42.7)
7.3
(35.5)
(2.9)
(0.33)
(0.03)
FY22
1,180.0
718.5
(534.1)
184.4
25.7%
5.1
(32.5)
(71.2)
85.8
FY20 vs FY22
CAGR5 %
FY21 vs FY22
Mvmt %
23.6%
20.1%
19.9%
20.7%
0.1%
(8.0%)
(7.4%)
(9.5%)
0.3pp/0.5% (0.4pp)/(1.6%)
100.0%
100.0%
27.2%
60.5%
4.4%
(27.6%)
21.4%
(14.3%)
11.9% (3.9pp)/(13.1%) (0.9pp)/(6.9%)
105.9%
36.8%
61.2%
22.6%
43.3%
2.5%
11.7%
(250.1%)
(38.3%)
60.9%
n/a
163.3%
n/a
n/a
n/a
n/a
(69.4%)
75.5%
(100.6%)
569.1%
(479.0%)
(193.8%)
n/a
n/a
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
19 The differential between Revenue and Gross Sales is reflective of Kogan Marketplace and Kogan Verticals recognising only
commission‑based Revenue while the gross transaction values are recognised within Gross Sales.
20 Given the various adjustments (including provision for the likely payment of Mighty Ape Tranche purchase price instalments
and equity‑based compensation) the Company believes the data is not directly comparable to prior periods.
Annual Report 2022
13
OPERATING & FINANCIAL REVIEW CONTINUED
In FY22, our Business achieved its highest ever Gross Sales3 of $1.180 billion despite operational disruptions
caused by volatile customer demand.
Revenue19 of $718.5 million reflects the contribution of Mighty Ape, the expanding Kogan Marketplace, our
Kogan First loyalty program, as well as Advertising Income, Kogan Money, Kogan Energy and Kogan Mobile
New Zealand. Growth in these areas was partially offset by a decline in both our Exclusive Brands and
Third‑Party Brands product divisions which have cycled extreme growth in the prior year. As a result,
Revenue declined by 17.6% and 35.0%, respectively. However, Exclusive Brands Revenue of $311.6 million
in FY22 had a CAGR5 of 15.7% since FY20, reflecting the strong long‑term growth trajectory of the division.
The Business has been performing extensive range reviews to ensure it is offering the most in‑demand
products at the most affordable prices, without investing in under‑performing product categories.
By focusing on in‑demand products, and removing inefficiencies in the long‑tail of the product range,
the Business will offer a curated range of products at lower prices, driven by the efficiencies created.
Our Marketplace team has worked tirelessly this year to improve and grow the platform. This included
the expansion of the platform to New Zealand.
Kogan Marketplace Gross Sales3 increased by 20.3% year‑on‑year, with a CAGR5 of 51.6% since FY20. Sellers
on the platform increased by 49.1% this year, and there continues to be a strong pipeline of new sellers ready
to be onboarded.
We are continuously improving our proprietary marketplace platform which enables the Company to achieve
ongoing growth without further investment in inventory – these improvements include a current investment
in implementing an advertising platform for marketplace sellers to gain further reach within the Kogan.com
website. The growth of Kogan Marketplace means that customers have more choice than ever and the
Business can become leaner, without the reliance on ongoing investment in inventory to drive sales.
The Kogan First loyalty program grew to over 372,000 subscribers as at 30 June 2022, with Revenue
increasing to $15.5 million, an increase of 73.4% on the prior year. Kogan First Subscribers4 enjoy incredible
value, with more than $20.5m in benefits provided to members in FY22, in addition to special access to deals
and priority customer service. Growth of the program was underpinned by increasing renewal rates, which
was 84.7% in FY22 (FY21: 78.2%), demonstrating strong customer satisfaction with the program.
Mighty Ape recorded FY22 Revenue of $163.46 million, Gross Profit of $39.16 million, Adjusted EBITDA2
of $12.36 million and Adjusted EBIT2 of $10.5 million6. Active Customers were 783,000 as at 30 June 2022,
increasing 2.5% year‑on‑year.
The year included the appointment of Gracie MacKinlay to Chief Executive Officer, following 10 successful
years as their Chief Sales and Marketing Officer. As part of the transition, Simon Barton, Mighty Ape’s founder,
is continuing as Mighty Ape’s Chief Financial Officer.
Variable costs consist of warehousing and selling costs. Costs have been elevated reflecting the levels of
excess inventory and increased logistics costs relating to COVID interruptions. As excess inventory unwinds,
associated costs are reducing and we expect that to continue into FY23.
In order to reward and incentivise key talent and align their interests with our Shareholders, the Business has
made strategic investments in team members. Long‑term Incentives remain in place and people costs have
increased YoY, as a result. FY22 included equity‑based compensation expenses driven by the award of options
after the Company’s AGM in November 2020, which are being expensed as per the accounting treatment
described in the Notice of Meeting of the 2020 AGM.
Statutory NPAT of $(35.5) million was significantly impacted by non‑cash equity‑based compensation and
the continued provision for the likely payment of Mighty Ape Tranches 3 & 4 Acquisition Payables.
Adjusted EBITDA2, Adjusted EBIT2 and Adjusted NPAT2 which excludes unrealised gain/(loss), equity‑based
compensation and other one‑off non‑recurring items including the profit from sale of the bitbuy.com domain,
was $18.9 million, $(0.3) million and $(2.9) million, respectively. Refer to page 23 of this Annual Report for a
detailed reconciliation of adjusting items.
14
kogan.com
MIGHTY APE
FY22 represented the first full financial year of Mighty Ape21. The Business is entering a new era with the transition
of a new CEO, whilst continuing to benefit from the ongoing implementation of synergies with Kogan.com.
Table 1.2 Mighty Ape financial highlights for FY22
$m
Gross Sales3
Revenue
Gross Profit
Gross Margin
EBITDA3
EBITDA Margin
Adjusted EBITDA2
Adjusted EBIT2
Adjusted NPAT2
FY22
164.2
163.4
39.1
23.9%
12.3
7.5%
12.3
10.5
7.3
PORTFOLIO BUSINESS MIX
Exclusive Brands generated 33.1% of the Group’s overall Gross Profit and continues to deliver the largest
Gross Profit contribution across the Business.
Mighty Ape is now the Group’s second largest contributor, accounting for 21.2% of the Group’s Gross Profit. Kogan
Marketplace, Third‑Party Brands, Kogan First and Kogan Mobile are material contributors to overall Gross Profit.
Kogan First reflects subscription revenues. Despite only launching in late FY19, Kogan First is already contributing
8.4% of overall Gross Profit indicating the growth opportunity in Kogan First. We grew Active Customers within
Kogan Mobile AU, our largest Vertical, and we have high hopes for this division over the coming year and beyond.
Advertising income contributed 2.3% of our Gross Profit in FY22. We anticipate significant growth of this
Division as we launch an advertising platform as an extension of our Marketplace, which will allow us to
continue providing great value back to our customers.
Figure 1.6 Kogan Group Gross Profit Product & Business Mix
Mighty Ape
21.2%
Kogan Marketplace
16.6%
Third-Party Brands
9.7%
Kogan First
8.4%
Exclusive Brands
33.1%
Exclusive Brands products
continue to deliver the
largest Gross Profit
contribution across
the business.
Other Business22
2.8%
Advertising Income
2.3%
Kogan Mobile
5.9%
21 Mighty Ape was purchased in December 2020.
22 Other Business includes Kogan Travel, Kogan Insurance, Kogan Internet, Kogan Money, Kogan Cars and Kogan Energy.
Annual Report 2022
15
OPERATING & FINANCIAL REVIEW CONTINUED
KOGAN FIRST
Kogan First reflects subscription revenues. In just its third full year since it was launched in late FY19 –
it is contributing 8.4% of overall Gross Profit indicating the growth opportunity in Kogan First.
Figure 1.7 Kogan First Subscribers4
Figure 1.8 Kogan First renewal rates23
209.7% on FY21
400,000
s
r
e
b
i
r
c
s
b
u
S
t
s
r
i
F
n
a
g
o
K
300,000
200,000
100,000
0
FY20
FY21
FY22
)
%
(
e
t
a
r
l
a
w
e
n
e
r
t
s
r
i
F
n
a
g
o
K
90.0%
80.0%
70.0%
60.0%
50.0%
84.7%
78.2%
70.0%
FY20
FY21
FY22
The Kogan First loyalty program grew to over 372,000 subscribers as at 30 June 2022, with Kogan First
Subscribers4 demonstrating stronger loyalty and repeat purchase behaviour than non‑members. The benefits
provided are being recognised by our customers, as demonstrated by the increasing renewal rate of Kogan
First subscriptions.
In FY22, the loyalty program has delivered over $20.5 million in subscription benefits. In addition to these
benefits, Kogan First Subscribers4 also received early access and priority customer service.
With the ongoing increase and evolution of subscriber benefits as well as the impacts of inflation, the price
of Kogan First has been increased in FY22. Monthly subscriptions have increased from $6.99/month to
$8.99/month, and yearly subscriptions have increased from $59.00/year to $79.00/year.
The Company’s medium‑term goal is to reach 1 million Kogan First Members, and the Company is investing
in member benefits to work toward this goal.
23 Kogan First renewal rate is calculated as the number of Kogan First subscriptions resubscribed as a proportion of total subscriptions
due for renewal during the relevant period.
16
kogan.com
STATEMENT OF FINANCIAL POSITION
Table 1.3 Summary of Kogan Group Net Assets at 30 June 2022 and 30 June 2021.
$m
Current assets
Non‑current assets
Total assets
Current liabilities
Non‑current liabilities
Total liabilities
Net assets
30-Jun-22
30-Jun-21
235.5
124.8
360.3
(137.6)
(50.1)
(187.7)
172.6
329.2
112.8
442.0
(163.1)
(98.2)
(261.3)
180.7
The Group had a strong capital position, with net cash (total cash less loans & borrowings) of $31.2 million,
after having funded the Tranche 2 payment in respect of the Mighty Ape acquisition of A$29.9 million during
the year and loans & borrowings repayments of $49.0 million.
Inventory in‑warehouse has reduced by $53.9 million over the past 12‑months, and the Group continues to be
focussed on reducing inventory levels over the coming periods.
The acquisition of Mighty Ape in December 2020 resulted in the recognition of Goodwill, as well as significant
Right‑of‑Use Assets, Lease liabilities and intangibles which continue to be reflected in the Group’s Net Assets.
An assessment of impairment to Goodwill was performed on 30 June 2022 with no adjustments required. The
increase in Goodwill reflects the movement in foreign exchange at time of the payment of Tranche 2, reflected
through the Balance Sheet as per accounting standards.
CASH FLOWS
Table 1.4 Summary of Kogan Group Statutory Cash Flow from Operating Activities.
$m
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs paid
Income tax paid
Net cash provided by/(used in) operating activities
FY22
745.0
FY21
885.5
(678.5)
(926.3)
0.0
(1.7)
(3.0)
61.8
0.0
(0.6)
(21.7)
(63.0)
The Group returned to positive operating cash flows, of $61.8 million, following the continued unwinding
of inventory and initiatives to reduce costs, as mentioned earlier in this report.
The Group finished the period with a cash balance of $66.2 million.
Annual Report 2022
17
OPERATING & FINANCIAL REVIEW CONTINUED
OUTLOOK
We’re excited for what FY23 and beyond will look like as we navigate the changing online retail environment
and continue to create a leaner, stronger and more profitable Group.
In FY23, we expect:
• Continued expansion of Kogan Marketplace and the anticipated launch of an advertising platform
• Continued growth of Mighty Ape
• Further growth in Kogan First heading toward medium‑term goal of 1 million subscribers
• Continued strong contribution from Exclusive Brands
• The roll‑out of enhancements across a number of Kogan Verticals
•
Improved operating leverage, consistent with the Company’s long‑term track record
NON-IFRS MEASURES
Throughout this report, Kogan.com has included certain non‑IFRS financial information, including Gross
Sales, EBITDA, Adjusted EBITDA, EBIT, Adjusted EBIT, Adjusted NPAT and Adjusted EPS. Kogan.com believes
that these non‑IFRS measures provide useful information to recipients for measuring the underlying operating
performance of Kogan.com’s business. Non‑IFRS measures have not been subject to audit.
The table below provides details of the Non‑IFRS measures used in this report.
Table 1.5 Non‑IFRS Measures
Gross Sales
EBITDA
EBIT
Adjusted EBITDA
Adjusted EBIT
Adjusted NPAT
Adjusted EPS
The gross transaction value, on a cash basis, of products and services sold,
of Kogan Retail, Kogan Marketplace and the Kogan Verticals.
Earnings before interest, tax, depreciation and amortisation.
Earnings before interest and tax.
Earnings before interest, tax, depreciation, amortisation, unrealised gain/(loss),
equity‑based compensation and one‑off non‑recurring items. Refer to page 23
of this Annual Report for a detailed reconciliation of adjusting items.
Earnings before interest, tax, unrealised gain/(loss), equity‑based compensation
and one‑off non‑recurring items. Refer to page 23 of this Annual Report for
a detailed reconciliation of adjusting items.
Net profit after tax and before unrealised gain/(loss), equity‑based compensation
and one‑off non‑recurring items. Refer to page 23 of this Annual Report for a
detailed reconciliation of adjusting items.
Earnings per share before unrealised gain/(loss), equity‑based compensation
and one‑off non‑recurring items. Refer to page 23 of this Annual Report for
a detailed reconciliation of adjusting items.
18
kogan.com
STRATEGY, RISK AND OPPORTUNITIES
STRATEGY
Online retail is in its infancy in Australia. According to IBIS World, the online shopping industry was worth
$52.7 billion in FY22, and is set to grow at an annualised rate of 10.4% over the next five years through to
FY28, to $92.1 billion.
Figure 1.9 Online Shopping industry growth forecast (Source: IBIS World24).
)
%
(
8
2
0
2
–
3
2
0
2
k
o
o
l
t
u
O
y
r
t
s
u
d
n
I
14
12
10
8
6
4
2
0
FY23
FY24
FY25
FY26
FY27
FY28
Kogan.com’s strategy involves a number of initiatives aimed at sustaining long‑term growth, which will be
driven by our Kogan First loyalty program, Kogan Marketplace, Exclusive Brands Division and Kogan Verticals.
24 Source: IBISWorld X0004 Online Shopping in Australia Industry Report Aug 2022.
Annual Report 2022
19
OPERATING & FINANCIAL REVIEW CONTINUED
KOGAN MARKETPLACE
Kogan Marketplace continues to rapidly grow. We achieved another year of record Gross Sales3 for the
Division and we continue to onboard more and more sellers.
The Kogan Marketplace delivers incredible range and choice for our customers without the need to invest
capital. This enables us to scale infinitely into the future without corresponding capital requirements for
warehousing and stock. It also enables thousands of small and medium sized businesses to access millions
of customers and grow their business.
Figure 1.10 Kogan Marketplace Gross
Sales growth
Figure 1.11 Kogan Marketplace Active Sellers
)
m
$
(
l
s
e
a
S
s
s
o
r
G
400
300
200
100
0
51.6% CAGR since FY20
20.3% on FY21
138.0% CAGR since FY20
49.1% on FY21
s
r
e
l
l
e
S
e
v
i
t
c
A
FY20
FY21
FY22
FY20
FY21
FY22
We are always looking to enhance the Marketplace platform, and in FY23, we are excited to be launching
a new advertising platform for marketplace sellers to gain further reach within the Kogan.com website
and improve the customer experience.
20
kogan.com
EXCLUSIVE BRANDS STRATEGY
Kogan.com has 20 Exclusive Brands in its stable, offering the best value products available anywhere.
This division is one of the pillars of our Business as it is the most efficient way to get a product from
a manufacturer to the customer and results in incredible value. Our Exclusive Brands Division is the
largest contributor to Gross Profit in our business, and is a highlight of our customer offering.
As part of the initiatives to reduce our cost of doing business, we are performing ongoing range reviews
to ensure we are offering the most in‑demand products at the most affordable prices. We continue to see
a bright future for our Exclusive Brands division, as we control the entire supply chain which enables us to
deliver customers incredible value across the most in‑demand products.
Figure 1.12 Exclusive Brands Revenue growth
)
m
$
(
e
u
n
e
v
e
R
400
300
200
100
0
15.7% CAGR since FY20
FY20
FY22
Our Exclusive Brands business benefits from:
• Full control of the end‑to‑end supply chain
• Strong competitive advantage
• Building trusted brands renowned for value
• Compelling consumer offering
• Ever expanding range of in‑demand products
•
16+ years’ experience
Annual Report 2022
21
OPERATING & FINANCIAL REVIEW CONTINUED
RISKS
Set out below are the key financial and operational risks facing the Business. Kogan.com manages and seeks
to mitigate these risks through internal review and control processes at the Board and management level.
Australian retail
environment and
general economic
conditions may
worsen
Many of Kogan.com’s products are discretionary goods and, as a result, sales levels
are sensitive to consumer sentiment. Kogan.com’s offering of products, and its
financial and operational performance, may be affected by changes in consumers’
disposable incomes, or their preferences as to the utilisation of their disposable
incomes. Any reduction in the disposable incomes of Kogan.com’s customers as a
result of changes to factors such as economic outlook, interest rates, unemployment
levels and taxation may decrease consumer confidence and consumer demand,
which may subsequently result in lower levels of revenue and profitability.
Competition may
increase and change
Kogan.com could be adversely affected by increased competition in the various
segments in which it operates. The Australian online retail market is highly
competitive and is subject to changing customer preferences.
COVID-19
Events related to the Coronavirus pandemic (COVID‑19) have resulted in significant
market volatility. There is continued uncertainty as to ongoing and future response
of governments and authorities globally as well as a likelihood of an Australian
economic recession of unknown duration or severity. As such, the full impact of
COVID‑19 to consumer behaviour, suppliers, employees and the Company are
not fully known. Given this, the impact of COVID‑19 could potentially be materially
adverse to the Company’s financial and operational performance. Further, any
government or industry measures may adversely affect Kogan.com operations
and are likely beyond the control of Kogan.com.
In compliance with its continuous disclosure obligations, Kogan.com will continue
to update the market in regard to any material impact of COVID‑19 on Kogan.com.
Inventory
management
In order to operate its business successfully, Kogan.com must maintain sufficient
inventory and also avoid the accumulation of excess inventory.
Key supplier,
service provider and
counterparty factors
Manufacturing and
product quality
Kogan.com has a large number of international suppliers and service providers,
from which it sources a broad range of products and services. There is a risk that
Kogan.com may be unable to continue to source products or services from existing
suppliers or service providers, and in the future, to source products from new
suppliers or services from new service providers, at favourable prices, on favourable
terms, in a timely manner or in sufficient volume.
Kogan.com currently uses a wide range of third‑party suppliers to produce its
Exclusive Brands products. While Kogan.com employs dedicated engineers to
assess product samples, and uses third‑party inspection agencies for quality control
and inspections, there is no guarantee that every supplier will meet Kogan.com’s
cost, quality and volume requirements.
Marketplace
operations
As the Kogan Marketplace continues to grow, Kogan.com must maintain the
integrity of the platform by ensuring the quality of sellers and products being
offered. Additionally, processes are in place to ensure fair competition on the
website amongst all sellers.
Performance
and reliability of
Kogan.com’s websites,
databases and
operating systems
Reputational product
sourcing factors
Kogan.com’s websites, Apps, databases, IT and management systems, including
its ERP and security systems, are critically important to its success. The satisfactory
performance, reliability and availability of Kogan.com’s websites, Apps, databases,
IT and management systems are integral to the operation of the Business.
The Kogan.com portfolio of Exclusive Brands names and related intellectual property
are key assets of the Business. In addition, Kogan.com sells a range of Third‑Party
Branded products, where the intellectual property is owned by third‑parties.
22
kogan.com
Exposure to litigation Kogan.com may be subject to litigation, claims, disputes and regulatory
investigations, including by customers, suppliers, government agencies, regulators
or other third parties. These disputes may be related to warranties, product
descriptions, personal injury, health, environmental, safety or operational concerns,
nuisance, negligence or failure to comply with applicable laws and regulations.
Changes in GST and
other equivalent taxes
Changes in local indirect tax, such as the goods and services tax in Australia
(“GST”), and duty treatment of any of the markets in which Kogan.com operates,
could have an impact on the sales of imported brands.
Retention of key
team members
Kogan.com relies on the expertise, experience and strategic direction provided
by its Executive Directors and key team members. These individuals have extensive
experience in, and knowledge of, Kogan.com’s business and the Australian online
retail market. Additionally, successful operation of Kogan.com’s business depends
on its ability to attract and retain quality team members.
Reliance on
third-party payment
providers
Kogan.com is exposed to risks in relation to the methods of payment that it
currently accepts, including credit card, PayPal and vouchers. Kogan.com may
incur loss from fraud or erroneous transactions.
RECONCILIATION TO ADJUSTED EBITDA, ADJUSTED EBIT AND ADJUSTED NPAT
Table 1.5 Reconciliation to Adjusted EBITDA, Adjusted EBIT and Adjusted NPAT
Unadjusted
Unrealised
gain/(loss)
Equity-
based
compensa-
tion
Mighty Ape
purchase –
Tranches
3&4
Bitbuy.com
domain sale
Adjusted
Revenue
Cost of sales
Gross Profit
Gross margin
Other income
Variable costs
Marketing costs
People costs
Other costs
718.5
(534.1)
184.4
25.7%
5.1
(32.5)
(71.2)
(85.5)
(19.9)
Total operating costs
(204.0)
(2.2)
(21.8)
(3.0%)
(19.2)
(41.0)
(1.7)
(42.7)
7.3
(35.5)
(0.33)
Unrealised gain/(loss)
EBITDA
EBITDA margin
Depreciation &
amortisation
EBIT
Interest
Loss before tax
Income tax benefit/
(expense)
NPAT
EPS
Annual Report 2022
(5.1)
26.6
17.0
2.2
(0.6)
(8.0)
0.5
718.5
(534.1)
184.4
25.7%
0.0
(32.5)
(71.2)
(41.8)
(19.9)
(165.5)
0.0
18.9
2.6%
(19.2)
(0.3)
(1.7)
(2.0)
(0.8)
(2.9)
(0.03)
23
OPERATING & FINANCIAL REVIEW CONTINUED
Adjusted EBITDA, Adjusted EBIT, Adjusted NPAT and Adjusted EPS: are measures of the underlying
performance of the Business, they remove non‑cash items including the unrealised gain/(loss), equity‑based
compensation and one‑off non‑recurring items. In respect of FY22 the below items have been adjusted:
• Unrealised gain/(loss): unrealised loss at year end related to shares still held and open forward foreign
exchange contracts.
• Equity-based compensation: significant equity‑based compensation expenses driven largely by the award
of options after the Company’s AGM in November 2020. These options were granted to Ruslan Kogan,
CEO, and David Shafer, CFO & COO, with a strike price of $5.29.
• Mighty Ape purchase – Tranches 3 & 4: refers to the provision for the likely payment of Mighty Ape
Tranche 3 & 4 purchase price instalments as part of the Sale Agreement, which are contingent on the
Mighty Ape Founder & CFO remaining with the Business until the delivery of the financial year 2022
and 2023 results, respectively. In line with accounting standards, Tranches 3 and 4 payments will
be considered as compensation for post‑combination services, and as such, treated as employee
remuneration for accounting purposes. The Group will proportionately account for these expenses
up until the respective payment dates.
– For Australian income tax purposes, amounts paid for the acquisition of Mighty Ape shares are
considered as capital in nature and are therefore non‑deductible, rather increasing the tax cost
base of the shares. No deferred tax asset is recognised due to it being probable that the temporary
difference will not reverse in the foreseeable future.
• Bitbuy.com domain sale: relates to the profit on the sale of the domain name bitbuy.com. For full details
of the transaction, refer to the ASX release ‘Domain sale re Bitbuy’ on 14 December 2021.
24
kogan.com
DIRECTORS’ REPORT
The Directors of Kogan.com Limited and its controlled entities (“The Group”) present their report together
with the consolidated financial report of the Group for the financial year ended 30 June 2022 and the audit
report thereon.
DIRECTORS
The following persons were Directors of the Group at any time during the financial year and up to the date
of signing this report.
Greg Ridder – Independent, Non‑Executive Chairman
Janine Allis – Independent, Non‑Executive Director
David Shafer – Chief Financial Officer, Chief Operating Officer and Executive Director
Harry Debney – Independent, Non‑Executive Director
James Spenceley – Independent, Non‑Executive Director
Ruslan Kogan – Founder, Chief Executive Officer and Executive Director
Particulars of each Director’s experience and qualifications are set out later in this report.
COMPANY SECRETARY
Kogan.com engages Acclime Australia Pty Ltd to provide company secretarial services, with Mark Licciardo
as Kogan.com’s Company Secretary.
PRINCIPAL ACTIVITIES
Kogan.com is a portfolio of retail and services businesses that included Kogan Retail, Kogan Marketplace,
Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel, Kogan Money, Kogan Cars, Kogan Energy,
Dick Smith, Matt Blatt and Mighty Ape during the year ended 30 June 2022.
Kogan.com earns the majority of its Revenue and profit through the sale of goods and services to Australian
and New Zealand customers. Its offering comprises products released under Kogan.com’s Exclusive Brands,
such as Kogan, Ovela, Fortis, Vostok and Komodo (“Exclusive Brands Products”), and products sourced
from imported and domestic Third‑Party Brands such as Apple, Canon, Swann and Samsung (“Third‑Party
Brands Products”).
In addition to product offerings, Kogan.com earns seller‑fee based Revenue from Kogan Marketplace and
commission‑based Revenue from the Verticals including Kogan Mobile, Kogan Internet, Kogan Insurance,
Kogan Money, Kogan Cars, Kogan Energy and Kogan Travel (“Kogan Verticals”).
In December 2020, Kogan.com acquired Mighty Ape, one of New Zealand’s largest online retailers with
a focus on gaming, toys and other entertainment categories.
The results of Kogan HK Limited, a Hong Kong registered entity, Kogan US Trading Inc, a US incorporated
entity, and Mighty Ape Limited, a New Zealand registered entity, have been compiled using International
Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board.
An operating and financial review of the Group during the financial year and the results of these operations
are contained on pages 7 to 24 of this report.
No significant change in the nature of other activities occurred during the year.
EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
There are no subsequent events post reporting date 30 June 2022.
Annual Report 2022
25
DIRECTORS’ REPORT CONTINUED
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
Kogan.com has entered into a deed of indemnity, insurance and access with each Director confirming
the Director’s right of access to Board papers and requires Kogan.com to indemnify the Director, on a full
indemnity basis and to the full extent permitted by law against all losses or liabilities (including all reasonable
legal costs) insured by the Director as an officer of Kogan.com or of a related body corporate.
Under the deeds of indemnity, insurance and access, Kogan.com must maintain a Directors’ and Officers’
insurance policy insuring a Director (among others) against liability as a Director and Officer of Kogan.com
related to body corporate (or the date any relevant proceedings commenced during the seven year period
have been finally resolved).
Disclosure of the total amount of the premiums paid under this renewed insurance policy is not permitted
under the provisions of the insurance contract.
INDEMNIFICATION AND INSURANCE OF AUDITORS
No indemnities have been given or insurance premiums paid, during or since the end of the year, for any
person who is or has been an auditor of the Group.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or 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 any part of those proceedings.
The Company was not a party to any such proceedings during the year.
DIVIDENDS
As the Business works through a period of consolidation, the Kogan.com Board has decided to not declare
a FY22 Dividend.
Noting a pause on Dividends during FY22, a Dividend Reinvestment Plan was available for the 2021
interim Dividend.
NON-AUDIT SERVICES
During the year KPMG, the Group’s auditors, performed certain other services in addition to the audit
and review of the financial statements.
The Board of Directors has considered the non‑audit services provided during the year by the auditor
and is satisfied that the provision of those non‑audit services during the year is compatible with, and did
not compromise the auditor’s independence requirements of the Corporations Act 2001. The Directors are
satisfied that the services disclosed below did not compromise the external auditor’s independence for the
following reasons:
• All non‑audit services were subject to the corporate governance procedures adopted by the Group and have
been reviewed by the Audit Committee to ensure they did not adversely affect the integrity and objectivity
of the auditor; and
• The non‑audit services provided do not undermine the general principles relating to auditor independence
as set out in APES 110: Code of Ethics for Professional Accountants, as they did not involve reviewing or
auditing the auditor’s own work, acting in a management or decision‑making capacity for the Group,
acting as an advocate for the Group or jointly sharing risks and rewards.
26
kogan.com
The following fees were paid or payable to KPMG for non‑audit services provided during the year ended
30 June 2022:
Tax advisory and compliance
$
5,121
5,121
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the financial year ended 30 June 2022 can be found
on page 51 of the financial report and forms part of the Directors Report.
THE BOARD OF DIRECTORS AND COMPANY SECRETARY
Greg Ridder
(BBus (Acc), Grad Dip (Mktg), GAICD, CPA)
Independent, Non‑Executive Chairman
Mr Ridder was appointed to the Board of Kogan.com in May 2016 as Independent,
Non‑Executive Chairman. Mr Ridder also serves as Chairman of the Remuneration
and Nomination Committee.
Formerly Asia Pacific Regional President at NYSE listed Owens‑Illinois, he is experienced
in leading businesses in multiple countries, cultures, economic circumstances and market
conditions. Mr Ridder is also a director at Spirit Technology Solutions Limited and a number
of unlisted and not for profit entities.
Mr Ridder holds a Bachelor of Business in Accounting from RMIT, a Graduate Diploma
in Marketing from Monash University, and has completed the Advanced Management
Programme at INSEAD in France. He is a CPA and a graduate member of the Australian
Institute of Company Directors.
Directorship of listed entities within the past three years
• Director of Spirit Technology Solutions Ltd (appointed in November 2019)
Board Committee membership
• Member of the Audit and Risk Management Committee
• Chairman of the Remuneration and Nomination Committee
Annual Report 2022
27
DIRECTORS’ REPORT CONTINUED
Janine Allis
Independent Non‑Executive Director
Ms Allis was appointed to the Board of Kogan.com in April 2021, as an Independent,
Non‑Executive Director and also serves as a member of the Remuneration and
Nomination Committee and Audit and Risk Management Committee.
Ms Allis is the founder of Boost Juice and the Retail Zoo group of food retail brands.
Ms Allis has been Telstra Businesswoman of the Year, Amex Franchisor of the Year, ARA
Retailer of the Year and was inducted into the Australian Business Women Hall of Fame.
Ms Allis was listed as one of BRW's top 15 people who have changed the way we
do business in the last 20 years and is an ambassador for UNHCR.
Directorship of listed entities within the past three years
• Director of Australian Pharmaceuticals Industries (API) (ceased March 2022)
Board Committee membership
• Member of the Audit and Risk Management Committee
• Member of the Remuneration and Nomination Committee
David Shafer
(LLB (Hons), BCom, CFA)
Chief Financial Officer, Chief Operating Officer and Executive Director
Mr Shafer has worked with Kogan.com since 2006, moving to a full‑time role as Chief
Financial Officer, Chief Operating Officer and Executive Director in November 2010.
Prior to joining Kogan.com, Mr Shafer was Senior Associate at Arnold Bloch Leibler.
Mr Shafer holds a Bachelor of Law (Honours) and Bachelor of Commerce from
The University of Melbourne and is a Chartered Financial Analyst.
Harry Debney
(BAppSc (Hons))
Independent Non‑Executive Director
Mr Debney was appointed to the Board of Kogan.com in May 2016, as an Independent,
Non‑Executive Director and also serves as Chairman of the Audit and Risk Management
Committee.
Mr Debney was the CEO of Costa Group until April 2021 and oversaw the business’
transition from a privately‑owned Company to a member of the S&P/ASX 200 Index until
his retirement in March 2021. On 26 September 2022, Harry was appointed Interim CEO
of Costa Group, as they transition to a new CEO.
Prior to joining the Costa Group, Mr Debney spent 24 years at Visy Industries, including
eight years as CEO. During this time, he substantially grew the Visy business, both
organically and through acquisitions.
Mr Debney holds a Bachelor of Applied Science (Honours) from the University of Queensland.
Directorship of listed entities within the past three years
• Non‑Executive Director of Costa Group Holdings Ltd (appointed on 1 July 2021)
Board Committee membership
• Chairman of the Audit and Risk Management Committee
• Member of the Remuneration and Nomination Committee
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kogan.com
James Spenceley
Independent Non‑Executive Director
Mr Spenceley was appointed to the Board of Kogan.com in March 2021, as an Independent,
Non‑Executive Director and also serves as a member of the Remuneration and Nomination
Committee and Audit and Risk Management Committee.
Mr Spenceley founded Vocus Communications (now Vocus Group, ASX:VOC) in 2007 and
built it into an ASX100 company through organic growth and acquisitions. Mr Spenceley
is Chairman of local services provider Airtasker and Chairman at Swoop Telecom.
Mr Spenceley was the former owner of Illawarra Hawks NBL team and has twice won Ernst
& Young Australian Entrepreneur of the Year recognition. In 2018, he was inducted into the
Telecommunications Hall of Fame.
Directorship of listed entities within the past three years
• Chairperson of Airtasker Limited (appointed in December 2015)
• Chairperson of Swoop Telecom (appointed in February 2019)
• Non‑Executive Director at Think Childcare (ceased October 2021)
Board Committee membership
• Member of the Audit and Risk Management Committee
• Member of the Remuneration and Nomination Committee
Ruslan Kogan
(BBS)
Founder, Chief Executive Officer and Executive Director
Mr Kogan founded Kogan.com in 2006, and has been its CEO since inception, growing
the Business into Australia’s leading Pure Play Online Retailer in under a decade.
Prior to founding Kogan.com, Mr Kogan held roles in the IT departments of Bosch and GE,
and as a consultant at Accenture.
Mr Kogan holds a Bachelor of Business Systems from Monash University.
Mark Licciardo (Acclime Australia Pty Ltd)
(B Bus (Acc), GradDip CSP, FGIA, GAICD)
Company Secretary
Mr Licciardo is the founder of Mertons Corporate Services, now part of Acclime Australia,
and is responsible for Acclime Australia’s Listed Services Division.
He is also an ASX‑experienced director and chair of public and private companies,
with expertise in the listed investment, infrastructure, bio‑technology and digital sectors.
He currently serves as a director on a number of Australian company boards as well as
foreign controlled entities and private companies.
During his executive career, Mr Licciardo held roles in banking and finance, funds
management, investment and infrastructure development businesses, including being the
Company Secretary for ASX 100 companies Transurban Group and Australian Foundation
Investment Company Limited.
Mr Licciardo holds a Bachelor of Business degree in accounting, a Graduate Diploma
in Governance and is a Fellow of the Chartered Governance Institute, the Governance
Institute of Australia and the Australian Institute of Company Directors.
Annual Report 2022
29
DIRECTORS’ REPORT CONTINUED
MEETINGS OF DIRECTORS
Directors' meetings held between 1 July 2021 and 30 June 2022:
Greg Ridder
Janine Allis
David Shafer
Harry Debney
James Spenceley
Ruslan Kogan
BOARD
AUDIT AND RISK
REMUNERATION
AND NOMINATION C
A
11
11
11
11
11
11
B
11
11
11
11
11
11
A
3
3
3
3
3
3
B
3
3
31
2
3
21
A
–
–
–
–
–
–
B
–
–
–
–
–
–
1
Indicates that a Director is not a member of a specific committee and attended by invitation.
A Number of meetings held during the time the Director held office or was a member of the committee during the year.
B Number of meetings attended.
C Remuneration & Nomination committee discussions were concurrently with Board Meetings throughout the year.
CORPORATE GOVERNANCE STATEMENT
The Board is committed to achieving and demonstrating the highest standards of Corporate Governance.
The Board continues to refine and improve the governance framework and practices in place to ensure they
meet the interest of Shareholders.
The Company complies with the Australian Securities Exchange Corporate Governance Council’s Corporate
Governance Principles and Recommendations 4th Edition (‘the ASX Principles’). Kogan.com’s Corporate
Governance Statement, which summarises the Company’s Corporate Governance practices and incorporates
the disclosures required by the ASX Principles, can be viewed at www.kogancorporate.com.
ENVIRONMENTAL REGULATIONS
The Group is not subject to any significant environmental regulations under Commonwealth or State legislation.
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kogan.com
DIRECTORS INTERESTS
The following table sets out each Director’s relevant interest in shares of the Company at the date of this report.
Ruslan Kogan
David Shafer
Greg Ridder
Harry Debney
Janine Allis
James Spenceley
SHARE RIGHTS
Unissued Shares under Rights
Ordinary
Shares
15,853,321
5,225,642
158,000
98,099
4,761
0
At 30 June 2022 the Group had 963,331 unissued shares under Right which are expected to vest up until
30 June 2026, all unissued shares under Right are Ordinary Shares of the Company.
Shares Issued on Exercise of Rights
During the financial year, the Group issued 364,477 Ordinary Shares as a result of the Rights vesting.
RETENTION OPTIONS
Unissued Shares under Options
At 30 June 2022 the Group had 6,401,632 unissued shares under Options which are expected to vest up until
31 December 2027, all unissued shares under Options are Ordinary Shares of the Company.
Annual Report 2022
31
REMUNERATION REPORT
INTRODUCTION
The Directors are pleased to present the FY22 Remuneration Report, outlining the Board’s approach to the
remuneration for Key Management Personnel (KMP).
The Board recognises that the performance of the Group depends on the quality and motivation of its team
members. The Group remuneration strategy therefore seeks to appropriately attract, reward and retain team
members at all levels of the Business, but in particular for management and key executives. The Board aims
to achieve this by establishing executive remuneration packages that include a mix of fixed remuneration,
short‑term incentives and long‑term incentives.
At the 2021 Annual General Meeting (AGM), held on 25 November 2021, the majority of shareholder votes cast
(57.08%) were in favour of adopting the 2021 Remuneration Report. However 41.69% of the votes cast were
against the 2021 Remuneration Report, constituting a second strike under the Corporations Act 2001. We have
since consulted with proxy advisors, investors and other stakeholders to understand the concerns. In response
to the feedback provided, the Board has actioned their feedback where immediately possible as we continue
to evolve our remuneration framework going forward. During the last 12 months, no new long term incentive
plans were issued to key executives, Founder and CEO of Kogan.com, Mr. Kogan, and the Company's CFO
and COO, Mr. Shafer, nor did they receive any short term incentive variable remuneration for the year
ended 30 June 2022.
The quantum and conditions of Retention Options awarded to the Founder and CEO of Kogan.com, Mr Kogan,
and the Company’s CFO/COO Mr Shafer were approved by Shareholders at the 2020 AGM. The details of this
awarded Long Term Incentive (LTI) are provided below and are accounted for in the same way the Company’s
other equity‑settled awards are treated (refer section 5.2 of the FY22 Annual Report), with their fair value
determined at their date of grant (30 November 2020) in line with AASB 2 Share‑Based Payments. The cost
of these transactions is recognised in the Consolidated Income Statement and Consolidated Statement of
Other Comprehensive Income on a straight‑line basis over the vesting period after allowing for an estimate
of shares that will eventually vest. The level of vesting is reviewed annually and the charge adjusted to reflect
actual and estimated levels of vesting. It is important to note that, while the Strike Price of the Retention
Options is $5.29 (and the Options are out‑of‑the‑money as at the date of this Report), the accounting
treatment in accordance with AASB 2 Share‑Based Payments, requires that the value as at the date of
grant is expensed over the vesting period.
We continue to engage with Shareholders and look forward to receiving further feedback on our 2022
Remuneration Report.
The audited Remuneration Report covers the following matters:
1. 2022 outcomes at a glance;
2. Details of Key Management Personnel;
3. Remuneration governance;
4. Remuneration policy;
5. Company performance;
6. Details of realised remuneration;
7. Details of statutory remuneration;
8. Equity instruments;
9. Executive Directors and Other KMP Service Agreements; and
10. Key Management Personnel transactions.
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kogan.com
2022 KEY OUTCOMES AT A GLANCE
Chief Executive Officer (CEO) remuneration
Chief Financial Officer (CFO) remuneration
For FY22, our CEO:
For FY22, our CFO:
• Had no increase to fixed remuneration
• Had no increase to fixed remuneration
• Was not awarded any additional
• Was not awarded any additional
variable remuneration
variable remuneration
• Received total realised remuneration
• Received total realised remuneration
of $447,068
of $386,568
• Had total statutory remuneration
• Had total statutory remuneration
of $15,222,128
of $10,244,160
• Has outstanding Options with a value of
$3,548,10125. The associated strike price
is $5.29 (currently out‑of‑the‑money) and
will vest in August 2023 if service conditions
are met.
• Has outstanding Options with a value of
$2,365,40125. The associated strike price
is $5.29 (currently out‑of‑the‑money) and
will vest in August 2023 if service conditions
are met.
Non-Executive Directors (NED) fees
No increases to NED fees (the Chairman and other NED base fees remained unchanged).
DETAILS OF KEY MANAGEMENT PERSONNEL
Key Management Personnel (KMP) are individuals who have authority and responsibility for planning,
directing and controlling the activities of the Group, directly or indirectly, and comprise the Directors
and the Senior Executives of the Group, as listed below.
KMP
POSITION HELD
Independent Non-Executive Directors
Greg Ridder
Chairman, Independent Non‑Executive Director
Janine Allis
Independent Non‑Executive Director
Harry Debney
Independent Non‑Executive Director
James Spenceley
Independent Non‑Executive Director
Executive Directors
TERM AS KMP
Full year
Full year
Full year
Full year
David Shafer
Chief Financial Officer, Chief Operating Officer & Executive Director
Full year
Ruslan Kogan
Chief Executive Officer and Executive Director
Other KMP
Gracie MacKinlay
Mighty Ape, Chief Executive Officer (from 6 June 2022)
Simon Barton
Mighty Ape, Chief Financial Officer26
Full year
Part year
Full year
25 Based on a valuation performed by SLM Corporate at 23rd August 2022.
26 Simon Barton was determined a KMP upon the acquisition of Mighty Ape on 1 December 2020. Simon Barton, Founder of Mighty Ape,
was CEO of Mighty Ape until 6 June 2022. He continues in the capacity of Mighty Ape CFO.
Annual Report 2022
33
REMUNERATION REPORT CONTINUED
REMUNERATION GOVERNANCE
The Board has appointed the Remuneration and Nomination Committee (“the Committee”) whose objective
is to assist the Board in relation to the Group remuneration strategy, policies and actions. In performing this
responsibility, the Committee must give appropriate consideration to the Company’s performance and
objectives, employment conditions and external remuneration relativities.
Remuneration and Nomination Committee
Kogan.com’s Remuneration and Nomination Committee is composed of Independent Non‑Executive Directors.
The responsibilities of the Committee include to:
• develop criteria for Board membership and identify specific individuals for nomination;
• establish processes for the review of the performance of individual Directors, Board Committees and the
Board as a whole and implementation of such processes;
• review and make recommendations to the Board on board succession planning generally;
• review and make recommendations to the Board on the process for recruiting a new Director, including
evaluating the balance of skills, knowledge, experience, independence and diversity on the Board;
• review and make recommendations to the Board on the Company’s remuneration framework,
remuneration packages and policies applicable to the members of the executive management of the
Company (“Senior Management”) and Directors;
• review and make recommendations to the Board on equity‑based remuneration plans for senior executives
and other employees;
• define levels at which the Chief Executive Officer must make recommendations to the Committee on
proposed changes to remuneration and employee benefit policies;
• ensure that remuneration packages and policies attract, retain and motivate high calibre executives; and
• ensure that remuneration policies demonstrate a clear relationship between key executive performance
and remuneration.
All Directors who are not members of the Committee are entitled to attend any meeting of the Committee.
The Committee may invite any Director, including members of Senior Management.
A full Charter outlining the Committee’s responsibilities and the Process for Evaluation of Performance are
available at www.kogancorporate.com.
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kogan.com
REMUNERATION POLICY
The Group has established incentive arrangements subsequent to listing on the ASX to assist in the attraction,
motivation and retention of the executive team and other selected team members. To align the interests of its
team members and the goals of the Group, the Directors have decided the remuneration packages of the
executive team and other selected team members will consist of the following components:
• Fixed remuneration (inclusive of superannuation);
• Short‑term cash‑based incentives; and
• Long‑term equity‑based incentives.
The payment of any cash and award of equity under the incentive arrangements will be subject to the
achievement of performance criteria or hurdles set by the Board. The remuneration packages of the senior
management team are determined by the Committee and reported to the Board. The remuneration of senior
managers are reviewed annually by the Committee. At the absolute discretion of the Committee, Kogan.com
may seek external advice on the appropriate level and structure of the remuneration packages of the senior
management team from time to time.
Fixed remuneration
Fixed remuneration consists of the base salary and team member benefits which include superannuation,
leave entitlements and other benefits.
Executive KMP’s did not receive an adjustment to fixed remuneration in the 2022 financial year.
Statutory values
Executive KMP
R. Kogan
D. Shafer
Other KMP
G. MacKinlay27
S. Barton28
Total
Executive KMP
R. Kogan
D. Shafer
Other KMP
S. Barton28
Total
Year
2022
2022
2022
2022
2021
2021
2021
Cash Salary
$
Super-
annuation
$
Annual & Long
Service Leave
$
423,500
363,000
15,481
279,104
23,568
23,568
464
–
1,081,085
47,600
423,500
363,000
163,371
949,871
21,694
21,694
–
43,388
39,645
33,982
1,060
19,001
93,688
39,645
33,982
15,704
89,331
27 Gracie MacKinlay is deemed a KMP following her appointment to CEO of Mighty Ape on 6 June 2022. Values have been disclosed
in AUD using an average exchange rate of 0.9041.
28 Values for Simon Barton have been disclosed in AUD using an average exchange rate of 0.9376 for 2022 and 0.9315 for 2021.
Annual Report 2022
35
REMUNERATION REPORT CONTINUED
Short-term incentives (STI) – Cash based
The following table outlines the significant aspects of the STI.
Purpose of STI plan
Provide a link between remuneration and both short‑term Company
and individual performance.
Eligibility
Create sustainable Shareholder value.
Reward individuals for their contribution to the success of the Group.
Actively encourage team members to take more ownership over the EBITDA3.
Offers of cash incentive may be made to any team member of the Group
(including a Director employed in an executive capacity) or any other person
who is declared by the Board to be eligible to receive a grant of cash incentive
under the STI.
Calculation & Target
The EBITDA3 of Kogan.com shall exceed the management forecast
for the full financial year (after payment of the STI).
25% of the outperformance will be allocated to a ‘bonus pool’.
The ‘bonus pool’ will then be shared in cash bonuses among a number of team
members in fixed proportions.
Maximum opportunity
The maximum payable is 25% of the outperformance and 35% of the team
member’s annual salary.
Performance conditions
Outperformance of the EBITDA3.
Continuation of employment.
Why were the performance
conditions chosen
To achieve successful and sustainable financial business outcomes as well as
any annual objectives that drive short‑term and long‑term business success
and sustainability.
Performance period
1 July 2021 to 30 June 2022.
Timing of assessment
August 2022, following the completion of the 30 June 2022 accounts.
Form of payment
Board discretion
Paid in cash.
Targets are reviewed annually and the Board has discretion to adapt
appropriately to take into account exceptional items.
KMP’s did not receive a payment under the STI plan in the 2022 financial year (FY21: $0).
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kogan.com
Long-Term Incentives (LTI) – Equity Incentive Plan (EIP)
The Group has established an Equity Incentive Plan (EIP), which is designed to align the interests of eligible
team members more closely with the interests of Shareholders in the listed entity post 7 July 2016. Under
the EIP, eligible team members may be offered Restricted Shares, Options or Rights which may be subject
to vesting conditions. The Group may offer additional long‑term incentive schemes to senior management
and other team members over time.
The following table outlines the significant aspects of the current EIP.
Purpose of LTI plan
Support the strategy and business plan of the Group.
Eligibility
Align the interests of team members more closely with the interests
of Shareholders.
Reward individuals for their contribution to the success of the Group over
the long‑term.
Offers of Incentive Securities may be made to any team member of the Group
(including a Director employed in an executive capacity) or any other person
who is declared by the Board to be eligible to receive a grant of incentive
Securities under the EIP.
Service condition on vesting Individuals must be employed by the Group at time of vesting and not be
Form of award and payment Performance Rights or Options.
in their notice period.
Board discretion
The Board has the absolute discretion to determine the terms and conditions
applicable to an offer under the EIP.
Consideration
Nil.
Rights
Restrictions on dealing
Each Right confers on its holder an entitlement to a Share, subject to the
satisfaction of applicable conditions.
Shares allocated upon exercise of Performance Rights will rank equally
with all existing Ordinary Shares from the date of issue (subject only to
the requirements of Kogan.com’s Securities Trading Policy).
Upon vesting, there will be no disposal restrictions placed on the Ordinary
Shares issued to participants (subject only to the requirements of Kogan.com’s
Securities Trading Policy).
Lapse of Rights
A Right will lapse upon the earliest to occur of:
• expiry date;
•
failure to meet vesting conditions;
• employment termination;
• the participant electing to surrender the Right;
• where, in the opinion of the Board, a participant deals with a Right
in contravention of any dealing restrictions under the EIP.
Annual Report 2022
37
REMUNERATION REPORT CONTINUED
Performance Rights awarded to KMPs:
The Statutory Values below represent the expenses incurred through the Consolidated Income Statement
and Consolidated Statement of Other Comprehensive Income Statement in accordance with AASB 2
Share‑Based Payments.
Executive KMP
R. Kogan
D. Shafer
Other KMP
G. MacKinlay
S. Barton
Total
STATUTORY VALUE
Year
Value
Year
Value
2022
2022
2022
2022
–
–
393
–
393
2021
2021
2021
2021
–
–
–
–
–
Options awarded to KMPs:
The Statutory Values below represent the expenses incurred through the Consolidated Income Statement
and Consolidated statement of Other Comprehensive Income Statement in accordance with AASB 2
Share‑Based Payments.
Executive KMP
R. Kogan
D. Shafer
Other KMP
S. Barton
Total
STATUTORY VALUE
Year
Value
Year
Value
2022
2022
14,735,415
9,823,610
2021
2021
8,495,007
5,663,338
2022
31,439
2021
16,703
24,590,464
14,175,048
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kogan.com
To better understand the underlying remuneration potentially being delivered to the KMPs, the Committee
re‑engaged SLM Corporate to perform an updated valuation as of 23 August 2022 (release date of the FY22
Appendix 4E) and 23 August 2021 for comparative purposes. The results are as follows:
Options
Executive KMP
R. Kogan
D. Shafer
Other KMP
S. Barton
Total
Date
Value
Date
Value
23/08/2022
3,548,101
23/08/2021
26,866,641
23/08/2022
2,365,401
23/08/2021
17,911,094
23/08/2022
4,418 23/08/2021
76,597
5,917,920
44,854,332
Mr. Barton did not receive any Options during FY22. As at 30 June 2022, 17,443 Options remained unvested.
At the date of grant for Mr. Kogan and Mr. Shafer, being 30 November 2020, the value of their options were
worth $41,325,935 and $27,550,623, respectively. At the date of grant for Mr. Barton, being 3 December 2020,
his options were worth $161,871.
As part of Mrs. MacKinlay's appointment to CEO, she was granted 112,360 Performance Rights which have
both a service condition and performance hurdle attached. As at 30 June 2022, all Performance Rights
remained unvested.
Performance Rights
Date
Value
Date
Value
Other KMP
G. MacKinlay
Total
23/08/2022
398,878 23/08/2021
398,878
n/a
n/a
At the time of grant, these performance rights were worth $400,000.
The below relates to the Options awarded to Mr. Kogan and Mr. Shafer following the FY20 Annual General
Meeting. During FY22, no new Retention Options were granted. As at 30 June 2022, all Retention Options
remained unvested.
The number and class
of securities issued to
the Directors
Details of the Retention
Options
3,600,000 options granted to Mr Kogan and 2,400,000 granted to Mr Shafer
under the EIP.
The Board (excluding Mr Kogan and Mr Shafer) decided to grant the Retention
Options to Mr Kogan and Mr Shafer because the Board believed it was in the
best interests of the Company and Shareholders to incentivise Mr Kogan and
Mr Shafer to remain in their positions for the next 3 years given their proven
track records, in order to maximise the prospect of Mr Kogan and Mr Shafer
contributing to the creation of significant future returns for Shareholders.
The Retention Options are being accounted for in the same way the
Company’s current equity‑settled awards are treated (refer section 5.2 of the
FY22 Annual Report), with their accounting value determined at their date
of grant (within 10 Business Days of the Meeting). Equity‑settled awards are
measured at fair value at the date of grant. The cost of these transactions is
recognised in the Company’s Consolidated Income Statement and
Consolidated Statement of Other Comprehensive Income and credited to
equity on a straight‑line basis over the vesting period after allowing for an
estimate of shares that will eventually vest. The level of vesting is reviewed
annually and the charge adjusted to reflect actual and estimated levels
of vesting.
Annual Report 2022
39
REMUNERATION REPORT CONTINUED
Details of the Retention
Options (continued)
The Company obtained an independent valuation of the Retention Options
from SLM Corporate dated 7 May 2020 to provide advice in relation to
whether the proposed grant of the Retention Options were reasonable in the
circumstances and by reference to industry standards. The valuation applied
a number of assumptions and variables, including the following:
• the closing price of the Company’s Shares on ASX on 30 April 2020
(a reference date under the report), being $7.99 per Share;
• a risk‑free rate of 0.33%;
• a volatility factor of 62.5%;
• dividend yield of 1.96%; and
• a time to maturity of the underlying Options of 4 years.
The estimated value of each Retention Option pursuant to the valuation
was $4.13 as at the reference date of the report of 7 May 2020. On this basis,
the estimated value as at the reference date of the report of 7 May 2020 of:
• the Retention Options to be granted to Mr Kogan under Item 5.1 was
$14,872,133; and
• the Retention Options to be granted to Mr Shafer under Item 5.2 was
$9,914,756.
The report from SLM Corporate dated 7 May 2020 reflects the value of the
Retention Options on or about the date that the Company agreed to grant
the Retention Options to Mr Kogan and Mr Shafer. For completeness, given
the time that has elapsed between the AGM (at which the Retention Options
were approved by Shareholders) and both the date of the independent
valuation of the Retention Options from SLM Corporate and the date that the
Company agreed to grant the Retention Options, the Company obtained an
updated independent valuation of the Retention Options from SLM Corporate
dated 8 December 2020. This valuation applied the same assumptions and
variables as noted above, except that:
• the closing price of the Company’s Shares on ASX on 30 November 2020
(date of issue of the Retention Options as per the updated independent
valuation), being $16.40 per Share;
• a risk‑free rate of 0.25%;
• a volatility factor of 62.5%; and
• dividend yield of 1.28%.
The value of each Retention Option pursuant to the valuation was $11.48 as
at the issue date of the updated independent valuation of 8 December 2020.
On this basis, the value as at the issue date of the updated independent
valuation of 8 December 2020 of:
• the Retention Options granted to Mr Kogan was $41,325,935; and
• the Retention Options granted to Mr Shafer was $27,550,623.
The increase in the value of the Retention Options reflected the increase
in the Company’s share price since the Company announced the terms of the
Retention Options to the ASX on 12 May 2020 and the grant of the Retention
Options following the Company’s AGM on 20 November 2020.
Strike price
Share price at grant date
Share price at
28 September 2022
$5.29
$16.40
$2.99
40
kogan.com
Independent Non-Executive Directors’ remuneration
Kogan.com Independent Non‑Executive Director remuneration policy is set up to attract and retain Directors
with the experience, knowledge, expertise and acumen to manage the Company.
Each of the Independent Non‑Executive Directors has entered into appointment letters with Kogan.com,
confirming the terms of their appointment, their roles and responsibilities and Kogan.com’s expectations
of them as Directors.
Under the Constitution, the Board may decide the remuneration from Kogan.com to which each Director
is entitled for their services as a Director. However, under the ASX Listing Rules, the total amount paid to all
Non‑Executive Directors for their services must not exceed in aggregate in any financial year the amount
fixed at Kogan.com’s general meeting.
This amount has been fixed by Kogan.com at $800,000 per annum. Any change to that aggregate annual
sum needs to be approved by Shareholders.
The annual Independent Non‑Executive Directors’ fees paid or payable to Greg Ridder (as Chairman of the
Board and Remuneration & Nomination Committee), Harry Debney (as Chairman of the Audit & Risk Committee),
Janine Allis and James Spenceley for FY22 are $185,000, $110,000, $95,000 and $95,000, respectively.
No additional fees are presently proposed to be paid for membership or Chairmanship of the Audit and Risk
Management Committee or the Remuneration and Nomination Committee. In subsequent years, additional
fees for membership or Chairmanship of these committees may apply.
All Directors’ fees include superannuation payments, to the extent applicable.
Independent Non‑Executive Directors are not eligible to participate in Kogan.com’s short‑term or long‑term
incentive programs.
Independent Non‑Executive Directors’ did not receive an adjustment to Directors’ fees in the 2022 financial year.
COMPANY PERFORMANCE
Relationship to remuneration policy
In considering the consolidated entity’s performance and the benefits of Shareholder wealth, the Committee
considers a range of indicators in respect of senior executive remuneration and linked these to the previously
described short‑ and long‑term incentives.
At Kogan.com, we remunerate our KMP in a way which:
• aims to align executive interests with Shareholders;
•
is sufficiently competitive in the marketplace to enable us to attract, retain, and motivate exceptional talent;
and
• encourages and rewards the behaviours and outcomes that will deliver business success and a good return
for our Shareholders.
To achieve this, we set challenging targets and monitor performance against them closely.
We have strengthened the connection between our key reward metrics and our business strategy by adapting
the performance conditions used for our STI.
We remain committed to the use of stretching performance metrics, and recognise the importance of having
performance conditions that are linked to customer engagement.
Annual Report 2022
41
REMUNERATION REPORT CONTINUED
Shareholder wealth
The following table presents these indicators showing the impact of the Company’s performance on Shareholder
wealth, during the financial years:
Revenue (in $'m)
Net profit after income tax (NPAT)
Adjusted NPAT2
Earnings per share (EPS)
Adjusted EPS2
EBITDA3,29 (in $'m)
Adjusted EBITDA2 (in $'m)
Dividends paid (in $'m)
Share Price at 30 June
FY18
412.3
14.1
15.2
0.15
0.16
26.0
27.1
10.0
6.82
FY19
438.7
17.2
18.6
0.18
0.20
30.1
31.5
11.4
4.75
FY20
497.9
26.8
30.0
0.29
0.32
46.5
49.7
14.8
14.72
FY21
780.7
3.5
42.9
0.03
0.41
22.5
61.8
31.3
11.58
FY22
718.5
(35.5)
(2.9)
(0.33)
(0.03)
(21.8)
18.9
0.0
2.78
Profit amounts have been calculated in accordance with Australian Accounting Standards (AASB). EBITDA3
is calculated based on the operating profit before interest, tax, depreciation and amortisation.
DETAILS OF REALISED REMUNERATION
KMP realised remuneration
The table below is a voluntary non‑statutory disclosure that details realised remuneration that the KMPs
received for the period in FY22 and FY21. It includes cash salary, superannuation contributions, STI earned and
LTI that vested during the period, including Mighty Ape – acquisition related remuneration that vested during
the period. This information differs from the statutory remuneration table found on the following page, which
also includes the expense for vested & unvested awards, along with other long term benefits, in accordance
with Australian Accounting Standards.
Executive KMP
R. Kogan
D. Shafer
Other KMP
G. MacKinlay27
S. Barton
Total
R. Kogan
D. Shafer
Other KMP
S. Barton26
Total
Fixed
Remun-
eration30
447,068
386,568
15,945
279,104
1,128,685
445,194
384,694
Year
2022
2022
2022
2022
2021
2021
2021
163,371
993,259
STI
LTI
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
realised
remun-
eration
447,068
386,568
15,945
279,104
1,128,685
445,194
384,694
163,371
993,259
29 Earnings Before Interest, Tax, Depreciation & Amortisation.
30
Includes cash salary and superannuation consistent with the statutory remuneration table in the next section, excluding accrued
annual leave entitlements.
42
kogan.com
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Annual Report 2022
43
REMUNERATION REPORT CONTINUED
Mighty Ape – acquisition-related remuneration
Mighty Ape acquisition related remuneration, refers to the likely payment of Mighty Ape Tranche 3 & 4
purchase price instalments as part of the Sale Agreement. Tranche 3 and 4 are contingent on the Mighty Ape
Founder & CEO, Simon Barton, remaining with the business until the delivery of the financial year 2023 results.
In line with accounting standards, Tranches 3 & 4 payments will be considered as compensation for
post‑combination services, and as such, treated as employee remuneration for accounting purposes.
The Group will proportionately account for these expenses up until the respective payment dates.
As at 30 June 2022 a total of $29,085,807 has been provided for in relation to Tranche 3 & 4.
Non-Executive Directors’ remuneration
The table below sets out the remuneration paid to Non‑Executive Directors:
Greg Ridder
Harry Debney
Janine Allis
James Spenceley
Total
Greg Ridder
Harry Debney
Janine Allis
James Spenceley
Total
Year
2022
2022
2022
2022
2021
2021
2021
2021
SHORT‑
TERM
BENEFITS
Total fees
$
POST‑
EMPLOY‑
MENT
BENEFITS
Super-
annuation
$
185,000
110,000
95,000
95,000
485,000
185,000
110,000
24,457
31,667
351,124
–
–
–
–
–
–
–
–
–
–
Total
$
185,000
110,000
95,000
95,000
485,000
185,000
110,000
24,457
31,667
351,124
EQUITY INSTRUMENTS
Kogan.com successfully listed on the ASX on 7 July 2016. The following table presents the interests of each
Director held directly, indirectly or beneficially, including their related parties:
Ruslan Kogan
David Shafer
Greg Ridder
Harry Debney
Janine Allis
Gracie MacKinlay27
James Spenceley
Simon Barton26
No. shares
held
2022
%
Ownership
2022
No. shares
held
2021
%
Ownership
2021
15,853,321
14.83%
15,853,321
14.88%
5,075,642
4.75%
6,075,642
158,000
98,099
4,761
500
–
–
0.15%
0.09%
0.00%
0.00%
–%
–%
158,000
98,099
4,761
–
–
–
5.70%
0.15%
0.09%
0.00%
–%
–%
–%
44
kogan.com
EXECUTIVE DIRECTORS AND OTHER KMP SERVICE AGREEMENTS
Notice and termination payments
Executives are on contracts with no fixed end date.
The following table captures the notice periods applicable to the termination of the Executive KMP and Other
KMP employment:
Executive KMP
CEO
CFO, COO
Other KMP
CEO – Mighty Ape
CFO – Mighty Ape
Termination notice
by Kogan.com
Termination notice
by employee
Termination
payments provided
for under contract
12 months
6 months
6 months
6 months
12 months
6 months
6 months
6 months
12 months
6 months
6 months
6 months
Executive and Other KMP Service Agreements
Prior to the Company’s ASX Listing on 7 July 2016, Ruslan Kogan and David Shafer were not subject to
employment arrangements and instead received profit distributions proportionate to their shareholdings
in the Group.
Subsequent to Listing, Ruslan Kogan and David Shafer entered into employment contracts.
Simon Barton has been determined to be a KMP from the acquisition date of Mighty Ape Limited,
1 December 2020. Mr Barton entered into a new agreement for his role as Chief Financial Officer – Mighty Ape
on 6 June 2022.
Gracie MacKinlay has been determined to be a KMP following her promotion to Chief Executive Officer
– Mighty Ape on 6 June 2022.
Chief Executive Officer
Mr Kogan is employed in the position of Chief Executive Officer of Kogan.com.
Kogan.com has entered into an employment contract with Mr Kogan to govern his employment with Kogan.com.
Mr Kogan or Kogan.com may terminate Mr Kogan’s employment by giving 12 months’ notice. Kogan.com may
elect to make payment in lieu of notice. Kogan.com may terminate Mr Kogan’s employment without notice in
circumstances warranting summary dismissal.
Upon termination of Mr Kogan’s employment, Mr Kogan will be subject to a restraint of trade period of
12 months during which time Mr Kogan cannot compete with Kogan.com or provide services in any capacity
to a competitor of Kogan.com or solicit suppliers, clients or employees of Kogan.com. The enforceability
of the restraint clause is subject to all usual legal requirements.
The Board may invite Mr Kogan to participate in Kogan.com’s incentive programs.
Annual Report 2022
45
REMUNERATION REPORT CONTINUED
Chief Financial Officer and Chief Operating Officer
Mr Shafer is employed in the position of Chief Financial Officer and Chief Operating Officer of Kogan.com.
Kogan.com has entered into an employment contract with Mr Shafer to govern his employment with Kogan.com.
Mr Shafer or Kogan.com may terminate Mr Shafer’s employment by giving 6 months’ notice. Kogan.com may
elect to make payment in lieu of notice. Kogan.com may terminate Mr Shafer’s employment without notice in
circumstances warranting summary dismissal.
Upon termination of Mr Shafer’s employment, Mr Shafer will be subject to a restraint of trade period of
6 months during which time Mr Shafer cannot compete with Kogan.com or provide services in any capacity
to a competitor of Kogan.com or solicit suppliers, clients or employees of Kogan.com. The enforceability
of the restraint clause is subject to all usual legal requirements.
The Board may invite Mr Shafer to participate in Kogan.com’s incentive programs.
Chief Executive Officer – Mighty Ape
Mrs MacKinlay is employed in the position of Chief Executive Officer of Mighty Ape.
Kogan.com has entered into an employment contract with Mrs MacKinlay to govern her employment
with Mighty Ape.
Mrs MacKinlay or Mighty Ape may terminate Mrs MacKinlay’s employment by giving 6 months’ notice.
Mighty Ape may elect to make payment in lieu of notice. Mighty Ape may terminate Mrs MacKinlay’s
employment without notice in circumstances warranting summary dismissal.
Upon termination of Mrs MacKinlay’s employment, Mrs MacKinlay will be subject to a restraint of trade
period of 6 months during which time Mrs MacKinlay cannot compete with Mighty Ape or provide services
in any capacity to a competitor of Mighty Ape or solicit suppliers, clients or employees of Mighty Ape.
The enforceability of the restraint clause is subject to all usual legal requirements.
The Board may invite Mrs MacKinlay to participate in Kogan.com’s incentive programs.
Chief Financial Officer – Mighty Ape
Mr Barton is employed in the position of Chief Financial Officer of Mighty Ape as of 6 June 2022. Prior to this,
Mr Barton was employed in the position of Chief Executive Officer of Mighty Ape.
Mighty Ape has entered into an employment contract with Mr Barton to govern his employment with
Mighty Ape.
Mr Barton may terminate his employment by giving 6 months’ notice. Mighty Ape will not terminate
Mr Barton’s employment for any reason (except for reasons stated within Mr Barton’s employment contract)
during the period of three years from Mr Barton’s commencement date. Thereafter, Mr Barton’s employment
may be terminated at any time by Mighty Ape by giving Mr Barton six months’ notice. Mighty Ape may elect
to make payment in lieu of notice. Mighty Ape may terminate Mr Barton’s employment without notice in
circumstances warranting summary dismissal.
Upon termination of Mr Barton’s employment, Mr Barton will be subject to a restraint of trade period of
12 months during which time Mr Barton cannot compete with Mighty Ape or the Group or provide services
in any capacity to a competitor of Mighty Ape or the Group or solicit suppliers, clients or employees of
Mighty Ape or the Group. The enforceability of the restraint clause is subject to all usual legal requirements.
The Board may invite Mr Barton to participate in Kogan.com’s incentive programs.
46
kogan.com
KEY MANAGEMENT PERSONNEL TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Kogan Australia Pty Ltd entered into a Logistic Services Agreement with eStore Logistics Pty Ltd (“eStore”),
in a prior financial period, in relation to the provision of warehousing, distribution and logistics services by
eStore to Kogan Australia. Mr Kogan is a minority shareholder and Director of eStore. The agreement was
entered into an arm’s length terms.
KMP
Ruslan Kogan
Transaction type
Services provided by eStore warehousing
CONSOLIDATED GROUP
2022
$000
7,829
2021
$000
11,986
As at 30 June 2022, the total liability to eStore Logistics Pty Ltd was $488,813 (30 June 2021: $556,156).
The Directors' Report is signed on behalf of the Board in accordance with a resolution of the Directors.
Greg Ridder
Non-Executive Chairman
Melbourne, 29 September 2022
Annual Report 2022
47
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
GOVERNANCE
The Kogan.com Board of Directors and senior management team operate the business with high regard to
Corporate Governance at all times and are transparent to its shareholders, team members and suppliers.
Kogan.com operates with a majority independent Board of Directors and supporting majority independent
Audit & Risk Committee and Remuneration & Nomination Committee. The Audit & Risk Committee
is required to meet at least twice per annum and the Remuneration & Nomination Committee is required
to meet at least annually in order to perform their functions.
Kogan.com is committed to observing its disclosure obligations under the ASX Listing Rules (and the
Corporations Act 2001 (Cth) (the Act)) and is governed by the Company's Continuous Disclosure Policy.
Information is communicated to shareholders through the lodgement of all relevant financial, continuous
disclosure announcements and other information with the ASX and is also made available on Kogan.com’s
Corporate Website.
MODERN SLAVERY AND ETHICAL SOURCING
Kogan.com takes its obligations under the Australian Modern Slavery Act 2018 (the Modern Slavery Act)
seriously and is committed to the ongoing review and improvement of its contribution and impact on
human rights.
Kogan.com has prepared its Modern Slavery Statement in accordance with the Modern Slavery Act and
with regard to the Commonwealth Modern Slavery Act 2018 Guidance for Reporting Entities (the Guidance).
The Company’s Modern Slavery Statement is available on Kogan.com's Corporate Website. The Statement
outlines the measures taken annually by the Company to reduce the risk of modern slavery occurring in the
Company’s businesses or its supply chain.
Kogan.com’s supply chains are sophisticated and span the globe. The Company places great emphasis on
working solely with ethical suppliers and expects its suppliers to comply with the mandatory non‑negotiable
requirements of its Ethical & Sustainable Sourcing Policy, with preference among those suppliers going to
the ones that also respond to the desirable elements (refer to the Company's Ethical & Sustainable Sourcing
Policy available on Kogan.com’s Corporate Website). Suppliers are required to update and provide evidence
of internationally recognised accreditation (e.g. BSCI) for their production facilities.
The Company applies a risk‑based approach to assessing which areas of business may have greater potential
for modern slavery to occur. Refer to the Kogan.com Modern Slavery Statement available on Kogan.com’s
Corporate Website for further detail on the supply chain risk assessment and mitigating actions the Company
engages in to reduce the risk of modern slavery.
Kogan.com opposes modern slavery in all its forms.
THE KOGAN.COM TEAM
The Kogan.com team thrives in a dynamic, high‑performance culture.
The Company's success is built off technology and digital efficiency and it is our dedicated team that
makes it all happen. Kogan.com’s team is central to the business, its culture and its ability to outperform
the expectations of shareholders and customers.
The team’s training sessions (Lunch & Learns) are held across the business to drive engagement, career
development and growth opportunities internally. Our highly skilled Software Engineering team holds
“Tech Talks” and Meetups for the industry, sharing knowledge and experiences with like‑minded professionals
in their field.
Kogan.com embraces growing talent from within our team members. The business is dedicated to supporting
the growth of our team, with many of the role appointments made coming from internal team promotion
within the business.
48
kogan.com
Kogan.com recognises that a diverse workplace is achieved through merit‑based decision‑making which is
integral to building and sustaining a culture that fosters equal opportunity, diversity and inclusion. Kogan.com
operates under an Equal Opportunity, Merit and Diversity Policy, which can be located on Kogan.com’s
Corporate Website.
Kogan.com continues to recognise the importance of gender and cultural diversity with a commitment to
ensuring all representatives have equal opportunity through a merit based approach. The team are provided
with a learning and development budget, to further enhance their skill sets in their chosen fields.
Our team and culture are at the heart of our business operations and a key ingredient in our success.
OUR VALUES
Each team member is driven by the Company’s core values, they ensure that we individually and collectively
maintain focus on putting our customers first, being honest with ourselves and each other and being the
pioneers of our industry to deliver on the Company’s long term growth strategy.
Put our customer first
Deliver on promises and delight customers. Win customers for life. Use your creativity, imagination and energy
to deliver value.
Have fun
Don’t take yourself too seriously. Be positive and work as a team. Treat others as you'd like to be treated.
Be honest
With yourself, customers & co‑workers. Confront the facts, even the hard ones. Think from first principles.
Pioneer
Experiment, fail fast, learn quickly, fix things quickly, and repeat. Embrace technology and change. Have an
open mind and don’t be afraid of a challenge. We're changing the way people shop. There is always a better
way – challenge the status quo.
Do more with less
Do things in the most efficient way possible. Being frugal allows us to keep prices low for customers.
Keep it real
Focus on doing good, not looking good. Ensure merit‑based decisions by placing facts at the heart of your
processes. Concentrate on real life results and being objective. Always put health and safety first; nothing
is more important.
Have high expectations
Work collaboratively, give your best in your work, and expect the same of the team.
Think long term
We're creating customers for life and a company that's built to last. Take the short term pain for a long
term gain.
Step up
Do what it takes. Solve problems that need to be solved. Be a doer.
Annual Report 2022
49
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
SAFETY, HEALTH AND WELLBEING
The safety, health and wellbeing of the Kogan.com team are the Company’s top priorities. The business
takes all measures necessary to ensure that its team is safe. This includes being one of the first companies in
Australia to switch to a ‘work from home’ model at the beginning of the COVID‑19 pandemic. A COVID‑Safe
Plan was immediately developed to ensure that our team, suppliers and customers remained as safe as
possible during this difficult and unprecedented time.
Since the beginning of the COVID‑19 pandemic, Kogan.com has supported a flexible work model for its team
members as well as providing all the necessary measures including hand sanitiser for each team member as
well as sanitiser stations set up around the office, masks and team members and visitors alike requiring to
scan or sign into the office in order to ensure contact tracing is available in the event that it may be required.
The health and wellbeing, including mental health, of our team members is imperative. There are various
health and wellbeing related activities the team are encouraged to participate in including yoga (onsite but
also done virtually), pilates, meditation, Kogan.com Fitness Squad activities including marathons, fun runs,
10,000 steps challenges, Corporate Games and team group social activities and team event celebrations
(onsite and virtual) to keep the team connected. In addition, all team members have access to the Company’s
independent and confidential Employee Assistance Program (EAP) if required.
50
kogan.com
AUDITOR’S INDEPENDENCE DECLARATION
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Kogan.com Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit of Kogan.com Ltd for the
financial year ended 30 June 2022 there have been:
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
i.
ii.
KPM_INI_01
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG
Simon Dubois
Partner
Melbourne
29 September 2022
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under
Professional Standards Legislation.
Annual Report 2022
51
FINANCIAL REPORT
53 CONSOLIDATED INCOME STATEMENT AND
75 SECTION 3: CAPITAL STRUCTURE AND FINANCING
CONSOLIDATED STATEMENT OF OTHER
COMPREHENSIVE INCOME
54 CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
55 CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
56 CONSOLIDATED STATEMENT OF CASH FLOWS
57 NOTES TO THE FINANCIAL STATEMENTS
57 BASIS OF PREPARATION
57 a. Principles of Consolidation
57 b. Uses of Judgements and Estimates
58 c. Common Control Transaction
58 d. Functional and Presentation Currency
58 e. New Accounting Standards and Interpretations
75 3.1 Loans and Borrowings
76 3.2 Capital and Financial Risk Management
83 3.3.1 Issued Capital and Reserves
85 3.3.2 Dividends
86 3.4 Earnings per Share
87 SECTION 4: GROUP STRUCTURE
87 4.1 Controlled Entities
87 4.2 Deed of Cross Guarantee
88 4.3 Parent Entity Disclosures
88 4.4 Related Parties
89 SECTION 5: EMPLOYEE REWARD
AND RECOGNITION
89 5.1 Key Management Personnel Compensation
90 5.2 Incentive Plans
59 SEGMENT INFORMATION
100 SECTION 6: OTHER
59 a. Basis of segmentation
59 b. Segment information provided to the Board
60 SECTION 1: BUSINESS PERFORMANCE
60 1.1 Revenue
61 1.2a Operating activities
61 1.2b Finance costs
62 1.3 Tax Balances
65 1.4 Notes to the Cash Flow Statement
65 SECTION 2: OPERATING ASSETS AND LIABILITIES
65 2.1 Working Capital
70 2.2 Intangible Assets
73 2.3 Property, Plant and Equipment
100 6.1 Subsequent Events
100 6.2 Remuneration of Auditors
101 6.3 Contingent Liabilities
101 6.4 Company Information
102 DIRECTORS' DECLARATION
103 INDEPENDENT AUDITOR’S REPORT
108 SHAREHOLDER INFORMATION
111 CORPORATE DIRECTORY
52
kogan.com
CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED
STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Revenue
Cost of sales
Gross profit
Other Income
Selling and distribution expenses
Warehouse expenses
Administrative expenses
Other expenses
Results from operating activities
Finance income
Finance costs
Unrealised gain/(loss)
Net finance (cost)/income
(Loss)/Profit before income tax
Tax Benefit/(expense)
(Loss)/Profit after income tax
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange (loss)/gain on translation of foreign operations
Other comprehensive (loss)/income for the year
Total comprehensive (loss)/income for the year
Note
1.1
1.2a
1.2b
1.3
CONSOLIDATED GROUP
2022
$000’s
2021
$000’s
718,504
780,742
(534,076)
(577,037)
184,428
203,705
5,129
–
(79,217)
(68,865)
(24,553)
(34,735)
(121,702)
(86,403)
(2,204)
(38,119)
48
(2,467)
(2,170)
(4,589)
(42,708)
7,251
(35,457)
(2,967)
10,735
25
(938)
1,446
533
11,268
(7,731)
3,537
(809)
(809)
272
272
(36,266)
3,809
Basic earnings per Share
Diluted earnings per Share
3.4a
3.4b
(0.33)
(0.33)
0.03
0.03
The accompanying notes form part of these financial statements
Annual Report 2022
53
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Prepayments and other assets
Current tax assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant & equipment
Intangible assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Acquisition payables
Lease liabilities
Employee benefits
Provisions
Deferred income
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Acquisition payables
Loans & borrowings
Lease liabilities
Employee benefits
Deferred income
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Merger reserve
Other reserves
Accumulated losses
TOTAL EQUITY
Note
2.1.2a
2.1.1
2.1.2b
1.3
2.3
2.2
1.3
2.1.3a
2.1.3a
2.1.3b
2.1.3c
3.1
2.1.3b
2.1.3c
1.3
3.3.1a
3.3.1c
CONSOLIDATED GROUP
2022
$000’s
2021
$000’s
66,230
5,357
91,691
5,810
159,898
227,873
532
2,785
716
205
1,981
1,689
235,518
329,249
24,642
92,077
8,073
124,792
360,310
83,021
29,086
7,670
1,929
2,072
13,773
137,551
–
34,869
14,993
261
–
–
50,123
187,674
172,636
17,668
95,098
–
112,766
442,015
104,317
36,290
5,554
1,638
3,480
11,777
163,056
5,247
78,699
10,279
173
86
3,746
98,230
261,286
180,729
301,082
299,186
(131,816)
(131,816)
40,429
(37,059)
15,648
(2,289)
172,636
180,729
The accompanying notes form part of the financial statements
54
kogan.com
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED GROUP
Share
Capital
$000
Retained
earnings
$000
Merger
reserve
$000
Note
Trans-
lation
reserve
$000
Share-
based
pay-
ments
reserve
Total
Equity
$000
269,033
25,456 (131,816)
(291)
1,643 164,025
–
–
–
3,537
–
3,537
3.3.1b
1,537
Balance at 1 July 2020
Comprehensive income
Net profit after tax
Other comprehensive income
Total net profit and other
comprehensive income for the year
Transactions with owners,
in their capacity as owners
Issue of Ordinary Shares under
performance plans
Tax deduction for difference between
accounting expense and funds paid
to issue incentive plans
Equity‑settled share‑based payments
5.2c
Institutional placement net
of tax impact
Dividend reinvestment plan
4,812
–
19,751
4,053
(4,053)
Dividends paid
3.3.2
–
(27,229)
Total transactions with owners
and other transfers
30,153
(31,282)
–
–
–
–
(35,457)
687
–
(34,770)
Balance at 30 June 2021
Balance at 1 July 2021
Comprehensive income
Net loss after tax
Retained earnings relates to prior
financial years
Other comprehensive expense
Total net loss and other
comprehensive expense for the year
Transactions with owners,
in their capacity as owners
Issue of Ordinary Shares under
performance plans
Tax deduction for difference between
accounting expense and funds paid
to issue incentive plans
Equity‑settled share‑based payments
5.2c
Total transactions with owners
and other transfers
3.3.1b
1,021
875
–
1,896
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
272
272
–
–
–
3,537
272
3,809
–
–
–
–
–
–
–
(1,537)
–
–
4,812
15,561
15,561
–
–
–
19,751
–
(27,229)
14,024
12,895
–
–
–
–
–
–
–
–
–
–
(809)
(809)
–
–
–
–
(35,457)
687
(809)
(35,579)
–
–
–
–
(1,021)
–
–
875
26,611
26,611
25,590
27,486
299,186
(2,289) (131,816)
(19)
15,667 180,729
299,186
(2,289) (131,816)
(19)
15,667 180,729
Balance at 30 June 2022
301,082
(37,059) (131,816)
(828)
41,257
172,636
The accompanying notes form part of the financial statements
Annual Report 2022
55
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs paid
Income tax paid
CONSOLIDATED GROUP
2022
$000’s
2021
$000’s
Note
744,950
885,495
(678,455)
(926,285)
48
(1,733)
(2,971)
25
(596)
(21,671)
Net cash provided by/(used in) operating activities
1.4
61,839
(63,032)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Purchase of intangible assets
Disposal of intangible assets
Business acquisition net of acquired cash32
Net cash (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Transaction costs related to the issue of shares
Dividends paid net of dividend reinvestment plan
Repayment of loans & borrowings
Draw down on debt facility
Transaction costs on draw down facility
Repayment of lease liabilities
Net cash (used in)/provided by financing activities
Net (decrease) in cash held
Cash and cash equivalents at beginning of financial year
Effects of exchange rate changes on cash
(1,505)
(4,054)
2,672
(810)
(3,919)
–
(29,891)
(50,960)
(32,778)
(55,689)
–
–
–
20,001
(250)
(27,229)
(48,980)
(20,002)
5,000
94,749
(9)
(234)
(10,252)
(3,276)
(54,241)
63,759
(25,180)
(54,962)
91,691
146,726
(281)
(73)
Cash and cash equivalents at end of financial year
3.2
66,230
91,691
The accompanying notes form part of the financial statements
32 There were no acquisitions during this financial year. FY21 relates to the payment of Mighty Ape Tranche 1 net of cash acquired
at the time of purchase. FY22 relates to the payment of Mighty Ape Tranche 2.
56
kogan.com
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
BASIS OF PREPARATION
The financial report of Kogan.com Ltd and its controlled entities (“the Group”; “Kogan.com”) for the year ended
30 June 2022 was authorised for issue in accordance with a resolution of the Directors on 29 September 2022.
The Group is a for‑profit entity for financial reporting purposes under Australian Accounting Standards and
the nature of its operations and principal activities are described in the Directors' Report on page 25.
These General Purpose Financial Statements have been prepared in accordance with the Corporations Act
2001, Australian Accounting Standards and Interpretations of the Australia Accounting Standards Board and
International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).
Accounting policies adopted in the preparation of these financial statements are presented below and have
been consistently applied unless stated otherwise.
The accounting policies applied in these financial statements are the same as those applied in the Group’s
consolidated financial statements as at and for the year ended 30 June 2021.
Except for cash flow information, the financial statements have been prepared on an accruals basis and
are based on historical costs, modified, where applicable, by the measurement at fair value of selected
financial assets and financial liabilities.
Kogan.com is a Company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 and in accordance with that instrument, amounts in the Directors’ Report
and the Financial Report are rounded to the nearest thousand dollars, except where otherwise indicated.
a. Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the Group, in line with
AASB 10 Consolidated Financial Statements. Subsidiaries are entities the parent controls. The parent controls an
entity when it’s exposed to, or has rights to, variable returns from the involvement with the entity and has the
ability to affect those returns through its power over the entity. A list of the subsidiaries is provided in Note 4.1.a.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements
of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that the control ceases. Intercompany transactions, balances and unrealised gains
or losses on transactions between group entities are fully eliminated on consolidation. Accounting policies
of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
b. Uses of Judgements and Estimates
In preparing the financial report, management have made judgements, estimates and assumptions that affect
the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised prospectively.
Estimates that have the most significant effect on the amounts recognised in the financial statements are:
• the provisions for warranties and sales returns which are based on estimates from historical warranty and
sales returns data associated with similar products and services. The Group expects to incur most of the
liability during financial year 2022/23
• the assessment of the recoverable value of non‑current assets, including intangible assets, which is based on
management’s assessment of the nature of the capitalised costs and their expected continued contribution
of economic benefit to the Group, having regard to actual and forecast performance and profitability
• the provision for slow moving and obsolete inventory is based on estimates of net realisable value
• the valuation of Goodwill based on value in use calculations.
Key estimates and judgements have not changed from those disclosed in the Group financial report for the
year ended 30 June 2021. The goodwill recognised as at 30 June 2021 in relation to the acquisition of Mighty
Ape was final.
Annual Report 2022
57
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
BASIS OF PREPARATION (continued)
c. Common Control Transaction
On 6 July 2016 Kogan.com Ltd acquired control of Kogan Operations Holdings Pty Ltd and subsidiaries
at book value for consideration in preparation for the Initial Public Offering and the Group’s admission
to the ASX on 7 July 2016 pursuant to a replacement prospectus dated 24 June 2016.
d. Functional and Presentation Currency
These consolidated financial statements are presented in Australian dollars, which is the Parent’s
functional currency.
e. New Accounting Standards and Interpretations
In the current year, the Group has adopted all of the following new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and
effective for the current annual reporting period. Their adoption has not had any material impact on the
disclosures or on amounts reported in these financial statements.
The effects of the following Standards and Interpretations that are issued but not yet effective are not
expected to be material:
(i) AASB 2014‑10 Amendments to Australian Accounting Standards: Sale or Contribution of Assets
Between an Investor and its Associate or Joint Venture (effective 1 January 2022)
(ii) AASB 2015‑10 Amendments to Australian Accounting Standards – Effective Date of Amendments
to AASB 10 and AASB 128 (effective 1 January 2022)
(iii) AASB 2017‑5 Amendments to Australian Accounting Standards – Effective Date of Amendments
to AASB 10 and AASB 128 and Editorial Corrections (effective 1 January 2022)
(iv) AASB 17 Insurance Contracts and AASB 2020‑5 Amendments to Australian Accounting Standards
– Insurance Contracts (effective 1 January 2023)
(v) AASB 2020‑1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current
or Non‑Current (effective 1 January 2022)
(vi) AASB 2020‑3 Amendments to Australian Accounting Standards – Annual Improvements 2018‑2020
and Other Amendments (effective 1 January 2022)
(vii) AASB 2021‑2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies
and Definition of Accounting Estimates (effective 1 January 2023)
(viii) AASB 2021‑5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets
and Liabilities arising from a single transaction (effective 1 January 2023)
58
kogan.com
SEGMENT INFORMATION
a. Basis of segmentation
The Group has the following two operating divisions, Kogan.com and Mighty Ape. These operating divisions
offer different products and services and are managed separately because they require different product
sourcing and marketing strategies.
The Board considers the business primarily from an operating divisions perspective, and receives monthly
reports that allow them to make strategic decisions about resource allocation to each. On this basis,
management has identified the operating divisions as the Group’s two reporting segments.
The Board monitors the performance of these two segments separately. The Group does not operate under
any other operating division.
Reportable segments Operations
Kogan.com
Online retailer selling in‑house and third‑party brand household and consumer
electronics products, as well as providing services for telecommunication, internet,
insurance, home finances, utilities,
Mighty Ape
Online specialist retailer of gaming and entertainment products.
b. Segment information provided to the Board
Information related to each reportable segment, split by primary geographical market, is set out below.
Segment Adjusted EBITDA2 is used to measure performance as management believes that this information
is the most relevant in evaluating the results of the respective segments relative to other entities that operate
in the same sectors.
REPORTABLE SEGMENT
30 June 2022
Segment revenue
Adjusted EBITDA2
Interest income
Interest expense
Depreciation and amortisation
Total Segment assets
Capital expenditure
Total Segment liabilities
KOGAN PARENT
(Australia)
$000’s
(New
Zealand)
$000’s
MIGHTY
APE
(New
Zealand)
$000’s
TOTAL
$000’s
523,020
32,054
163,430
718,504
6,197
45
(1,310)
(14,040)
329,034
4,585
162,773
380
12,331
18,908
–
–
–
–
–
–
3
(461)
48
(1,771)
(5,163)
(19,203)
31,275
360,309
974
5,559
24,901
187,674
Annual Report 2022
59
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SEGMENT INFORMATION (continued)
b. Segment information provided to the Board (continued)
REPORTABLE SEGMENT
KOGAN PARENT
(Australia)
$000’s
672,949
52,771
22
675
10,015
390,192
3,758
219,638
(New
Zealand)
$000’s
27,588
2,163
–
–
–
–
–
–
30 June 2021
Segment revenue
Adjusted EBITDA2
Interest income
Interest expense
Depreciation and amortisation
Total Segment assets
Capital expenditure
Total Segment liabilities
SECTION 1: BUSINESS PERFORMANCE
1.1 Revenue
Sale of goods
MIGHTY
APE
(New
Zealand)
$000’s
TOTAL
$000’s
80,205
780,742
6,899
61,833
3
263
925
25
938
10,940
49,650
439,842
971
4,729
39,475
259,113
Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good
to a customer. When a performance obligation is satisfied, the Group recognises as revenue the amount of the
transaction price which excludes the associated costs and possible return of goods. Prior to these conditions
being met, receipts from the sale of the goods are recorded in deferred income. Revenue is measured net of
returns, trade discounts and volume rebates.
The majority of sales undertaken by Kogan.com are through the website, where payment is received upfront.
Kogan.com is an online‑only retailer. Each sale represents a separate identified contract with a customer for
which generally two performance obligations are expected: sales of goods and delivery revenue.
The timing of transfer of control varies depending on the individual terms of the sales agreement. For sale
of goods, transfer usually occurs upon dispatch of the goods, where control is contractually transferred to
the customer.
Revenue is the amount of the transaction price which excludes the associated costs and possible return
of goods. Prior to these conditions being met, receipts from the sale of the goods are recorded in deferred
income. Revenue is measured net of returns, trade discounts and volume rebates.
A provision for warranties is recognised when the underlying products or services are sold, based on historical
warranty data and a specific review of warranty claims outstanding.
A provision for sales returns is recognised for the expected value of returns, based on historical sales return
data and a specific review of the profile of sales for the period and post period‑end.
60
kogan.com
Rendering of services
Revenue from the rendering of services is recognised when management has fulfilled its service obligations
to the Group’s customers, recovery of the consideration is probable, and the amount of revenue can be
measured reliably. Revenue is measured net of returns and trade discounts.
The timing of revenue recognition varies depending on the individual terms of the services agreement and the
contractual obligations of the Group.
Revenue from the rendering of services is deferred when a customer has paid up front but the Group has not
yet fulfilled its obligations to the customer, in line with the terms and conditions of sale.
Revenue
Sales revenue:
Sale of goods33
Rendering of services
Other revenue:
Marketing subsidies
Other revenue
Total revenue
1.2a Operating activities
Expenses
Cost of sales
Employee benefit expense
Depreciation and amortisation expense
1.2b Finance costs
Realised foreign exchange losses
Finance costs on debt facilities
Interest Expense
Bank Fees
Total finance costs
33
Includes associated delivery fee income.
Annual Report 2022
CONSOLIDATED GROUP
2022
$000
2021
$000
651,561
729,927
61,814
45,466
713,375
775,393
4,223
906
5,129
4,000
1,349
5,349
718,504
780,742
2022
$000
2021
$000
534,076
577,037
85,475
19,203
59,641
10,940
2022
$000
396
990
781
300
2,467
2021
$000
120
88
194
535
938
61
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 1: BUSINESS PERFORMANCE (continued)
1.3 Tax Balances
Income tax expense (income) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities
(assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax assets and deferred tax liability balances
during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the
tax relates to items that are recognised outside profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled and their measurement also reflects the manner in which
management expects to recover or settle the carrying amount of the related assets or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax
asset can be utilised.
Deferred tax assets and liabilities are offset where: (i) a legally enforceable right of set‑off exists; and (ii) the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur in future periods in which significant
amounts of deferred tax assets or liability are expected to be recovered or settled.
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 ATO are presented as operating cash flows
included in receipts from customers or payments to suppliers.
a. The components of tax (benefit)/expense comprise:
Current Tax
Deferred Tax
Over provision in respect of prior year
Income tax (benefit)/expense attributable to the Group
b. The prima facie tax on (loss)/profit from ordinary activities before income
tax is reconciled to income tax as follows:
Prima facie tax on (loss)/profit from ordinary activities before income
tax at 30% (2021: 30%):
• Consolidated Group
• Effect of expenses that are not deductible in determining taxable profit
• Effect of other deductibles in determining taxable profit
• Effect of other non‑allowable items (Mighty Ape Tranche 3 & 4)
• Other
Income tax (benefit)/expense attributable to the Group
The applicable weighted average effective tax rates are as follows:
CONSOLIDATED GROUP
2022
$000
2021
$000
4,694
13,231
(11,855)
(5,335)
(90)
(7,251)
(165)
7,731
(12,812)
3,380
961
(454)
5,114
(60)
(7,251)
17%
381
104
3,914
(48)
7,731
69%
62
kogan.com
The Group’s consolidated effective tax rate for the 12 months ended 30 June was 17% (for the 12 months
ended 30 June 2021: 69%). The effective tax rate is impacted by the difference in accounting versus tax
treatment of the Mighty Ape Tranche 3 and 4 payments. For Australian income tax purposes, amounts paid
for the acquisition of Mighty Ape shares are considered as capital in nature and are therefore non‑deductible,
rather increasing the tax cost base of the shares. No deferred tax asset is recognised due to it being probable
that the temporary difference will not reverse in the foreseeable future.
Effective tax is impacted by the differences between when an amount of revenue or expense is recognised
for accounting purposes and when income and deductions are recognised under the tax laws.
Current and deferred tax balances
Assets
CURRENT
Current tax asset
Deferred tax asset
Total
Liabilities
CURRENT
Current tax liabilities
Deferred tax liabilities
Total
CONSOLIDATED GROUP
2022
$000
2021
$000
716
8,073
8,789
–
–
–
1,689
–
1,689
–
3,746
3,746
Annual Report 2022
63
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 1: BUSINESS PERFORMANCE (continued)
1.3 Tax Balances (continued)
Movements in deferred tax balances
2022
BALANCE AT 30 JUNE
Net
balance
at 1 July
Under/
Over
Recog-
nised in
profit
or loss
Recog-
nised
in OCI
Recog-
nised
directly
to
equity
Acqui-
sitions
Other
Net
De-
ferred
tax
assets
Intangible assets
(13,696)
(1,855)
(76)
619
2,182
172
2,963
1,079
4,700
166
(3,746)
–
–
–
–
–
–
–
–
–
–
–
(3,401)
2,864
76
209
819
(86)
1,456
(254)
7,677
2,754
12,114
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(295)
(295)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
De-
ferred
tax
liabili-
ties
(5,256)
(10,832)
–
–
–
(5,256)
(10,832)
–
828
–
–
–
828
3,001
3,001
86
198
(112)
4,419
4,419
825
825
12,377
12,377
2,625
2,625
–
–
–
–
8,073
24,273 (16,200)
BALANCE AT 30 JUNE
Net
balance
at 1 July
Under/
Over
Recog-
nised in
profit
or loss
Recog-
nised
in OCI
Recog-
nised
directly
to
equity
(671)
(899)
318
346
609
422
732
1,037
493
–
28
(777)
–
–
–
–
–
–
–
–
–
1,343
(431)
155
1,337
(250)
(258)
(17)
4,207
166
2,387
28
5,475
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
De-
ferred
tax
assets
De-
ferred
tax
liabili-
ties
Other
Net
–
–
–
–
–
–
–
–
–
–
–
(1,855)
–
(1,855)
(13,696)
1,106 (14,802)
(76)
619
2,182
172
318
619
2,182
258
2,963
2,963
1,079
1,079
4,700
4,700
166
166
(394)
–
–
(86)
–
–
–
–
(3,746)
13,391
(17,137)
Acqui-
sitions
(434)
(14,140)
37
118
236
–
2,489
59
–
–
(11,635)
$000
Property, plant
& equipment
Financial assets
Employee benefits
Provisions
Deferred Income
Lease Liability
Other items
Share‑based
payments reserve
Tax losses carried
forward
Net tax assets
(liabilities)
2021
$000
Property, plant
& equipment
Intangible assets
Financial assets
Employee benefits
Provisions
Deferred Income
Lease Liability
Other items
Share‑based
payments reserve
Tax losses carried
forward
Net tax assets
(liabilities)
64
kogan.com
1.4 Notes to the Cash Flow Statement
Reconciliation of Cash Flows from Operating Activities
with Profit after Income Tax
(Loss)/Profit after income tax
Non‑cash flows in profit:
• depreciation & amortisation
• provision for aged and slow‑moving stock
• Mighty Ape Tranche 3 & 4 Accrual
•
issue of Performance Rights and Shares
• Unrealised loss/(gain) on financial instruments
•
Income tax (benefit)/expense
• Other
Changes in assets and liabilities:
• (increase)/decrease in trade and term receivables
• (increase) in prepayments and other assets
• decrease/(increase) in inventories
• (decrease)/increase in trade payables and accruals
•
increase/(decrease) in deferred income
• (decrease)/increase in provisions
• tax paid
Cash flows from operating activities
SECTION 2: OPERATING ASSETS AND LIABILITIES
2.1 Working Capital
2.1.1 Inventories
CONSOLIDATED GROUP
2022
$000
2021
$000
(35,457)
3,537
19,203
4,934
17,047
26,611
2,170
(7,251)
(71)
(5,138)
(483)
10,940
2,366
12,039
20,373
(1,508)
7,731
–
670
(640)
62,108
(89,829)
(19,783)
1,925
(1,005)
(2,971)
61,839
1,596
(10,591)
1,954
(21,669)
(63,032)
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on
the weighted average cost principle and includes all direct costs attributable to purchase, such as freight
and insurance.
CURRENT
Inventory in transit
Inventory on hand
CONSOLIDATED GROUP
2022
$000
21,982
137,916
2021
$000
36,102
191,771
159,898
227,873
In 2022, inventories of $534 million (2021: $577 million) were recognised as an expense during the year and
included in ‘cost of sales’.
In addition, inventories have been reduced by $7.5 million (2021: $3.0 million) as a result of the write‑down
to net realisable value. This write‑down was recognised as an expense during the year.
Annual Report 2022
65
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 2: OPERATING ASSETS AND LIABILITIES (continued)
2.1 Working Capital (continued)
2.1.2a Trade and other receivables
Trade and other receivables include amounts due from customers for goods sold and services performed
in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the
reporting period are classified as current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any provision for impairment.
CURRENT
Trade receivables
Other receivables
Credit risk
CONSOLIDATED GROUP
2022
$000
4,434
923
5,357
2021
$000
4,925
885
5,810
The Group has no significant concentration of credit risk with respect of any single counterparty or group of
counterparties other than those receivables specifically provided for and mentioned within Note 3.2. The class
of assets described as “trade and other receivables” is considered to be the main source of credit risk related
to the Group.
On a geographical basis, the Group has significant credit risk exposures in Australia given the substantial
operations in this region. The Group’s exposure to credit risk for receivables at the end of the reporting period
in those regions is as follows:
AUD
Australia
New Zealand
CONSOLIDATED GROUP
2022
$000
4,941
416
5,357
2021
$000
5,259
551
5,810
66
kogan.com
The following table details the Group’s trade and other receivables exposed to credit risk with ageing analysis
and impairment provided for thereon. Amounts are considered as “past due” when the debt has not been
settled, within the terms and conditions agreed between the Group and the customer or counterparty to the
transactions. Receivables that are past due are assessed for impairment by ascertaining solvency of the
debtors and are provided for where there are specific circumstances indicating that the debt may not be fully
repaid to the Group.
The balance of receivables that remain within initial trade terms (as detailed in the table) is considered to be
of high credit quality.
PAST DUE BUT NOT IMPAIRED
(DAYS OVERDUE)
Gross
Amount
$000
Past Due
and
Impaired
$000
< 30
$000
31-60
$000
61-90
$000
> 90
$000
4,434
923
5,357
4,925
885
5,810
–
–
–
–
–
–
4,311
923
5,234
3,765
885
4,650
53
–
53
813
–
813
23
–
23
91
–
91
47
–
47
256
–
256
2022
Trade and
term receivables
Other
Total
2021
Trade and
term receivables
Other
Total
2.1.2b Prepayments and Other Current Assets
CURRENT
Prepayments
Rental bond
CONSOLIDATED GROUP
2022
$000
2,538
247
2,785
2021
$000
1,954
27
1,981
Annual Report 2022
67
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 2: OPERATING ASSETS AND LIABILITIES (continued)
2.1 Working Capital (continued)
2.1.3a Trade and other payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain
unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts
normally paid within 45 days of recognition of the liability.
CURRENT
Trade payables
Other payables
Total Trade and other payables
CURRENT
Mighty Ape Tranche 2
Mighty Ape Tranche 3
Mighty Ape Tranche 4
Total Acquisition payables
NON‑CURRENT
Mighty Ape Tranche 4
Total Acquisition payables
CONSOLIDATED GROUP
2022
$000
2021
$000
59,643
23,378
83,021
–
14,804
14,282
29,086
65,351
38,966
104,317
29,500
6,790
–
36,290
–
–
5,247
5,247
Mighty Ape – acquisition-related remuneration
Mighty Ape acquisition related remuneration, refers to the provision for the likely payment of Mighty Ape Tranche
3 & 4 purchase price instalments as part of the Sale Agreement, which are contingent on the Mighty Ape
Founder & CFO, Simon Barton, remaining with the Business until the delivery of the financial year 2023 results.
In line with accounting standards, Tranches 3 & 4 payments will be considered as compensation for
post‑combination services, and as such, treated as employee remuneration for accounting purposes.
The Group will proportionately account for these expenses up until the respective payment dates.
68
kogan.com
2.1.3b Lease liability
At inception of a contract, the Group assess whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Group assesses whether:
• The contract involves the use of an identified asset – this may be specified explicitly, and should be
physically, or represent substantially, all the capacity of a physically distinct asset. If the supplier has
a substantive substitution right, then the asset is not identified;
• The Group has the right to obtain substantially all of the economic benefits from the use of the asset
throughout the period of use; and
• The Group has the right to direct the use of asset. The Group has this right when it has the decision‑making
rights that are most relevant to determining how and for what purpose the asset is used. In rare cases
where all the decisions about how and for what purpose the asset is used are predetermined, the Group
has the right to direct the use of the asset if either:
• The Group has the right to operate the asset; or
• The Group designed the asset in a way that predetermines how and for what purpose it will be used.
As a lessee
The Group recognises a right‑of‑use asset and a lease liability at the lease commencement date. The
right‑of‑use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date, plus any initial direct costs incurred and
an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset, less any
lease incentives received.
The right‑of‑use asset is subsequently depreciated using the straight‑line method from the commencement
date to the earlier of the end of the useful life of the right‑of‑use or the end of the lease term. The estimated
useful lives of the right‑of‑use assets are determined on the same basis as those property, plant and
equipment. In addition, the right‑of‑use asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate
as the discount rate.
Lease payments included in the measurement of the lease liability comprise:
•
fixed payments, including in‑substance fixed payments;
• amounts expected to be payable under a residual guarantee; and
•
lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension
option, and penalties for early termination of a lease unless the Group is reasonably certain not to
terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when
there is a change in future lease payments arising from a change in an index or rate, if there is a change in
the Group’s estimate of the amount expected to be payable under a residual value guarantee or if the Group
changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right‑of‑use asset, or is recorded in profit or loss if the carrying amount of the right‑of‑use asset has
been reduced to zero.
The Group does not have any short‑term or low‑value leases.
The Group presents right‑of‑use assets that do not meet the definition of investment property in ‘property,
plant and equipment’ and lease liabilities separately in the statement of financial position. As at 30 June 2022,
the net carrying amount of the right‑of‑use asset is $22.1 million (2021: $15.7 million), please refer to note 2.3.
Annual Report 2022
69
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 2: OPERATING ASSETS AND LIABILITIES (continued)
2.1 Working Capital (continued)
2.1.3b Lease liability (continued)
The lease liability as of 30 June 2022 is presented below:
Lease liability – Maturity analysis
Maturity analysis – contractual undiscounted cash flows
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities as at 30 June
Lease liabilities included in the statement of financial position as at 30 June
Current
Non‑current
2.1.3c Deferred Income
2022
$000
8,795
14,252
942
23,989
22,663
7,670
14,993
2021
$000
6,349
8,313
2,522
17,184
15,833
5,554
10,279
Deferred Income relates to receipts from the sale of the goods which have not been dispatched, unfulfilled
services to be performed under the Group’s Kogan First loyalty program and advertising fees received upfront
with the obligation to be fulfilled in a future period as per the agreement.
CURRENT
Deferred Income
NON CURRENT
Deferred Income
Total Deferred Income
2022
$000
13,773
13,773
–
13,773
2021
$000
11,777
11,777
86
11,863
2.2 Intangible Assets
(i) Website development and software costs
Website development and software costs are measured at cost less any accumulated amortisation and
accumulated impairment losses. Such development costs are only capitalised if they can be reliably measured,
the process is technically and commercially feasible, future economic benefits are probable, and the Group
has sufficient resources to complete development.
(ii) Intellectual property
Acquired intellectual property, including customer lists, which enable direct marketing of products and
services, are capitalised to the extent it is probable that expected future economic benefits attributable
to the asset will flow to the entity, and the cost can be reliably measured.
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kogan.com
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill
and brands, is recognised in profit or loss as incurred.
(iv) Amortisation
Amortisation is calculated to write‑off the cost of intangible assets less their estimated residual values using
the straight‑ line method over their estimated useful lives and is generally recognised in the Statement of
Comprehensive Income.
Intangibles that are considered to have indefinite useful lives are not subject to amortisation.
The estimated useful lives for the current and comparative periods are as follows:
Patents and trademarks – general
Patents and trademarks – Matt Blatt
Website development costs
Software costs
Intellectual property
Brand Names
2.5 years
10.0 years
2.5 years
2.5 years
2.0 years
10.0 – 15.0 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted,
if appropriate.
(v) Impairment of Assets
At each reporting date, the Group reviews the carrying amounts of its non‑financial assets (other than
inventories and deferred tax assets) to determine whether there is any indication of impairment. If any
such indication exists, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash
Generating Units (CGU).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to
sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre‑tax
discount rate that reflects current marketing assessments of the time value of money and the risks specific
to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in the Statement of Comprehensive Income. They are allocated to reduce
the carrying amount of assets in the CGU on a pro‑rata basis only if Goodwill has been fully impaired. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had
been recognised.
(vi) Impairment testing for Goodwill
Goodwill arising on the acquisition of Mighty Ape in New Zealand of $46.3M, has been allocated to the
Mighty Ape Cash generating unit (“CGU”) based on their expected earnings contribution to the Group
arising from the acquisition.
The recoverable amount of each CGU (or group of CGUs) has been determined based on value in use
calculations which use cash flow projections from financial budgets approved by management covering
a five‑year period, using a post‑tax discount rate of 11.2% for Mighty Ape. The cash flow beyond the budget
period have been extrapolated using a steady 2% long term growth rate assumption which is consistent
with the projected long term average growth rate for the industry in New Zealand.
Annual Report 2022
71
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 2: OPERATING ASSETS AND LIABILITIES (continued)
2.2 Intangible Assets (continued)
(vi) Impairment testing for Goodwill (continued)
The key assumptions used in the value in use calculations includes sales growth, operating costs and the
discount rate. The assumptions regarding sales growth and operating costs are based on experience and
the Group’s forecasted operating and financial performance for Mighty Ape. The discount rate is derived
from Mighty Ape’s weighted average cost of capital (WACC).
Sensitivity analysis indicates that no reasonably possible change in key assumptions would result in an
impairment loss. Accordingly, the Group has concluded that no impairment is required based on current
market economic conditions and expected future performance.
Patents and trademarks:
Cost
Accumulated amortisation
Net carrying amount
Website development costs:
Cost
Accumulated amortisation
Net carrying amount
Software costs:
Cost
Accumulated amortisation
Net carrying amount
Intellectual property:
Cost
Accumulated amortisation
Net carrying amount
Goodwill:
Cost
Accumulated amortisation
Net carrying amount
Total intangibles
CONSOLIDATED GROUP
2022
$000
2021
$000
45,522
(6,331)
39,191
13,792
(8,791)
5,001
1,284
(1,096)
188
45,617
(3,004)
42,613
11,101
(6,624)
4,477
1,154
(940)
214
23,233
21,928
(21,847)
(20,054)
1,386
1,874
46,311
45,920
–
46,311
92,077
–
45,920
95,098
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kogan.com
Patents
and
trademarks
$000
Website
develop-
ment costs
$000
Software
costs
$000
Intellectual
property
$000
Goodwill
$000
Total
$000
4,065
109
1,168
1,726
40,795
3,223
–
–
13
296
–
–
3,033
1,510
–
–
(2,356)
(1,640)
(95)
(2,669)
–
–
8,279
3,641
45,920
89,938
–
–
–
(6,760)
42,613
4,477
214
1,874
45,920
95,098
42,613
200
(294)
4,477
2,691
–
214
130
–
1,874
1,305
–
(3,320)
(2,168)
(156)
(1,793)
(8)
–
–
–
45,920
95,098
391
–
–
–
4,717
(294)
(7,436)
(8)
39,191
5,001
188
1,386
46,311
92,077
Consolidated Group:
Year ended 30 June 2021
Balance at the beginning
of the year
Additions
Additions through
acquisition of entities
Disposals
Amortisation
Closing value at
30 June 2021
Year ended 30 June 2022
Balance at the beginning
of the year
Additions
Disposals
Amortisation
Foreign Currency
exchange differences
Closing value at
30 June 2022
2.3 Property, Plant and Equipment
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated
depreciation and impairment losses.
Property, plant and equipment are measured on a cost basis and therefore carried at cost less accumulated
depreciation and any accumulated impairment losses. In the event the carrying amount of property, plant
and equipment is greater than the estimated recoverable amount, the carrying amount is written down
immediately to the estimated recoverable amount and impairment losses are recognised either in profit
or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment
of recoverable amount is made when impairment indicators are present.
The carrying amount of property, plant and equipment is reviewed annually by the management to ensure it
is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis
of the expected net cash flows that will be received from the asset’s employment and subsequent disposal.
The expected net cash flows have been discounted to their present values in determining recoverable amounts.
The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are recognised
as expenses in the Statement of Comprehensive Income during the financial period in which they are incurred.
Annual Report 2022
73
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 2: OPERATING ASSETS AND LIABILITIES (continued)
2.3 Property, Plant and Equipment (continued)
Depreciation
The depreciable amount of all fixed assets purchased is depreciated on a straight‑line basis over the asset’s
useful life to the Group commencing from the time the asset is held ready for use. Leasehold improvements
are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of
the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Computer equipment (straight‑line basis)
Office equipment (straight‑line basis)
Leasehold improvements (straight‑line basis)
Class of Fixed Asset
Right of use asset
Depreciation Rates
67%
20%
20%
Lease Term
2‑7 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are recognised in the Statement of Comprehensive Income in the period in which they arise.
Equipment & Vehicles:
Cost
Accumulated depreciation
Net carrying amount
Leasehold improvements:
Cost
Accumulated amortisation
Net carrying amount
Right-of-use asset:
Cost
Accumulated amortisation
Net carrying amount
Total property, plant and equipment
CONSOLIDATED GROUP
2022
$000
2021
$000
4,961
(2,410)
2,551
40
(36)
4
39,416
(17,329)
22,087
24,642
3,611
(1,669)
1,942
39
(32)
7
21,822
(6,103)
15,719
17,668
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kogan.com
Movements in carrying amounts
Movements in the carrying amounts for each class of property, plant and equipment between the beginning
and the end of the current financial year:
Equipment
& Vehicles
$000
Leasehold
improve-
ments
$000
Right-of-use
asset
$000
Consolidated Group:
Year ended 30 June 2021
Balance at the beginning of the year
Additions
Additions through acquisition of entities
Depreciation Expense
Closing value at 30 June 2021
Year ended 30 June 2022
Balance at the beginning of the year
Additions
Depreciation Expense
Foreign Currency exchange differences
Closing value at 30 June 2022
237
305
1,795
(395)
1,942
1,942
1,350
(665)
(76)
2,551
14
–
–
(7)
7
7
–
(3)
–
4
SECTION 3: CAPITAL STRUCTURE AND FINANCING
3.1 Loans and Borrowings
NON‑CURRENT
Trade Advance
Amortised borrowing costs
Net carrying amount
Total
$000
2,603
7,233
12,147
(4,315)
17,668
2,352
6,928
10,352
(3,913)
15,719
15,719
17,594
17,668
18,944
(11,016)
(11,684)
(210)
(286)
22,087
24,642
CONSOLIDATED GROUP
2022
$000
2021
$000
35,000
78,902
(131)
(203)
34,869
78,699
The Group’s interest bearing loans and borrowings have been measured at amortised cost.
Annual Report 2022
75
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 3: CAPITAL STRUCTURE AND FINANCING (continued)
3.1 Loans and Borrowings (continued)
Debt Facilities
The group has multiple debt facilities, referring to loans and borrowings in the balance sheet. The tables below
set out the various structures of the debt facilities between Kogan.com and Mighty Ape as at balance dates.
Debt Facility
KOGAN
2022
$000
AUD
Multi‑option facility
55,000
Additional debt facility
–
Total Debt Facility
55,000
2021
$000
AUD
75,000
10,000
85,000
Debt Facility
Overdraft facility
Trade finance facility
Total Debt Facility
MIGHTY APE
2022
$000
NZD
1,500
6,000
7,500
2021
$000
NZD
1,500
6,000
7,500
For details relating to the amounts drawn down against these facilities, please refer to the table below.
Mighty Ape drawn down amount has been converted to AUD from NZD 4.0 million for the financial year
ended 30 June 2021 based on the AUD/NZD spot rate (FY22: Nil).
Drawn down amount
Kogan
Mighty Ape
Total Drawn down amount
CONSOLIDATED GROUP
2022
$000
AUD
35,000
–
35,000
2021
$000
AUD
75,200
3,702
78,902
3.2 Capital and Financial Risk Management
The Group’s financial instruments consist mainly of deposits with banks, local money market instruments,
short‑term investments and payable derivatives.
Financial risk management policies
The Board’s overall risk management strategy seeks to assist the Group in meeting its financial targets, while
minimising potential adverse effects on financial performance. This includes the review of the use of hedging
derivative instruments, credit risk policies and future cash flow requirements.
Specific financial risk exposures and management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk, and
market risk consisting of interest rate risk and foreign currency risk. There have been no substantive changes
in the types of risks the Group is exposed to, how these risks arise, or the Board’s objectives, policies and
processes for managing or measuring the risks from the previous period.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non‑performance by counterparties
of contract obligations that could lead to a financial loss to the Group.
Credit risk is managed through internal procedures (such as the utilisation of systems for the approval,
granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring
of the financial stability of significant customers and counterparties), ensuring to the extent possible, that
customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in
assessing receivables for impairment.
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kogan.com
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating,
or in entities that the Board has otherwise assessed as being financially sound. Where the Group is unable
to ascertain a satisfactory credit risk profile in relation to a customer or counterparty, the risk may be further
managed through title retention clauses over goods or obtaining security by way of personal or commercial
guarantees over assets of sufficient value which can be claimed against in the event of any default.
Credit risk exposures
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting
period excluding the value of any collateral or other security held, is equivalent to the carrying amount
and classification of those financial assets (net of any provisions) as presented in the Statement of Financial
Position. Credit risk also arises through the provision of financial guarantees, as approved at Board level,
given to parties’ security liabilities of certain subsidiaries.
The Group has no significant concentrations of credit risk with any single counterparty or group of counterparties.
However, the Group has significant credit risk exposures to Australia given the substantial operations in this
region. Details with respect to credit risk of trade and other receivables are provided in Note 2.1.2a. The Group’s
exposure to credit risk is minimised given a significant portion of sales are paid for at the time purchase.
Management has assessed that trade and other receivables that are not past due or are considered to be
of good credit rating. Aggregates of such amounts are detailed in Note 2.1.2a.
Cash and cash equivalents
Credit and risk related to balances with banks and other financial institutions is managed by the Board.
The Group held cash and cash equivalents of $66.2 million as at 30 June 2022 and $91.7 million as at the end
of 30 June 2021. The cash and cash equivalents are held with bank and financial institution counterparties,
which are rated A to AA–, based on the Standard & Poor’s ratings
Impairment of cash and cash equivalents has been measured on a 12‑month expected loss basis and reflects
the short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit
risk based on the external credit ratings of the counterparties.
The Group uses a similar approach for assessment of ECLs for cash and cash equivalents to those used for
debt securities.
No impairment allowance was recognised during FY22 (FY21: Nil).
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the
following mechanisms:
• prepared forward‑looking cash flow analysis in relation to its operating, investing and financing activities;
• using derivatives that are only traded in highly liquid markets;
• monitoring undrawn credit facilities;
• maintaining a reputable credit profile;
• managing credit risk related to financial assets; and
• only investing surplus cash with major financial institutions.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation.
Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle
financial liabilities reflects the earliest contractual settlement dates.
Annual Report 2022
77
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 3: CAPITAL STRUCTURE AND FINANCING (continued)
3.2 Capital and Financial Risk Management (continued)
Financial liability and financial asset maturity analysis
Consolidated Group
Note
2022
$000
2021
$000
2022
$000
2021
$000
2022
$000
2021
$000
2022
$000
2021
$000
WITHIN 1 YEAR
1 TO 5 YEARS
OVER 5 YEARS
TOTAL
Financial liabilities due for payment
Trade and other
payables
2.1.3a
(83,021) (104,317)
Acquisition payables
(29,086)
(36,290)
–
–
–
(5,247)
–
–
–
–
(83,021) (104,317)
(29,086)
(41,537)
Lease liabilities
2.1.3b
(7,670)
(5,554)
(13,804)
(7,568)
(1,189)
(2,711)
(22,663)
(15,833)
Loan & borrowings
3.1
Financial liabilities
Total Expected
outflows
–
–
–
–
(34,869)
(78,699)
–
–
–
–
–
–
(34,869)
(78,699)
–
–
(119,777)
(146,161)
(48,673)
(91,514)
(1,189)
(2,711) (169,639) (240,386)
Financial assets – cash flows realisable
Cash and cash
equivalents
Trade, term and
loan receivables
66,230
91,691
2.1.2a
5,357
5,810
Other financial assets
532
205
72,119
97,706
Total anticipated
inflows
Net (Outflow)/inflow
on financial
instruments
Market risk
a. Interest rate risk
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
66,230
91,691
5,357
5,810
532
205
72,119
97,706
(47,658)
(48,455)
(48,673)
(91,514)
(1,189)
(2,711)
(97,520) (142,680)
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the
reporting period whereby a future change in interest rates will affect future cash flows or the fair value of
fixed rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments.
The financial instruments that primarily expose the Group to interest rate risk are borrowings and cash and
cash equivalents.
b. Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument
fluctuating due to movement in foreign exchange rates of currencies in which the Group holds financial
instruments which are other than the functional currency of the Group.
With instruments being held by overseas operations, fluctuations in the US dollar may impact on the Group’s
financial results unless those exposures are appropriately hedged.
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kogan.com
Foreign currency transactions
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented
in Australian dollars, which is the parent entity’s functional currency.
Foreign exchange forward contracts
The Group has open foreign exchange forward contracts at the end of the reporting period relating to highly
probable forecast transactions and recognised financial assets and financial liabilities. These contracts commit
the Group to buy and sell specified amounts of foreign currencies in the future at specified exchange rates.
It is the Group’s policy to manage pricing of its products (with exception of ageing and obsolete inventory)
according to specified target Gross Margins, rather than to sacrifice Gross Margin to drive sales volumes. In an
environment where the Australian dollar may be declining, in particular, relative to the United States dollar, the
Group’s ability to price Third‑Party branded international products competitively in comparison with other
Australian retailers deteriorates (to the extent that those retailers have not adjusted retail prices). As a result,
lower volumes of Third‑Party branded international products are generally sold during periods of sharp
decline in the Australian dollar, leading to lower revenues in that product segment. The reverse occurs in
periods in which there is a sharp increase in the Australian dollar, while there has historically been neutral
revenue impact in periods in which the currency is relatively stable, whether that is at high or low levels.
The following table summarises the notional amounts of the Group’s commitments in relation to foreign
exchange forward contracts. The notional amounts do not represent amounts exchanged by the transaction
counterparties and are therefore not a measure of the exposure of the Group through the use of the contracts.
Consolidated Group
Buy USD/sell AUD
NOTIONAL AMOUNTS
AVERAGE
EXCHANGE RATE
2022
$000
2021
$000
2022
$000
2021
$000
Settlement
‑ less than 6 months
‑ 6 months to 1 year
0
–
30,430
–
0.69
–
0.75
–
The fair value of foreign exchange contracts at 30 June 2022 totalled $170.29 (2021: ($204,798)).
Sensitivity analysis
The following table illustrates sensitivities to the Group’s exposures to changes in exchange rates. The table
indicates the impact of how profit and equity values reported at the end of the reporting period would have
been affected by changes in the relevant risk variable that management considers to be reasonably possible.
These sensitivities assume that the movement in a particular variable is independent of other variables.
Year ended 30 June 2022
+/‑10bps in foreign exchange rates
Year ended 30 June 2021
+/‑10bps in foreign exchange rates
CONSOLIDATED GROUP
Profit
$000
Equity
$000
0
0
3,043
3,043
The Group, through its hedging of foreign exchange using forward contracts, reduces its exposure to foreign
exchange risk by locking in the exchange rate with the bank on deal date. Any movement in interest rates has
been deemed to be immaterial.
Annual Report 2022
79
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 3: CAPITAL STRUCTURE AND FINANCING (continued)
3.2 Capital and Financial Risk Management (continued)
Fair values
The Group measures some of its assets and liabilities at fair value on either a recurring or non‑recurring basis,
depending on the requirements of the applicable Accounting Standards.
Fair value estimation
The carrying value of financial assets and financial liabilities are not materially different to their fair values.
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the entity commits itself
to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument
is classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss
immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest
method, or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at
initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative
amortisation of the difference between that initial amount and the maturity amount calculated using the
effective interest method.
The effective interest method is used to allocate interest income or interest expense over the relevant period
and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees,
transaction costs and other premiums or discounts) over the expected life (or when this cannot be reliably
predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset
or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying
amount with a consequential recognition of an income or expense item in profit or loss.
The Group does not designate any interests in subsidiaries, associates, or joint ventures as being subject to the
requirements of Accounting Standards specifically applicable to financial instruments.
Financial assets and financial liabilities at fair value through profit or loss (FVTPL) are initially recognised at fair
value and thereafter carried at fair value.
a Financial assets at amortised cost
Financial assets at amortised cost are non‑derivative financial assets with fixed or determinable payments
that are not quoted in an active market and are subsequently measured at amortised cost. Gains or losses are
recognised in profit or loss through the amortisation process and when the financial asset is derecognised.
b. Financial assets/financial liabilities at fair value through profit or loss
Financial assets/financial liabilities relating to foreign exchange forward contracts are measured at fair value
and fair value changes are recognised in profit or loss.
c. Financial liabilities at amortised cost
Non‑derivative financial liabilities other than financial guarantees are subsequently measured at amortised
cost. Gains or losses are recognised in profit or loss when the financial liability is derecognised.
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Derivative instruments
The Group enters into forward contracts to manage the cash flow risk attached to inventory purchased
in foreign currency. The Group has elected not to adopt hedge accounting, with any period movements
in the fair value of the derivative contract taken to the income statement.
Impairment
The Group recognises loss allowances for expected credit loss (ECL) on:
•
•
financial assets measured at amortised cost;
financial assets measured at FVTPL.
The Group measured loss allowances at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information that is
relevant and available without undue cost or effort. This includes both quantitative and qualitative information
and analysis, based on the Group’s historical experience and informed credit assessment and including
forward looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days
past due.
The Group considers a financial asset to be in default when:
• the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group
to actions; or
• the financial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a
financial instrument.
12‑month ECLs are the portion of ECLs that result from default events that are possible within the 12 months
after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the
Group is exposed to credit risk.
Measurement of ECLs
ECLs are a probability‑weighted estimate of credit losses. Credit losses are measured as the present value of
all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract
and the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and financial
assets at FVTPL are credit‑impaired. A financial asset is ‘credit‑impaired’ when one or more events that have
a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit‑impaired includes the following observable data:
• significant financial difficulty of the borrower or issuer;
• a breach of contract such as a default or being more than 90 days past due;
• the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
•
it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
• the disappearance of an active market for a security because of financial difficulties.
Annual Report 2022
81
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 3: CAPITAL STRUCTURE AND FINANCING (continued)
3.2 Capital and Financial Risk Management (continued)
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount
of the assets.
For financial assets at FVTPL, the loss allowance is charged to profit or loss.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations
of recovering a financial asset in its entirety or a portion thereof. For individual customers, the Group has
a policy of writing off the gross carrying amount when the financial asset is 180 days past due based on
historical experience of recoveries of similar assets. For corporate customers, the Group individually makes
an assessment with respect to the timing and amount of write‑off based on whether there is a reasonable
expectation of recovery. The Group expects no significant recovery from the amount written off. However,
financial assets that are written off could still be subject to enforcement activities in order to comply with the
Group’s procedures for recovery of amounts due.
The Group holds the following financial assets and financial liabilities at reporting date:
Financial assets
Cash and cash equivalents
Trade and other receivables
Foreign exchange forward contracts
Total financial assets
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables
Loans & borrowings
Acquisitions payable – current
Acquisitions payable – non‑current
Lease liability – current
Lease liability – non‑current
Financial liabilities
Total financial liabilities
Fair value measurements
CONSOLIDATED GROUP
Note
2022
$000
2021
$000
66,230
5,357
532
72,119
83,021
34,869
29,086
–
7,670
14,993
–
91,691
5,810
205
97,706
104,317
78,699
36,290
5,247
5,554
10,279
–
169,639
240,386
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after
initial recognition:
• cash and cash equivalents;
•
foreign exchange forward contracts; and
• shares investment in Bitbuy entity
The Group does not subsequently measure any liabilities at fair value on a non‑recurring basis.
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a. Fair value hierarchy
AASB 9 Financial Instruments requires the disclosure of fair value information by level of the fair value
hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest
level that an input that is significant to the measurement can be categorised into as follows:
Level 1
Level 2
Level 3
Measurements based on quoted
prices (unadjusted) in active
markets for identical assets
or liabilities that the entity can
access at the measurement date.
Measurements based on inputs
other than quoted prices included
in Level 1 that are observable for
the asset or liability, either directly
or indirectly.
Measurements based on
unobservable inputs for
the asset or liability
Cash & cash equivalents and Shares are Level 1 measurements, whilst foreign exchange contracts are Level 2.
The fair values of assets and liabilities that are not traded in an active market are determined using one or
more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable
market data. If all significant inputs required to measure fair value are observable, the asset or liability is
included in Level 2. If one or more significant inputs are not based on observable market data, the asset
or liability is included in Level 3.
The table below sets out the fair value of foreign exchange contracts and the shares as at 30 June 2022.
This represented the amount ‘in/out of the money’ on financial instruments as at the reporting dates.
Fair Value
Foreign exchange contracts
Shares investment in Bitbuy entity
CONSOLIDATED GROUP
2022
$000
–
532
2021
$000
205
–
b. Disclosed fair value measurements
The carrying amounts of assets and liabilities are the same as their carrying values.
The Group enters into forward exchange contracts to manage the foreign exchange risk attached to inventory
purchased in foreign currency. The Group has elected not to adopt hedge accounting, with any period
movements in the fair value of the derivative contract taken to the income statement.
The fair value of forward exchange contracts is determined based on an external valuation report using
forward exchange rates at the balance sheet date.
3.3.1 Issued Capital and Reserves
a. Ordinary Shares
CONSOLIDATED GROUP
2022
$
2021
$
2022
No
2021
No
Fully paid ordinary shares
301,081,639 299,185,901
106,927,603 106,561,563
Ordinary Shares participate in Dividends and the proceeds on winding‑up of the parent entity in proportion
to the number of Shares held. At the Shareholders’ meetings each Ordinary Share is entitled to one vote when
a poll is called, otherwise each Shareholder has one vote on a show of hands.
Annual Report 2022
83
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 3: CAPITAL STRUCTURE AND FINANCING (continued)
3.3.1 Issued Capital and Reserves (continued)
b. Movement in Ordinary Shares
Details
Balance
Date
Shares No.
Issue
price
$
30 June 2020 103,531,706
269,033,496
Share purchase plan
10 July 2020
1,746,733
$11.45 20,000,854
Transaction costs incurred during
Share purchase plan net of tax
Shares issues to eligible employees
under an incentive plan
10 July 2020
–
–
(250,237)
17 August 2020
343,440
$1.68
576,746
Dividend reinvestment plan
28 October 2020
86,648
$21.19
1,835,644
Tax deduction for difference between
accounting expense and funds paid
to issue incentive plans
Shares issues to eligible employees
under an incentive plan
31 December 2020
–
–
1,755,158
26 February 2021
682,454
$1.41
959,801
Dividend reinvestment plan
31 May 2021
170,582
$13.00
2,217,387
Tax deduction for difference between
accounting expense and funds paid
to issue incentive plans
30 June 2021
–
–
3,057,052
Balance
30 June 2021
106,561,563
299,185,901
Shares issues to eligible employees
under an incentive plan
Tax deduction for difference between
accounting expense and funds paid
to issue incentive plans
Shares issues to eligible employees
under an incentive plan
Shares issues to eligible employees
under an incentive plan
Shares issues to eligible employees
under an incentive plan
Tax deduction for difference between
accounting expense and funds paid
to issue incentive plans
24 August 2021
326,646
$1.79
585,544
31 December 2021
–
–
931,667
25 February 2022
37,831
$11.26
425,934
25 February 2022
6 April 2022
30 June 2022
678
885
–
$6.04
4,096
$5.65
5,000
–
(56,503)
Balance
30 June 2022 106,927,603
301,081,639
c. Merger reserve
The acquisition of Kogan Operations Holdings Pty Ltd by Kogan.com Ltd has been treated as a common
control transaction at book value for accounting purposes, and no fair value adjustments have been made.
Consequently, the difference between the fair value of issued capital and the book value of net assets
acquired was recorded within a merger reserve of $131,816,250.
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d. Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees as part of their
remuneration. The Group measures the cost of equity‑settled transactions with employees by reference to
the fair value of the Ordinary Shares at the date at which they are granted. The fair value is determined using
a discounted cash flow valuation model, taking into account the terms and conditions upon which the equity
instruments were granted, as discussed in Note 5.2.
e. Capital management
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate
long‑term shareholder value and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital include ordinary share capital and financial liabilities, supported by financial assets.
The Group is not subject to any externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting
its capital structure in response to changes in these risks and in the market. These responses include the
management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group
since the prior year.
3.3.2 Dividends
Dividends paid during the year
Dividend reinvestment plan
a. Ordinary Shares
Recognition and measurement
CONSOLIDATED GROUP
2022
$000
–
–
–
2021
$000
31,282
(4,053)
27,229
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer
at the discretion of the entity before or at the end of the financial year but not distributed at balance date.
There was no final 2022 dividend declared and therefore is not reflected in the consolidated financial
statements for the year ended 30 June 2022.
Dividends
Dividends per Share (in cents)
Franking percentage
Payment date
Dividend record date
b. Franking credits
2022
Final
2022
Interim
–
–
–
–
–
–
–
–
2021
Final
–
–
–
2021
Interim
16.0
100%
31 May 2021
– 9 March 2021
The franking account balance as at 30 June 2022 is 9,591,844 (2021: $8,657,001).
Annual Report 2022
85
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 3: CAPITAL STRUCTURE AND FINANCING (continued)
3.4 Earnings per Share
a. Basic earnings per share
Net profit for the reporting period
Net profit for the reporting period used in calculating EPS
Weighted average number of ordinary shares of the entity
Basic Earnings per Share
b. Diluted earnings per share
Net profit for the reporting period
CONSOLIDATED GROUP
2022
2021
(35,456,513)
3,536,756
(35,456,513)
3,536,756
106,852,382 105,803,451
(0.33)
0.03
CONSOLIDATED GROUP
2022
2021
(35,456,513)
3,536,756
Weighted average number of ordinary shares of the entity on issue
106,852,382 105,803,451
Adjustments to reflect potential dilution for Performance Rights
365,155
3,029,857
Diluted weighted average number of Ordinary Shares of the entity
107,217,537 108,833,308
Diluted Earnings per Share
(0.33)
0.03
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SECTION 4: GROUP STRUCTURE
4.1 Controlled Entities
a. Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of Ordinary Shares or, in the case of Kogan
Technologies Unit Trust, Ordinary Units, which are held directly by the Group. Kogan.com Holdings Pty Ltd
is the Trustee of the Kogan Technologies Unit Trust. The Trustee and the Trust are wholly‑owned entities
within the Group. The proportion of ownership interests held equals the voting rights held by the Group.
Each subsidiary’s principal place of business is also its country of incorporation.
Name of subsidiary
Principal place of business
Kogan Mobile Operations Pty Ltd
(formerly Kogan Mobile Australia Pty Ltd)
Kogan Mobile Pty Ltd
Kogan Australia Pty Ltd
Kogan International Holdings Pty Ltd
Kogan HK Limited
Kogan HR Pty Ltd
Kogan Travel Pty Ltd
Dick Smith IP Holdings Pty Ltd
(formerly Kogan Technologies UK Pty Ltd)
Online Business Number 1 Pty Ltd
Kogan Technologies Unit Trust
Kogan.com Holdings Pty Ltd
Kogan Operations Holdings Pty Ltd
Kogan US Trading Inc
Kogan Superannuation Pty Ltd
Matt Blatt Pty Ltd
Mighty Ape Limited
Mighty Ape Australia Pty Ltd
b. Significant restrictions
Australia
Australia
Australia
Australia
Hong Kong
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United States
Australia
Australia
New Zealand
Australia
OWNERSHIP INTEREST
HELD BY THE GROUP
2022
%
2021
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
There are no significant restrictions over the Group’s ability to access or use assets, and settle liabilities,
of the Group.
4.2 Deed of Cross Guarantee
A deed of cross guarantee between Kogan.com Ltd and its entities listed above was enacted during FY22
and relief was obtained from preparing individual financial statements for the Group under ASIC Corporations
(Wholly‑owned Companies) Instrument 2016/785. Under the deed, Kogan.com Ltd guarantees to support
the liabilities and obligations of its subsidiaries listed above. As its entities are a party to the deed the income
statement and balance sheet information of the combined class‑ordered group is equivalent to the consolidated
information presented in this financial report.
Annual Report 2022
87
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 4: GROUP STRUCTURE (continued)
4.3 Parent Entity Disclosures
The following information has been extracted from the books and records of the parent (Kogan.com Ltd) and
has been prepared in accordance with Australian Accounting Standards.
Statement of Financial Position
ASSETS
Current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Performance Rights reserve
Dividends
Retained earnings
TOTAL EQUITY
Statement of Profit or Loss and Other Comprehensive Income
Total profit
Total comprehensive income
4.4 Related Parties
a. The Group’s main related parties are as follows:
(i) Entities exercising control over the Group:
2022
$000
2021
$000
202,979
202,979
191,707
191,707
684
684
1,330
1,330
202,295
190,377
169,266
41,257
167,370
15,667
–
(31,282)
(8,228)
38,622
202,295
190,377
(15,567)
(15,567)
3,551
3,551
The ultimate parent entity that exercised control over the Group at year‑end was Kogan.com Ltd, which
is incorporated in Australia.
(ii) Key Management Personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of
the entity, directly or indirectly, including any Director (whether executive or otherwise) of the entity, are
considered Key Management Personnel (refer to 5.1).
(iii) Entities subject to significant influence by the Group:
An entity that has the power to participate in the financial and operating policy decisions of an entity, but
does not have control over those policies, is an entity which holds significant influence. Significant influence
may be gained by share ownership, statute or agreement. There are no such entities at year end (2021: nil).
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(iv) Other related parties:
Other related parties include entities controlled by the ultimate parent entity and entities over which Key
Management Personnel have joint control.
b. Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Kogan Australia Pty Ltd entered into a Logistic Services Agreement with eStore Logistics Pty Ltd (“eStore”),
in a prior financial period, in relation to the provision of warehousing, distribution and logistics services by
eStore to Kogan Australia. Ruslan Kogan is a minority Shareholder and Director of eStore. The agreement
was entered into on arm’s length terms.
Services provided by eStore warehousing
Amounts payable to eStore as at 30 June
CONSOLIDATED GROUP
2022
$
2021
$
7,829,196
11,985,662
488,813
556,156
SECTION 5: EMPLOYEE REWARD AND RECOGNITION
5.1 Key Management Personnel Compensation
As deemed under AASB 124 Related Parties disclosures, Key Management Personnel (KMP) include each of
the Directors, both Executive and Non‑Executive, and those members who have authority and responsibility
for planning, directing and controlling activities within the business. A summary of the KMP compensation is
set out in the following table. Refer to the Remuneration Report for full details.
A summary of the KMP compensation is set out in the following table. Refer to the Remuneration Report for
full details.
Cash Salary
Short‑term incentives
Post‑employment
Long‑term benefits
Equity‑based compensation
Other long‑term benefits
CONSOLIDATED GROUP
2022
$
2021
$
1,081,085
949,871
–
47,600
93,688
–
43,388
89,331
24,590,857
14,175,048
17,047,089
12,038,718
42,860,319
27,296,356
Annual Report 2022
89
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 5: EMPLOYEE REWARD AND RECOGNITION (continued)
5.1 Key Management Personnel Compensation (continued)
Movement in shares
The movement during the reporting period in the number of Ordinary Shares in Kogan.com held, directly,
indirectly or beneficially, by each key management person, including their related parties, is as follows:
Executive KMP
Ruslan Kogan
David Shafer
Other Non-Executive KMP
Held at
1 July 2021
15,853,321
6,075,642
Received
on exercise
of rights
–
–
Shares
purchased
Shares Sold
Held at
30 June 2022
–
–
–
15,853,321
(1,000,000)
5,075,642
Held at
1 July 2021
Received
on exercise
of rights
Shares
purchased
Shares Sold
Held at
30 June 2022
Gracie MacKinlay
Simon Barton
–
–
–
–
500
–
–
–
500
–
Non-Executive Directors
Greg Ridder
Harry Debney
Janine Allis
James Spenceley
5.2 Incentive Plans
Held at
1 July 2021
Received
on exercise
of rights
Shares
purchased
Shares Sold
Held at
30 June 2022
158,000
98,099
4,761
–
–
–
–
–
–
–
–
–
–
–
–
–
158,000
98,099
4,761
–
Kogan.com Ltd has adopted an Equity Incentive Plan (EIP) to assist in the motivation and retention of
management and selected team members.
The Group has established incentive arrangements subsequent to listing on the ASX to assist in the attraction,
motivation and retention of the executive team and other selected team members. To align the interests of its
employees and the goals of the Group, the Directors have decided the remuneration packages of the
executive team and other selected team members will consist of the following components:
•
fixed remuneration (inclusive of superannuation);
• short‑term cash‑based incentives; and
• equity based long‑term incentives.
The Group has established the EIP, which is designed to align the interests of eligible employees more closely
with the interests of Shareholders in the listed entity post 7 July 2016. Under the EIP, eligible employees may
be offered Restricted Shares, Options or Rights which may be subject to vesting conditions. The Group may
offer additional long‑term incentive schemes to senior management and other employees over time.
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Short-term incentives – Cash based
The following table outlines the significant aspects of the STI.
Purpose of STI plan
Provide a link between remuneration and both short‑term Company
and individual performance.
Eligibility
Create sustainable Shareholder value.
Reward individuals for their contribution to the success of the Group.
Actively encourage team members to take more ownership over the EBITDA3.
Offers of cash incentive may be made to any team members of the Group
(including a Director employed in an executive capacity) or any other person
who is declared by the Board to be eligible to receive a grant of cash incentive
under the STI.
Calculation & Target
The actual EBITDA3 of Kogan.com shall exceed the management forecast
for the full financial year (after payment of the STI).
25% of the outperformance will be allocated to a 'bonus pool'.
The 'bonus pool' will then be shared in cash bonuses among a number of team
members in fixed proportions.
Maximum opportunity
The maximum payable is 25% of the outperformance and 35% of the team
member’s annual salary.
Performance conditions
Outperformance of the actual EBITDA3.
Continuation of employment.
Why were the performance
condition chosen
To achieve successful and sustainable financial business outcomes as well as
any annual objectives that drive short‑term and long‑term business success
and sustainability.
Performance period
1 July 2021 to 30 June 2022.
Timing of assessment
August 2022, following the completion of the 30 June 2022 accounts.
Form of payment
Paid in cash.
Board discretion
Targets are reviewed annually and the Board has discretion to adapt
appropriately to take into account exceptional items.
Long-term incentives – Equity Incentive Plan
The following table outlines the significant aspects of the current EIP.
Consideration
Eligibility
Nil.
Offers of Incentive Securities may be made to any employee of the Group
(including a Director employed in an executive capacity) or any other person
who is declared by the Board to be eligible to receive a grant of incentive
Securities under the EIP.
Amount payable
& Entitlement
No amount is payable upon the exercise of a Performance Right that has
vested, with each Performance Right entitling the holder to one fully paid
Ordinary Share on exercise.
Service condition
on vesting
Individual must be employed by the Group at time of vesting and not be
in their notice period.
Annual Report 2022
91
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 5: EMPLOYEE REWARD AND RECOGNITION (continued)
5.2 Incentive Plans (continued)
Long term incentives – Equity Incentive Plan (continued)
Restrictions on dealing
Shares allocated upon exercise of Performance Rights will rank equally with
all existing Ordinary Shares from the date of issue (subject only to the
requirements of Kogan’s Securities Trading Policy).
Upon vesting, there will be no disposal restrictions placed on the Shares issued
to participants (subject only to the requirements of Kogan.com’s Securities
Trading Policy).
Lapse of Rights
A Right will lapse upon the earliest to occur of:
• expiry date;
•
failure to meet vesting conditions;
• employment termination;
• the participant electing to surrender the Right;
• where, in the opinion of the Board, a participant deals with a Right
in contravention of any dealing restrictions under the EIP.
Executive Retention Options awarded at the 2020 AGM issued under the Groups EIP
The following table outlines the significant aspects of the Executive EIP.
The number and class
of securities issued
to the Directors
Details of the Retention
Options
3,600,000 options granted to Mr Kogan and 2,400,000 granted to Mr Shafer
under the EIP.
The Board (excluding Mr Kogan and Mr Shafer) decided to grant the Retention
Options to Mr Kogan and Mr Shafer because the Board believed it was in the
best interests of the Company and Shareholders to incentivise Mr Kogan and
Mr Shafer to remain in their positions for the next 3 years given their proven
track records, in order to maximise the prospect of Mr Kogan and Mr Shafer
contributing to the creation of significant future returns for Shareholders.
The Retention Options are being accounted for in the same way the Company’s
current equity‑settled awards are treated (refer above), with their accounting
value determined at their date of grant (within 10 Business Days of the Meeting).
Equity‑settled awards are measured at fair value at the date of grant. The cost
of these transactions is recognised in the Company’s Consolidated Statement
of Comprehensive Income and credited to equity on a straight‑line basis over
the vesting period after allowing for an estimate of shares that will eventually
vest. The level of vesting is reviewed annually and the charge adjusted to reflect
actual and estimated levels of vesting.
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Details of the Retention
Options (continued)
The Company obtained an independent valuation of the Retention Options
from SLM Corporate dated 7 May 2020 to provide advice in relation to whether
the proposed grant of the Retention Options were reasonable in the
circumstances and by reference to industry standards. The valuation applied
a number of assumptions and variables, including the following:
• the closing price of the Company’s Shares on ASX on 30 April 2020
(a reference date under the report), being $7.99 per Share;
• a risk‑free rate of 0.33%;
• a volatility factor of 62.5%;
• dividend yield of 1.96%; and
• a time to maturity of the underlying Options of 4 years.
The estimated value of each Retention Option pursuant to the valuation was
$4.13 as at the reference date of the report of 7 May 2020. On this basis, the
estimated value as at the reference date of the report of 7 May 2020 of:
• the Retention Options to be granted to Mr Kogan under Item 5.1 was
$14,872,133; and
• the Retention Options to be granted to Mr Shafer under Item 5.2 was
$9,914,756.
The report from SLM Corporate dated 7 May 2020 reflects the value of the
Retention Options on or about the date that the Company agreed to grant the
Retention Options to Mr Kogan and Mr Shafer. For completeness, given the
time that has elapsed between the AGM (at which the Retention Options were
approved by Shareholders) and both the date of the independent valuation
of the Retention Options from SLM Corporate and the date that the Company
agreed to grant the Retention Options, the Company obtained an updated
independent valuation of the Retention Options from SLM Corporate dated
8 December 2020. This valuation applied the same assumptions and variables
as noted above, except that:
• the closing price of the Company’s Shares on ASX on 30 November 2020
(date of issue of the Retention Options as per the updated independent
valuation), being $16.40 per Share;
• a risk‑free rate of 0.25%;
• a volatility factor of 62.5%; and
• dividend yield of 1.28%.
The value of each Retention Option pursuant to the valuation was $11.48 as at
the issue date of the updated independent valuation of 8 December 2020. On
this basis, the value as at the issue date of the updated independent valuation
of 8 December 2020 of:
• the Retention Options granted to Mr Kogan was $41,325,935; and
• the Retention Options granted to Mr Shafer was $27,550,623.
The increase in the value of the Retention Options reflects the increase in
the Company’s share price since the Company announced the terms of the
Retention Options to the ASX on 12 May 2020 and the grant of the Retention
Options following the Company’s AGM on 20 November 2020.
Strike price
$5.29
Share price at grant date
$16.40
Annual Report 2022
93
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 5: EMPLOYEE REWARD AND RECOGNITION (continued)
5.2 Incentive Plans (continued)
Recognition and measurement
a. Equity-settled transactions
The charge related to equity‑settled transactions with team members is measured by reference to the fair
value of the equity instruments at the date they are granted, using an appropriate valuation model selected
according to the terms and conditions of the grant. The fair value is determined using a discounted cash flow
valuation model. Judgement is applied in determining the most appropriate valuation model and in
determining the inputs to the model. Third‑party experts are engaged to advise in this area where necessary.
Judgements are also applied in relation to estimations of the number of rights which are expected to vest,
by reference to historic leaver rates and expected outcomes under relevant performance conditions.
The Group issues equity‑settled share‑based payments to certain team members, whereby team members
render services in exchange for Shares or Rights over Shares of the Parent Company.
Equity‑settled awards are measured at fair value at the date of grant. The cost of these transactions is
recognised in the Consolidated Income Statement and Consolidated Statement of Comprehensive Income
and credited to equity on a straight‑line basis over the vesting period after allowing for an estimate of shares
that will eventually vest. The level of vesting is reviewed annually and the charge adjusted to reflect actual
and estimated levels of vesting.
Where an equity‑settled share‑based payment scheme is modified during the vesting period, an additional
charge is recognised over the remainder of that vesting period to the extent that the fair value of the revised
scheme at the modification date exceeds the fair value of the original scheme at the modification date. Where
the fair value of the revised scheme does not exceed the fair value of the original scheme, the Group continues
to recognise the charge required under the conditions of the original scheme. Individuals must be employed
by the Group at the time of vesting, and not in their notice period, to be entitled to the equity incentives.
b. Cash-settled transactions
The amount payable to team members in respect of cash‑settled share‑based payments is recognised as
an expense, with a corresponding increase in liabilities, over the period which the team members become
unconditionally entitled to the payment. The liability is measured at each reporting date and at settlement
date based on the fair value, with any changes in the liability being recognised in profit or loss.
c. Expense recognised in profit or loss
During the period the Group recognised a share‑based payment expense of $26.6 million (2021: $15.6 million)
which relates to Performance Rights and Options granted during the year or in previous years.
The Group has recognised no expense in relation to cash based short term incentives in 2022 (2021: nil).
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Incentive Plans inputs
Long-term incentives – Equity
The following inputs were used in the measurement of the fair values of Performance Rights issued, at grant date:
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
29 July 2016 29 September 2016 20 December 2016 20 December 2016
495,140
$583,727
$1.49
$0.00
178,573
$237,500
$1.52
$0.00
1,451,856
$1,516,224
$1.34
$0.00
1 to 5 years
1 to 5 years
3 & 4 years
30 Jun 2017
30 Jun 2017
31 Dec 2019
30 Jun 2018
30 Jun 2018
31 Dec 2020
30 Jun 2019
30 Jun 2019
30 Jun 2020
30 Jun 2020
30 Jun 2021
30 Jun 2021
37,037
$42,029
$1.34
$0.00
1 to 5 years
31 Dec 2017
31 Dec 2018
31 Dec 2019
31 Dec 2020
31 Dec 2021
Dividend yield
5.2%
5.1%
5.7%
5.7%
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
29 June 2017
29 June 2017
29 June 2017
29 June 2017
436,365
$617,699
$1.70
$0.00
12,121
$17,667
$1.70
$0.00
18,182
$27,295
$1.70
$0.00
212,121
$290,244
$1.70
$0.00
1 to 5 years
1 to 4 years
1 to 3 years
3 & 4 years
30 Jun 2018
30 Jun 2018
30 Jun 2018
30 Jun 2020
30 Jun 2019
30 Jun 2019
30 Jun 2019
30 Jun 2021
30 Jun 2020
30 Jun 2020
30 Jun 2020
30 Jun 2021
30 Jun 2021
30 Jun 2022
Dividend yield
6.3%
6.3%
6.3%
6.3%
Annual Report 2022
95
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 5: EMPLOYEE REWARD AND RECOGNITION (continued)
5.2 Incentive Plans (continued)
Incentive Plans inputs (continued)
Long-term incentives – Equity (continued)
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
22 December 2017 22 December 2017
6 April 2018
28 June 2018
LONG‑TERM INCENTIVE PLANS
55,633
$324,011
$6.20
$0.00
30,810
$182,256
$6.20
$0.00
18,013
$151,273
$8.60
$0.00
21,708
$140,203
$6.76
$0.00
1 to 4 years
1 to 5 years
1 to 5 years
1 to 4 years
31 Dec 2018
30 Jun 2018
31 Dec 2018
30 Jun 2019
31 Dec 2019
30 Jun 2019
31 Dec 2019
30 Jun 2020
31 Dec 2020
30 Jun 2020
31 Dec 2020
30 Jun 2021
31 Dec 2021
30 Jun 2021
31 Dec 2021
30 Jun 2022
30 Jun 2022
31 Dec 2022
Dividend yield
2.1%
2.1%
1.4%
1.8%
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
27 February 2019 27 February 2019
20 August 2019
20 August 2019
LONG‑TERM INCENTIVE PLANS
10,491
$42,908
$4.09
$0.00
15,152
$23,837
$4.09
$0.00
30,711
$173,210
$5.64
$0.00
36,550
$206,141
$5.64
$0.00
1 to 3 years
1 to 2 years
1 to 4 years
1 to 4 years
31 Dec 2019
30 Jun 2020
31 Dec 2019
30 Jun 2020
31 Dec 2020
30 Jun 2021
31 Dec 2020
30 Jun 2021
31 Dec 2021
31 Dec 2021
30 Jun 2022
31 Dec 2022
30 Jun 2023
Dividend yield
2.0%
2.0%
1.3%
1.3%
96
kogan.com
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
18 February 2020 18 February 2020
17 August 2020
17 August 2020
LONG‑TERM INCENTIVE PLANS
9,766
$50,000
$5.12
$0.00
1 year
3,906
$20,000
$4.98
$0.00
21,767
$369,979
$17.00
$0.00
11,831
$174,744
$14.77
$0.00
1 to 2 years
1 to 4 years
1 to 5 years
31 Dec 2020
30 Jun 2022
30 Jun 2021
31 Dec 2021
30 Jun 2023
30 Jun 2022
31 Dec 2022
30 Jun 2023
31 Dec 2023
30 Jun 2024
31 Dec 2024
31 Dec 2025
Dividend yield
4.2%
1.5%
1.4%
1.4%
LONG‑TERM INCENTIVE PLANS
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
17 August 2020
19 October 2020
19 October 2020
19 October 2020
9,077
$154,309
$17.00
$0.00
1 year
1,536
$30,000
$19.53
$0.00
1 to 2 years
512
$10,000
$19.53
$0.00
1 year
134
$1,973
$14.77
$0.00
1 to 3 years
31 Dec 2021
30 Jun 2021
31 Dec 2020
31 Dec 2021
30 Jun 2022
31 Dec 2022
31 Dec 2023
Dividend yield
1.4%
0.6%
0.6%
0.6%
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
1 December 2020 3 December 2020
25 January 2021
25 January 2021
LONG‑TERM INCENTIVE PLANS
6,000,000
$68,876,559
$16.40
$5.29
3 years
61,632
$571,945
$19.00
$16.38
3 years
6,125
$118,825
$19.40
$0.00
167,607
$3,251,576
$19.40
$0.00
1 to 3 years
1 to 4 years
30 Jun 2023
1 Apr 2023
31 Dec 2021
31 Dec 2021
Dividend yield
1.4%
1.7%
0.9%
0.9%
31 Dec 2022
31 Dec 2022
31 Dec 2023
31 Dec 2023
31 Dec 2024
Annual Report 2022
97
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 5: EMPLOYEE REWARD AND RECOGNITION (continued)
5.2 Incentive Plans (continued)
Incentive Plans inputs (continued)
Long-term incentives – Equity (continued)
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
16 April 2021
16 April 2021
30 June 2021
30 June 2021
11,279
$180,013
$15.95
$0.00
8,773
$140,017
$15.95
$0.00
1,806
149,869
$20,000
$1,652,050
$11.07
$0.00
$11.07
$0.00
1 to 3 years
1 to 3 years
1 to 2 years
1 to 3 years
31 Dec 2021
30 Jun 2022
31 Dec 2022
30 Jun 2022
31 Dec 2022
30 Jun 2023
31 Dec 2023
30 Jun 2023
31 Dec 2023
30 Jun 2024
30 Jun 2024
Dividend yield
1.2%
1.2%
0.0%
0.0%
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
25 August 2021
25 August 2021
25 August 2021
25 August 2021
7,208
$81,500
$11.30
$0.00
11,766
$200,022
$17.00
$0.00
1,546
$29,992
$19.40
$0.00
1 to 2 years
1 to 2 years
1 to 2 years
8,233
$91,139
$11.07
$0.00
3 years
31 Dec 2022
30 Jun 2023
30 Jun 2023
30 Jun 2024
31 Dec 2023
30 Jun 2024
30 Jun 2024
Dividend yield
0.0%
0.0%
0.0%
0.0%
LONG‑TERM INCENTIVE PLANS
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
25 August 2021
7 October 2021
7 October 2021
7 October 2021
38,780
$438,214
$11.30
$0.00
6,193
$69,981
$11.30
$0.00
5,736
$64,071
$11.17
$0.00
1 to 4 years
1 to 4 years
1 to 3 years
430,000
$4,248,400
$9.88
$9.88
3 years
30 Jun 2022
30 Jun 2022
30 Jun 2022
25 Feb 2024
30 Jun 2023
30 Jun 2023
30 Jun 2023
30 Jun 2024
30 Jun 2024
30 Jun 2024
30 Jun 2025
30 Jun 2025
Dividend yield
0.0%
0.0%
0.0%
0.0%
98
kogan.com
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
31 December 2021 31 December 2021
6 April 2022
6 April 2022
LONG‑TERM INCENTIVE PLANS
32,048
$299,969
$9.36
$0.00
6,411
$60,007
$9.36
$0.00
8,763
$55,032
$6.28
$0.00
3,982
$25,007
$6.28
$0.00
1 to 2 years
1 to 2 years
less than 1 year
less than 1 year
31 Dec 2022
30 Jun 2023
31 Dec 2022
30 Jun 2022
31 Dec 2023
30 Jun 2024
Dividend yield
0.0%
0.0%
0.0%
0.0%
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
6 April 2022
6 April 2022
30 June 2022
30 June 2022
33,997
$213,501
$6.28
$0.00
345,464
$1,951,872
$5.65
$0.00
10,583
$40,004
$3.78
$0.00
39,684
$150,006
$3.78
$0.00
1 to 2 years
2 to 3 years
less than 1 year
1 to 2 years
30 Jun 2023
30 Jun 2024
31 Dec 2022
30 Jun 2023
30 Jun 2024
30 Jun 2025
30 Jun 2024
Dividend yield
0.0%
0.0%
0.0%
0.0%
LONG‑TERM INCENTIVE PLANS
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
30 June 2022
30 June 2022
30 June 2022
30 June 2022
10,204
$30,000
$2.94
$0.00
1 year
5,291
$20,000
$3.78
$0.00
1 year
112,360
$400,002
$3.56
$0.00
60,000
$226,800
$3.78
$3.78
2 to 4 years
2 to 5 years
30 Jun 2023
30 Jun 2023
30 Jun 2024
27 Feb 2024
Dividend yield
0.0%
0.0%
0.0%
0.0%
30 Jun 2025
27 Feb 2025
30 Jun 2026
27 Feb 2026
27 Feb 2027
Annual Report 2022
99
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
SECTION 5: EMPLOYEE REWARD AND RECOGNITION (continued)
5.2 Incentive Plans (continued)
Reconciliation of outstanding Performance Rights
The following table details the total movement in Performance Rights issued by the Group during the year:
LONG‑TERM
INCENTIVE PLANS
Performance Rights
No.
2022
No.
2021
789,348
1,514,138
700,182
390,316
364,477
(1,025,894)
(161,722)
(89,212)
–
–
963,331
789,348
116,495
326,646
Outstanding at beginning of period
Granted during the period
Exercised during the period
Forfeited during the period
Expired during the period
Outstanding at the end of the period
Exercisable at the end of the period
SECTION 6: OTHER
6.1 Subsequent Events
Subsequent to the financial year end, there were no events which would require adjustment or disclosure to
the financial statements.
6.2 Remuneration of Auditors
Remuneration of the auditors for:
Auditing or reviewing the financial statements
Due diligence
Tax advisory and compliance
CONSOLIDATED GROUP
2022
$
2021
$
413,330
429,458
–
235,000
5,121
17,830
418,450
682,288
100
kogan.com
6.3 Contingent Liabilities
As at 30 June 2022 the Group had bank guarantees of A$1.2 million (30 June 2021: A$1.2 million)
and NZ$8.6 million (30 June 2021: NZ$8.6 million) with Westpac Banking Corporation in relation
to its ordinary course of business.
6.4 Company Information
The registered office of the Company is:
Kogan.com Ltd
Level 7
330 Collins Street
Melbourne VIC 3000
The principal place of business is:
Kogan.com Ltd
139 Gladstone Street
South Melbourne VIC 3205
Annual Report 2022
101
DIRECTORS' DECLARATION
1
In the opinion of the Directors of Kogan.com Ltd (‘the Company’):
(a) the consolidated financial statements and notes that are set out on pages 53 to 101 and the
Remuneration report on pages 32 to 47 in the Directors’ report, are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
performance and its cash flows, for the financial year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
2 There are reasonable grounds to believe that the Company and the group entities identified in Note 4.1
will be able to meet any obligations or liabilities to which they are or may become subject to by virtue
of the Deed of Cross Guarantee between the Company and those group entities pursuant to ASIC
Corporations (Wholly‑owned Companies) Instrument 2016/785.
3 The Directors draw attention to the Basis of Preparation note to the consolidated financial statements,
which includes a statement of compliance with International Financial Reporting Standards.
4 This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ending 30 June 2022.
Signed in accordance with a resolution of the Directors:
David Shafer
Executive Director
Melbourne, 29 September 2022
102
kogan.com
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
To the shareholders of Kogan.com Ltd
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Kogan.com Ltd (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
• giving a true and fair view of the
Group’s financial position as at 30
June 2022 and of its financial
performance for the year ended on
that date; and
The Financial Report comprises:
• Consolidated statement of financial position as at 30
June 2022
• Consolidated income statement and consolidated
statement of other comprehensive income,
Consolidated statement of changes in equity, and
Consolidated statement of cash flows for the year
then ended
• Notes including a summary of significant accounting
•
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
policies
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 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 fulfilled our other ethical responsibilities in
accordance with these requirements.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private
English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG
global organisation. Liability limited by a scheme approved under Professional Standards Legislation.
Annual Report 2022
103
INDEPENDENT AUDITOR’S REPORT CONTINUED
Key Audit Matters
The Key Audit Matters we identified are:
• Revenue recognition from sale of
goods
• Valuation of inventory
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
Revenue recognition from sale of goods (AUD $652m)
Refer to Note 1.1 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Revenue recognition from sale of goods is a
key audit matter due to the:
-
-
-
relative size of sale of goods revenue
(being 91% of total revenue) within the
Group’s consolidated income
statement;
significant audit effort to test the high
volume of sale of goods transactions
recorded as revenue by the Group;
the Group has specific processes and
controls they perform at year end to
check revenue is recognised in the
right period. This increases the risk of
bias and our audit effort to perform
specific testing of revenue transactions
in the last week of the reporting period.
Our procedures included:
•
•
•
•
evaluating the appropriateness of the
Group’s revenue recognition policies
against the requirements of the
accounting standard.
testing key controls related to the sale of
goods, including management review of
the exceptions to 3-way-match exception
report.
for a sample of sale of goods revenue
recognised by the Group throughout the
year, we checked the amount of revenue
recorded by the Group to the amount of
the customer sales invoice and cash
receipts obtained from the Group’s bank
statements. We checked the date
revenue was recognized by the Group to
the underlying shipping documentation
and against the terms of sale of goods.
selecting a sample of revenue
transactions before and after the year end
due to the increased risk of potential bias.
For each sample selected we:
o
checked the amount of revenue
recorded by the Group to the
amount of the sales invoice to
the customer and cash receipts
from the Group’s bank
statements; and
104
kogan.com
o
checked the date the revenue
was recognised to shipping
documents.
•
assessing the disclosures in the Group’s
financial report using our understanding
obtained from our testing and against the
requirements of the accounting standards.
Valuation of inventory-on-hand (AUD $138m)
Refer to Basis of preparation Note b and Note 2.1.1 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Valuation of inventory is a key audit matter due
to the:
• Relative size of inventories (being 44% of
total assets) within the Group’s
consolidated statement of financial position.
•
Judgement applied by us to assess the
Group’s provisioning of slow moving and
obsolete inventory and consideration of
market and consumer factors impacting the
Group’s ability to sell certain inventory
items at profitable margins, such as
seasonality of demand and changing
consumer preferences.
Our procedures included:
• evaluating the appropriateness of the Group’s
inventory valuation policies against the
requirements of the accounting standards.
•
•
•
•
•
attending a sample of inventory counts across
the Group’s warehouse locations, to observe
the condition of a sample of products held.
analysing the level of inventory by ageing
categories for each product type per the
inventory ageing report, including movements
in ageing categories compared to prior periods,
in order to highlight products or categories at
higher risk of impairment.
checking the integrity of the Group’s inventory
ageing report at 30 June 2022, as a key input
used in the slow moving and obsolete
inventory provisioning, by comparing on a
sample basis the inventory age and inventory
cost per the ageing report to purchase
invoices.
comparing product unit cost to most recent
sales price information (as proxy for net
realizable value) for a sample of products
recorded by the Group at year-end in order to
identify inventory at risk of selling below cost.
challenging the Group’s judgements within
their obsolete inventory provisioning,
particularly the extent to which aged and
seasonal inventory can be sold, taking into
Annual Report 2022
105
INDEPENDENT AUDITOR’S REPORT CONTINUED
account our knowledge of the industry,
seasonality of demand, consumer preferences
and past Group performance.
assessing the historical accuracy of the
Group’s inventory provisioning against actual
outcomes, to inform our evaluation of the
current year provisioning and key judgements.
assessing the disclosures in the Group’s
financial report using our understanding
obtained from our testing against the
requirements of accounting standards.
•
•
Other Information
Other Information is financial and non-financial information in Kogan.com Ltd’s annual reporting which
is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible
for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or 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. In doing so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error
assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
106
kogan.com
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
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 Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They 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 the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report
of Kogan.com Ltd for the year ended 30
June 2022, complies with Section 300A of
the Corporations Act 2001.
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 responsibilities
We have audited the Remuneration Report included in
pages 32 and 47 of the Directors’ report for the year
ended 30 June 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Simon Dubois
Partner
Melbourne
29 September 2022
Annual Report 2022
107
SHAREHOLDER INFORMATION
The Shareholder information set out below was applicable as at 14 September 2022.
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report, is listed below.
A. NUMBER OF HOLDERS OF EQUITY SECURITIES
Ordinary Share Capital
107,044,098 fully paid ordinary shares are held by 44,718 individual shareholders.
All issued ordinary shares carry one vote per share and the rights to dividends.
Performance Rights
864,260 performance rights are held by 85 individuals.
All performance rights are unvested and do not carry a right to vote.
B. DISTRIBUTION OF EQUITY SECURITY
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Holdings less than a marketable parcel
Fully paid
ordinary
shares
Performance
Rights
33,966
8,632
1,282
797
41
44,718
12,886
10
49
11
14
1
85
–
108
kogan.com
C. EQUITY SECURITY HOLDERS
Twenty largest quoted equity security holders
Name
KOGAN MANAGEMENT PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
SHAFER CORPORATION PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
SBL POSITIONS
MR GORAN STEFKOVSKI
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
SUPERHERO SECURITIES LIMITED
BNP PARIBAS NOMS (NZ) LTD
BUTTONWOOD NOMINEES PTY LTD
MR JOHN STEVEN LUNDGREN
MATTHEW WONG INVESTMENTS (AUS) PTY LTD
DR BERYL LIN
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
ABICHANDANI & ASSOCIATES PTY LTD
SNOWY MOUNTAIN PTY LTD
Units
15,515,701
8,004,386
6,431,714
5,075,642
3,070,259
1,152,008
1,056,451
733,550
676,939
669,336
504,853
408,723
398,404
350,001
350,000
337,080
336,448
295,514
275,000
250,000
% units
14.49%
7.48%
6.01%
4.74%
2.87%
1.08%
0.99%
0.69%
0.63%
0.63%
0.47%
0.38%
0.37%
0.33%
0.33%
0.31%
0.31%
0.28%
0.26%
0.23%
Total
Total Remaining Holders Balance
45,892,009
61,152,089
42.87%
57.13%
D. SUBSTANTIAL SECURITY HOLDERS
The Company has received the following substantial holder notices from shareholders who hold relevant
interest in the Company’s Ordinary Shares as at 14 September 2022:
Disclosed Holder
JPMorgan Chase & Co. and its affiliates
Shafer Corporation Pty Ltd ATF the Shafer Family Trust
Number of
Shares held
at time of
notice
5,364,769
5,225,642
% of Issued
Capital
disclosed at
time of
notice
5.02%
4.88%
Annual Report 2022
109
SHAREHOLDER INFORMATION CONTINUED
E. VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
Ordinary Shares
Each Share is entitled to one vote when poll is called, otherwise each member present at a meeting
or by proxy has one vote on a show of hands.
Performance Rights
All Performance Rights are unvested and do not carry a right to vote.
F. STOCK EXCHANGE LISTING
Quotation has been granted for all of the Ordinary Shares of the Company on all Member Exchanges
of the ASX Limited.
G. UNQUOTED SECURITIES
864,260 performance rights held by 85 holders.
H. SECURITIES SUBJECT TO VOLUNTARY ESCROW
There are no securities subject to voluntary escrow.
I. ON MARKET BUY-BACK
There is currently no on market buy‑back.
110
kogan.com
CORPORATE DIRECTORY
COMPANY SECRETARY
Mark Licciardo, Acclime Australia
PRINCIPAL REGISTERED OFFICE
KOGAN.COM LTD
C/‑ Acclime Australia
7/330 Collins Street
Melbourne VIC 3000
+61 3 8689 9997
PRINCIPAL PLACE OF BUSINESS
KOGAN.COM LTD
139 Gladstone Street
South Melbourne VIC 3205
+61 3 6285 8572
LOCATION OF SHARE REGISTRY
COMPUTERSHARE
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
+61 3 9415 5000
STOCK EXCHANGE LISTING
Kogan.com Ltd (KGN) shares are listed on the ASX.
AUDITORS
KPMG
Tower Two, Collins Square
727 Collins Street
Dockland VIC 3008
Annual Report 2022
111
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112
kogan.com
www.colliercreative.com.au #KOG0015
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