A N N U A L R E P O R T
2 0 2 1
CONTENTS
ABOUT MYER
MYER IS ONE OF AUSTRALIA’S LARGEST DEPARTMENT STORE GROUPS,
PLACING CUSTOMERS FIRST IN EVERY DECISION WE MAKE AND EVERY
ACTION WE TAKE. WE PROVIDE FRIENDLY, HELPFUL SERVICE, HIGH
QUALITY AND EXCLUSIVE BRANDS, WITH COMPELLING VALUE.
Myer operates 59 department stores
MYER IN THE COMMUNITY
impact, make a lasting contribution,
across Australia, along with one of
Australia’s largest retail online sites
myer.com.au, and we are committed to
being Australia’s favourite department
store. Myer’s online business continues
to deliver strong growth, representing
20.3% of total sales during FY21.
Our merchandise offer includes core
product categories: Womenswear;
Menswear; Childrenswear; Beauty;
Homewares; Electrical Goods; Toys
and General Merchandise. The majority
of Myer’s operations are in Australia
and encompass Myer department
stores, sass & bide and Marcs and
David Lawrence, with a sourcing office
located in Hong Kong.
Myer has a long-standing history of
supporting local communities and
is proud to partner with more than
60 charities across Australia annually.
Myer’s founder Sidney Myer was a
well-known philanthropist, and it is in
his tradition that the Myer Community
Fund remains committed and focused
on charitable work.
The Myer Community Fund is the
national charity of the Myer Group; it is
a public ancillary fund and governed by
its own Board. The fund is committed
to raising funds through charitable
activities involving Myer team members,
customers, and suppliers. We believe
that by engaging with and contributing
to the communities in which we live
and work, we can have a positive social
and help achieve positive change.
In FY21, the Myer Community Fund
was proud to raise over $825,000
to support children and families in
Australia, including those experiencing
family violence or requiring emergency
financial relief. Funds were directed
to our national charity partner The
Salvation Army and local charity
partners nationally. In light of the
COVID-19 pandemic, an emergency
relief program was implemented to
provide grants to charities experiencing
increased service demands due to
the pandemic. Furthermore, the
Myer Community Fund supported
communities impacted by flood and
storm damage via Givit and paediatric
healthcare through The Royal Children’s
Hospital Foundation.
ANNUAL GENERAL MEETING
The twelfth Annual General Meeting of Myer Holdings Limited ABN 14 119 085 602
will be held virtually on Thursday 4 November 2021 at 11:00am (Melbourne time).
The AGM will be accessible to shareholders via a live webcast and an online platform.
Shareholders can participate in the AGM by watching the live webcast, logging into the
online platform to vote and ask questions, submitting written questions before the AGM
and verbal questions via telephone facility during the AGM.
The online platform can be accessed at:
The 2021 Myer Annual Report reflects the Company’s financial and sustainability performance for the period 26 July 2020 to 31 July 2021.
It covers our retail and store support operations in Australia. The Annual Report is prepared for all Myer stakeholders including shareholders,
analysts, customers, suppliers, team members, and the wider community. Content is based on ASX financial and governance reporting guidelines,
stakeholder feedback, and Myer’s business strategy. Further information is available from myer.com.au.
In the spirit of reconciliation, Myer acknowledges the Traditional Custodians of country throughout Australia and their connections to land, sea,
and community. We pay our respects to their Elders past and present and extend that respect to all Aboriginals and Torres Strait Islander people.
Acknowledgement of Country
1
Myer Annual Report 2021 CHAIRMAN AND
CEO’S REPORT
Dear Shareholder,
business under our Customer First Plan
• Net profit after tax(3) of $51.7 million,
being named Department Store of the
WE ARE CHRISTMAS READY
Myer’s Customer First Plan is gaining
momentum and delivering results,
since it was launched three years ago
up from a net loss after tax of
in September 2018.
$13.4 million in prior year.
improved operating gross profit margin,
We have remained focused on the
despite the current challenges
The improved fundamentals were
associated with the COVID-19
key to the growth in profitability in
pandemic.
Over the past year, we have been
focused on bringing our Customer
First Plan to life, to be a truly data-led
retailer, using the combined strength of
our store network and online capability,
FY21, despite the challenging macro
environment characterised by
widespread government mandated
store closures, travel restrictions and
reduced in-store traffic associated
with COVID-19.
as we responded to the dynamic
Your Company is in better shape. The
environment created by COVID-19.
FY21 result reflects organisational
Throughout the year, we have continued
to see Australians living through various
lockdowns across our nation, with large
parts of the population of the Country
having to navigate some form of stay-at-
home measure during this time.
As a result of this, we continued to meet
achievements including continued
rapid growth in the online business, an
sustained disciplined management
of costs and cash, the first time the
Company has delivered a second
half net profit after tax (NPAT)(3) since
2017, and the signing of a new National
the protective measures implemented
Distribution Centre to offer more
by the various levels of government
efficiencies for both stores and online.
closure of stores in various states and
• Total sales(1) up 5.5% to
territories, where we continued to offer
$2,658.3 million; representing
our customers our free contactless
solid growth despite Government
click-and-collect service as well as
mandated store closures and travel
the convenience of online shopping
restrictions, particularly in the first
via myer.com.au.
and fourth quarters.
FY21 RESULTS
The much improved FY21 results
• Continued strong growth in
Group online sales(2), up 27.7%
to $539.5 million, now 20.3%
reflect the momentum gained from
of total sales.
the successful transformation of the
• Net cash improved by $103.9 million
to $111.8 million.
• Solid 2H21 performance with
comparable store sales(4) up 8.4%,
EBIT(3) of $61.5 million and NPAT(3)
of $8.8 million, representing the first
profit achieved in the second half
since FY17.
THREE YEARS OF DELIVERY
THROUGH OUR CUSTOMER
FIRST PLAN
delivery of our Customer First Plan,
using the strength of our store network
as well as online, and responding to
the challenges and opportunities
associated with COVID-19.
We continue to deliver against our
Plan by providing leading service,
us in-store or online. It ensures we
are operating in the most productive,
efficient, and effective way across the
business, with a focus on profitable
sales, disciplined management of costs,
cash and inventory, and deleveraging
of the balance sheet - all of which
combine to underpin Myer’s delivery of
growth across all key metrics in FY21.
It is through the delivery of our Plan
that we have again recorded our
highest levels of customer satisfaction,
with a lens on protecting the health and
safety of customers, team members
and the broader communities where we
operate. This resulted in the temporary
Key highlights of the FY21 Results (post-
experiences and brands to our
AASB 16) for the 53 weeks to 31 July 2021
customers, whether they shop with
are outlined below:
(1)
Revenue from sale of goods excluding concession sales and sales revenue deferred under customer loyalty program was $2,116.5 million (FY20: $2,047.9 million)
(2) Group online sales includes sass & bide and Marcs and David Lawrence. Excludes sales via in-store iPads
(3) Excluding implementation costs and individually significant items
(4) In addition to the historical definition of comparable sales, stores closed during COVID-19 have been removed from both the current and previous year
to obtain comparable sales. Where a store was closed mid-week, the week in which the store closed has been removed. On reopening, the store has
been included from the first full week of trade
Year and rated the 7th most trusted
brand in Australia by Roy Morgan.
It is clear from our FY21 results that
our Customer First Plan is getting real
traction - it was the right plan when it
started three years ago, is the right plan
for us during COVID-19, and is the right
plan going forward.
BOARD
On 16 September 2021, Myer announced
that Mr Ari Mervis will join the Myer
Board. Mr Mervis’ executive career
included more than 25 years with
SABMiller PLC, including nearly ten
years as Managing Director of the Asia
Pacific region. He was responsible
for the acquisition and integration
of Carlton and United Breweries by
SABMiller as Chief Executive Officer,
whilst retaining responsibility for the
Asia-Pacific region.
Mr Mervis is currently a Non-Executive
Director and Chairman of McPherson’s
Ltd and brings global experience
spanning a range of industries in
branded goods and consumer staples
bringing a deep understanding of
consumer markets. With his executive
experience in driving sustainable
Myer is well stocked and well prepared
for Christmas. There will be a larger
than ever Giftorium offer this year,
including Giftorium being located
MYER CHAIRMAN,
JOANNE STEPHENSON,
ON HER APPOINTMENT
TO THE ROLE
within the iconic Mural Hall in Myer
“I look forward to continuing to work
Melbourne, with an improved online
closely with the Myer Board and
and in-store shopping experience.
executive team on the work underway
Myer Melbourne is set to again
showcase our Christmas Windows
for the 66th time.
THANK YOU
In closing, we take this opportunity to
thank you: our shareholders, our team,
our partners and suppliers and, above
all else, our customers for your ongoing
support and loyalty.
We have achieved a lot during the past
three years, but we know there is more
to be done, and we have the right plan
in place with more initiatives to come,
to continue delivering results.
We remain focused on the delivery
of our Customer First Plan, and on
the best possible upcoming peak
trade period for our customers. We
also remain absolutely focused, as an
independent Board, on protecting your
interests and driving shareholder value.
through the Customer First Plan. I
also assure shareholders, that as a
member of an independent Board,
I will continue to protect your interests
and drive shareholder value.”
MYER CEO, JOHN KING,
ON MYER’S CUSTOMER
FIRST PLAN
“Our Customer First Plan is the
right plan for the business, as
demonstrated by momentum evident
in our FY21 results. We have a range
of existing initiatives in place that
will ensure we continue to drive our
business forward.”
top-line growth, cost reduction and
Yours sincerely,
unlocking value through portfolio
optimisation, Mr Mervis is expected
to bring valuable insights to the Myer
Board and business. At the same time,
the Board announced that the Acting
Chairman’s role would be formalised
and would now be Chairman.
JoAnne Stephenson
Chairman
John King
CEO and Managing Director
2
3
Myer Annual Report 2021Myer Annual Report 2021 PERFORMANCE OVERVIEW
COVID-19 UPDATE
OUR RECENT RESULTS SHOW THE INVESTMENT IN OUR STORES
AND ONLINE BUSINESS IS PAYING OFF, WITH A STRONG BALANCE
SHEET AND A SIGNIFICANTLY IMPROVED FULL YEAR PROFIT RESULT,
DESPITE THE ONGOING COVID-19 IMPACTS IN FY21.
OUR TEAM HAS WORKED HARD TO ENSURE THE SAFEST
POSSIBLE SHOPPING ENVIRONMENT, AND HAVE PRIORITISED
THE HEALTH OF CUSTOMERS, TEAM MEMBERS AND THE
BROADER COMMUNITIES WHERE WE OPERATE.
This result is a testament to the hard
The business has remained focused
The sustained profitable growth in our
This year, we continued to prioritise
Throughout this time, Myer accelerated
for their agility in responding to the
work of our team, brand partners
on profitable sales, growing the online
online channel again demonstrated the
the health and wellbeing of customers,
its online business as well as our popular
challenges throughout the year as well
and suppliers, and we are starting to
business, disciplined management
benefit of our multi-channel approach
team members, their families and
contactless click-and-collect service.
as the volatile operating environment.
see the business thrive despite the
of costs, cash, and inventory, space
to market and now represents a
the broader communities in which
In order to make it easier for customers
extraordinary market conditions. Our
optimisation and the deleveraging
meaningful 20.3% of total sales.
we operate to assist in preventing the
during this time, Myer reduced the
significantly improved FY21 results,
of our balance sheet. The successful
There was significant growth achieved
spread of COVID-19. We have ensured
threshold for free delivery to $49 per
including growth in profitability for both
execution of these, and many more
during 1H FY21, in particular during the
our team have been fully informed,
order and relaxed its returns policy.
the first and second half, demonstrates
strategic initiatives, has delivered
Black Friday 4-day sale period in the
the Customer First Plan is getting
solid growth across all our key
lead-up to peak Christmas trade.
real traction.
metrics in FY21.
KEY FINANCIALS
$ Millions
Total Sales(1)
Operating Gross Profit (OGP)
Cost of Doing Business (CODB)(2)
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA)(2)
Earnings before Interest and Tax (EBIT)(2)
Net Profit / (Loss) after Tax(2)
Implementation costs and individually significant items (post-tax)
Statutory Net Profit / (Loss) after tax
Basic EPS (cents)(4)
Basic EPS (cents)(5) – adjusted
2021
2020
Change
2,658.3
2,519.4
1,055.7
958.2
(665.7)
(652.9)
390.0
170.5
51.7
(5.3)
46.4
5.7
6.3
305.3
78.5
(13.4)
(159.0)
(172.4)
(21.0)
(1.6)
5.5%
10.2%
2.0%
27.7%
117.0%
nm(3)
nm(3)
nm(3)
nm(3)
nm(3)
(1)
Revenue from sale of goods excluding concession sales and sales revenue deferred under customer loyalty program was $2,116.5 million
(FY20: $2,047.9 million)
(2) Excluding implementation costs and individually significant items
(3) Not meaningful
(4) Based on statutory NPAT
(5) Based on NPAT excluding implementation costs and individually significant items
providing regular information to
support a safe work environment.
We recognise that this was a challenging
and difficult period for our team
In support of government health
members, to whom we focused on
measures across the Country, Myer
providing support and assistance
temporarily closed many stores across
throughout the year. Team members
its network in New South Wales,
were offered free counselling, as well
Queensland, South Australia, Victoria,
as health and wellbeing resources
and Western Australia. This resulted in
and materials.
more than 2,000 trading days lost. More
information on this can be found in the
Directors’ Report.
We thank Myer team members as well as
our brand partners and suppliers,
HEALTH AND SAFETY
Myer is absolutely focused on providing a safe working and shopping environment for our team members and customers, with
enhanced safety and cleaning measures implemented across our stores, including:
Increased frequency of cleaning services
Change rooms open with distancing and hygiene
across all stores
measures in place
Protective items such as hand sanitiser stations,
face masks and gloves available to team members
The monitoring of customer numbers in store
Hand sanitiser available for our customers
Contactless payments
Sneeze guards at registers rolled out across
Informing our team members on social distancing
the stores
and hygiene measures
Social distancing measures of 1.5 metres between
customers and team members, with clear signage
across the stores
Prominent signage of QR codes across our stores
and POS
4
5
Myer Annual Report 2021Myer Annual Report 2021 OUR CUSTOMER FIRST PL AN
ALL MYER TEAM MEMBERS ARE CONTINUING TO DELIVER AGAINST
THE CUSTOMER FIRST PLAN – PROVIDING A LEADING OFFER, GREAT
VALUE, WITH THE BEST CUSTOMER SERVICE IN THE SAFEST POSSIBLE
ENVIRONMENT DURING COVID-19 - ENSURING WE REMAIN AUSTRALIA’S
FAVOURITE AND MOST TRUSTED DEPARTMENT STORE.
OUR VALUES
CUSTOMERS
COME FIRST
OWN OUR
FUTURE
DO WHAT’S
ONE INCLUSIVE
RIGHT
TEAM
OUR CUSTOMER FIRST PLAN – THREE YEARS OF DELIVERY
ACCELERATE ONLINE
ACCELERATE F2C
ADAPT IN-STORE
EXPERIENCE
REFOCUS MERCHANDISE
RATIONALISE PROPERTY
REDUCE OVERHEADS
ENGAGING THE CONSUMER
We have achieved much through the Customer First Plan over the past three years, but know there is more work to be done.
The Company adjusted the Customer First Plan initiatives as a result of COVID-19, by accelerating, re-sequencing
or expanding areas in response to the changing environment.
The key highlights and focus areas include:
Accelerate online: we continue to
enhance and improve myer.com.au,
Adapt in-store experience: we
continue to improve the customer
Rationalise property: we continue
to strategically review, optimise
as well as making improvements
experience with redevelopments
and reduce our overall store space
in the way we engage and reward
and relayering taking place across
with a view to driving greater
through MYER one, with online
sales(1) up 27.7% to $539.5 million,
now 20.3% of total sales.
the Country.
Refocus merchandise: we are
improving our range and key
Accelerate Factory to Customer:
we announced in July this year that
categories, with a more disciplined
approach to purchasing and
we have secured a lease on a new
inventory, focusing on core lines and
profitability. Our approach will seek
the appropriate balance between
physical stores and online capability
to better serve our customers.
Reduce overheads: we remain
focused on reducing costs and will
40,000 square metre facility in
supplier relationships – making the
continue to proactively reduce
Victoria, as our National Distribution
big brands bigger. We are focused on
space and seek productivity
Centre (NDC). This will ensure we are
adding brands our customers want,
improvements in our stores and
getting products to our customers in
and expanding ones that are the
at the Store Support Office.
the quickest and most efficient way.
most popular.
Engaging the consumer: we are
driving engagement and growth
through our MYER one loyalty base
by delivering improved rewards and
greater personalisation.
ACCELERATE ONLINE
Group online sales(1) continue to grow
making it one of Australia’s biggest
online retail businesses – now at
$539.5 million, which is up from
$208.6m in FY18 when we started
our Customer First Plan.
Throughout the year we have
continued to improve our checkout
and navigation, enhanced product
visibility and search functionality,
and redesigned our filters.
With the work done to improve
the user experience, we have seen
our Net Promoter Score online has
significantly improved since the start
of our Customer First Plan. This shows
this investment is resonating with our
customers.
Our focus for the business is to make
online even better and bigger, whilst
being more data driven in our approach
to engage with our customers. We have
a clear focus to expand and drive more
value in this space with a number of key
strategic investments.
ACCELERATING FACTORY
TO CUSTOMER
In July we announced that we have
secured a lease on a new 40,000 square
metre facility in Victoria, as our
National Distribution Centre (NDC) for
both stores and online fulfilment.
The NDC represents the next phase of
the supply chain ‘Factory to Customer’
initiative underpinning our Customer
First Plan, following the enhancements
to online operations that were
undertaken last year and changes to
international freight arrangements
earlier this year.
The new build, located at Dexus’s
‘Horizon 3023’ industrial estate in
Ravenhall, Victoria, will be a state-of-
the art facility holding over 100,000
SKU’s, with widespread customer
benefits and efficiencies anticipated
for both the stores and online business,
through the implementation of several
automation solutions.
The new NDC is expected to provide
centralised fulfilment for stores
The National Distribution Centre will provide widespread customer
benefits and efficiencies for both the stores and online business
ensuring stock is prioritised for stores
receiving a score of 83%. Myer was
with the highest sell through, which
again named Department Store of the
is anticipated to maximise sales and
Year by Roy Morgan, as well as being
reduce markdowns. For the online
rated as the 7th most trusted brand in
business, it is anticipated that up to
Australia in the Roy Morgan 2021 Risk
70% of fulfilment will be performed by
Report, up from 10th spot last year.
the NDC, ensuring improved levels of
service for our customers, operational
efficiencies and reduced cost per
order. Our stores will still be key for
click-and-collect options as well as
‘last mile’ deliveries in some areas.
Having a centralised fulfilment centre
for stores replaces our historical
push model, and will result in
improved inventory management,
reduced markdowns and maximised
sell-through whilst also producing
significant efficiencies in our online
fulfilment operations.
ADAPT IN-STORE
EXPERIENCE
We have continued with our focus on
improving customer service, store
layouts and the appearance of our
stores as well as our range and offer.
We have again recorded our highest
levels of customer satisfaction results
with our in-store team members
This result reflects the commitment
from all team members to exceptional
service, our value proposition,
improvements across the store network
with our brand offer, as well as making
the big brands bigger.
We have continued to ensure the safest
possible shopping environment, with
enhanced measures in place ensuring a
one-stop, safe shop for our customers.
With many stores being closed
throughout the past year, team
members have worked hard to
support online fulfilment as well as
our popular free contactless click-
and-collect service.
We are continuing to ensure team
members have the technology they
need to service our customers in an
even better way. As part of this, we
recently completed the first successful
trial of our replacement Point of Sale
system with further pilots to be rolled
out before Christmas.
(1) Group online sales includes sass & bide and Marcs and David Lawrence. Excludes sales via in-store iPads
(1) Group online sales includes sass & bide and Marcs and David Lawrence. Excludes sales via in-store iPads
6
7
Myer Annual Report 2021Myer Annual Report 2021 This is in addition to our leading
Our Karrinyup major refurbishment is
M-Comms communication app,
complete, as well as refurbishments
VOICE OF OUR
which provides real time digital
at our resized Cairns and Belconnen
CUSTOMERS
communications, product knowledge
stores. Highpoint and Morley stores
and performance recognition,
have been resized, relayered and
delivered direct to our team members.
refreshed. The stores look fantastic
The app displays customer feedback,
and the customer response has
and provides a wide range of learning
been positive.
moments including video content.
STORE IMPROVEMENTS
We are continuing to improve
the customer experience with
redevelopments and relayering taking
place at a number of stores across
the country, including at Melbourne
City, Werribee, Sydney City, Liverpool,
Blacktown, and Townsville.
We are also relayering and refreshing
our store at Chadstone, which will
be completed by November 2021,
and further improvement works are
planned or underway at our Albury
and Toowoomba stores. All of these
targeted works are aimed at giving our
customers the best possible in-store
experience when shopping with us.
We have again recorded our
highest levels of customer
satisfaction results with our
in-store team members
receiving a score of 83%.
This is what some of our
customers said:
Beth Winkel
Brisbane City, QLD
“Beth was warm, friendly, helpful
and informative. She took the
extra step as a staff member.
I have never been served by
anyone, in any shop, ever, who
was better than Beth. She made
my day. I want to go back to shop
at Myer just because of Beth!”
George Trentou
Doncaster, VIC
“George was fantastic. An asset
to Myer Doncaster. He had me
smiling and laughing the whole
time and he had great knowledge
of the product.”
Linh Nguyen
Morley, WA
“Linh had superb customer
service skills, along with
a beautifully friendly and
welcoming attitude. An absolute
asset to your business.”
Vinka Jovancevic
Belconnen, ACT
“I have been buying shoes from
Vinka for years. Her knowledge,
customer service and attention
is exemplary.”
ENGAGING THE CONSUMER
MYER one is a pivotal pillar of our
business in which we are seeing
significant momentum, delivering some
standout results, which has resulted
in our members receiving more value
from Myer in return for increased
engagement in the program.
There has been significant work
undertaken during FY21 to get
even closer to our customers – to
understand what they want to buy,
when they want to buy, and where they
want to buy it.
Our increased focus on driving
MYER one in-store, and process
improvements to online user and
account flows, has seen MYER one
engagement improve significantly in
FY21. MYER one sales improved to 69.7%
of total sales, up from 64.9% in FY20,
with MYER one online sales improving to
66.5% of total sales, up from 53.1% the
year prior.
New member acquisition has grown
by more than 116%, with over 450,000
new members joining the MYER one
program in the last year – this is more
than double the number of members
MYER NAMED
DEPARTMENT STORE
OF THE YEAR & 7TH
MOST TRUSTED BRAND
Myer was honoured to have
been announced the Roy
Morgan Annual Customer
Satisfaction Awards Department
Store of the Year as well as
moving to 7th spot this year on
their Most Trusted Brands list.
ensure customers continue to choose
acquired in FY20.
REFOCUS MERCHANDISE
Menswear will add Barbour London
Myer has continued to reinvigorate the
brand and product portfolio, which
continues to be a top priority for Myer’s
merchants, ensuring we have the
brands and products our customers
are wanting and needing, particularly
during COVID-19.
Our inventory health position is
significantly improved – ensuring
newness for our customers. We have put
in place a more disciplined merchandise
cycle, and we are continuing with our
strategy of making the big brands bigger,
as well as cementing our strong, strategic
relationships with our key brand partners.
In September, we launched the
much anticipated ‘The Movement
at Myer’ in our flagship Melbourne
store, incorporating a whole floor
dedicated to Sport Fashion, Lifestyle
and Technology, which will be a unique
format in the Australian market. New
brand introductions for ‘The Movement
to its classic stable of brands, whilst
Emerge showcases the best of up and
coming local Australian brands, which
was launched at Myer Melbourne.
We are also accelerating the roll-out
and scale of existing key Women’s,
Men’s and Childrenswear brands,
for example Levis, Tommy Hilfiger,
Champion, and Polo Ralph Lauren.
These new additions are just a small
proportion of the breadth of exciting
innovations and launches that will
Myer as their favourite Australian
department store.
RATIONALISE PROPERTY
AND REDUCE OVERHEADS
Myer is continuing to reduce space
across the business, including with the
closure of our Knox store in August and
reduced space at our Highpoint and
Morley stores.
at Myer’ include Lacoste Sport,
In total, we have exited or announced
Superdry Sport, AFL Store, Rockwear,
to exit 83,000 square metres of space
L.I Virtual and many more.
Further new brand introductions
since FY18 and we have a further
70,000 square metres in the pipeline.
include Lauren Ralph Lauren, Temple
Reducing costs and ensuring we are
Luxe, and Gucci Beaute (which debuted
operating in the most efficient and
in Chadstone, Melbourne CBD, and
online). These brands will be much
effective way continues to be a focus
across the business. As part of this,
sought after additions to our portfolio.
in 2022 we will be moving to a more
Myer Home continues to expand
and take market share and we will
exclusively launch the much anticipated
US department store and shopping
channel icon, Martha Stewart.
appropriately sized store support office
at 1000 La Trobe Street in Docklands,
ensuring the best office environment
for our team members, whilst reducing
costs to the business.
8
9
Myer Annual Report 2021Myer Annual Report 2021 SUSTAINABILIT Y AT MYER
AT MYER, SUSTAINABILITY IS ABOUT RESPONSIBLE BUSINESS
GROWTH AND DEVELOPMENT THAT CONSIDERS AND ADDRESSES
THE ENVIRONMENTAL, ETHICAL, ECONOMIC AND SOCIAL IMPACTS
OF OUR BUSINESS OPERATIONS AND STRATEGIES.
Myer continues to be committed
SUSTAINABLE PACKAGING
80% of packaging with reference to
Sustainable Packaging Guidelines (SPG)
or equivalent.
Myer’s plastic bag initiative, which
focuses on phasing out single use
plastic shopping bags, has successfully
decreased plastic bag consumption in
stores, with the total number of units
ordered down 4.96 million on FY20.
Myer continues to reduce its waste
sent to landfill, while sustaining
effective re-use systems including
cardboard and paper, less clear flexible
plastics, apparel hangers, damaged
and unsold stock, timber pallets and
security tags. Myer also has a Reverse
Logistics process that recycles or
salvages products including hangers
accompanying products.
In FY21, Myer’s total waste and recycling
generation remains relatively stable
with a 63.6% recycling diversion rate.
to the development of our overall
Sustainability Strategy, taking into
account business activities and
their impacts, as well as stakeholder
concerns and interests.
The Sustainability Strategy has
three primary focus areas including,
Sustainable Packaging, Sustainable
Merchandise and Energy Management.
Accountability for the implementation
of this strategy is cross-departmental,
with many core business units working
together to embed sustainable
initiatives into business processes and
ensuring the values of our stakeholders
continue to be met.
The reduction of packaging and
unnecessary packaging is a key focus
of the Sustainability Strategy, with a
number of initiatives in place across
departments in the business to reduce
packaging waste, and to implement
recycled materials in packaging.
Myer remains committed to the
Australian Packaging Covenant (APC)
and Sustainable Packaging Guidelines,
submitting its 14th Annual Report
in March 2021. The APC is a national
co-regulatory initiative in place of
state-based regulatory arrangements
for sustainable packaging management,
optimising packaging practices,
ENERGY MANAGEMENT
reducing the environmental impact of
packaging in Australian communities
and increasing recycling diversion.
Notably in this year’s Action Plan, Myer
has committed to reviewing at least
Energy usage and associated
greenhouse gas emissions continues
to be a focus area with regard to our
impact on the environment.
This year Myer’s total energy use
for the year reduced by 6.7% to
469,447 gigajoules, resulting in
101,773 tonnes of carbon dioxide
equivalent greenhouse gas emissions,
which is a reduction of 6.9% from FY20.
The energy intensity of our business
decreased by 10.4% on the FY20 result.
Since the commencement of the
strategy in 2014, we have achieved 35%
reduction in total net company overall
energy use, 41% reduction in CO2
emissions and 18% reduction in our
energy intensity.
As our strategic plan continues to
develop, numerous projects focusing
on our energy usage have been
developed which will ensure Myer’s
continued track record of optimised
energy output and minimising
environmental impact.
SUSTAINABLE
MERCHANDISE
Increasing the offering of sustainably
made merchandise remains a key focus
of the Myer Sustainability Strategy. This
includes the ongoing development
of product made from recycled
components, sourced from farms with
a greater focus on the environment
or ethical farming practices and the
continued goal of increasing our
offering of Australian sourced and
made products.
The impacts of fibres are reviewed as
part of the design and development
process, with private label teams
focusing on utilising a number of
sustainable alternatives to traditional
fibers, including Certified European
Flax, organic cotton, recycled PET and
recycled nylon, as well as vegan leather
alternatives and Tencel.
Work continues to be done to explore
avenues to increase supply chain
transparency and further ensure
certification of sustainably sourced
fibres, including cotton and wool.
Myer uses third party certification
program, Oritain to examine the
chemical composition of fibres to trace
it back to the region in which it was
grown. Through this program, Myer
was able to trace wool back to the
farm to ensure it was 100% Australian
Made. This initiative was run by our
menswear department.
OUR TEAM
Myer team members are our most
important resource. We are committed
to offering our approximately
10,000 team members a supportive,
challenging and rewarding workplace
that enables them to contribute to
Myer’s success and reach their full
potential.
Myer aspires to create and maintain a
collaborative and inclusive workplace
to reflect the diversity of our customers
and our community. The business
focuses on three key inclusion
priorities: cultural diversity, LGBTQIA+
inclusion and female representation
at senior leadership levels.
The Group’s workforce composition
them informed on new measures
at 31 July 2021 was 80.5% female,
implemented in accordance with
with 54.87% of leadership roles and
Government guidelines and public
66.7% of our Non-Executive Directors
health orders.
being female. Myer monitors progress
in female representation through
measurable objectives in terms of
succession planning, parental leave
and leadership development metrics.
We have continued our commitment
to the health and wellbeing of all team
members. Over the last financial year,
our store teams achieved the lowest
ever injury rates. The LTIFR result of
Our commitment to developing the
5.2 is a 13% reduction on last year and
leadership and capability of our team
the TRIFR reduced by 20% to 15.3.
was also reflected with the continuation
We also focused on ensuring our team
of Certificate IV in Retail Management
are able to work safely, delivering
and Merchandiser in Training programs
key safety refresher training to over
98% of all team members in addition
to mandatory safety training for all
new team members. Our Employee
Assistance Program has continued to
provide counselling services for our
team to support them, with increased
services utilised during the continuing
challenges of the COVID-19 pandemic.
during the year.
Providing an environment that
protects the health and safety of
all team members, contractors and
customers has, as always, been an
overriding priority during the year,
particularly as we continue to manage
the impacts of the COVID-19 pandemic.
Myer implemented robust COVIDSafe
plans at all sites, along with a range
of hygiene and physical distancing
measures. Regular communication with
our team members has been critical,
providing clear advice and keeping
10
11
Myer Annual Report 2021Myer Annual Report 2021 ETHICAL SOURCING
recognise the rights of its workers, and
a challenge, with a primary focus on
Myer is committed to sourcing
responsibly and ensuring our sourcing
framework is sustainable and effective
in improving social and environmental
practices within our operations and
supply chain.
Myer acknowledges its responsibility
to respect global standards on human
rights, ethical business practices
and workplace safety, and work with
suppliers and business partners that
share our values of accountability and
ethical conduct. Myer continues to
work with its suppliers to ensure that
its Ethical Sourcing Policy is embedded
into its suppliers operations.
Our Ethical Sourcing Program
standardises our approach to ethical
business conduct and responsible
sourcing, and embraces internationally
recognised labour standards such as
the Ethical Trade Initiative (ETI). All
suppliers must adhere to our Ethical
Sourcing Policy and have management
systems covering all its factories,
which must include a requirement to
treat them with dignity and respect as
increasing traceability beyond the tier
understood by international community
one supply chain in progress.
standards. Suppliers must also ensure
that workers are provided a safe work
environment free from discrimination,
abuse and harassment, are protected
against forced or child labour, are
compensated fairly, and are allowed the
freedom of association and the right to
collectively bargain.
Myer directly sources products from
over 320 suppliers across 15 countries
for its private label brands. The major
locations we source from include
China, India, Bangladesh and Vietnam.
During the year we reviewed audits
from 275 suppliers (423 factories)
within our private label network. Our
In January 2021, Myer published
review identified no zero tolerance
its first Modern Slavery Statement
issues and 54 high risk issues, which
which outlined the actions taken to
primarily related to excessive overtime
identify, assess and mitigate the risk of
hours. Myer continues to support
modern slavery within our operations
factories and suppliers to address any
and supply chains. This Statement
non-conformances as our preference
addresses our cross-functional
is continued business and an ongoing
approach to address modern slavery
relationship with suppliers to ensure
risk, with accountability across many
labour and worker rights are met.
internal business units to embed ethical
Alternative sources of supply will only
sourcing initiatives into processes.
be sought where it is evident a supplier
During the year, Myer continued
to strengthen its ethical sourcing
program with a focus on improving and
implementing mitigation processes for
modern slavery risks identified. The
complexity of supply chains remain
is unwilling or unable to adequately
remediate concerns. Suppliers with
high risk issues have co-operated with
remediation actions.
SUSTAINABILITY PERFORMANCE AND TARGETS
Focus Area
Key Measure
Team
Diversity and Inclusion (% female senior managers)
Workplace safety (LTIFR)
Community
Direct community contribution (%EBIT)
Environment
Greenhouse gas emissions reduction (%)
FY19
FY20
FY21
Performance
Performance
Performance
FY22
Target
55
6
1.2
8.6
56.5
54.87
6.4
1.9
9.6
5.2
0.29
6.9
≥50
<5.3
>0.5
≥1.0
Energy intensity (kJ/m2.opening hour)
146.4
163.1
146.7
≤146.0
Recycling rate (%)
Business
New suppliers agreed to Ethical Sourcing Policy
Code of Conduct Training
64
100
63
100
63.6
100
≥60
100
(% of required team members trained)
83.8
88.8
87.9
≥80.0
Improved / met target
Did not reach target
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Your directors present their annual report on the consolidated entity consisting of Myer Holdings Limited ABN 14 119 085 602 (the
Company or Myer) and the entities it controlled (collectively referred to as the Group) at the end of, or during, the financial period
ended 31 July 2021.
1. DIRECTORS
The following persons were directors of the Company during the financial period and / or up to the date of this Directors’ Report:
Director
Position
JoAnne Stephenson
Independent Non-Executive Director
Acting Chairman from 29 October 2020 to 15 September 2021
Chairman from 16 September 2021
John King
Chief Executive Officer and Managing Director
Jacquie Naylor
Independent Non-Executive Director
Dave Whittle
Independent Non-Executive Director
Garry Hounsell
Independent Non-Executive Director
Deputy Chairman from 20 September 2017
Chairman from 24 November 2017 and from 4 June 2018
Executive Chairman from 14 February 2018 to 3 June 2018
Lyndsey Cattermole AM
Independent Non-Executive Director
Julie Ann Morrison
Independent Non-Executive Director
Date appointed
28 November 2016
4 June 2018
27 May 2019
30 November 2015
20 September 2017
15 October 2018
17 October 2017
Garry Hounsell retired from the Board with effect from 28 October 2020. Both Lyndsey Cattermole AM and Julie Ann Morrison retired
from the Board with effect on 29 October 2020. All directors other than Mr Hounsell, Ms Cattermole AM, and Ms Morrison served as
directors of the Company for the whole financial period and until the date of this Directors’ Report. Details of the qualifications,
experience, and special responsibilities of each current director are set out below.
JOANNE STEPHENSON
JOHN KING
JACQUIE NAYLOR
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Member of the Board since 28
November 2016
Acting Chairman from 29 October
2020 to 15 September 2021
Chairman from 16 September 2021
Member – Audit, Finance and Risk
Committee
Chairman – Nomination Committee
Member – Human Resources and
Remuneration Committee
JoAnne has extensive experience
spanning over 25 years across a range of
industries. JoAnne was previously a
senior client partner in the Advisory
division at KPMG and has key strengths
in finance, accounting, risk management
and governance. JoAnne holds a
Bachelor of Commerce and Bachelor of
Laws (Honours) from The University of
Queensland. She is also a member of
both the Australian Institute of Company
Directors and Chartered Accountants in
Australia and New Zealand. JoAnne
resides in Victoria.
OTHER CURRENT DIRECTORSHIPS
JoAnne is an Independent Non-Executive
Director of Challenger Limited and Japara
Healthcare Limited. She is also Chair of
the Victorian Major Transport
Infrastructure Board. JoAnne was
previously a director of Asaleo Care Ltd.
CHIEF EXECUTIVE OFFICER &
MANAGING DIRECTOR
Member of the Board since 4 June
2018
John was appointed CEO & Managing
Director on 4 June 2018. In this role, John
has overall accountability for Myer
strategy and performance. John brings to
the role more than 30 years’ retail
experience in merchandising and
management roles across a variety of
retail sectors, including department
stores, value retail and wholesale apparel.
John started his career at Sainsbury’s and
also worked for Marks & Spencer before
taking senior roles in the manufacturing
and wholesale sector in the UK and the
USA. John successfully led Matalan from
2003 to 2006, an apparel and housewares
retailer based in the UK. In this role, John
launched new brands, opened 20 new
stores and successfully sold the company
back to the founder. More recently, John
led the successful turnaround of House of
Fraser from 2006 to 2015. During his
tenure he improved the product
differentiation, decreased debt, improved
EBITDA and repositioned the business as
one of the leading premium department
stores in the UK. John resides in Victoria.
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Member of the Board since 27 May
2019
Member – Audit, Finance and Risk
Committee
Member – Nomination Committee
Chairman – Human Resources and
Remuneration Committee
Jacquie was appointed as a Non-
Executive Director on 27 May 2019.
Jacquie brings to the role a wealth of
experience and knowledge of both
women’s and men’s apparel, homewares
and outdoor brands. She has been an
owner, director and executive at some of
the most iconic Australian retailers.
Jacquie has held the position of Non-
Executive Director at The PAS Group and
in addition, Jacquie was a Non-Executive
Director of one of the world’s most trusted
outdoor brands, Macpac, which is sold in
more than thirty countries.
At the Just Jeans Group, Jacquie was a
Group Executive Director and responsible
for driving the merchandise, marketing
and brand strategies of five of their key
brands including Just Jeans, Jay Jays,
Portmans, Jacqui E and Dotti.
Jacquie brings to the Myer Board
considerable eCommerce experience
from her retail career and as a strategic
adviser at Practicology, a digital marketing
12
1
13
Myer Annual Report 2021Myer Annual Report 2021 DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
and eCommerce agency.
DAVE WHITTLE
Jacquie was a Non-Executive Director of
the Virgin Australia Melbourne Fashion
Festival for more than 12 years and
remains committed to showcasing the
fashion industry as well as new and
emerging talent. Jacquie is also a
member of the Australian Institute of
Company Directors and of the
International Women’s Forum. Jacquie
resides in Victoria.
OTHER CURRENT DIRECTORSHIPS
Jacquie is a Non-Executive Director of
Cambridge Clothing Ltd and Michael Hill
International Limited.
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Member of the Board since 30
November 2015
Chairman – Audit, Finance and Risk
Committee
Member – Nomination Committee
Member – Human Resources and
Remuneration Committee
Dave has considerable brand, data,
technology, omni-channel retail and digital
transformation experience. Over the last
six years Dave has led Lexer, a global
software company helping brands and
retailers genuinely understand and
engage their customers.
Previously, Dave spent 10 years with
global advertising group M&C Saatchi in a
number of local and international
leadership roles, culminating in three
years as Managing Director in Australia.
Prior to joining M&C Saatchi, Dave was
the first employee of a marketing services
group that built four digital service and
software businesses. Dave has a
Bachelor of Arts and a Bachelor of
Commerce from Deakin University. Dave
resides in New South Wales.
OTHER CURRENT DIRECTORSHIPS
Dave is a director of Lexer Pty Ltd.
2. DIRECTORSHIPS OF OTHER LISTED COMPANIES
The following table shows, for each director, all directorships of companies that were listed on the ASX, other than the Company, since
31 July 2018, and the period during which each directorship has been held.
Director
JoAnne Stephenson
John King
Jacquie Naylor
Dave Whittle
Listed entity
Challenger Limited
Asaleo Care Limited
Period directorship held
October 2012 – present
May 2014 – June 2021
Japara Healthcare Limited
September 2015 – present
-
-
Michael Hill International Limited
15 July 2020 – present
-
-
3. MEETINGS OF DIRECTORS AND BOARD COMMITTEES
The number of meetings of the Board and of each Board Committee held during the period ended 31 July 2021 are set out below. All
directors are invited to attend Board Committee meetings. Most Board Committee meetings are attended by all directors; however, only
attendance by directors who are members of the relevant Board Committee is shown in the table below.
Director
Meetings of
Directors
Audit, Finance and
Risk Committee
Human Resources
and Remuneration
Committee
Nomination
Committee
Meetings
Held*
Attended Meetings
Attended Meetings
Attended Meetings
Attended
Held*
Held*
Held*
JoAnne Stephenson
John King
Jacquie Naylor
Dave Whittle
Garry Hounsell(1)
Lyndsey Cattermole AM(2)
Julie Ann Morrison(3)
13
13
13
13
4
5
5
13
13
13
13
4
5
5
7
-
4
7
3
-
-
7
-
4
7
3
-
-
3
-
5
2
3
3
3
3
-
5
2
3
3
3
2
-
2
2
-
-
-
2
-
2
2
-
-
-
* Number of meetings held during the time the director held office or was a member of the Committee during the period.
(1)
(2)
(3)
Garry Hounsell retired from the Board with effect from 28 October 2020.
Lyndsey Cattermole AM retired from the Board with effect from 29 October 2020.
Julie Ann Morrison retired from the Board with effect from 29 October 2020.
4. DIRECTORS’ RELEVANT INTERESTS IN SHARES
The following table sets out the relevant interests that each director has in the Company’s ordinary shares or other securities as at the
date of this Directors’ Report. No director has a relevant interest in a related body corporate of the Company.
Director
JoAnne Stephenson
John King
Jacquie Naylor
Dave Whittle
Ordinary Shares
235,000
Rights
Nil
Performance
Rights
Performance
Options
Nil
Nil
1,150,000
2,432,432
3,442,622
14,631,014
121,000
266,666
Nil
Nil
Nil
Nil
Nil
Nil
5. COMPANY SECRETARY AND OTHER OFFICERS
Paul Morris was appointed as General Counsel and Company Secretary of the Company effective 3 February 2020. Prior to joining
Myer, Paul Morris was General Counsel and Company Secretary of Spotless Group.
Myer’s Chief Financial Officer is Nigel Chadwick. Details of Nigel Chadwick’s experience and background are set out in the Executive
Management Team section of Myer’s Investor Centre website.
6. PRINCIPAL ACTIVITIES
During the financial period, the principal activity of the Group was the operation of the Myer department store business.
7. OPERATING AND FINANCIAL REVIEW
The Directors’ Report includes references to Non-IFRS financial measures which represent the financial performance of the Group
excluding implementation costs and individually significant items, and the impact of the lease accounting standard AASB 16. Refer to
the Non-IFRS Financial Measures section below.
SUMMARY OF FINANCIAL RESULTS (POST-AASB 16) FOR 53 WEEKS ENDED 31 JULY 2021:
(1)
(2)
(3)
Total sales(1) up 5.5% to $2,658.3 million; despite widespread store closures.
Group online sales(2) of $539.5 million, up 27.7%, representing 20.3% of total sales.
Operating Gross Profit (OGP) improved by 10.2% to $1,055.7 million. OGP margin improved by 168 basis points to 39.7%.
Cost of Doing Business(3) as a percent to sales decreased by 87 basis points, and was $665.7 million, including JobKeeper wage
subsidy and rent waivers.
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA)(3) of $390.0 million.
Net profit after tax(3) was $51.7 million, compared to a net loss after tax(3) of $13.4 million in prior year.
Implementation costs and individually significant items (ISIs) of $5.3 million ($7.6 million pre-tax), including space exit costs and
asset impairments.
Statutory net profit after tax of $46.4 million.
Net cash position of $111.8 million, an improvement of $103.9 million compared to FY20, due to improvements to the
merchandise cycle, and a prudent approach to preserving cash with a focus on deleveraging, and disciplined cost control.
No final dividend will be paid.
Revenue from sale of goods excluding concession sales and sales revenue deferred under customer loyalty program was $2,116.5 million (FY20: $2,047.9 million)
Group online sales includes sass & bide and Marcs and David Lawrence. Excludes sales via in-store iPads
Excluding implementation costs and individually significant items
14
2
3
15
Myer Annual Report 2021Myer Annual Report 2021
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
INCOME STATEMENT (POST-AASB 16) FOR THE 53 WEEKS TO 31 JULY 2021
CASH FLOW FOR THE 53 WEEKS TO 31 JULY 2021
Total sales(1)
Operating gross profit
Cost of doing business(2)
EBITDA(2)
Depreciation(2)
EBIT(2)
Net finance costs
Tax(2)
Profit/(Loss) after tax(2)
Implementation costs and individually significant items (post-tax)
Statutory profit/(loss) after tax
2021
2020
(Statutory)
(Statutory)
$m
2,658.3
1,055.7
(665.7)
390.0
(219.5)
170.5
(96.1)
(22.7)
51.7
(5.3)
46.4
$m
2,519.4
958.2
(652.9)
305.3
(226.8)
78.5
(98.2)
6.3
(13.4)
(159.0)
(172.4)
Change
5.5%
10.2%
2.0%
27.7%
(3.2%)
117.0%
(2.1%)
nm(3)
nm(3)
nm(3)
nm(3)
(1)
(2)
(3)
Revenue from sale of goods excluding concession sales and sales revenue deferred under customer loyalty program was $2,116.5 million (FY20: $2,047.9 million)
Excluding implementation costs and individually significant items
Not meaningful
BALANCE SHEET (POST-AASB16) AS AT 31 JULY 2021
Inventory
Creditors
Other assets
Other liabilities
Right-of-use assets
Lease liabilities
Property
Fixed assets
Intangibles – Brands
Intangibles - Software
Total Funds Employed
Debt
Less Cash
Net (Debt) / Cash
Equity
July 2021
$m
305.2
(353.3)
137.3
(85.6)
1,224.1
(1,735.5)
21.7
296.8
240.2
64.2
115.1
(66.8)
178.6
111.8
226.9
July 2020(1)
$m
256.0
(354.2)
184.1
(62.5)
1,272.6
(1,794.7)
22.2
324.8
240.2
76.2
164.7
(78.6)
86.5
7.9
172.6
(1)
Comparative information has been restated due to a change in accounting policy. Refer to note I in the Financial Statements for more information
EBITDA(1)
Less Implementation costs and ISIs
Add Non-cash asset impairments
Working capital movement
Operating cash flow (before interest and tax)
Conversion
Tax refunded/(paid)
Net Interest paid
Interest – lease liabilities
Operating cash flow
Capex paid(2)
Free cash flow
Principle portion of lease liabilities paid
Other
Net cash flow
(1)
(2)
Excluding implementation costs and individually significant items
Net of landlord contributions
SHARES AND DIVIDENDS
2021
$m
390.0
(7.6)
1.8
(19.0)
365.2
95.1%
6.8
(7.5)
(87.2)
277.3
(31.9)
245.4
(140.3)
(0.4)
104.7
2020
$m
305.3
(221.4)
185.2
29.2
298.3
110.9%
(8.1)
(8.9)
(89.3)
192.0
(40.3)
151.7
(101.9)
(0.7)
49.1
Shares on issue
Basic earnings per share(1)
Basic earnings per share (pre implementation and individually significant items)(2)
Dividend per share
2021
2020
821.3 million
821.3 million
5.7 cents
6.3 cents
Nil
(21.0) cents
(1.6) cents
Nil
(1)
(2)
Calculated on weighted average number of shares of 818.9 million (FY20: 820.1 million) and based on NPAT
Calculated on weighted average number of shares of 818.9 million (FY20: 820.1 million) and based on NPAT pre implementation costs and individually significant items
NON-IFRS FINANCIAL MEASURES
The Company’s results are reported under International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board. The Company discloses certain non-IFRS measures in this Directors’ Report, which can be reconciled to
the Financial Statements as follows:
INCOME STATEMENT RECONCILIATION
$ millions
Statutory reported result
Add back: implementation costs and individually significant items
Space exit costs/(reversals) and other asset impairments/(reversals)
Result: post-AASB 16(1)
Impact of AASB 16
Result: pre-AASB 16(1)
(1)
Excluding implementation costs and individually significant items
EBIT
INTEREST
TAX
NPAT
162.9
(96.1)
(20.4)
46.4
7.6
170.5
(86.9)
83.6
-
(2.3)
(96.1)
(22.7)
85.5
0.5
(10.6)
(22.3)
5.3
51.7
(1.0)
50.7
16
4
5
17
Myer Annual Report 2021Myer Annual Report 2021
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
IMPACT OF COVID-19
The ongoing COVID-19 pandemic and associated Government actions has had a significant impact on the Company during FY21. The
Company’s response has been managed by its COVID-19 Operations Committee, Executive Management team, and Board, with the
primary focus being on the health and wellbeing of its customers, team members and the broader community in which it operates, and
in supporting government health measures.
As a result of COVID-19 outbreaks in the community and Government directions, the Company temporarily closed many stores across
its network in New South Wales, Queensland, South Australia, Victoria, and Western Australia. This was following closures in FY20,
where the Company temporarily closed all of its 60 stores nationally for approximately 6 weeks, as well as more localised state and
metropolitan temporary store closures. In FY21, the greatest impacted states were NSW and Victoria, where stores were temporarily
closed for significant periods of time. A breakdown of the temporary store closures is set out below.
Period of temporary closure
Days closed
Stores affected
State
New South Wales
Queensland
27 June 2021 – 31 July 2021
9 January 2021 – 11 January 2021
30 March 2021 – 1 April 2021
30 March 2021 – 1 April 2021
30 June 2021 – 2 July 2021
30 June 2021 – 3 July 2021
South Australia
19 November 2020 - 21 November 2020
Victoria
20 July 2021 – 27 July 2021
6 August 2020 – 27 October 2020
13 February 2021 – 17 February 2021
28 May 2021 – 3 June 2021
28 May 2021 – 10 June 2021
16 July 2021 – 27 July 2021
Western Australia
1 February 2021 – 5 February 2021
24 April 2021 – 26 April 2021
29 June 2021 – 2 July 2021
35 days
3 days
2.5 days
3 days
3 days
4 days
3 days
8 days
83 days
5 days
7 days
14 days
12 days
5 days
3 days
4 days
16 stores
6 stores
5 stores
1 store
4 stores
6 stores
3 stores
3 stores
11 stores
14 stores
3 stores
11 stores
14 stores
6 stores
6 stores
6 stores
During the 6 August 2020 to 27 October 2020 Victorian store closure period, Myer stood down a large portion of its permanent store
workforce for the entire lockdown period. This excluded store team members who were required to continue to support fulfilment for the
online business and contactless click-and-collect. During part of this store closure period, stood down permanent store team members
who were eligible were able to access the Federal Government JobKeeper Payment Scheme until 27 September 2020. From 28
September 2020 to 18 October 2020, Myer paid those team members a wage representing their ordinary hours of work at a base rate
of pay, with the remainder of the store closure period to 27 October 2020 being without pay (with team members being able to access
their leave entitlements).
For the remainder of the financial year and subsequent store closures (as listed above), Myer did not qualify for the Federal
Government JobKeeper Payment Scheme. For the 27 June to 31 July 2021 NSW store closure period, the Company continued to pay
its store team members who remained working in stores. The only exception was a portion of the NSW permanent store workforce
who were stood down for one week from 24 July to 31 July 2021, however, were eligible for the NSW Disaster Relief Payment during
that time. The Company otherwise continued to pay stood down permanent store team members a wage representing their ordinary
hours of work throughout the store closure periods in FY21, allowing team members to maintain an income and their ongoing role with
the Company.
The Company ceased to generate revenue or cash inflows from its physical stores during temporary closures, other than through click-
and-collect services. When stores reopened in line with the easing of Government restrictions, a combination of the ongoing uncertainty
generated by the COVID-19 pandemic, the lack of tourism, a large proportion of workers still working remotely, and reduced foot traffic
(primarily in CBD store locations), continued to impact sales in physical stores.
During FY21, we continued to invest in our online operation to deliver strong sales growth of 27.7% compared to FY20. Improvements
were made to the online customer experience, contributing to an increased conversion of 26 basis points and a record online Net
Promoter Score from our customers.
In response to the temporary cessation of trade in physical stores, deterioration in trading conditions, and other impacts of the COVID-
19 pandemic, the Company also took decisive actions to reduce operating expenses, defer non-essential services and manage
inventory levels. As a result of this prudent approach to preserving cash, disciplined cost control, an improved merchandise cycle,
support from the Federal Government, and despite the loss of revenue and earnings as a result of the store closures and reduced foot
traffic, the Company finished the period with a net cash position of $111.8 million, representing a $103.9 million improvement on the
prior year.
The Company continued to maintain the additional health and safety measures that were implemented in FY20 across the Company’s
stores, distribution centres and store support office (as appropriate) to protect team members, customers and visitors to these sites,
which included increased frequency and intensity of cleaning, contactless payment, social distancing practices at POS and change
rooms and protective screens at POS, adherence to COVIDSafe Plans, QR codes displayed at entrances and throughout stores, and
the majority of team members working remotely where possible.
FY21 OPERATIONS
In addition to the Company’s actions during the COVID-19 pandemic as noted above, the Company achieved the following during
FY21:
2H FY21 was profitable(2), first time since FY17.
Improved inventory stockturn to 3.87x, up from 3.13x in FY20, combined with a reduction in aged inventory of 40.2%.
Group online sales(1) of $539.5 million, representing 20.3% of total sales.
Delivered improvements to the Myer one program resulting in an increase in tag rate to 69.7% (FY20: 64.9%).
Opened 3PL fulfilment site in Melbourne fulfilling 2.2m customer orders at lower cost, and launched multi-carrier last mile delivery.
In July 2021, Myer secured a 10-year lease on a new 40,000 square metre state-of-the art National Distribution Centre in Victoria,
representing the next phase of the “Factory to Customer” strategy.
Record customer service satisfaction in store, and online Net Promoter Score.
Exited Knox store and completion of store relaunches post space handbacks at Belconnen, Cairns, and Morley. Store
refurbishment at Karrinyup was underway in FY21 and completed in August 2021.
Negotiated an extension of its syndicated finance facility to November 2022 to enable an orderly longer-term refinancing,
consistent with strategic objectives.
(1)
(2)
Group online sales includes sass & bide and Marcs and David Lawrence. Excludes sales via in-store iPads
Net Profit After Tax pre Implementation Costs and Individually Significant Items; pre-AASB16
Further to these matters, Section 9 provides an outline of the Company’s future developments and strategy. These should be read in
conjunction with Section 10, which describes factors that could impact the Company’s results.
8. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS IN FY21
In addition to the matters described in Section 7 above, the following significant changes occurred during FY21:
Gary Hounsell retired from the Board with effect from 28 October 2020.
Lyndsey Cattermole AM retired from the Board with effect from 29 October 2020.
Julie Ann Morrison retired from the Board with effect from 29 October 2020.
JoAnne Stephenson was appointed Acting Chairman of the Company, Chairman of the Nominations Committee, a member of the
Human Resources and Remuneration Committee, and stood down as Chairman of the Audit, Finance and Risk Committee.
Jacquie Naylor was appointed as Chairman of the Human Resources and Remuneration Committee and became a member of the
Audit, Finance and Risk Committee.
Dave Whittle was appointed Chairman of the Audit, Finance and Risk Committee and a member of the Human Resources and
Remuneration Committee.
There were no new Board or Executive appointments during the period.
9. BUSINESS STRATEGIES AND FUTURE DEVELOPMENTS
The Board and the Executive Management Group continue to focus on delivery against the Customer First Plan. The FY21 results
reflect the improving momentum driven by the successful transformation of the business achieved under the Customer First Plan – it is
the right strategy for the Company. The Customer First Plan further evolved during COVID-19 and focuses on the following areas:
Accelerate Online: focus on online growth in terms of both overall scale and as a percentage of total company sales. Investment in
customer experience has led to significant improvements in conversion and customer Net Promoter Scores.
Accelerate Factory to Customer (F2C) change: improvements to online fulfilment (3PL / multicarrier) arrangements delivered cost
and customer experience benefits in FY21, and the announcement of the development of a National Distribution Centre in FY22
(operational in FY23) will be transformational to Myer’s supply chain and customer experience.
Re-engage the Consumer: drive engagement and growth through our MYER one loyalty base by delivering improved rewards and
greater personalisation.
Adapting our in-store experience: our focus on delivering an uplifted in-store experience has contributed to record levels of in-
store customer satisfaction. Investments in store formats and the product offer, and the increasing use of technology in store, such
as M-metrics, will continue to deliver a compelling experience for our customers.
Refocus Merchandise: improving our range in key categories, with a more disciplined approach to purchasing and inventory,
focusing on core lines and supplier relationships, making the big brands bigger.
Rationalise Property: strategically review, optimise and reduce our overall store space with a view to driving greater profitability.
Our approach will seek the appropriate balance between physical stores and online capability to better serve our customers.
Reduce Costs: proactively realign our cost base to manage profitability and increase flexibility as the change to our markets and
channels accelerates.
18
6
7
19
Myer Annual Report 2021Myer Annual Report 2021
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
10. KEY RISKS AND UNCERTAINTIES
BRAND REPUTATION RISKS
The Group’s strategies take into account the expected operating and retail market conditions, together with general economic
conditions, which are inherently uncertain.
The Group has a structured proactive risk management framework and internal control systems in place to manage material risks. The
key risks and uncertainties that may have an effect on the Group’s ability to execute its business strategies, and the Group’s future
growth prospects and how the Group manages these risks, are set out below.
COVID-19
The future impact of the COVID-19 pandemic on the Company’s operations (including any requirement for further temporary store
closures), domestic and global economic conditions, and consumer behaviour remains uncertain, and may adversely affect the
Company’s financial position and performance. The Executive Management Group and the COVID-19 Operations Committee
(implemented in FY20) continue to monitor and assist the business to adapt to changes in ongoing risks and adhere to Government
requirements and health measures. In addition, the Company continues to remain agile to adapt to changing market conditions
(including adjusting its strategic initiatives in response to the changing market context), whilst maintaining its focus on the disciplined
management of costs and preservation of cash to ensure it is well placed to deal with any future impacts.
EXTERNAL RISKS
Macro-economic factors such as the fluctuation of the Australian dollar and interest rates; poor consumer confidence; changes in
government policies; external, natural or unforeseen events, such as an act of terrorism, national strike or pandemic; transition to a
lower carbon economy; physical impacts of climate change and weakness in the global economy could adversely impact the
Company’s ability to achieve financial and trading objectives. Myer regularly analyses and monitors economic and other available data
to allow the Company to develop action plans to mitigate the future impact on sales, and has implemented conservative hedging,
capital management, and marketing and merchandise initiatives to address the cyclical nature of the business.
COMPETITIVE LANDSCAPE RISKS
The Australian retail industry in which Myer operates remains highly competitive. The Company’s competitive position may be
negatively impacted by new entrants to the market, existing competitors, changes to consumer demographics and increased online
competition, which could impact sales. To mitigate these risks, Myer continues to select optimal merchandise assortment with the right
categories and brands.
SUPPLIER AND SUPPLY CHAIN RISKS
Myer monitors its supplier relationships and quality standards via a range of means, including implementation of its quality assurance
and compliance policies and rigorous procurement and contracting processes. Recent headwinds in the retail sector, exacerbated by
the impact of the COVID-19 pandemic, have created particular financial and other challenges for some of Myer’s suppliers, but these
risks are mitigated by the size and diversity of the supplier base and Myer’s ability to expand its product ranges and brands.
The disruption in the global shipping industry, contributed to by COVID-19, presents an ongoing risk to the timely flow of stock into
Myer’s stores and an increase in supply chain costs. The Company faces ongoing challenges with port closures, congestion through
Asian consolidation hubs, and reduced space allocation on vessels. Vessel unavailability itself is an issue due to larger vessels moving
away from the Oceania market and onto the more lucrative European and US markets. This, coupled with the reduced space
allocations, has forced the Company to use the spot market at increased rates. All of these risks continue to be managed, including
through the implementation of pick and pack operations at Myer’s regional distribution centres (rather than in Asian hubs), delivering
centrally to the regional distribution centres and then transhipping interstate, and finding alternative vessels to ship containers.
TECHNOLOGY RISKS, INCLUDING CYBER SECURITY
With Myer’s increasing reliance on technology in a rapidly changing digital environment, there is a risk that the malfunction of IT
systems, outdated IT infrastructure, a cyber-security violation or a data breach of personal information could have a detrimental effect
on Myer’s sales, business efficiencies, and brand reputation. To offset these risks, Myer continues to invest and develop our in-house
technology capabilities and engage with reputable third-party IT service providers to ensure that we have reliable IT systems and issue
management processes in place.
As one of the top 10 most trusted brands in Australia as reported in the Roy Morgan 2021 Risk Report, Myer’s strong brand reputation
is crucial for building positive relationships with customers, suppliers, and contractors which in turn generates sales and goodwill
towards the Company. A significant event or issue could attract strong criticism of the Myer brand, which could impact sales or our
share price. Myer has a range of policies and initiatives to mitigate brand risk, including an updated Code of Conduct, a Whistleblower
Policy, an Ethical Sourcing Policy, marketing campaigns, and ongoing environmental and sustainability initiatives.
STRATEGIC AND BUSINESS PLAN RISKS
A failure to deliver our strategic Customer First Plan could impact sales, profitability, share price, and our reputation. It includes that all
team members, brand partners and suppliers provide our customers with the service, brands and products they desire and expect, both
in store and online.
The strategy has been overlaid and enhanced with additional details of initiatives and mitigation plans in response to COVID-19 to
ensure it remains “fit for purpose”. This includes changes to the economic environment, customer behaviours, and to the retail
landscape.
PEOPLE MANAGEMENT RISKS
Myer needs to attract and retain talented senior managers to ensure that our leadership team has the right skills and experience to
deliver our strategy. Failure to do so may adversely impact Myer’s ability to deliver on its strategic imperatives. Training and
development programs continue to be offered to further refine the skills of our team members and business leaders.
Safety is a high priority at Myer to ensure the wellbeing of all of our team members, customers, and suppliers. Failure to manage health
and safety risks could have a negative effect on Myer’s reputation and performance. We conduct regular detailed risk assessments at
each store, distribution centre, and at our support office, as well as regular education sessions.
REGULATORY RISKS
From time to time, Myer may be subject to regulatory investigations and disputes, including by the Australian Taxation Office (ATO),
Federal or State regulatory bodies including the Australian Competition and Consumer Commission (ACCC), the Australian Securities
and Investments Commission (ASIC), the Australian Securities Exchange (ASX) and Federal and State work, health and safety
authorities. The outcome of any such investigations or disputes may have a material adverse effect on Myer’s operating and financial
performance. Myer has an established governance framework to monitor, assess and report on such occurrences to senior
management when they arise.
LITIGATION
The Company is required to maintain compliance with applicable laws and regulations. Failure to comply could result in enforcement
action and claims, which may have a material adverse impact on the Company’s reputation, financial performance and profitability.
Legal proceedings and claims may also arise in the ordinary course of the Company’s business and could result in high legal costs,
adverse monetary judgements, reputational damage and other adverse consequences. The Company has an established governance
framework to monitor, assess and report to management on litigation risks when they arise, and seeks to minimise risk through
appropriate compliance training for team members and management.
11. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Following the end of the financial year:
The Company agreed with its financiers an extension of its syndicated finance facility to November 2022 to enable an orderly
longer-term refinancing.
Due to Government restrictions in response to the ongoing COVID-19 pandemic, Myer again temporarily closed stores across
New South Wales, Queensland, Victoria, and the Australian Capital Territory.
JoAnne Stephenson was appointed Chairman of the Company with effect from 16 September 2021.
No other matter or circumstance has arisen since the end of the financial year which has not been dealt with in this Directors’
Report or the Financial Report, and which has significantly affected, or may significantly affect:
the Group’s operations in future financial years;
the results of those operations in future financial years; or
the Group’s state of affairs in future financial years.
12. DIVIDENDS
The Board determined that no final dividend would be paid for the period ending 25 July 2020.
The Board determined that no interim dividend would be paid for the period ending 23 January 2021.
The Board determined that no final dividend would be paid for the period ending 31 July 2021.
Further information regarding dividends is set out in the Financial Statements (at note F3).
20
8
9
21
Myer Annual Report 2021Myer Annual Report 2021
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
13. PERFORMANCE RIGHTS AND OPTIONS GRANTED OVER UNISSUED SHARES
The Myer Long Term Incentive Plan (LTIP) operates for selected senior executives and has been in operation since December 2006.
Under the LTIP, the Company has granted eligible executives:
(1)
in FY21, performance rights over unissued ordinary shares of the Company;
(2)
in FY19 and FY20, performance options over unissued ordinary shares of the Company, and
(3)
in previous years, performance rights over unissued ordinary shares of the Company,
with all options and rights issued, subject to certain vesting conditions. Shares delivered to senior executives as a result of the
vesting of performance options and rights can be either issued as new shares or purchased on market.
Each performance right entitles the holder to acquire one ordinary fully paid share in the Company (subject to the adjustments outlined
below).
Performance options are exercised on a net settlement basis; the executive is allocated the total number of shares that would have
been allocated upon exercise, less the number of shares equal to the value of the aggregated exercise price payable (and the exercise
price is not required to be paid). The number of shares delivered by the Company represents the value above the exercise price in
accordance with the formula below:
(A - B) / C, where:
A = Aggregate value of vested performance options (based on the market value of a share)
B = Aggregate exercise price payable
C = Market value of share
The net settlement method ensures that executive reward is aligned to shareholder value creation by only rewarding executives if there
is a growth to share price and material reward can be earned only if there is a significant growth to share price.
During the financial period ended 31 July 2021, the Company granted a total of 14,140,544 performance rights under the LTIP:
3,442,622 performance rights to the CEO and 10,697,922 performance rights to other selected senior executives.
The performance options and rights granted under each offer are subject to different performance conditions. No performance options
or rights have been granted since the end of the financial period ended 31 July 2021.
In September 2020, a total of 4,061,254 performance options granted under the LTIP in FY18 lapsed following testing against the
performance criteria.
During FY18, the Company granted 2,432,432 alignment rights to the CEO, and 555,555 alignment rights to the Chief Merchandise
Officer. These rights vested on a monthly basis in 36 equal tranches and are now fully vested and will be automatically exercised and
converted into Myer ordinary shares following the opening of the trading window after the release of the FY21 Results. During FY21,
743,257 alignment rights vested to the CEO and 169,755 rights vested to the Chief Merchandise Officer.
The table in Section 14 sets out the details of performance options and rights that have been granted under the LTIP and the alignment
rights plan and which remain on issue as at the date of this Directors’ Report.
A holder of a performance option or right may only participate in new issues of securities of the Company if the performance option or
right has been exercised, participation is permitted by its terms, and the shares in respect of the performance options or rights have
been allocated and transferred to the performance option or right holder before the record date for determining entitlements to the new
issue.
During FY21, the Transformative Incentive Plan (TIP) was introduced to replace the normal STI plan for a period of 2 years. Under the
TIP, the Chief Executive Officer and nominated executives receive 50% of the annual TI achieved in cash and 50% in the form of
deferred rights to shares in the Company. Deferred rights relating to the FY21 TI plan were granted on 15 December 2020. The number
of rights to be issued will be determined by dividing the dollar value of the deferred rights component of the TIP award outcome by the
volume weighted average price of the Company’s shares over the five trading days immediately following the release to the market of
the Company’s full year FY21 results.
Further information about performance options and rights issued under the LTIP and TIP (including the performance conditions
attached to the performance options and rights granted under the LTIP and TIP, and the performance options and rights granted to the
KMP of the Company) is included in the Remuneration Report.
14. SHARES ISSUED ON THE EXERCISE OF PERFORMANCE OPTIONS AND PERFORMANCE RIGHTS
From time to time, the Company issues fully paid ordinary shares in the Company to the Myer Equity Plans Trust (Trust) for the
purpose of meeting anticipated exercises of securities granted under the LTIP. To calculate the issue price of shares issued to the
Trust, the Company uses the five-day volume weighted average price of the Company’s shares as at the close of trading on the date of
issue.
During the financial period ended 31 July 2021, 1,611,325 fully paid ordinary shares were purchased on market by the Trust. No shares
were transferred from the Trust in relation to any performance rights or options issued. Since 31 July 2021, no shares have been
issued to or otherwise acquired by the Trust, and no fully paid ordinary shares of the Company held by the Trust were transferred to
participants in the LTIP.
Date performance rights and options granted
Expiry date
Issue price
Number of
performance rights
and options remaining
on issue(1)
4 June 2018 (rights grant to CEO under Alignment Equity offer)(2)
25 June 2018 (rights grant to senior executive under Alignment Equity
offer(3)
n/a
n/a
24 December 2018 (options grant to CEO under the FY19 LTIP offer)
24 Dec 2022
24 December 2018 (options grant to senior executives under the FY19
LTIP offer)
24 Dec 2022
21 November 2019 (options grant to CEO under the FY20 LTIP offer)
21 Nov 2023
21 November 2019 (options grant to senior executives under the FY20
LTIP offer)
21 Nov 2023
9 November 2020 (rights grant to CEO under the FY21 LTIP offer)
9 November 2020 (rights grant to senior executives under the FY21
LTIP offer)
n/a
n/a
Closing balance of performance rights and options
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
2,432,432
555,555
9,032,258
21,013,775
5,598,756
18,658,535
3,442,622
10,697,922
71,431,855
(1)
Each performance right entitles the holder to receive one fully paid ordinary share in the Company, subject to the satisfaction of the relevant performance outcomes. Performance
options vest and are automatically exercised on a net settlement basis. The executive is allocated the total number of shares that would have been allocated upon exercise, less the
number of shares equal to the value of the aggregated exercise price payable (and the exercise price is not required to be paid). The number of shares delivered by the Company
represents the value above the exercise price in accordance with the formula below:
(A - B) / C, where:
A = Aggregate value of vested performance options (based on the market value of a share)
B = Aggregate exercise price payable
C = Market value of a share
(2)
(3)
The number of performance options or rights that a holder is entitled to receive on the exercise of a performance option or right may also be adjusted in a manner consistent with the
ASX Listing Rules if there is a pro-rata issue of shares or a reconstruction of the capital of the Company.
Mr King was appointed as CEO and Managing Director on 4 June 2018 and was granted 2,432,432 alignment rights on appointment. These rights vested in equal monthly
instalments over the period 4 June 2018 to 4 June 2021 and are now fully vested and will be automatically exercised and converted into Myer ordinary shares following the opening
of the trading window after the release of the FY21 Results.
Mr Winstanley was appointed as Chief Merchandise Officer on 25 June 2018 and was granted 555,555 alignment rights on appointment. These rights vested in equal monthly
instalments over the period 25 June 2018 to 25 June 2021 and are now fully vested and will be automatically exercised and converted into Myer ordinary shares following the
opening of the trading window after the release of the FY21 Results.
15. REMUNERATION REPORT
The Remuneration Report, which forms part of this Directors’ Report, is presented separately from page 25.
16. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company’s Constitution requires the Company to indemnify current and former directors, alternate directors, executive officers and
officers of the Company on a full indemnity basis and to the full extent permitted by the law against all liabilities incurred as an officer of
the Group, except to the extent covered by insurance. Further, the Company’s Constitution permits the Company to maintain and pay
insurance premiums for director and officer liability insurance, to the extent permitted by law.
Consistent with (and in addition to) the provisions in the Company’s Constitution outlined above, the Company has also entered into
deeds of access, indemnity and insurance with all directors of the Company which provide indemnities against losses incurred in their
role as directors, subject to certain exclusions, including to the extent that such indemnity is prohibited by the Corporations Act 2001
(Cth) or any other applicable law. The deeds stipulate that the Company will meet the full amount of any such liabilities, costs and
expenses (including legal fees).
During the financial period, the Company paid insurance premiums for a directors’ and officers’ liability insurance contract that provides
cover for the current and former directors, alternate directors, secretaries, executive officers and officers of the Company and its
subsidiaries. The directors have not included details of the nature of the liabilities covered in this contract or the amount of the premium
paid, as disclosure is prohibited under the terms of the contract.
The Group’s auditor is PricewaterhouseCoopers (PwC). No payment has been made to indemnify PwC during or since the financial
period end. No premium has been paid by the Group in respect of any insurance for PwC. No officers of the Group were partners or
directors of PwC whilst PwC conducted audits of the Group.
22
10
11
23
Myer Annual Report 2021Myer Annual Report 2021
DIRECTORS’ REPORT
D I R EC TO R S’ R E P O R T
Continued
Continued
REMUNERATION REPORT
REMUNERATION REPORT
17. PROCEEDINGS ON BEHALF OF THE COMPANY
Dear Shareholder,
No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with the leave of the court under section 237 of the
Corporations Act 2001.
18. ENVIRONMENTAL REGULATION
The Group is subject to and has complied with the reporting and compliance requirements of the National Greenhouse and Energy
Reporting Act 2007 (Cth) (NGER Act). The NGER Act requires the Group to report its annual greenhouse gas emissions and energy
use. The Group has implemented systems and processes for the collection and calculation of the data required. In compliance with the
NGER Act, the Group is due to submit its report by 31 October 2021. No significant environmental incidents have been reported
internally, and no breaches have been notified to the Group by any government agency.
The Group is a signatory to the Australian Packaging Covenant, which is a national co-regulatory initiative in place of state-based
regulatory arrangements for sustainable packaging management. Members are required to adhere to the covenant commitments,
which include development and implementation of an action plan and report annually on progress. The Group submitted its report on
31 March 2021.
19. NON-AUDIT SERVICES
The Company may decide to employ its external auditor on assignments additional to its statutory audit duties where the auditor’s
expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor (PwC) for audit and non-audit services provided during the financial period are set
out in the Financial Statements (at note H5).
The Board has considered the position and, in accordance with advice received from the Audit, Finance and Risk Committee, is
satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001. The directors are satisfied that the provision of the non-audit services by the auditor did not compromise the
auditor independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed by the Audit, Finance and Risk Committee to ensure that they do not impact on the
impartiality and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
20. AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is attached to this
Directors’ Report.
21. ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and, except
where otherwise stated, amounts in the Directors’ Report have been rounded off to the nearest hundred thousand dollars.
22. ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held on Thursday 4 November 2021.
The Directors’ Report is made in accordance with a resolution of directors.
JoAnne Stephenson
Chairman
Melbourne, 16 September 2021
On behalf of the Board, I present to you Myer Holdings Limited’s (Myer or the Company) Remuneration Report for FY21. This report
sets out the remuneration information for the Non-Executive Directors and Executive Key Management Personnel (KMP). It describes
our Executive remuneration framework and pay outcomes for FY21 in a simple and transparent way.
The remuneration outcomes set out in this Report were carefully considered by the Board, taking into account all relevant factors,
including the Management team’s performance in delivering the FY21 results, the impacts of the COVID-19 pandemic on those results
and ensuring the best interest of our shareholders and other stakeholders.
In determining the remuneration framework and assessing remuneration outcomes, Myer’s Remuneration objective is to support
Executive KMP to deliver a business strategy that puts our customers first and ultimately delivers value to our shareholders. There are
five key principles associated with the Remuneration objective:
Build our capability by attracting and retaining high calibre talent
Align the interests of our executives to those of our shareholders – think like owners
1. Reward outcomes that reinforce our Customer First Plan
2.
3.
4. Drive sustainable long-term performance of the business
5.
Be simple and transparent
COMPANY PERFORMANCE IN FY21
The FY21 results showed solid improvement in sales, profitability, cash management and other key metrics. These achievements
reflect the improving momentum driven by the successful transformation of the business achieved under the Customer First Plan and
the Management team’s performance in continuing to successfully deliver on that Plan.
These results were achieved despite the continued widespread impacts of the COVID-19 pandemic, including extensive state
lockdowns, several periods of government mandated store closures, and travel restrictions, particularly in Q1 FY21 and Q4 FY21,
which presented significant challenges for the business.
There was solid growth across all key metrics and a return to second half profitability for the first time since FY17, reflecting the
Management team’s continuing focus on profitable sales, growth in the online business, disciplined management of costs, cash, and
inventory, as well as deleveraging of the balance sheet.
FY21 results (post-AASB 16) and highlights include:
(1)
(2)
(3)
Total sales(1) up 5.5% to $2,658.3 million; despite widespread store closures and travel restrictions, positive comparable store
sales growth.
Continued strong growth in Group online sales(2) of $539.5 million, up 27.7%, representing 20.3% of total sales.
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA)(3) up 27.7% to $390.0 million.
Net profit after tax(3) was $51.7 million, compared to a net loss after tax(3) of $13.4 million in prior year.
Statutory net profit after tax of $46.4 million.
Net cash position of $111.8 million, an improvement of $103.9 million compared to FY20.
Exited the store at Knox and completed store relaunches post space handbacks at Belconnen, Cairns, and Morley. Completed a
store refurbishment at Karrinyup in August 2021.
Extension of the syndicated finance facility to November 2022 to enable an orderly longer-term refinancing.
Improved merchandise cycle with improved margins, stockturn, reduced aged stock, and clearance inventory.
Myer one program improvements resulting in an increase in tag rate to 69.7% (FY20: 64.9%).
Opened 3PL fulfilment site in Melbourne fulfilling 2.2 million customer orders at lower cost, and launched multi-carrier last mile
delivery.
Record customer service satisfaction in store, and online Net Promoter Score.
In July 2021, secured a 10-year lease on a new 40,000 square metre National Distribution Centre in Victoria, representing the
next phase of the “Factory to Customer” strategy.
Revenue from sale of goods excluding concession sales and sales revenue deferred under customer loyalty program was $2,116.5 million (FY20: $2,047.9 million).
Group online sales includes sass & bide and Marcs and David Lawrence. Excludes sales via in-store iPads.
Excluding implementation costs and individually significant items.
24
12
1
25
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
CHANGES TO THE EXECUTIVE REMUNERATION FRAMEWORK FROM FY21
NON-EXECUTIVE DIRECTOR REMUNERATION
During FY21 and after taking account of shareholder feedback, we took the following actions to reduce Board costs:
Effective 1 July 2020, the Chairman’s and Non-Executive Directors’ annual base fees were reduced to $250,000 (from $300,000)
and $100,000 (from $120,000) respectively. This represents the third reduction to Chairman and Non-Executive Director fees
since FY18.
Following the retirement of Garry Hounsell as Chairman prior to our FY20 AGM, JoAnne Stephenson was appointed Acting
Chairman. During her tenure as Acting Chairman, Ms Stephenson elected not to receive the full Chairman fee and is instead only
receiving an annual Non-Executive Director fee of $120,000.
The retirement of Lyndsey Cattermole AM and Julie Ann Morrison as Non-Executive Directors from Myer’s Board at the FY20
AGM further reduced Board costs, with the Board now comprised of four directors, including our CEO and Managing Director,
John King.
At our 2020 Annual General Meeting (AGM), the majority of eligible shareholder votes cast (66.38 percent) were in favour of adopting
the FY20 Remuneration Report and 33.62 percent of the votes cast were against the adoption of the report. As outlined above, we
made a number of changes to our remuneration framework for FY21 to further align the remuneration of our Executives with the
interests of our shareholders.
As always, we thank the many stakeholders who have shared their feedback with us over the past year. The Board will continue to take
account of the views of our shareholders in reviewing and setting the remuneration framework.
Yours faithfully,
Jacquie Naylor
Chairman – Human Resources and Remuneration Committee
As outlined below, and foreshadowed in the FY20 Remuneration Report, for FY21 we made a number of changes to our remuneration
framework to further align the remuneration of our Executives with the interests of our shareholders. In response to feedback, we have
also increased our level of disclosure in relation to incentive targets and outcomes.
In FY21 we introduced the Transformation Incentive (TI) plan to replace the normal Short Term Incentive (STI) plan for FY21 and FY22,
with the STI plan to be reinstated after this time. The objective of the TI plan is to promote longer-term shareholder interests by placing
significant importance on transforming the business, including key focus areas of online profitability, physical stores earnings per
square metre, management of stock and Myer one tag rate, while also adapting to the new challenges presented by COVID-19.
Key features of the TI plan are as follows:
(1) Performance measures under the TI plan are aligned with the accelerated Customer First Plan, aligning Executive effort
behind the turn-around strategy of the business. Financial performance is measured against Net Profit After Tax (NPAT), the
strongest indicator of Myer’s profitability, but with performance also assessed against key measures critical to the
transformation of Myer.
(2) An increased portion of the TI award will be deferred (50 percent where previously it was 40 percent);
(3) All deferred awards will be delivered in equity as deferred rights with a reduced cash amount compared to the previous STI
plan.
(4) A longer deferral period will apply with 50 percent of deferred rights vesting into shares 12 months following performance
testing and the remaining 50 percent of deferred rights vesting into shares 24 months following performance testing. The
overall life of the TI plan is extended to three years, as compared to two years under the previous STI plan.
As also foreshadowed last year, changes were implemented to the FY21 Long Term Incentive (LTI) plan to further align with market
practice and to further focus the Executive effort on shareholder value creation. The FY21 LTI was delivered in performance rights as
opposed to performance options under the previous LTI plan, to address the dilutive effect of performance options, particularly in a
volatile share market environment. All performance rights under the FY21 LTI are subject to a positive absolute Total Shareholder
Return (TSR) gateway measure which prevents reward outcomes where there have been declines in the share price over the
performance period.
For FY21 and FY22, the pay mix for the CEO and Managing Director, and the Executive Management Team was also changed, with
increased weighting towards the TI and a decrease in the weighting towards the LTI. This has not resulted in any increases to the
overall “maximum” opportunity for each Executive. This change reflects the priority of transforming the business over FY21 and FY22
and ensuring an optimal response to the challenges currently faced due to the COVID-19 pandemic. The larger equity component and
the longer deferral period in the TI provides a meaningful retention hook and promotes longer-term shareholder value creation.
Under both the TI and LTI plans, clawback provisions that apply to equity were also strengthened for FY21.
These changes to the executive remuneration framework reflect our ongoing commitment to creating a strong link between
transforming our business performance and Executive remuneration outcomes. We believe our current approach to Executive
remuneration will support the delivery of our Customer First Plan, for the benefit of our customers and our shareholders.
EXECUTIVE REMUNERATION OUTCOMES IN FY21
The Board believes the remuneration outcomes detailed below reflect the performance of our Executive KMP and acknowledge the
continuing impact that COVID-19 is having on our shareholders, customers, team members, and the communities in which we operate.
The freeze on Executive pay continued in FY21 with no salary increases awarded for the Executive Management Team.
The Board considered this to be an appropriate decision, considering the continuing impact of the COVID-19 pandemic and given
the ongoing focus on cost management.
When assessing performance and associated remuneration outcomes for the FY21 TI plan and the FY19 LTI, the Board made the
decision to remove the impact of net JobKeeper subsidies and rent waivers that were received during FY21. Additionally, in
assessing LTI and TI outcomes, no adjustment was made for the significant impact of sales and gross profit forgone when stores
were unable to trade during lockdowns throughout FY21.
Following the exercise of Board discretion to exclude the impact of net JobKeeper subsidies and rent waivers, no
performance options vested under the FY19 LTI for the Executive KMP.
TI plan outcomes for FY21 reflected strong performance against financial KPIs (after removing the impact of net JobKeeper
subsidies and rent waivers), as well as transformational targets, further evidencing the efforts of the Executive Management Team
in continuing to lead the transformation of the business in alignment with the Customer First Plan.
In undertaking a review of TI scorecard outcomes, the Board also exercised its discretion to adjust TI outcomes for all
Executive KMP and the broader Management team downwards by 20%, with a final TI outcome reduced to 64.8% of
maximum. This decision was taken after considerable review and the Board believes this appropriately balances the Company’s
financial and non-financial performance with the shareholder experience and the impacts of lockdowns and travel restrictions on
our operating environment, while also acknowledging and rewarding our people for their significant contributions during FY21,
including in particular the return to profitability in the second half of FY21, which was largely unaffected by Jobkeeper or rent
waivers and despite significant store closures due to lockdowns.
26
2
3
27
Myer Annual Report 2021Myer Annual Report 2021 REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
CONTENTS
1.
2.
3.
4.
Introduction
Snapshot of Remuneration Framework
Executive KMP Remuneration
Executive KMP Service Agreements
5. Non-Executive Director Remuneration
6. Remuneration Governance
7.
8.
9.
Executive KMP Statutory Disclosures
Equity
Loans
10. Dealing in Securities
1.
INTRODUCTION
28
29
34
40
41
43
44
48
49
49
2. SNAPSHOT OF REMUNERATION FRAMEWORK
2.1 OBJECTIVE AND GUIDING PRINCIPLES
Our remuneration objective is to support Executive KMP in delivering a business strategy that will put our customers first and ultimately
deliver value to our shareholders.
The Directors of the Company present the Remuneration Report for the financial period ended 31 July 2021 prepared in accordance
with the requirements of the Corporations Act 2001 and its regulations.
This report outlines the remuneration strategy, framework and other conditions of employment for Executive KMP and Non-Executive
Directors, and details the role and accountabilities of the Board and relevant Committees that support the Board on these matters.
The information provided within this report has been audited as required by section 308(3C) of the Corporations Act 2001 and forms
part of the Directors’ Report. The table below details the Company’s Executive KMP and Non-Executive Directors during FY21.
2.2 REMUNERATION STRUCTURE FOR FY21
All KMP were in their roles for the full year, unless otherwise stated.
Name
Role
Non-Executive Directors
J Stephenson(1)
D Whittle
J Naylor
Former Non-Executive Directors
G Hounsell(2)
L Cattermole AM(3)
J Morrison(4)
Executive Directors
J King
Executive KMP
N Chadwick
A Sutton
A Winstanley
Chairman, Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Chairman, Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Chief Executive Officer and Managing Director
Chief Financial Officer
Executive General Manager Stores
Chief Merchandise Officer
(1)
(2)
(3)
(4)
Ms Stephenson was Acting Chairman from 29 October 2020 to 15 September 2021, and was appointed Chairman with effect from 16 September 2021.
Mr Hounsell retired as a Non-Executive Director with effect from 28 October 2020.
Ms Cattermole AM retired as a Non-Executive Director with effect from 29 October 2020.
Ms Morrison retired as a Non-Executive Director with effect from 29 October 2020.
Strategic objectives and
performance link
Performance
measures
What has changed
for FY21?
To attract and retain high
calibre talent.
Provides “predictable” base
level of reward.
Set with reference to the
market using external
benchmark data.
Varies based on employee’s
experience, skills, and
performance.
Consideration is given to both
internal and external
relativities across retail and
other relevant sectors.
No changes to fixed pay for
Executives were made during
FY21.
Total Fixed
Compensation
(TFC)
For Executive KMP, 50
percent of the award is
delivered in cash, and 50
percent is deferred and
delivered as equity in deferred
rights. This represents a
greater portion of the award
deferred into equity and a
longer deferral period than the
previous STI.
Transformation
Incentive (TI)
plan
Designed to drive the short-
term financial and strategic
objectives of the Company,
aligned to the accelerated
Customer First Plan and
Myer’s turnaround strategy.
Supports retention and
encourages focus on long-
term value in addition to
annual results, through the
deferred component.
TI awards for all participants
at Myer are assessed against
a set of balanced scorecard
measures outlined below:
NPAT accounts for 50
percent of the maximum
TI.
Transformation progress
against the accelerated
Customer First Plan
accounts for 50 percent
of the maximum TI.
Transformation measures
include online EBIT, Bricks &
mortar EBITDA per square
metre, cost per customer
order, Stock turn
performance, Myer one tag
rate. For more details on
performance measures, refer
to Section 3.2.
A greater portion of the award
is deferred (50 percent up
from 40 percent).
All deferred awards to be
delivered in equity as deferred
rights, with a reduced cash
amount compared to the
previous STI plan (under
which half of deferred
component was in cash,
except for the CEO and
Managing Director).
Under the STI, awards
delivered in equity were
deferred for 12 months. Under
the TI, 50 percent of deferred
rights will be deferred for 12
months, with the remaining 50
percent deferred for 24
months following the end of
the performance period.
While NPAT is the largest
28
4
5
29
measure within the scorecard,
it no longer acts as a
gateway. This is in order to
ensure appropriate reward for
performance in respect of
transformation objectives.
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
The Board considers NPAT
outcomes when determining
whether the exercise of
discretion is appropriate.
Performance measures have
shifted to reflect focus on our
Customer First Plan and
Myer’s turnaround strategy
with NPAT now the key
financial measure of
performance under the TI
plan.
The delivery vehicle under the
LTI has changed with grants
now made in performance
rights as opposed to
performance options to
address the dilutive effect of
options in the current market.
Previous LTI awards were not
subject to any gateway testing
before being assessed
against performance
measures. The absolute TSR
gateway is intended to
encourage Executive effort on
growing Myer’s share price
over the 3-year performance
period. For more details on
performance testing, refer to
Section 3.3.
Delivered in equity, in the
form of performance rights (as
opposed to options under the
FY20 plan), which most
appropriately aligns Executive
KMP with shareholder
interests and avoids the
dilutive impact of performance
options.
Focused on delivery of Myer’s
long-term business strategy
and shareholder value
creation.
Long Term
Incentive (LTI)
Measures complement those
in the TI plan to provide a
holistic and aligned reward
offer.
Supports ongoing,
sustainable performance and
the retention of key executive
talent, which is critical to the
turnaround of Myer.
All Performance Rights
granted under each LTI award
will be tested against a
positive absolute Total
Shareholder Return (TSR)
gateway measure.
Where positive TSR is
achieved over the 3-year
performance period (FY21-
FY23), the award will be
assessed against:
Relative TSR (50 percent
of award) against a retail
and consumer services
peer group; and
Underlying Earnings Per
Share (EPS) compound
annual growth (50
percent of award).
Shares provided on vesting
are subject to restriction for 1
year, making the total
alignment period with
shareholders 4 years. For the
CEO and Managing Director
performance is measured
over 3 years, but the vesting
period is 4 years and no
further restriction period
applies.
The following diagram shows how our remuneration framework is delivered to Executive KMP. The CEO and Managing Director has a
vesting period of 4 years for the LTI, with no restriction period, which has not been illustrated in the below diagram.
2.3 COMPANY PERFORMANCE FOR FY21
The Company’s remuneration structure aligns Executive KMP remuneration with shareholder interests over the short and long term and
provides an appropriate reward on delivering our strategy.
The table below presents the Company’s annual performance against key financial metrics since 2017.
Basic EPS (cents)
Basic EPS (cents) – adjusted (1)
NPAT (pre implementation costs and individually significant items) ($m)
NPAT (post implementation costs and individually significant items) ($m)
Dividends (cents per share)
Share price at beginning of year ($)
Share price at end of year ($)
Market capitalisation ($m)
FY17
1.5
8.3
67.9
11.9
5.0
1.34
0.77
FY18
(59.2)
4.0
32.5
(486.0)
-
0.77
0.46
FY19
3.0
4.0
33.2
24.5
-
0.46
0.53
FY20
(21.0)
(1.6)
(13.4)
(172.4)
-
0.53
0.21
FY21
5.7
6.3
51.7
46.4
-
0.21
0.49
632.4
377.8
435.3
172.5
402.4
(1)
Basic EPS is adjusted to exclude implementation costs and individually significant items. Refer to Section 7 of the Directors’ Report for further details. The Directors believe this
metric is more relevant as it excludes individually significant items that may not recur and may not be predictive of future performance.
2.4 REMUNERATION OUTCOMES FOR FY21
FY21 TFC
No increases were made to TFC levels for Executive KMP in FY21.
In FY20, the Executive Management Team elected to forego 12% of their annual base salary in response to COVID-19. Base salaries
reverted to prior levels at the start of FY21.
TFC consists of base salary plus statutory superannuation contributions. Senior executives receive a TFC package which is reviewed
annually by the Human Resources and Remuneration Committee with reference to Company and individual performance, size and
complexity of the role and benchmark market data.
FY21 TI OUTCOME
The Board set challenging, but achievable, performance targets for the FY21 TI following a rigorous budget setting process that took
into account many factors, including market conditions and the challenges presented by COVID-19. Threshold TI targets were set at
higher levels than contained in the budget.
TI outcomes for FY21 reflect the efforts of our people in progressing the Customer First Plan during FY21. Strong growth was achieved
against the key financial metric of NPAT and there was also strong performance in relation to key transformational measures compared
to FY20.
The impact of all net JobKeeper subsidies and rent waivers has been excluded from the NPAT (and other applicable results) used to
measure the vesting of the NPAT TI plan performance condition and other applicable transformational performance conditions. For
example, if the impact of net JobKeeper subsidies was excluded, FY21 NPAT (excluding implementation costs and individually
significant items) would have been $29.6 million. Additionally, in assessing TI outcomes, no adjustment was made for the substantial
impact of sales and gross profit forgone when stores were unable to trade during lockdowns throughout FY21.
In assessing performance, the Board considers what has been achieved and how it was achieved. Actual TI outcomes can be adjusted
to consider external factors related to the shareholder experience, the broader employee experience and factors both within and
outside the control of our Management team. When assessing TI awards for FY21, the Board considered the impact of COVID-19 on
Myer’s operating environment, the market volatility affecting our shareholders and the experience of our broader workforce.
Notwithstanding the efforts of our Management team and considering all the external contributing factors, the Board exercised its
discretion and reduced TI awards by 20 percent. Actual TI payments to each Executive KMP are detailed in the table at Section 7. The
payment of a TI award for FY21 represents the first time that the Company has paid either a TI or STI award to Executive KMP since
the STI award relating to FY16.
30
6
7
31
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
2.5 OTHER AWARDS
Following the release of Myer’s financial results in September 2020, the performance rights granted to Executive KMP in December
2017 were tested against the hurdles of ROFE, EPS and relative TSR. The hurdles were not met, and accordingly the rights granted to
Executive KMP under the FY18 LTI plan lapsed.
As part of the terms of their appointment, Mr King and Mr Winstanley were granted share rights, creating an immediate alignment
between them and shareholders. These rights have now vested, and the resulting shares will be allocated following the opening of the
trading window following the release of the FY21 Results.
2.6 PAYMENTS TO EXECUTIVE KMP IN FY21
The table below sets out the actual remuneration received by Executive KMP in FY21. The table has not been prepared in accordance
with accounting standards but has been provided to outline clearly the remuneration outcomes for Executive KMP. Remuneration
outcomes prepared in accordance with the accounting standards are provided in Section 7.
Short Term
Incentive
Long Term
Incentive
Name
Cash salary(1)
$
Super-
annuation(2)
$
FY20 STI(3)
$
STI deferred
from prior
year(4)
$
Vested &
exercised
LTIP(5)
$
Termination and
other payments
$
Actual FY21
Remuneration
$
Executive Directors
J King(6)
Executive KMP
N Chadwick
A Sutton
A Winstanley(7)
1,200,000
-
773,150
638,150
795,000
21,850
21,850
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,200,000
795,000
660,000
795,000
(1)
(2)
(3)
(4)
(5)
Cash salary includes short-term compensated absences, including any leave taken during the COVID-19 store closure period, any salary sacrifice arrangement implemented by the
Executive KMP, including additional superannuation contributions.
Executive KMP receive a statutory superannuation contribution up to a threshold limit in line with the ATO published maximum superannuation contribution base.
STI payments relating to FY20 performance and conditions, but paid during FY21. Includes only the non-deferred component.
Deferred STI relating to FY19 performance and conditions, paid during FY21.
The number of performance rights vested and exercised under the FY18 LTI plan multiplied by the Myer share price at vesting. Mr King and Mr Winstanley had rights vest under their
equity alignment plans; these rights have fully vested and will be automatically exercised following the opening of the trading window after the release of the FY21 Results.
(6) Mr King does not receive superannuation contributions due to his tax status. As per the terms of his employment contract, Mr King is entitled to other support including, a health
insurance allowance, relocation expenses for spouse, and return flights home. This support has not been included in this table. More details can be found in Section 7.
(7) Mr Winstanley does not receive superannuation contributions due to his tax status. As per the terms of his employment contract, Mr Winstanley is entitled to other support, including
a health insurance allowance, and return flights home. More details can be found in Section 7.
The following table details FY21 TI scorecard measures and assessment applied to Executive KMP prior to the application of Board
discretion.
Objectives
2021 Performance Assessment
Commentary
Financial Objectives (50% weighting)
NPAT
Stretch target exceeded
Stretch NPAT target achieved despite
lockdowns in FY21 and excluding the
impact of net JobKeeper subsidies and rent
waivers.
Transformation Objectives (50% weighting, 10% for each measure)
Online Earnings Before
Interest and Taxes
Threshold target not met
Cost per Customer Order
Threshold target not met
Department Store, Bricks and Mortar
EBITDA per square metre
Stretch target exceeded
Stock turn
Threshold target achieved
Myer one tag rate (in-store and online) %
Threshold target achieved
NPAT(1) including JobKeeper and rent
waivers was $51.7 million compared to a
net loss after tax of $13.4 million in FY20.
Company returned to second half
profitability for the first time since FY17.
Strong growth achieved but below stretch
transformation objective.
Initiatives achieved reduction in this metric,
but below stretch transformation objectives.
Stores performed strongly when open.
Initiatives to enhance customer experience
and satisfaction, productivity improvements,
and management of costs drove the
outcome.
Improvements delivered to the
merchandise offer and cycle resulting in
faster stock turn, reduced ageing, and
improved margins. The improved stock
turns have delivered additional benefit to
newness and store layouts as well as
working capital.
Changes to the program have delivered
more value to our customers. Improved
acquisition flow and on-boarding process
both in-store and online, resulting in higher
customer acquisitions. The improved tag
rate delivers higher engagement through
our own channels and increased revenue
through redemptions.
% of Maximum Achieved (adjusted award after Board modifier): 64.8%
(1)
Excluding implementation costs and individually significant items
FY19 LTI PLAN OUTCOME
In respect of the FY19 LTI, there was nil vesting under the relative TSR performance condition as threshold performance was not met
and the Board exercised its discretion to reduce vesting to nil under the EPS performance condition. As a result, no performance
options vested under the FY19 LTI for Executives.
The FY19 LTI was tested equally against both performance conditions over the three-year performance period between 29 July 2018
and 31 July 2021. Based on reported FY21 results, threshold performance under the EPS condition was met with a compound annual
growth rate of 16.4%.
Under the Plan rules, the Board retains discretion in exceptional circumstances to ensure that matters beyond the control of Executives
do not materially affect the achievement of the EPS performance condition.
The Board considered the outcome in light of shareholder outcomes over the three-year performance period and determined that, while
threshold achievement under the EPS performance condition may have been achieved based on the FY21 results, this was not the
case where the benefits of net JobKeeper subsidies and rent waivers on NPAT performance are excluded from the EPS calculation. In
the circumstances, the Board exercised its discretion under the Plan and determined that the threshold EPS vesting condition was not
achieved.
32
8
9
33
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
3. EXECUTIVE KMP REMUNERATION
3.2 TRANSFORMATION INCENTIVE PLAN
Executive KMP remuneration is delivered through a mix of fixed and variable (or “at risk”) pay, and a blend of short and longer-term
incentives. As outlined in the Remuneration Structure in Section 2.2, Executive KMP remuneration is made up of three components:
Total Fixed Compensation;
Transformation Incentive Plan; and
Long Term Incentives.
The combination of these components comprises an Executive KMP’s total remuneration.
3.1 TOTAL FIXED COMPENSATION
TFC provides the base level of reward and is set at a level to attract and retain high calibre Executives.
Features of Total Fixed Compensation
What is
included in
TFC?
TFC is structured as a total fixed remuneration package, made up of base salary, superannuation, other benefits
and Fringe Benefits Tax, where applicable. Some of the benefits include the opportunity to receive a portion of
fixed remuneration in a variety of forms, including fringe benefits such as motor vehicles, or to make additional
contributions to superannuation or retirement plans (as permitted by relevant legislation).
How is TFC
reviewed?
TFC levels for each Executive KMP are set with reference to the market, the scope and nature of each role, the
incumbent’s experience and individual performance.
The Human Resources and Remuneration Committee (Committee) typically reviews and makes recommendations
to the Board regarding TFC for Executive KMP annually, having regard to Company and individual performance
and relevant comparative remuneration in the market. However, given current financial performance, the Board
decided not to increase TFC as part of the annual remuneration review in FY21.
The Board may also consider adjustments to Executive KMP remuneration outside the annual remuneration review
process as recommended by the CEO and Managing Director, such as on promotion or as a result of additional
duties performed by the Executive KMP. Where new Executive KMP join the Company or existing Executive KMP
are appointed to new roles, a review and benchmarking of fixed and total remuneration is conducted prior to the
offer and execution of a new employment contract.
Which
benchmarks are
used?
Remuneration for Executive KMP is considered in the context of the skills and experience being sought and the
global Senior Management retail market, as well as in relation to the other industries where we are increasingly
seeking talent. Benchmarking is also undertaken against local industry peer groups and companies with a similar
market capitalisation to Myer where relevant for the roles under review.
Mr King’s package was set with reference to the skills and experience required to turn around the company’s
performance in what is a very challenging time in the retail industry. It must also be noted that Myer is competing
for talent in a very small pool of international candidates and the current package was necessary to attract and
retain a high quality, experienced CEO of Mr King’s calibre. Mr King’s fixed remuneration was set at the same level
as the previous CEO, which had not been reviewed since 2015.
Some of Mr King’s significant achievements have been:
Leading the ongoing business transformation under the Customer First Plan which was launched in
September 2018.
Delivering significantly improved FY21 results with growth in profitability for both the first and second halves,
demonstrating the Customer First Plan gaining traction.
Continued rapid growth in the online business (passed $0.5 billion annual Group online sales(1)).
Improved operating gross profit margin, sustained disciplined management of costs, cash, and inventory, and
further progress on space optimisation (exited Knox store, re-launched Cairns, Belconnen, and Morley
following space reductions).
Net cash at end of period of $111.8 million; a $103.9 million improvement on FY20 reflecting the strong
operating performance and prudent financial management.
Significantly improved customer service in a challenging environment (as measured by record customer
service satisfaction scores).
Improved merchandise cycle as evidenced by improved margins and stockturn, reduced aged stock and
record low levels of clearance inventory.
Progressing to the next stage of Factory to Customer, with improvements to online (3PL/Multicarrier) and
international freight arrangements and new National Distribution Centre (NDC) announced for FY23 opening.
(1)
Group online sales includes sass & bide and Marcs and David Lawrence. Excludes sales via in-store iPads.
As in FY20, Mr King did not receive an increase to his Fixed Remuneration in FY21.
As part of the Executive reward review undertaken during FY20, the Transformative Incentive (TI) plan was introduced to replace the
normal STI plan for a period of 2 years, starting in FY21. The FY21 TI plan applied to all eligible Executives, including Executive KMP,
Senior Managers, and other select participants, subject to certain conditions and performance criteria being met which are reviewed
and approved annually by the Board.
Form and purpose of the plan
What is the TI
plan?
What is the
value of the TI
opportunity?
Does the TI
include a
deferred
component?
The TI plan replaces the annual STI plan for a period of two years after which the Company intends to resume the
previous STI plan. The TI plan is an at risk component of an Executive KMP’s reward opportunity, with longer
deferral periods and greater deferral into equity than the previous STI plan, which is designed to put a meaningful
part of the Executive KMP’s remuneration at risk. Payment under the TI plan has been designed to link a portion of
remuneration to the transformation of Myer, aligned with delivery of the Customer First Plan and to address the
new challenges presented by COVID-19.
TI targets are set as a percentage of the Executive KMP’s TFC. The current maximum levels for Executive KMP
are set out below.
CEO and Managing Director – 100 percent of TFC.
Other Executive KMP – 75 percent of TFC.
50 percent of the FY21 TI award will be delivered in deferred rights. The increased deferral periods under the TI
plan compared to the previous STI plan are intended to further align Executive KMP with the experience of
shareholders and provides a retention hook to help provide business continuity over the two-year life of the TI plan.
The TI plan also defers a greater portion of the TI award into equity than the previous STI plan which ensures
further shareholder alignment and prudent cashflow management.
Deferred rights to be granted under the FY21 TI plan will be issued in two tranches:
Tranche 1: 50% of the deferred rights will be subject to a one-year disposal restriction and will convert to
Shares on the first day after the first anniversary of the date on which the deferred rights are granted which
occurs during a trading window under the Company’s Security Dealing Policy, subject to ongoing employment
at that date; and
Tranche 2: the remaining 50% of the deferred rights will be subject to a two-year disposal restriction and will
convert to Shares on the first day after the second anniversary of the date on which the deferred rights are
granted which occurs during a trading window under the Company’s Security Dealing Policy, subject to
ongoing employment at that date.
Performance measures
What were the
FY21
performance
measures?
Why were the
performance
measures
selected?
The performance measures and their relative weightings applicable to the FY21 TI plan are:
Net Profit After Tax (NPAT) accounts for 50 percent of the TI scorecard.
Transformation measures (Online EBIT, cost per customer order, Bricks & mortar EBITDA per square metre,
stock turn performance, and Myer one tag rate) account for 50 percent of the TI scorecard, with each measure
counting towards 10 percent of the TI scorecard.
Performance measures under the TI plan are transformational in nature, in line with the accelerated Customer First
Plan. These measures immediately align Executive KMP effort with the turnaround strategy of the Company. The
performance measures are quantifiable and heavily focused on financial performance. The Board believes that a
large component of an Executive KMP’s TI award should be driven by the financial performance of the Company,
and accordingly 50 percent of the TI is dependent on Company NPAT, providing close alignment with shareholder
outcomes.
The Transformation measure reflects the significant importance of transforming the business and focus on our
Customer First Plan and turnaround strategy, including key focus areas of online profitability, physical stores
earnings per square metre, management of stock and Myer one tag rate. Targets are set at stretching levels to
align with the objectives set under the Customer First Plan. This directly links Myer’s short-term goals with the
longer-term strategy of the Company.
34
10
11
35
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
Governance
When are
performance
targets set and
reviewed?
How is
performance
measured?
Performance objectives and targets are set following a rigorous budget setting process at the beginning of the
financial period, while performance against these targets is reviewed following the end of the financial period.
The Committee determines whether, or the extent to which, each target is satisfied following the end of the financial
period, once the Company’s annual accounts are audited and have been approved by the Directors.
The quantum of any TI reward provided will depend on the extent to which the maximum reward is achieved. Once
it has been determined whether each objective has been satisfied, the Committee will make a recommendation to
the Board for approval of the TI awards to be paid to the CEO and Managing Director, Executive KMP and other
Executives.
The Committee is responsible for assessing whether the performance criteria are met. To help make this
assessment, the Committee receives reports on the Company’s performance from management. All proposed TI
awards are only made once the Company’s financial performance has been verified by internal and external audit.
The Committee has the discretion to recommend to the Board an adjustment to any award considering unexpected
or unintended circumstances.
When are
incentives paid?
The component of the TI awards approved by the Board that is not subject to deferral is paid to participating
Executive KMP and other Executives in October following the Financial Year End and are subject to ongoing
employment at the date of payment.
The deferred component of Executive KMP’s TI is provided in deferred rights, which they will not be able to trade
during the relevant deferral period. See above for details.
Cessation of employment, clawback or change of control
If an individual
ceases
employment
during the
performance
year, will they
receive a
payment?
Does a “clawback”
apply?
Participants leaving employment during the performance year due to resignation, termination for cause, or gross
misconduct are generally not eligible to receive an award under the TI plan.
Participants leaving employment during the performance year for other reasons (e.g. redundancy) will be entitled to
receive a pro-rata award.
The TI Plan allows the Board to take any steps that it determines appropriate to recover from the individual
Executives any TI reward that was determined to have been an “unfair benefit” as a result of a material
misstatement in, or omission from, the Company’s financial statements or concerning the satisfaction of KPI
applicable to the TI. The provision applies only to those who were Executives of the Company at the time the
financial statements were approved by the Board and issued by the Company. The Board may also adjust the
award in cases of fraud, or dishonest or gross misconduct, unsustainable performance involving high-risk actions
and bringing the company into disrepute.
How would a
change of
control affect
TI plan
entitlements?
The Board has absolute discretion in relation to the treatment, payment or provision of TI awards on a change of
control, which it would exercise in the best interests of the Company. The Board may also give the CEO and
Managing Director notice that the restriction period for any restricted shares will end if certain change of control
events occur.
3.3 FY21 LONG TERM INCENTIVE PLAN
Features of the LTI plan applicable in respect of FY21 are outlined in the table below. In FY21, the Board granted performance rights
under the LTI plan to Executive KMP and other Senior Executives.
Form and purpose of the plan
What is the LTI plan? The LTI plan is an incentive that is intended to promote alignment between Executives and shareholder
interests over the longer term. Under the LTI plan, performance rights may be offered annually to the CEO
and Managing Director and nominated Executives, including Executive KMP. The employees invited to
participate in the plan include Executives who are considered to play a leading role in achieving the
Company’s long-term strategic and operational objectives.
From FY21, performance rights will replace performance options as the vehicle to deliver the LTI.
Performance rights were chosen to align Executive remuneration with the shareholder experience, while
ensuring that the LTI remains a motivating incentive amidst a COVID-19 environment that is impacting the
Company’s share price.
How is the LTI plan
delivered?
The LTI plan is delivered via a grant of performance rights. The number of performance rights that vest is not
determined until after the end of the performance period.
The performance rights will therefore not provide any value to the holder between the dates the performance
rights are granted and the end of the vesting period and restriction period (if applicable), and then only if the
performance hurdles are satisfied.
Performance rights do not carry entitlements to ordinary dividends or other shareholder rights until the
performance rights vest and shares are provided. Accordingly, participating Executives do not receive
dividends during the vesting period.
How was the number
of performance rights
determined?
The number of performance rights for each Executive was determined as part of the calculation of total
remuneration for an Executive role. The Committee determined LTI plan awards by assessing the quantum
required to provide a market competitive total remuneration level, for on target performance.
The number of performance rights granted was determined by reference to the maximum value of the grant.
The maximum value was determined by a fixed percentage of the Executive’s TFC. The CEO and Managing
Director was entitled to a maximum value of 70 percent of TFC in FY21. Other Executive KMP are entitled to
a maximum value of 45 percent of TFC. These opportunity levels represent a reduction in quantum from the
maximum opportunity levels provided to Executive KMP under the previous LTI plan.
The maximum value divided by the value attributed to the performance right was used to determine the exact
number of performance rights granted. The value attributed to the performance right was calculated using the
volume weighted average price (VWAP) of the Company’s shares over the five trading days up to and
including the day before the grant date.
Vesting and performance hurdles
What is the
performance period?
What are the
performance hurdles?
The performance period commences at the beginning of the financial period in which the performance rights
are granted. For the performance rights granted under the FY21 LTI plan, the performance period started on
26 July 2020 and ends after three years on 29 July 2023. Following the end of the performance period and
after the Company has lodged its audited financial results for FY23 with the ASX, the Board will test the
performance hurdles that apply to the FY21 LTI plan offer and will determine how many performance rights (if
any) are eligible to vest.
The performance measures approved by the Board for the FY21 LTI plan offer were in two stages:
Stage 1 – Absolute TSR gateway - requiring achievement of a positive absolute TSR over the testing period.
If absolute TSR is negative, performance rights lapse.
Stage 2 – Where absolute TSR performance is positive over the performance period, performance rights will
be assessed against underlying EPS and relative TSR:
50 percent of the award is subject to the EPS hurdle; and
50 percent of the award is subject to the relative TSR hurdle.
Why were the
performance hurdles
chosen?
The hurdles were chosen to align shareholder returns with Executive remuneration outcomes over the three-
year performance period and to complement the TIP plan measures.
The Board considers underlying EPS the most effective measure for determining the underlying profitability of
the business. When determining normalised EPS for LTI purposes statutory earnings is adopted as the base
and the Board will allow adjustments to be made for significant items on a case-by-case basis. To the extent a
write-down occurs that is considered to have been within management’s control, it will form a part of the EPS
calculation.
The TSR hurdle was selected to ensure alignment between comparative shareholder return and reward for
36
12
13
37
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
Executives. This measure also provides a direct comparison of the Company's performance over the
performance period against a comparator group of companies that would, broadly, be expected to be similarly
impacted by changes in market conditions.
What is the
vesting
framework?
The number of performance rights that vest will depend on how well Myer has performed during the
performance period. For superior performance, 100 percent of the performance rights will vest. Only a
percentage of performance rights will vest for performance below that level. If Myer does not achieve certain
minimum thresholds then all the applicable performance rights will lapse, and no performance rights will vest.
For the FY21 LTI plan offer, the following vesting hurdles apply:
Stage 1 – Absolute TSR gateway
The absolute TSR hurdle is tested by measuring the Company’s Share price at the beginning and at the end
of the performance period, and the absolute TSR must be positive over the performance period to progress to
Stage 2 of testing. If the absolute TSR over the performance period is negative, all performance rights granted
under the LTI will lapse.
For the purpose of this calculation, the opening value was set at $0.20, being the 5 trading day VWAP up to
and including 26 July 2020. The end value will be based on the 5 trading day VWAP up to and including the
last day of the performance period.
The Board retains discretion to adjust the absolute TSR performance gateway in exceptional circumstances.
Stage 2 – Relative TSR and Underlying EPS
Only if Stage 1 testing delivers a positive absolute TSR result, will Stage 2 testing be undertaken. Stage 2
testing focuses Executive effort on long-term sustainable performance. Stage 2 requires two performance
hurdles to be met:
a) 50% of the performance rights will be subject to a hurdle based on the Company’s TSR relative to an
agreed peer group across the three-year performance period (Performance Period);
b) 50% of the performance rights will be subject to a hurdle based on the Company’s underlying EPS.
The Stage 2 performance hurdles have been chosen to align with shareholder returns and the delivery of
shareholder value over the long-term. Each of the performance hurdles under Stage 2 will be assessed
separately and apply to different performance rights. This means that both hurdles do not need to be satisfied
for any of the performance rights to vest.
Stage 2 - Performance rights subject to the EPS hurdle (50 percent of the Award)
The EPS hurdle will be tested over the performance period by calculating the compound annual growth rate in
the Company’s underlying EPS using EPS at the end of FY19 as the base year. The resulting growth rate will
be used to determine the level of vesting for the performance rights subject to the EPS Hurdle.
The table below sets out the percentage of performance rights subject to the EPS Hurdle that can vest
depending on the Company’s growth in underlying EPS. The EPS targets were the same as under the FY20
LTI plan. The Board believes that the FY21 targets provide appropriate ambition and stretch for Executives, in
light of Myer experiencing negative EPS growth in prior years.
Growth in underlying EPS from base year EPS
% of performance rights subject to the EPS
Hurdle that will vest
(rounded down to the nearest whole number)
Below 5% compound annual growth
At 5% compound annual growth
Nil
50%
Between 5% and 12% (inclusive) compound annual
growth
Straight line pro-rata vesting between 50% and 100%
At or above 12% compound annual growth
100%
Stage 2 - Performance rights subject to the TSR Hurdle (50 percent of the Award)
The TSR Hurdle will be tested following the end of the performance period by comparing the Company’s TSR
performance over the performance period relative to a set peer group. The peer group for the FY21 LTI grant
includes listed companies from the retail and the consumer services sector. The constituents are: Accent
Group, Adairs, AP Eagers, Baby Bunting, Bapcor, Beacon Lighting, Coles Group, Collins Foods, Corporate
Travel Management, Domino’s Pizza Enterprises, Flight Centre Travel Group, Harvey Norman Holdings,
Helloworld Travel, JB Hi-Fi, Kogan, Lovisa Holdings, Metcash, Michael Hill International, Motorcycle Holdings,
National Tyre & Wheel, Nick Scali, Mosaic Brands (previously Noni B), Premier Investments, Super Retail
Group, Webjet, Wesfarmers and Woolworths Group. The comparator group may, at the discretion of the
Board, be adjusted to take into account events during the performance period including, but not limited to,
takeovers, mergers, de-mergers and de-listings.
The table below sets out the percentage of performance rights subject to the TSR Hurdle that can vest
depending on the Company’s relative TSR performance:
TSR performance relative to peer group
% of performance rights subject to the TSR
Hurdle that will vest
(rounded down to the nearest whole number)
Below the 50th percentile
At the 50th percentile
Nil
50%
Between the 50th percentile and the 75th percentile Straight line pro-rata vesting between 50% and 100%
At or above the 75th percentile
100%
Are the performance
hurdles subject to
retesting?
No. Each performance hurdle is only tested once at the end of the performance period.
How are shares
allocated?
Under the plan, following vesting, the performance rights will be automatically exercised and the Executive is
allocated one fully paid ordinary share for each vested performance right.
Do any
restrictions apply once
the rights vest?
Any shares provided on vesting of the performance rights will be subject to a restriction period of one year,
during which they cannot be sold, transferred or otherwise dealt with. A continuous service restriction will also
apply during the restriction period.
Due to foreign resident tax considerations, for the CEO and Managing Director, the performance period is 3
years, but the vesting period is 4 years during which a continuous service condition applies.
Cessation of employment, change of control, clawback, forfeiture, participation in future issues and hedging arrangements
Cessation of
employment
The treatment of performance rights on cessation of employment will depend on the date as well as the
circumstances of cessation. Generally, if an Executive ceases employment on or before the end of the
restriction period due to resignation, termination for cause or gross misconduct, they will forfeit any interest in
the rights. If employment ceases on or before the end of the restriction period for other reasons, the Executive
will retain a pro-rata interest in the vested shares. The calculation is determined based on time elapsed
between the start of the performance period and cessation of employment. Subject to applicable law, the
Board has the discretion to allow a different treatment (although the discretion is only likely to be exercised in
exceptional circumstances).
How would a change of
control impact
LTI plan entitlements?
The Board has absolute discretion to allow full or pro-rated accelerated vesting of performance rights in the
event of certain change of control events, and would exercise this discretion as appropriate considering the
circumstances.
Does a
“clawback”
and/or forfeiture apply?
The LTI Plan allows the Board to take any steps that it determines appropriate to recover from the individual
Executives any LTI award that vests or may vest if it was determined to have been an ‘unfair benefit’ as a
result of a material misstatement in, or omission from, the Company’s financial statements or concerning the
satisfaction of KPI applicable to the LTI. The provision applies only to those who were Executives of the
Company at the time the financial statements were approved by the Board and issued by the Company. The
Board may also adjust the award in cases of fraud, or dishonest or gross misconduct, unsustainable
performance involving high-risk actions and bringing the company into disrepute.
How would a
bonus or rights issue
impact performance
rights under
the LTI plan?
The rights and entitlements attaching to performance rights may be adjusted if the Company undertakes a
bonus or rights issue or a capital reconstruction in relation to the Company's shares. For example, in the event
of a rights issue, the number of shares which an Executive is entitled to be allocated on the exercise of
performance rights may be changed in a manner determined by the Myer Board and consistent with the ASX
Listing Rules.
Do any other
restrictions apply
to performance rights
prior to vesting or
subject to restriction?
Executives are forbidden from entering into any hedging arrangements affecting their economic exposure to
performance rights or restricted shares.
Executives are also forbidden from entering into transactions or arrangements prohibited under the
Company’s Securities Dealing Policy.
38
14
15
39
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
In FY21, Executive KMP and other Senior Executives received a grant of performance rights. The awards granted may deliver value to
Executives at the end of the three-year performance period, subject to satisfaction of performance hurdles as set out in the table below.
The following table summarises the FY21 performance rights granted to Executive KMP:
Name
J King
N Chadwick
A Sutton
A Winstanley
Number of
performance rights
granted
Valuation of each
performance right
at grant date(1)
$
Exercise
price
$
Applicable
hurdles
1,721,311
1,721,311
733,094
733,094
608,607
608,607
733,094
733,094
0.1941
0.2150
0.1941
0.2150
0.1941
0.2150
0.1941
0.2150
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
TSR
EPS
TSR
EPS
TSR
EPS
TSR
EPS
End of
performance
period
29 July 2023
29 July 2023
29 July 2023
29 July 2023
29 July 2023
29 July 2023
29 July 2023
29 July 2023
(1)
The valuation is calculated in accordance with AASB 2 Share Based Payment.
4. EXECUTIVE KMP SERVICE AGREEMENTS
Remuneration and other terms of employment for the CEO and Managing Director, and other Executive KMP are formalised in service
agreements. The termination provisions for Executive KMP, as set out in their service agreements, are described below:
Name
J King
N Chadwick
A Sutton
A Winstanley
Contract type
Rolling contract
Rolling contract
Rolling contract
Rolling contract
Termination notice period
initiated by Executive KMP
12 months
Termination notice period, or
payment in lieu of notice,
initiated by Company
12 months
6 months
3 months
6 months
6 months
6 months
6 months
The agreements also provide for an Executive KMP’s participation in the TI and LTI plans subject to Board approval of their eligibility
and in accordance with the terms and conditions of the respective plans.
In addition, Mr King and Mr Winstanley have been provided with support relating to their relocations, and are entitled to the following
benefits:
Coverage of costs associated with moving personal and household items, tax services and rental assistance for the first year of
their assignments; and
Health care coverage and two return flights for self and spouse to and from the USA or the United Kingdom annually, and other
costs related to their Australian residency.
The cost to the Company in providing this support for the period ended 31 July 2021 is summarised in Section 7.
5. NON-EXECUTIVE DIRECTOR REMUNERATION
REMUNERATION POLICY
Myer’s policy regarding Non-Executive Director fees is as follows:
fees and payments to Non-Executive Directors reflect the demands upon and responsibilities of those Directors;
base fees for Non-Executive Directors include payment for participation on Board Committees; however, an additional payment is
made to those who serve as Chairman on a Committee (excluding the Nomination Committee) to recognise the additional
responsibility and time requirements involved in chairing a Committee;
Non-Executive Directors do not receive performance-based pay. However, they are able to purchase shares in the Company,
which can be acquired on market during approved trading ‘windows’ for share trading consistent with the Company’s Securities
Dealing Policy; and
the Board, on the recommendation of the Human Resources and Remuneration Committee, reviews Non-Executive Directors'
fees and payments at least once a year. As part of that review, the Board considers the advice of independent remuneration
consultants in relation to Chairman’s fees and payments, Non-Executive Directors’ fees and payments, and payments made in
relation to the Chairman of committees or for other specific tasks that may be performed by Directors.
Non-Executive Directors are not entitled to any additional remuneration upon retirement. Superannuation contributions required by
legislation are made from the fee paid to Directors and fall within the aggregate fee pool limit.
AGGREGATE FEE POOL
Non-Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit as approved from time to time by Myer
shareholders at the AGM. The maximum aggregate limit includes superannuation contributions for the benefit of Non-Executive
Directors and any fees which a Non-Executive Director agrees to sacrifice for other benefits. It does not include reimbursement of
genuine out-of-pocket expenses, genuine special exertions fees paid in accordance with the Company’s constitution, or certain issues
of securities under ASX Listing Rule 10.11 or 10.14, with the approval of shareholders. The current maximum aggregate fee pool limit
is $2,150,000 per annum. The aggregate fee pool limit has not changed since the Company was listed in November 2009.
REDUCTIONS TO NON-EXECUTIVE DIRECTOR FEES
In FY18, the Chairman and Non-Executive Directors’ fees had been reduced to align them with market benchmarks for companies with
a similar market capitalisation. The Chairman fee was initially reduced from $400,000 in FY17 to $350,000 from the start of FY18. From
21 March 2018, the Chairman fee was subsequently further reduced from $350,000 to $300,000, Non-Executive Directors’ fees were
reduced from $150,000 to $120,000, the Audit Finance and Risk Committee Chairman fees were reduced from $30,000 to $20,000 and
Human Resources and Remuneration Committee Chairman fees were reduced from $22,500 to $20,000.
The further reduction of 16.7 percent to the Chairman and Non-Executive Director fees was made effective from 1 July 2020, in
response to the impact of COVID-19 on Myer’s investors, customers, team members and the community more broadly and is detailed
below.
Base Annual Fees
Chairman (all inclusive)(1)
Other Non-Executive Directors
Additional annual fees
Audit Finance and Risk Committee – Chairman
Audit Finance and Risk Committee – member
Human Resources and Remuneration Committee – Chairman
Human Resources and Remuneration Committee – member
Nomination Committee – Chairman
Nomination Committee – member
(1)
As Acting Chairman, JoAnne Stephenson received a base annual fee of $120,000.
MINIMUM SHAREHOLDING POLICY
26 July 2020 – 31
July 2021
250,000
100,000
20,000
-
20,000
-
-
-
Each Non-Executive Director will target the purchase of a shareholding in the Company that, as at the date of the last purchase, is
equivalent to at least one year’s Non-Executive Director’s base fees, progressively over three years from the date of their appointment,
for new Non-Executive Directors, and within three years from April 2018 for Non-Executive Directors appointed before this date.
40
16
17
41
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
The table below shows the remuneration amounts recorded in the financial statements in the period for Non-Executive Directors:
6. REMUNERATION GOVERNANCE
Name
Non-Executive Directors
J Stephenson (1)
D Whittle(2)
J Naylor(3)
Former Non-Executive Directors
G Hounsell(4)
J Morrison(5)
L Cattermole AM(6)
I Cornell(7)
Total Non-Executive Directors
FY
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Myer Holdings Limited
Board & Committee
Fees
$
Superannuation
$
Total
$
108,550
104,075
104,094
88,992
104,094
88,992
55,347
227,649
22,282
92,199
22,282
88,992
-
31,216
416,649
722,115
11,450
10,925
10,982
9,342
10,982
9,342
5,259
18,185
2,339
9,342
2,339
9,342
-
3,277
43,351
69,755
120,000
115,000
115,076
98,334
115,076
98,334
60,606
245,834
24,621
101,541
24,621
98,334
-
34,493
460,000
791,870
(1) Ms Stephenson was appointed Acting Chairman on 29 October 2020 but elected not to receive the full Chairman Fees and was instead paid a base fee of $120,000.
(2) Mr Whittle was appointed Chairman of the Audit, Finance and Risk Committee on 29 October 2020.
(3) Ms Naylor was appointed Chairman of the Human Resource and Remuneration Committee on 29 October 2020.
(4) Mr Hounsell retired as a Non-Executive Director on 28 October 2020.
(5) Ms Morrison retired as a Non-Executive Director on 29 October 2020.
(6) Ms Cattermole AM retired as a Non-Executive Director on 29 October 2020.
(7) Mr Cornell retired as a Non-Executive Director on 30 October 2019.
6.1 HUMAN RESOURCES AND REMUNERATION COMMITTEE
The Board reviews its role, responsibilities, and performance annually to ensure that the Company continues to maintain and improve
its governance standards.
The Board is responsible for ensuring the Company’s remuneration strategy is equitable and aligned with Company performance and
shareholder interests. The Board conducts an annual review of the remuneration strategy of the business. To assist with this, the Board
has established a Human Resources and Remuneration Committee (Committee) made up of Non-Executive Directors only. The
Committee charter is available on the Company’s Investor Centre website.
When making remuneration decisions, the Committee will also consider the Company’s internal succession plan and capability profile.
Mr Garry Hounsell served as Chairman between October 2019 until October 2020. On 29 October 2020, following the retirements from
the Board of Mr Garry Hounsell, Ms Julie Ann Morrison and Ms Lyndsey Cattermole AM, the Committee was reconstituted to comprise
Ms Jacquie Naylor (Committee member from 3 September 2019) as Chairman and Ms JoAnne Stephenson and Mr David Whittle as
members.
In performing its role, the Committee has the responsibility to make recommendations to the Board on:
Non-Executive Director fees;
Executive remuneration (for the CEO and Managing Director, and other Executives) including specific recommendations on
remuneration packages and other terms of employment;
The overarching remuneration framework including the policy, strategy and practices for fixed reward and both short and long
term incentive plans and performance hurdles; and
The health of the organisation, suitable succession coverage, organisational culture and diversity.
The Committee has been established under rule 8.15 of the Constitution of the Company. Further information on the role of the
Committee, its membership and meetings held throughout the year will be set out in the Corporate Governance Statement (available on
the Company’s website) and the Directors’ Report.
The CEO and Managing Director, and the General Manager, People & Culture are regular attendees at the Committee meetings. The
CEO and Managing Director was not present during any Committee or Board meetings when his remuneration was considered or
discussed during the financial period.
The Committee must at all times have regard to, and notify the Board as appropriate, of all legal and regulatory requirements, including
any shareholder approvals required in connection with remuneration matters.
The Committee Chairman or, if he is not available, a Committee member, will attend the AGM and be available to answer any
questions from shareholders about the Committee’s activities or, if appropriate, the Company’s remuneration arrangements.
6.2 USE OF REMUNERATION CONSULTANTS
To ensure it is fully informed when making remuneration decisions, the Committee draws on services from a range of external sources,
including remuneration consultants where appropriate. The Company’s guidelines on the use of remuneration consultants aim to
ensure the independence of remuneration consultants from Myer’s management, and include the process for the selection of
consultants and the terms of engagement.
Remuneration consultants are engaged by the Committee Chairman, and report directly to the Committee. As part of this engagement,
an agreed set of protocols to be followed by the consultants, the Committee, and management, have been devised that determine the
way in which remuneration recommendations are developed and provided to the Board. This process is intended to ensure that any
recommendation made by a remuneration consultant is free from undue influence by the Executive KMP to whom any
recommendations may relate.
42
18
19
43
Myer Annual Report 2021Myer Annual Report 2021
f
o
%
n
o
i
t
a
r
e
n
u
m
e
R
f
o
%
s
n
o
i
t
p
o
f
o
g
n
i
t
s
i
s
n
o
c
/
r
o
d
n
a
s
t
h
g
i
r
n
o
i
t
a
r
e
n
u
m
e
r
$
d
e
t
a
l
e
r
e
c
n
a
m
r
o
f
r
e
P
l
a
t
o
T
$
-
e
r
a
h
S
d
e
s
a
b
t
n
e
m
y
a
p
)
8
(
e
s
n
e
p
x
e
$
i
g
n
d
u
l
c
x
E
e
r
a
h
s
d
e
s
a
b
s
t
n
e
m
y
a
p
$
r
e
h
t
o
&
s
t
n
e
m
y
a
p
n
o
i
t
a
n
m
r
e
T
i
$
g
n
o
L
i
e
c
v
r
e
s
)
7
(
e
v
a
e
l
$
l
a
t
o
t
b
u
S
e
s
n
e
p
x
e
n
o
i
t
a
r
e
n
u
m
e
r
l
a
t
o
T
s
t
i
f
e
n
e
b
m
r
e
t
-
g
n
o
L
,
s
e
v
i
t
n
e
c
n
i
n
o
i
t
n
e
t
e
r
d
n
a
s
t
n
e
m
y
a
p
d
e
s
a
b
e
r
a
h
s
f
o
e
s
a
c
e
h
t
n
I
.
d
o
i
r
e
p
i
s
h
t
n
i
i
d
e
d
v
o
r
p
i
s
e
c
v
r
e
s
r
o
f
d
e
d
r
a
w
a
r
o
i
d
a
p
n
o
i
t
a
r
e
n
u
m
e
r
e
h
t
f
o
t
n
e
m
e
e
l
h
c
a
e
f
o
t
n
u
o
m
a
d
n
a
e
r
u
t
a
n
e
h
t
f
o
s
l
i
a
t
e
d
s
w
o
h
s
l
e
b
a
t
i
g
n
w
o
l
l
o
f
e
h
T
T
R
O
P
E
R
N
O
I
T
A
R
E
N
U
M
E
R
d
e
u
n
i
t
n
o
C
T
R
O
P
E
R
N
O
I
T
A
R
E
N
U
M
E
R
d
e
u
n
i
t
n
o
C
I
S
E
R
U
S
O
L
C
S
D
Y
R
O
T
U
T
A
T
S
P
M
K
E
V
T
U
C
E
X
E
I
44
.
7
l
i
a
u
d
v
d
n
i
i
e
h
t
o
t
i
d
a
p
y
l
l
a
u
t
c
a
t
n
u
o
m
a
e
h
t
t
c
e
l
f
e
r
y
l
i
r
a
s
s
e
c
e
n
t
o
n
s
e
o
d
i
s
h
t
i
l
y
g
n
d
r
o
c
c
a
d
n
a
s
d
r
a
d
n
a
t
s
g
n
i
t
n
u
o
c
c
a
t
n
a
v
e
e
r
l
h
t
i
w
e
c
n
a
d
r
o
c
c
a
l
.
s
e
b
a
t
i
g
n
w
o
l
l
o
f
e
h
t
n
i
n
i
d
o
i
r
e
p
e
h
t
g
n
i
r
u
d
d
e
s
n
e
p
x
e
t
n
u
o
m
a
e
h
t
t
c
e
l
f
e
r
d
e
s
o
c
s
d
l
i
s
t
n
u
o
m
a
e
h
t
n
w
o
h
s
t
n
u
o
m
a
e
h
t
n
a
h
t
s
s
e
l
r
o
e
r
o
m
e
b
y
a
m
h
c
h
w
i
,
d
o
i
r
e
p
e
h
t
g
n
i
r
u
d
%
8
2
%
4
2
%
0
2
%
4
1
%
0
2
%
4
1
%
1
2
%
4
1
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
%
4
4
%
4
2
%
5
3
%
4
1
%
5
3
%
4
1
%
5
3
%
4
1
FOOTNOTES
2
1
2
,
3
3
4
,
2
7
2
3
,
1
7
6
5
8
8
,
1
6
7
,
1
5
7
2
,
1
9
5
,
1
2
5
7
,
9
7
3
3
2
5
,
1
1
2
,
1
1
5
9
,
3
0
3
,
1
8
4
3
,
3
6
2
3
0
6
,
0
4
0
,
1
3
4
9
,
5
3
8
3
6
0
,
5
1
1
0
8
8
,
0
2
7
9
6
7
,
0
8
0
,
1
6
3
7
,
8
1
2
3
3
0
,
2
6
8
1
2
6
,
1
0
7
0
4
7
,
9
9
1
8
8
,
1
0
6
4
6
7
,
4
0
9
1
2
2
,
8
2
1
3
4
5
,
6
7
7
9
0
6
,
4
0
3
,
1
3
6
9
,
8
6
2
6
4
6
,
5
3
0
,
1
1
4
5
,
2
2
1
,
6
4
7
3
,
2
2
4
,
1
7
6
1
,
0
0
7
,
4
3
0
6
,
3
3
0
,
4
6
7
7
,
2
2
7
7
2
8
,
0
1
3
,
3
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Cash salary includes short-term compensated absences, including any salary sacrifice arrangement implemented by the Executive KMPs, including additional superannuation
contributions.
TI payments relate to program performance and conditions for the year they were earned, not the year of actual payment.
Non-monetary short term benefits include Fringe Benefits Tax paid by the Company in respect of Company provided car parking up to the end of March 2021 (in accordance with the
FBT year), mobile phone expenses and other items referred to in footnotes (9) and (10) for Mr King and Mr Winstanley, respectively.
Other short-term employee benefits include the movement in annual leave accrual.
There were no post-employment benefits other than superannuation.
Executive KMPs receive a statutory superannuation contribution up to a threshold limit in line with the ATO published maximum superannuation contribution base, with the exception
of Mr King and Mr Winstanley, who do not receive superannuation due to their tax status.
This benefit includes the movement in long service leave accrual.
The share-based payment expense represents the amount expensed for the period based on valuations determined under AASB 2 Share Based Payment. This expense is based on
the fair value at grant date, and reflects expectations of the number of rights and options expected to vest. Where expectations change in relation to vesting, adjustment is made in
the current period to reflect this change. As the equity grant may fully vest, partially vest or not vest at all, the benefit that the Executive KMP ultimately realises is likely to be different
to the amount disclosed in a particular year. The amount disclosed does not represent cash payments received in the period, and if vesting conditions are not met, may result in
reversal of the remuneration amount in a future period.
(9) Mr King's other short-term benefits include annual leave accrual, a health insurance allowance, relocation expenses for spouse, and return flights home under the terms of his
employment contract.
-
-
-
-
-
-
-
-
-
-
(10) Mr Winstanley's other short-term benefits include annual leave accrual, a health insurance allowance, and return flights home under the terms of his employment contract.
2
1
1
6
2
,
,
3
7
7
5
3
7
1
,
3
8
4
9
,
0
4
0
2
0
2
,
,
1
7
8
1
,
8
1
,
6
1
4
2
2
0
1
,
$
-
-
t
s
o
P
)
5
(
s
t
i
f
e
n
e
b
t
n
e
m
y
o
p
m
e
l
-
r
e
p
u
S
)
6
(
n
o
i
t
a
u
n
n
a
l
s
t
i
f
e
n
e
b
e
e
y
o
p
m
e
m
r
e
t
-
t
r
o
h
S
$
)
4
(
r
e
h
t
O
$
-
n
o
N
)
3
(
y
r
a
t
e
n
o
M
$
)
2
(
I
T
$
h
s
a
C
)
1
(
y
r
a
l
a
s
Y
F
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
e
m
a
N
8
3
2
,
8
6
7
7
5
,
5
7
-
5
2
2
,
8
5
0
,
1
0
2
0
2
6
0
5
,
0
7
8
8
4
,
6
7
9
7
7
,
8
8
3
0
0
0
,
0
0
2
,
1
1
2
0
2
)
9
(
g
n
K
J
i
P
M
K
e
v
i
t
u
c
e
x
E
0
5
8
1
2
,
7
1
9
2
3
,
4
2
3
,
1
5
7
1
,
3
9
1
0
5
1
,
3
7
7
1
2
0
2
i
k
c
w
d
a
h
C
N
6
9
7
6
,
4
8
0
4
1
7
,
0
6
0
,
1
2
4
9
4
,
9
1
4
4
3
3
,
-
6
8
1
,
0
7
6
0
2
0
2
5
9
0
,
2
1
8
3
9
,
9
4
8
0
5
8
,
1
2
9
5
6
,
8
2
8
0
9
1
7
3
,
0
6
1
0
5
1
,
8
3
6
1
2
0
2
n
o
t
t
u
S
A
)
8
2
9
,
4
1
(
9
0
8
6
1
6
,
0
6
0
,
1
2
)
6
4
6
,
0
2
(
1
2
1
2
,
-
4
7
2
,
4
1
6
0
2
0
2
8
6
1
6
,
5
7
3
,
0
7
7
2
7
0
,
7
1
4
7
5
8
1
0
,
,
1
-
-
2
3
3
2
2
,
7
6
0
8
,
5
7
1
,
3
9
1
0
0
0
,
5
9
7
1
2
0
2
5
5
2
,
8
4
6
4
0
,
1
2
-
4
7
0
,
1
0
7
0
2
0
2
l
)
0
1
(
y
e
n
a
t
s
n
W
A
i
6
6
4
,
3
7
9
1
5
7
,
,
1
0
7
6
2
6
4
,
,
8
0
3
3
0
3
3
,
0
0
7
,
3
4
0
2
1
,
2
4
4
1
4
,
4
5
1
7
8
7
,
6
8
0
0
5
,
5
3
9
0
0
3
,
6
0
4
,
3
1
2
0
2
1
4
3
,
5
1
1
8
8
0
2
0
1
,
-
9
5
7
,
3
4
0
,
3
0
2
0
2
n
o
i
t
a
r
e
n
u
m
e
R
P
M
K
l
a
t
o
T
0
2
21
45
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
7.1 UNVESTED PERFORMANCE RIGHTS AND OPTIONS
7.3 SHARES PROVIDED ON EXERCISE OF RIGHTS OR OPTIONS
Details of performance rights and options granted to Executive KMP under the previous equity incentive plans that remain unvested as
at 31 July 2021 are set out in the table below. As set out in Section 2.4, the Options granted on 24 December 2018 will lapse following
the release of the FY21 results due to failure of the vesting conditions.
Grant type
Options (EPS hurdle)(1)
Options (TSR hurdle)(1)
CEO Options (EPS hurdle)(2)
Grant date
Number of
instruments
24-Dec-18
8,870,968
24-Dec-18
8,870,968
21-Nov-19
2,799,378
Other Executive KMP Options (EPS hurdle)(2)
21-Nov-19
3,499,223
CEO Options (TSR hurdle)(2)
21-Nov-19
2,799,378
Other Executive KMP Options (TSR hurdle)(2)
21-Nov-19
3,499,223
CEO Rights (EPS hurdle)
9-Nov-20
1,721,311
Other Executive KMP Rights (EPS hurdle)
9-Nov-20
2,074,795
CEO Rights (TSR hurdle)
9-Nov-20
1,721,311
Other Executive KMP Rights (TSR hurdle)
9-Nov-20
2,074,795
Value per
instrument
at grant
date
$
$0.12
$0.12
$0.18
$0.15
$0.16
$0.15
$0.22
$0.22
$0.19
$0.19
Vesting date (if holder
remains employed by a
Myer Group company)
N/A (Options to lapse)
N/A (Options to lapse)
End of vesting period
End of vesting period
End of vesting period
End of vesting period
End of vesting period
End of vesting period
End of vesting period
End of vesting period
TIP Rights(3)
Total
15-Dec-20
-
-
End of vesting period(4)
37,931,350
(1)
(2)
(3)
(4)
Performance options granted on 24 December 2018 will lapse following the release of the FY21 results due to failure of the vesting conditions (as disclosed in section 2.4 of this
Report).
Performance options granted on 21 November 2019 will expire on 21 November 2023.
The number of rights issued will be determined by dividing the dollar value of the deferred rights component of the TIP award by the volume weighted average price of the
Company’s shares over the five trading days immediately following the release to the market of the Company’s full year FY21 results.
Deferred rights granted under the FY21 TIP are expected to be issued shortly after the release of the Company's full year FY21 results. From issue date 50% of the deferred rights
are subject to a one-year service period and 50% are subject to a two-year service period.
Details of performance rights or options over ordinary shares in the Company currently provided as remuneration and granted
during FY21 to Executive KMP are set out overleaf. Further information on the LTI and TI plan is set out in note H4 of the Financial
Statements.
7.2 EQUITY INSTRUMENTS GRANTED TO EXECUTIVE KMP IN FY21
Name
J King(3)
N Chadwick
A Sutton
A Winstanley(4)
Vesting Date
16-Sep-24
16-Sep-23
16-Sep-23
16-Sep-23
Number of performance
rights granted(1)
Value of performance
rights at grant date(2)
$
Number of rights
vested during the
period
3,442,622
1,466,188
1,217,214
1,466,188
840,000
357,750
297,000
357,750
743,257
-
-
169,755
(1)
(2)
No performance rights were granted to Non-Executive Directors during the reporting period.
The face value for allocating rights under the FY21 LTI plan was $0.24, based on the volume weighted average price of the Company’s shares over the five trading days up to and
including the day before the date of the FY21 Grant.
(3) Mr King was appointed as CEO and Managing Director on 4 June 2018. The number of performance rights vested refer to rights granted on his commencement. This plan vests
monthly in 36 equal tranches.
No Non-Executive Directors of the company or Executive KMP were provided ordinary shares as a result of exercise of options or
rights.
7.4 PERFORMANCE OPTIONS AND PERFORMANCE RIGHTS ON ISSUE
For each grant of options or grant of performance rights included in this report, the percentage of the grant that was paid, or that
vested, in the financial period, and the percentage and value that was forfeited because the service and performance criteria were not
met is set out below. Options and performance rights vest provided the vesting conditions or performance hurdles are met. No options
or performance rights will vest if the hurdles (either service or performance) are not satisfied, therefore the minimum value of the
options or performance rights yet to vest is nil. As set out in Section 2.4, the Options granted on 24 December 2018 will lapse following
the release of the FY21 results due to failure of the vesting conditions.
Name
J King(2)
N Chadwick
A Sutton
A Winstanley(7)
Grant date
Equity Vehicle
Vested %
Forfeited %
Maximum total
value of grant yet
to be expensed (1)
15-Dec-20
9-Nov-20
21-Nov-19
24-Dec-18
4-Jun-18
15-Dec-20
9-Nov-20
21-Nov-19
24-Dec-18
29-Jan-18(5)(6)
15-Dec-20
9-Nov-20
21-Nov-19
24-Dec-18
21-Dec-17(6)
15-Dec-20
9-Nov-20
21-Nov-19
24-Dec-18
25-Jun-18
Rights(8)
Rights
Options(3)
Options(4)
Rights
Rights(8)
Rights
Options(3)
Options(4)
Rights
Rights(8)
Rights
Options(3)
Options(4)
Rights
Rights(8)
Rights
Options(3)
Options(4)
Rights
-
-
-
-
28%
-
-
-
-
-
-
-
-
-
-
-
-
-
28%
-
-
-
-
-
-
-
-
-
100%
-
-
-
-
100%
-
-
-
-
-
226,788
586,824
548,188
182,795
-
112,685
235,363
203,426
62,281
-
93,550
195,396
168,882
51,705
-
112,685
235,363
203,426
62,281
-
(1)
This represents the maximum remaining accounting value of the LTI and TI plan awards (rights and options) as at their grant date.
(2) Mr King was appointed as CEO and Managing Director on 4 June 2018. Performance rights were granted upon his appointment and vest monthly over the period 4 June 2018 to 4
(3)
(4)
June 2021.
Performance options granted on 21 November 2019 will expire on 21 November 2023.
Performance options granted on 24 December 2018 will lapse following the release of the FY21 results due to failure of the vesting conditions (as disclosed in Section 2.4 of this
Report).
(5) Mr Chadwick was appointed as Chief Financial Officer on 29 January 2018, and was granted performance rights upon his appointment.
(6)
The grants under the FY18 LTI plan were tested for vesting following the release of the FY20 results. The performance hurdles were not met and hence no rights vested under this
plan.
(7) Mr Winstanley was appointed as Chief Merchandise Officer on 25 June 2018. Performance rights were granted upon his appointment and vest monthly over the period 25 June 2018
(4) Mr Winstanley was appointed as Chief Merchandise Officer on 25 June 2018. The number of performance rights vested refer to rights granted on his commencement. This plan vests
to 25 June 2021.
monthly in 36 equal tranches.
DEFERRED RIGHTS – FY21 TI PLAN
Deferred rights relating to the FY21 TIP were granted on 15 December 2020. The number of rights issued will be determined by
dividing the dollar value of the deferred rights component of the TI plan award by the volume weighted average price of the Company’s
shares over the five trading days immediately following the release to the market of the Company’s full year FY21 results, and therefore
these rights are not reflected in the above table.
(8)
Deferred rights relating to the FY21 TI plan. The number of rights issued will be determined by dividing the dollar value of the deferred rights component of the TIP award by the
volume weighted average price of the Company’s shares over the five trading days immediately following the release to the market of the Company’s full year FY21 results
46
22
23
47
Myer Annual Report 2021Myer Annual Report 2021
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
REMUNERATION REPORT
Continued
R EMUN E R AT I O N R E P O R T
Continued
7.5 TRANSACTIONS WITH KMP
Mr King is a director of Raging Bull Group Limited and has a relevant interest in 20 percent of the shares. During the period ended 31
July 2021, Myer Pty Ltd placed orders for apparel totalling $1.6 million with Raging Bull Leisure Limited, whose ultimate parent is
Raging Bull Group Limited.
The orders have been placed on an arm’s length basis under a standard wholesale agreement. As at 31 July 2021, $0.7 million
remains on order and not received, and $0.6 million was owing to Raging Bull Leisure Limited, in accordance with the terms under the
wholesale agreement.
8. EQUITY
The number of rights and options over ordinary shares in the Company held during the financial period by Executive KMP of the
Company, including their personally related parties, are set out below. No rights or options over ordinary shares are held by Non-
Executive Directors.
Opening balance
Granted as
compensation
Exercised
Lapsed
Closing balance
Options
Rights
Options
Rights(3)
Options
Rights
Options
Rights
Options
Rights
2021
J King(1)
14,631,014
2,432,432
N Chadwick
5,550,204
681,818
A Sutton
4,607,716
600,000
A Winstanley(2)
5,550,204
555,555
-
-
-
-
3,442,622
1,466,188
1,217,214
1,466,188
2020
J King
9,032,258
2,432,432
5,598,756
N Chadwick
3,077,420
681,818
2,472,784
A Sutton
2,554,838
896,429
2,052,878
A Winstanley
3,077,420
555,555
2,472,784
Former Disclosed
Executives
M Cripsey(4)
-
231,060
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 14,631,014
5,875,054
-
(681,818)
5,550,204
1,466,188
-
(600,000)
4,607,716
1,217,214
-
-
-
-
-
- 5,550,204
2,021,743
- 14,631,014
2,432,432
-
5,550,204
681,818
(296,429)
4,607,716
600,000
-
5,550,204
555,555
-
(231,060)
-
-
(1) Mr King had rights vest under an alignment equity plan; these rights have fully vested and will be automatically exercised following the opening of the trading window after the release
of the FY21 Results. Of the total rights, 2,432,432 are alignment rights and 3,442,622 are performance rights.
(2) Mr Winstanley had rights vest under an alignment equity plan; these rights have fully vested and will be automatically exercised following the opening of the trading window after the
release of the FY21 Results. Of the total rights, 555,555 are alignment rights and 1,466,188 are performance rights.
(3)
Deferred rights relating to the FY21 TI plan were granted on 15 December 2020. The number of rights issued will be determined by dividing the dollar value of the deferred rights
component of the TI plan award by the volume weighted average price of the Company’s shares over the five trading days immediately following the release to the market of the
Company’s full year FY21 results, and therefore are not reflected in the number of rights disclosed as granted in the above table.
(4) Mr Cripsey’s performance rights relate only to the time he was considered as Executive KMP.
The number of shares in the Company held during the financial period by each Director of the Company and other Executive KMP of
the Company, including their personally related parties are set out below. There were no shares granted during the reporting period as
compensation.
Opening balance
Received on exercise of
rights and/or options to
shares
Other changes
during the year
Closing balance
2021
J Stephenson
D Whittle
J Naylor
Former Directors
G Hounsell(1)
J Morrison(2)
L Cattermole AM(3)
Executive KMP
J King
N Chadwick
A Sutton
A Winstanley
2020
Directors
G Hounsell
J Morrison
J Stephenson
D Whittle
L Cattermole AM
J Naylor
Former Directors
I Cornell(4)
Executive KMP
J King
N Chadwick
A Sutton
A Winstanley
185,000
66,666
121,000
1,400,000
146,788
1,023,232
1,000,000
350,000
26,086
500,000
-
-
-
-
-
-
-
-
-
50,000
200,000
-
-
-
-
235,000
266,666
121,000
-
-
-
150,000
1,150,000
-
-
-
350,000
26,086
500,000
1,000,000
400,000
1,400,000
124,788
95,000
66,666
659,996
-
266,000
400,000
200,000
-
200,000
22,000
90,000
-
363,236
121,000
146,788
185,000
66,666
1,023,232
121,000
-
-
600,000
150,000
26,086
300,000
1,000,000
350,000
26,086
500,000
(1) Mr Hounsell retired as Non-Executive Director on 28 October 2020. His holdings for the end of the FY21 period have not been reported in the table.
(2) Ms Morrison retired as Non-Executive Director on 29 October 2020. Her holdings for the end of the FY21 period have not been reported in the table.
(3) Ms Cattermole AM retired as Non-Executive Director on 29 October 2020. Her holdings for the end of the FY21 period have not been reported in the table.
(4) Mr Cornell retired as Non-Executive Director on 30 October 2019. His holdings for the end of the FY20 period have not been reported in the table.
9. LOANS
There were no loans made to Executive KMP or entities related to them, including their personally related parties, or other transactions
at any time during FY20 or FY21.
10. DEALING IN SECURITIES
Under the Securities Dealing Policy, Directors and Senior Executives are prohibited from entering into hedging arrangements with
respect to the Company’s securities. A copy of the Securities Dealing Policy is available on the Myer Investor Centre website.
48
24
25
49
Myer Annual Report 2021Myer Annual Report 2021
Auditor’s Independence Declaration
As lead auditor for the audit of Myer Holdings Limited for the period 26 July 2020 to 31 July 2021, I
Auditor’s Independence Declaration
Auditor’s Independence Declaration
declare that to the best of my knowledge and belief, there have been:
As lead auditor for the audit of Myer Holdings Limited for the period 26 July 2020 to 31 July 2021, I
As lead auditor for the audit of Myer Holdings Limited for the period 26 July 2020 to 31 July 2021, I
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
declare that to the best of my knowledge and belief, there have been:
declare that to the best of my knowledge and belief, there have been:
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
This declaration is in respect of Myer Holdings Limited and the entities it controlled during the period.
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Myer Holdings Limited and the entities it controlled during the period.
This declaration is in respect of Myer Holdings Limited and the entities it controlled during the period.
Alison Tait
Partner
PricewaterhouseCoopers
Alison Tait
Partner
PricewaterhouseCoopers
Alison Tait
Partner
PricewaterhouseCoopers
Melbourne
16 September 2021
Melbourne
16 September 2021
Melbourne
16 September 2021
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
PricewaterhouseCoopers, ABN 52 780 433 757
Liability limited by a scheme approved under Professional Standards Legislation.
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
50
Liability limited by a scheme approved under Professional Standards Legislation.
Liability limited by a scheme approved under Professional Standards Legislation.
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
for the peri od ended 31 July 2021
for the period ended 31 July 2021
Contents
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
A. Group performance
A1 Segment information
A2 Revenue
A3 Expenses
A4 Income tax
A5 Earnings per share
B. Working capital
B1 Trade and other receivables and prepayments
B2 Inventories
B3 Trade and other payables
C. Capital employed
C1 Property, plant and equipment
C2 Intangible assets
C3 Provisions
C4 Leases
D. Net debt
D1 Cash and cash equivalents
D2 Reconciliation of cash flows from operating activities
D3 Borrowings
E. Risk management
E1 Financial risk management
F. Equity
F1 Contributed equity
F2 Accumulated losses and reserves
F3 Dividends
G. Group structure
G1 Subsidiaries
G2 Deed of cross guarantee
G3 Parent entity financial information
H. Other financial information
H1 Contingencies
H2 Commitments
H3 Related party transactions
H4 Share-based payments
H5 Remuneration of auditors
H6 Events occurring after the reporting period
I. Other accounting policies
52
53
54
55
56
57
57
58
59
61
62
62
62
63
64
66
68
70
70
71
72
78
79
80
81
82
84
85
85
85
86
87
88
89
51
Myer Annual Report 2021Myer Annual Report 2021
CONSOLIDATED INCOME STATEMENT
CO N S O L I D AT E D I N CO M E S TAT EM E N T
for the peri od ended 31 July 2021
for the period ended 31 July 2021
CO N S O L I D AT E D S TAT EM E N T O F CO MP R E H E N S I V E I N CO M E
for the period ended 31 July 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the peri od ended 31 July 2021
Total sales
Concession sales
Sale of goods
Sales revenue deferred under customer loyalty program
Revenue from sale of goods
Other operating revenue
Cost of goods sold
Operating gross profit
Other income
Selling expenses
Administration expenses
Restructuring, impairment of assets and other significant items
Finance revenue
Finance costs
Net finance costs
Profit/(loss) before income tax
Income tax (expense)/benefit
Profit/(loss) for the period attributable to owners of Myer Holdings Limited
Earnings/(loss) per share attributable to the ordinary equity holders of the Company:
Basic earnings per share
Diluted earnings per share
The above consolidated income statement should be read in conjunction with the accompanying notes.
Notes
A2
A2
A2
A2
A3
A2
A3
A4
A5
A5
2021
53 weeks
$m
2,658.3
(505.5)
2,152.8
(36.3)
2,116.5
133.6
(1,194.4)
1,055.7
2.4
(648.3)
(239.3)
(7.6)
162.9
0.3
(96.4)
(96.1)
66.8
(20.4)
46.4
Cents
5.7
5.6
2020
52 weeks
$m
2,519.4
(445.2)
2,074.2
(26.3)
2,047.9
111.5
(1,201.2)
958.2
3.1
(635.8)
(247.0)
(221.4)
(142.9)
0.4
(98.6)
(98.2)
(241.1)
68.7
(172.4)
Cents
(21.0)
(21.0)
Profit/(loss) for the period
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss:
Cash flow hedges
Exchange differences on translation of foreign operations
Other comprehensive income/(loss) for the period, net of tax
Total comprehensive income/(loss) for the period attributable to owners of Myer Holdings Limited
Notes
F2
F2
2021
53 weeks
$m
46.4
2020
52 weeks
$m
(172.4)
5.9
0.6
6.5
52.9
(7.4)
(0.1)
(7.5)
(179.9)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
52
53
Myer Annual Report 2021Myer Annual Report 2021
CONSOLIDATED BALANCE SHEET
CO N S O L I D AT E D B A L A N C E S HE E T
as at 31 July 2021
as at 31 July 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CO N S O L I D AT E D S TAT EM E N T O F C H A N G E S I N EQ U I T Y
for the peri od ended 31 July 2021
for the period ended 31 July 2021
Balance as at 27 July 2019
Adjustment on change to accounting policy, net of tax
Adjustment on initial application of AASB 16, net of tax
Restated balance as at 28 July 2019
Net profit/(loss) for the period
Other comprehensive income/(loss) for the period
Total comprehensive income/(loss) for the period
Transactions with owners in their capacity as owners:
Acquisition of treasury shares
Employee share schemes
Balance as at 25 July 2020
Net profit/(loss) for the period
Other comprehensive income/(loss) for the period
Total comprehensive income/(loss) for the period
Transactions with owners in their capacity as owners:
Acquisition of treasury shares
Employee share schemes
Balance as at 31 July 2021
Notes
I
F1
F2
F1
F2
Contributed
equity
$m
Accumulated
losses
$m
738.8
-
738.8
-
-
-
(0.7)
-
(0.7)
738.1
-
-
-
(0.4)
-
(0.4)
737.7
(138.6)
(1.5)
(247.9)
(388.0)
(172.4)
-
(172.4)
-
-
-
(560.4)
46.4
-
46.4
-
-
-
(514.0)
Reserves
$m
1.9
-
1.9
-
(7.5)
(7.5)
-
0.5
0.5
(5.1)
-
6.5
6.5
-
1.8
1.8
3.2
Total
$m
602.1
(1.5)
(247.9)
352.7
(172.4)
(7.5)
(179.9)
(0.7)
0.5
(0.2)
172.6
46.4
6.5
52.9
(0.4)
1.8
1.4
226.9
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables and prepayments
Inventories
Derivative financial instruments
Current tax assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Derivative financial instruments
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Derivative financial instruments
Current tax liabilities
Other liabilities
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Accumulated losses
Reserves
Total equity
1 Comparative information has been restated due to a change in accounting policy. Refer to note I for more information.
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Notes
D1
B1
B2
E1
C1
C4
C2
A4
E1
B3
D3
C4
C3
E1
D3
C4
C3
E1
F1
F2
F2
2021
$m
178.6
20.0
305.2
3.1
-
506.9
318.5
1,224.1
304.4
112.2
0.7
1.3
1,961.2
2,468.1
353.3
-
156.2
63.1
1.1
16.4
0.2
590.3
66.8
1,579.3
4.8
-
1,650.9
2,241.2
226.9
737.7
(514.0)
3.2
226.9
20201
$m
86.5
58.4
256.0
0.3
7.2
408.4
347.0
1,272.6
316.4
116.5
-
1.7
2,054.2
2,462.6
354.2
78.6
167.5
55.0
3.5
-
0.2
659.0
-
1,627.2
3.6
0.2
1,631.0
2,290.0
172.6
738.1
(560.4)
(5.1)
172.6
54
55
Myer Annual Report 2021Myer Annual Report 2021 CONSOLIDATED STATEMENT OF CASH FLOWS
CO N S O L I D AT E D S TAT EM E N T O F C A S H FL O W S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Other income
Interest paid
Tax received/(paid)
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Lease incentives and contributions received
Interest received
Net cash outflow from investing activities
Cash flows from financing activities
Repayment of borrowings, including transaction costs
Payments for principal portion of lease liabilities
Payment for acquisition of treasury shares
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at end of period
Notes
D2
F1
D1
2021
53 weeks
$m
2,515.6
(2,153.1)
362.5
2.7
(95.0)
6.8
277.0
(37.9)
(19.1)
25.1
0.3
(31.6)
(12.6)
(140.3)
(0.4)
(153.3)
92.1
86.5
178.6
2020
52 weeks
$m
2,396.0
(2,098.4)
297.6
0.7
(98.6)
(8.1)
191.6
(31.3)
(13.7)
4.7
0.4
(39.9)
(10.0)
(101.9)
(0.7)
(112.6)
39.1
47.4
86.5
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
A . G R O U P P E R F O R M A N C E
This section provides additional information regarding lines in the financial statements that are most relevant to explaining the performance of the Group
during the period, including the applicable accounting policies applied and significant estimates and judgements made.
A 1 S E G M E N T I N F O R M A T I O N
Management has determined the operating segments based on the reports reviewed by the Chief Executive Officer that are used to make strategic
decisions about the allocation of resources.
The Chief Executive Officer considers the business based on total store and product portfolio, and has identified that the Group operates in Australia in the
department store retail segment.
The Group also undertakes activities outside the department store retail business through its subsidiaries: sass & bide and Marcs and David Lawrence. On
the basis that these subsidiaries represent less than 10% of the total Group's operations and have similar economic characteristics to the department store
retail business, they have not been disclosed as separate reporting segments.
Accounting policy
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating
decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief
Executive Officer.
A 2 R E V E N U E
Sales revenue
Total sales
Concession sales
Sale of goods
Sales revenue deferred under customer loyalty program
Revenue from sale of goods
Other operating revenue
Concessions revenue
Other1
Finance revenue
Interest revenue
Total revenue
2021
53 weeks
$m
2020
52 weeks
$m
2,658.3
(505.5)
2,152.8
(36.3)
2,116.5
114.7
18.9
133.6
0.3
2,250.4
2,519.4
(445.2)
2,074.2
(26.3)
2,047.9
98.7
12.8
111.5
0.4
2,159.8
1. Other includes revenue in relation to gift card non-redemption income, forfeited lay-by deposits and financial services income.
Accounting policy
Total sales value presented in the consolidated income statement represents proceeds from sale of goods (both from the Group and concession operators)
and prior to the deferral of revenue under the Myer one customer loyalty program. Concession sales presented in the income statement represents the
sales proceeds of concession operators within Myer stores. Total sales value is disclosed to show the total sales generated by the Group and provide a
basis of comparison with similar department stores.
Revenue from sale of goods, excluding lay-by transactions, is recognised when the performance obligation has been fulfilled, which is principally at the
point of sale after deducting taxes paid, and does not include concession sales. Goods are sold to the end customer with a right of return within a
reasonable period at the Group’s discretion and in accordance with legislative requirements. A refund liability (included in trade and other payables) and a
right to returned goods (included in trade and other receivables) are recognised for the goods expected to be returned, with a corresponding adjustment to
revenue from sale of goods and cost of goods sold. The assumptions and the estimated amount of returns are based on historical evidence and are
reassessed at the end of each reporting period. Revenue from lay-by transactions is recognised as part of revenue from sale of goods at the date upon
which the customer satisfies all payment obligations and control of the goods has transferred to the customer.
Revenue from sale of goods excludes concession sales in Myer stores on the basis that the inventory sold is owned by the concession operator at the time
of sale and not the Group. The Group's share of concession sales is recognised as revenue within other operating revenue at the time the sale is made.
Gift cards are considered a prepayment for goods or services to be delivered in the future, which creates a future performance obligation for the Group.
The Group recognises a liability for the amount received in advance for the gift card and recognises revenue when the customer redeems the gift card and
the Group fulfils the performance obligation related to the transaction. The Group recognises revenue on the unredeemed value of gift cards and rewards
cards (under the Myer one loyalty program), referred to as non-redemption income. The Group recognises the expected non-redemption amount as
revenue in proportion to the pattern in which the gift card or reward card is utilised by the customer.
Interest revenue is recognised on a time proportion basis using the effective interest method.
Critical accounting estimates and judgements – customer loyalty program
The Group operates a loyalty program where customers accumulate award points for purchases made which entitle them to discounts on future purchases.
The award points are recognised as a separately identifiable component of the initial sale transaction, by allocating the fair value of the consideration
received between the award points and the other components of the sale such that the award points are recognised at their fair value. Revenue from the
award points is recognised when the points are redeemed. The amount of revenue recognised is based on the number of points redeemed relative to the
total number expected to be redeemed. Award points expire 24 months after the initial sale.
56
57
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 July 2021
for the peri od ended 31 July 2021
A 3 E X P E N S E S
A 3 E X P E N S E S (C O N T I N U E D )
Profit/(loss) before income tax includes the following specific expenses:
Employee benefits expenses
Defined contribution superannuation expense
Other employee benefits expenses
Government grant income - wage subsidies1
Depreciation, amortisation and write-off expense
Property, plant and equipment
Intangibles
Right-of-use assets
Finance costs
Interest and finance charges paid/payable for lease liabilities and financial liabilities
Fair value losses on interest rate swap cash flow hedges, transferred from equity
Rental expense relating to operating leases
Contingent rentals
Net foreign exchange gains
2021
53 weeks
$m
2020
52 weeks
$m
31.2
379.1
(50.7)
359.6
64.2
31.2
124.1
219.5
96.4
-
96.4
1.5
1.5
(7.9)
32.6
403.2
(93.2)
342.6
69.1
30.6
127.1
226.8
98.5
0.1
98.6
1.1
1.1
(3.8)
1. The Group has been eligible to receive payments under the JobKeeper Payment Scheme (Australia) and Wage Subsidy (New Zealand). The Group only
qualified for the first phase of the JobKeeper Payment Scheme which ended on 27 September 2020. The payments received have been recognised as
government grant income because the wage subsidy has been provided with the objective of keeping employees connected with the Group during the
COVID-19 pandemic. During the period, the Group recognised government grant income totalling $50.7 million, with $19.1 million paid to eligible
employees whose remuneration was lower than the required income threshold under the JobKeeper Payment Scheme. These amounts have been
included in administration and selling expenses in the consolidated income statement.
Restructuring, impairment of assets and other significant items
The following individually significant items are included within restructuring, impairment of assets and other significant items in the consolidated income
statement:
Restructuring and redundancy costs1
Clearance floor closure and brand exit costs and related asset impairments2
Space exit costs/(reversals) and other asset impairments/(reversals)3
Impairment of assets4
Myer one loyalty program change5
Income tax benefit6
Restructuring, impairment of assets and other significant items, net of tax
2021
53 weeks
$m
2020
52 weeks
$m
-
-
7.6
-
-
7.6
(2.3)
5.3
11.9
18.5
(0.3)
184.4
6.9
221.4
(62.4)
159.0
1. The Group completed a restructuring program in 2020 resulting in redundancy and other costs being incurred. Refer to note C3 for more information.
2. Clearance floor closure and brand exit costs and related asset impairments includes the write-down of inventories to reflect the accelerated liquidation of
inventories and impairment of store assets associated with the closure of the clearance floor concept. Also included in this amount is the write-down of
inventories for the exit of brands from category changes, as part of the Customer First Plan. Refer to note C1 for more information on asset impairments.
3. Space exit costs/(reversals) and other asset impairments/(reversals) includes closure costs associated with store closures and space hand backs, costs
associated with the relocation of the Support Office and other store based asset impairments. In 2020, a reversal of previous impairments associated with
space handbacks and other store based assets was recorded. Refer to note C1 and C3 for more information.
4. In 2020, the Group recognised an impairment of the Myer and associated brand names, the sass & bide brand name and an impairment of certain Myer
store's right-of-use assets. Refer to note C2 for more information.
5. The Group made changes to the Myer one loyalty program in 2020, including a reduction in the threshold for the eligibility of a Myer one member to
receive a reward card, resulting in a required increase to the Myer one loyalty program liability.
6. In 2020, the income tax benefit includes a $35.5 million benefit relating to the unwind of the deferred tax liability as a result of the impairment of the Myer
and associated brand names, and the sass & bide brand name. Refer to note C2 for more information.
Accounting policy
The expenses disclosed above are also disclosed in the following sections of the financial statements:
Employee benefits expenses – refer to note C3
Depreciation and amortisation expense – refer to note C1 and C2
Finance costs – refer to note D3 and E1
Net foreign exchange gains – refer to note F2
Individually Significant Items
Certain items have been separately disclosed and presented as individually significant based on the nature and/or impact these items have on the Group’s
financial performance for the period.
Government Grants
Grants from the government are recognised where there is reasonable assurance that the grant will be received and the Group will comply with all attached
conditions. Government grants relating to expenses are deferred and recognised in profit or loss over the period necessary to match them with the
expenses that they are intended to compensate.
A 4 I N C O M E T A X
(a) Income tax expense/(benefit)
(i) Income tax expense/(benefit)
Current tax
Deferred tax
Income tax expense/(benefit)1
Deferred income tax expense included in income tax expense/(benefit) comprises:
(Increase)/Decrease in deferred tax assets
Increase/(Decrease) in deferred tax liabilities
(ii) Numerical reconciliation of income tax expense/(benefit) to prima facie tax payable
Profit/(loss) before income tax expense/(benefit)
Tax at the Australian tax rate of 30% (2020: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non-deductible asset impairments
Sundry items
Adjustments for current tax of prior periods
Income tax expense/(benefit)1
2021
53 weeks
$m
2020
52 weeks
$m
16.1
4.3
20.4
4.3
-
4.3
66.8
20.0
-
0.5
20.5
(0.1)
20.4
(11.8)
(56.9)
(68.7)
(21.4)
(35.5)
(56.9)
(241.1)
(72.3)
3.9
0.2
(68.2)
(0.5)
(68.7)
1. Income tax includes an income tax benefit of $2.3 million (2020: $62.4 million) attributable to the space exit costs and other impairment of assets
recorded during the period. Refer to note A3 for more information.
58
59
Myer Annual Report 2021Myer Annual Report 2021 N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 July 2021
for the peri od ended 31 July 2021
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 July 2021
for the peri od ended 31 July 2021
A 4 I N C O M E T A X (C O N T I N U E D )
A 5 E A R N I N G S P E R S H A R E
(a) Basic earnings per share
Total basic earnings per share attributable to the ordinary equity holders of the Company
(b) Diluted earnings per share
Total diluted earnings per share attributable to the ordinary equity holders of the Company
(c) Reconciliation of earnings used in calculating earnings per share
Earnings used in calculation of basic and diluted EPS attributable to ordinary shareholders
2021
cents
5.7
5.6
2021
$m
46.4
2021
Number
2020
cents
(21.0)
(21.0)
2020
$m
(172.4)
2020
Number
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share - performance rights and options
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating
diluted earnings per share
818,929,830
8,740,296
820,092,092
-
827,670,126
820,092,092
(e) Information concerning the classification of securities
Performance rights and options granted to employees under the Myer Long Term Incentive Plan and FY21 Transformation Incentive Plan are considered to
be potential ordinary shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The
performance rights and options granted have not been included in the determination of basic earnings per share. Details relating to performance rights and
options are set out in note H4.
Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares decreases earnings per share or increases loss
per share.
Accounting policy
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares
outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during the period and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive
potential ordinary shares.
(b) Deferred tax assets
Deferred tax assets comprise temporary differences attributable to:
Employee benefits
Non-employee provisions and accruals
Amortising deductions
Property, plant, equipment and software1
Leases
Trading stock
Tax losses
Total deferred tax assets
Set off of deferred tax liabilities/assets pursuant to set off provisions
Net deferred tax assets
Movement
Carrying amount at beginning of period
Adjustment on initial application of AASB 16
Adjustment on change to accounting policy1
Tax losses
Credited/(charged) to income statement
Carrying amount at end of period
2021
$m
14.9
6.9
0.1
33.7
123.3
5.1
-
184.0
(71.8)
112.2
188.3
-
(0.2)
-
(4.1)
184.0
2020
$m
12.3
10.7
0.4
24.6
127.0
5.7
7.6
188.3
(71.8)
116.5
57.9
100.6
1.0
7.4
21.4
188.3
1. Comparative information has been restated due to a change in accounting policy. Refer to note I for more information.
Deferred tax assets - tax losses
In 2020, the deferred tax assets included an amount of $7.4 million which relates to tax losses incurred by the Australian tax consolidated Group during the
period. The Group has utilised the tax losses as a result of the taxable income generated in 2021.
(c) Deferred tax liabilities
Deferred tax liabilities comprise temporary differences attributable to:
Brand names
Total deferred tax liabilities
Set off of deferred tax liabilities/assets pursuant to set off provisions
Net deferred tax liabilities
Movement
Carrying amount at beginning of period
Adjustment on initial application of AASB 16
Charged/(credited) to income statement
Carrying amount at end of period
2021
$m
71.8
71.8
(71.8)
-
71.8
-
-
71.8
2020
$m
71.8
71.8
(71.8)
-
112.8
(5.5)
(35.5)
71.8
Accounting policy
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the national income tax rate adjusted by
changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts
in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences and losses at the tax rates expected to apply when the assets are recovered or
liabilities are settled, based on those tax rates which are enacted or substantively enacted. The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the deferred tax asset or liability. An exemption is made for certain temporary differences if they
arise in a transaction, other than a business combination, that at the time of the transaction did not affect accounting profit or taxable profit or loss. Deferred
tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to
utilise those temporary differences and losses, which is dependent on the generation of future taxable profits. The assumptions regarding future taxable
profits are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of
deferred tax assets recognised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised in other comprehensive income or directly in equity are also recognised directly in
other comprehensive income or equity.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation
authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive
of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other
receivables or payables in the balance sheet.
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 taxation authority, are presented as operating cash flow.
60
61
Myer Annual Report 2021Myer Annual Report 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
B . WO R K I N G C A P I T A L
This section provides additional information regarding lines in the financial statements that are most relevant to explaining the assets used to generate the
Group's trading performance during the period and liabilities incurred as a result, including the applicable accounting policies applied and significant
estimates and judgements made.
C . C A P I T A L E M P L O YE D
This section provides additional information regarding lines in the financial statements that are most relevant to explaining the capital investment made that
allows the Group to generate its trading performance during the period and liabilities incurred as a result, including the applicable accounting policies
applied and significant estimates and judgements made.
B 1 T R A D E A N D O T H E R R E C E I V A B L E S A N D P R E P A YM E N T S
C 1 P R O P E R T Y, P L A N T A N D E Q U I P M E N T
Trade receivables
Loss allowance
Other receivables
Prepayments1
2021
$m
10.2
(0.5)
9.7
6.3
4.0
10.3
20.0
2020
$m
14.7
(2.1)
12.6
35.4
10.4
45.8
58.4
1. Comparative information has been restated due to a change in accounting policy. Refer to note I for more information.
Fair value and risk exposure
Due to the short term nature of these receivables, their carrying amount is assumed to approximate their fair value. The maximum exposure to credit risk at
the end of the reporting period is the carrying amount of each class of receivables mentioned above. Information about the Group's exposure to credit risk,
foreign currency risk and interest rate risk in relation to trade and other receivables and the Group's financial risk management policy is provided in note
E1.
Accounting policy
Trade receivables are non interest-bearing and are recognised initially at fair value, and subsequently at amortised cost using the effective interest rate
method, less expected loss allowance. Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial.
The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for trade and other
receivables based on all possible default events over the expected life of the receivable. The amount of the impairment loss is recognised as an expense
in the consolidated income statement. Subsequent recoveries of amounts previously written off are credited against expenses in the consolidated income
statement.
B 2 I N V E N T O R I E S
Retail inventories
2021
$m
305.2
2020
$m
256.0
Provision for write-down of inventories to net realisable value amounted to $7.8 million (2020: $10.4 million). This was recognised as an expense during the
period and included in cost of sales in the consolidated income statement.
Accounting policy
Inventories are valued at the lower of cost and net realisable value. Cost is determined using the weighted average cost method, after deducting any
purchase settlement discount and including logistics expenses incurred in bringing the inventories to their present location and condition.
Volume-related supplier rebates and supplier promotional rebates are recognised as a reduction in the cost of inventory and are recorded as a reduction of
cost of goods sold when the inventory is sold.
Critical accounting estimates and judgements - recoverable amount of inventory
Management has assessed the value of inventory that is likely to be sold below cost using past experience and judgement on the likely sell through rates of
various items of inventory, and booked a provision for this amount. To the extent that these judgements and assumptions prove incorrect, the Group may
be exposed to potential additional inventory write-downs in future periods.
B 3 T R A D E A N D O T H E R P A YA B L E S
Trade payables
Other payables
Trade and other payables are non-interest bearing.
Accounting policy
2021
$m
165.2
188.1
353.3
2020
$m
120.3
233.9
354.2
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial period which are unpaid. The amounts are
unsecured and are usually paid within 30 to 90 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due
within 12 months from the reporting date.
At 27 July 2019
Cost
Accumulated depreciation and impairment
Net book amount
Period ended 25 July 2020
Carrying amount at beginning of period
Additions
Transfer between classes
Assets written off – cost
Assets written off – accumulated
depreciation
Impairment1
Depreciation charge
Carrying amount at end of period
At 25 July 2020
Cost
Accumulated depreciation and impairment
Net book amount
Period ended 31 July 2021
Carrying amount at beginning of period
Additions
Transfer between classes
Assets written off – cost
Assets written off – accumulated
depreciation
Impairment1
Depreciation charge
Carrying amount at end of period
At 31 July 2021
Cost
Accumulated depreciation and impairment
Net book amount
Freehold
land
$m
9.6
-
9.6
9.6
-
-
-
-
-
-
9.6
9.6
-
9.6
9.6
-
-
-
-
-
-
9.6
9.6
-
9.6
Freehold
buildings
$m
19.5
(6.4)
13.1
13.1
-
-
-
-
-
(0.5)
12.6
19.5
(6.9)
12.6
12.6
-
-
-
-
-
(0.5)
12.1
19.5
(7.4)
12.1
Fixtures and
fittings
$m
522.7
(375.0)
147.7
147.7
7.8
5.2
(13.3)
13.4
1.1
(35.3)
126.6
522.4
(395.8)
126.6
126.6
7.4
2.2
(9.0)
5.7
0.3
(33.3)
99.9
523.0
(423.1)
99.9
Plant and
equipment
Capital works
in progress
$m
460.9
(258.6)
202.3
202.3
6.6
1.5
(8.6)
5.6
-
(30.4)
177.0
460.4
(283.4)
177.0
177.0
21.7
9.8
(4.3)
3.1
-
(27.2)
180.1
487.6
(307.5)
180.1
$m
10.8
-
10.8
10.8
21.8
(11.4)
-
-
-
-
21.2
21.2
-
21.2
21.2
14.2
(18.6)
-
-
-
-
16.8
16.8
-
16.8
Total
$m
1,023.5
(640.0)
383.5
383.5
36.2
(4.7)
(21.9)
19.0
1.1
(66.2)
347.0
1,033.1
(686.1)
347.0
347.0
43.3
(6.6)
(13.3)
8.8
0.3
(61.0)
318.5
1,056.5
(738.0)
318.5
1. Impairment relates to assets associated with space handbacks and assets associated with store closures (2020: assets associated with space
handbacks, store assets associated with closure of clearance floor concept, offset by reversal of asset impairment associated with surplus space identified
at support office as a sublease has been entered into for this space). Refer to note A3 for more information.
Accounting policy
Property, plant and equipment is stated at cost less depreciation. Cost includes expenditure that is directly attributable to the acquisition of the items. Cost
may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
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
charged to profit or loss during the financial period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate the cost net of their residual values, over their
estimated useful lives, as follows:
Buildings
Fixtures and fittings
Plant and equipment, including leasehold improvements
40 years
3 – 12.5 years
10 – 20 years
(2020: 40 years)
(2020: 3 – 12.5 years)
(2020: 10 – 20 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 (refer to note C2).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.
62
63
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
C 2 I N T A N G I B L E A S S E T S
At 27 July 2019
Cost
Accumulated amortisation and impairment
Adjustment on change to accounting policy3
Net book amount
Period ended 25 July 2020
Carrying amount at beginning of period
Additions
Transfer between classes
Assets written off – cost
Assets written off – accumulated amortisation
Impairment2
Amortisation charge
Carrying amount at end of period
At 25 July 2020
Cost
Accumulated amortisation and impairment
Net book amount
Period ended 31 July 2021
Carrying amount at beginning of period
Additions
Transfer between classes
Assets written off – cost
Assets written off – accumulated amortisation
Amortisation charge
Carrying amount at end of period
At 31 July 2021
Cost
Accumulated amortisation and impairment
Net book amount
Goodwill
$m
492.1
(492.1)
-
-
-
-
-
-
-
-
-
-
492.1
(492.1)
-
-
-
-
-
-
-
-
492.1
(492.1)
-
Brand names
and trademarks
$m
437.3
(65.7)
-
371.6
371.6
-
-
-
-
(131.4)
-
240.2
437.3
(197.1)
240.2
240.2
-
-
-
-
-
240.2
437.3
(197.1)
240.2
Software
$m
327.0
(231.0)
(3.2)
92.8
92.8
9.3
4.7
(0.3)
0.1
-
(30.4)
76.2
337.8
(261.5)
76.2
76.2
12.7
6.6
(2.0)
1.7
(31.0)
64.2
355.0
(290.8)
64.2
Lease
rights
$m
18.3
(18.3)
-
-
-
-
-
-
-
-
-
-
18.3
(18.3)
-
-
-
-
-
-
-
-
18.3
(18.3)
-
Total
$m
1,274.7
(807.1)
(3.2)
464.4
464.4
9.3
4.7
(0.3)
0.1
(131.4)
(30.4)
316.4
1,285.4
(969.0)
316.4
316.4
12.7
6.6
(2.0)
1.7
(31.0)
304.4
1,302.7
(998.3)
304.4
1. Amortisation of $31.0 million (2020: $30.4 million) is included in administration and selling expenses in the consolidated income statement.
2. In 2020, impairment was recognised for the Myer and associated brand names and the sass & bide brand name. Refer below for more information.
3. Comparative information has been restated due to a change in accounting policy. Refer to note I for more information.
Impairment of non-financial assets
AASB 136 Impairment of Assets requires goodwill and intangible assets with an indefinite useful life to be assessed at the end of each reporting period
where there is any indication that an asset may be impaired. A review of indicators of impairment using both external and internal sources of information
has been undertaken.
The brand names arising on the acquisition of the Myer business amounting to $232.8 million (2020: $352.5 million) cannot be allocated to the Group’s
individual cash generating units (CGUs) (the Group’s stores), and hence has been allocated to the Myer business as a whole. The remaining brand name
intangible asset with an indefinite useful life has been allocated to the Marcs David Lawrence business totalling $7.4 million (2020: $7.4 million).
In 2020, the carrying value exceeded the recoverable amount and an impairment charge of $119.7 million was recognised in respect of Myer and the
associated brand names. This was included within restructuring, impairment of assets and other significant items in the consolidated income statement.
AASB 136 Impairment of Assets requires goodwill and intangible assets with an indefinite useful life to be tested annually for impairment. As a result during
the period, the recoverable amount of the assets relating to this CGU have been assessed using a value-in-use discounted cash flow model. This model
uses cash flow projections based on financial forecasts approved by management covering a five-year period. Cash flows beyond five-year periods are
extrapolated using a terminal growth rate.
C 2 I N T A N G I B L E A S S E T S (C O N T I N U E D )
Impairment of non-financial assets (continued)
Key assumption
2021
2020
Approach used to determine value
Weighted average discount
rate (pre-tax)
12.8%
13.0%
The pre-tax discount rate is sourced from observable market information and is risk-
adjusted relative to the risks associated with the net pre-tax cash flows being achieved.
Terminal growth rate
1.7%
1.7%
This is the weighted average growth rate used to extrapolate cash flows beyond the five-
year forecast period.
Average EBITDA margin
12.5%
11.8%
Average annual EBITDA margin over the five-year forecast period, applied to sales
forecast consistent with external market forecasts. The average annual EBITDA margin is
based on external sources of information, past performance and management’s
expectations. This assumption incorporates anticipated market conditions, sales channel
performance, and management’s expectations of margin improvement and future cost
saving initiatives.
The headroom approximates 11% of the CGU's net carrying value. The recoverable amount is based on operating and cash flow performance stabilising
however the timing of cash flow benefits arising from initiatives could be influenced by market conditions.
The recoverable amount is highly sensitive to changes in the average EBITDA margin assumption. For the recoverable amount to approximate the carrying
value, a 76 basis points decrease in the average EBITDA margin would need to occur. Any reasonable possible change in other key assumptions would
not result in an impairment.
During the period, a review of the carrying value for each Myer store was undertaken and no indicators of impairment were identified. In 2020, the Group
identified indicators of impairment in certain Myer stores and an impairment of these store's right-of use assets was recognised totalling $53.0 million that
was included within restructuring, impairment of assets and other significant items in the consolidated income statement. Refer to note C4 for more
information.
sass & bide
In 2020, the carrying value exceeded the recoverable amount and an impairment charge of $11.7 million was recognised in respect of its brand name. This
was included within restructuring, impairment of assets and other significant items in the consolidated income statement.
Accounting policy
(i) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if
events or changes in circumstances indicate they might be impaired. Other non-current assets are reviewed for impairment whenever events or changes in
circumstances indicate the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the
cash inflows from other assets or group of assets (cash generating units). For store assets, the appropriate cash generating unit is an individual store. Non-
financial assets other than goodwill that have previously suffered an impairment are reviewed for possible reversal of the impairment at each reporting
date.
(ii) Goodwill
Goodwill is measured as described below under business combinations. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is
not amortised but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the
entity sold.
(iii) Brand names and trademarks
The useful life of brands are assessed on acquisition. The brands which are not considered to have foreseeable brand maturity dates have been assessed
as having indefinite useful lives as there is a view that there is no foreseeable limit to the period over which key brands are expected to generate net cash
inflows for the entity. These brands are therefore not amortised. Instead, these brand names are tested for impairment annually, or more frequently if
events or changes in circumstances indicate that they might be impaired, and are carried at cost less accumulated impairment losses.
64
65
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
C 2 I N T A N G I B L E A S S E T S (C O N T I N U E D )
C 3 P R O V I S I O N S (C O N T I N U E D )
Accounting policy (continued)
(iv) Computer software
All costs directly incurred in the purchase or development of major computer software or subsequent upgrades and material enhancements are capitalised
as intangible assets where the Group has control and obtains all the future economic benefit from the underlying asset. Direct costs may include internal
payroll and on-costs for employees directly associated with the project. Costs incurred on computer software maintenance or during the planning phase are
expensed as incurred. Costs paid to the suppliers for Software-as-a-Service arrangements to significantly customise cloud-based software for the Group
are recorded as a prepayment for services and amortised over the expected renewable term of the arrangement. Computer software is amortised over the
period of time during which the benefits are expected to arise, initially being up to 10 years. The assets' residual values and useful lives are reviewed
annually and adjusted if appropriate, which may result in a useful life outside of this period.
(v) Lease rights
Lease rights represent the amount paid up front to take over store site leases from the existing lessee where such payments are in addition to the ongoing
payment of normal market lease rentals. Lease rights are amortised over the term of the lease plus any renewal options reasonably certain to be utilised at
the time of acquisition of the lease rights.
Critical accounting estimates and judgements - impairment
Goodwill and intangible assets that have an indefinite life are tested annually for impairment, or more frequently if there are indicators of impairment, in
accordance with the accounting policy noted above. The recoverable amount of cash generating units have been determined at a store level. Goodwill and
certain intangibles are tested for impairment at the level of the Group as a whole, using value-in-use calculations.
The uncertainty surrounding the trading environment for the Group has impacted the approach to forecasting and modelling cash flows supporting the
impairment assessment over non-financial assets. Uncertainty remains as to the timing and extent of the economic recovery generally, the recovery from
store closures and the impact of possible future outbreaks of COVID-19 and the ability to operate bricks and mortar stores during these periods. Any
adverse changes could lead to further impairments. The Group continues to closely monitor and respond to the situation.
C 3 P R O V I S I O N S
Current
Employee benefits
Restructuring (i)
Workers' compensation (ii)
Other
Non-current
Employee benefits
Other
2021
$m
49.7
2.9
8.7
1.8
63.1
4.8
-
4.8
2020
$m
40.8
4.1
9.4
0.7
55.0
3.5
0.1
3.6
(i) Restructuring
The restructuring provision relates to redundancy costs associated with restructuring of the organisational structure and the costs associated with store
closures and space hand backs committed but not yet paid. Refer to note A3 for more information.
(ii) Workers' compensation
The amount represents a provision for workers' compensation claims in certain states, for which the Group is self insured.
Movement in provisions
Movement in each class of provision during the financial period, other than employee benefits, are set out below:
2021
Carrying amount at beginning of period
Additional provisions recognised
Amounts utilised
Carrying amount at end of period
Restructuring
$m
Workers'
compensation
$m
4.1
3.6
(4.8)
2.9
9.4
1.8
(2.5)
8.7
Other
$m
0.8
9.0
(8.0)
1.8
Total
$m
14.3
14.4
(15.3)
13.4
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes accrued annual leave and long service leave. For long service leave it covers all unconditional
entitlements where employees have completed the required period of service. The entire annual leave amount and current portion of the long service leave
provision is presented as current since the Group does not have an unconditional right to defer settlement for any of these obligations. However, based on
past experience, the Group does not expect all employees to take the full amount of accrued long service leave or require payment within the next 12
months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months.
Current long service leave obligations expected to be settled after 12 months
2021
$m
21.8
2020
$m
17.8
Accounting policy
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of
obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations
may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the
reporting period. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks
specific to the liability.
The Group is self-insured for costs relating to workers’ compensation and general liability claims in certain states. Provisions are recognised based on
claims reported, and an estimate of claims incurred but not yet reported, prior to balance date. These provisions are determined utilising an actuarially
determined method, which is based on various assumptions including but not limited to future inflation, average claim size and claim administrative
expenses. These assumptions are reviewed annually and any reassessment of these assumptions will affect the workers’ compensation expense.
Employee benefits
(i) Short term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months after the end of the period in
which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for employee benefits. All other
short term employee benefit obligations are presented as payables.
(ii) Other long term employee benefit obligations
The liability for long service leave which is not expected to be settled within 12 months after the end of the period in which the employees render the related
service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of
services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage
and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of
the reporting period on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least 12
months after the reporting date, regardless of when the actual settlement is expected to occur.
(iii) Profit sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit sharing based on a formula that takes into consideration the profit attributable to
the Group’s shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that
has created a constructive obligation.
(iv) Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in
exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current
employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage
voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
66
67
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
C 4 L E A S E S
C 4 L E A S E S (C O N T I N U E D )
Accounting policy
The Group leases various retail stores, distribution centres and offices. Rental contracts are typically made for fixed periods but may have extension
options.
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 any estimated restoration costs, less any lease incentives received. The right-of-use asset is subsequently depreciated on a straight-line basis
from the commencement date to the end of the lease term. The right-of-use asset can be reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Group's
incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise of fixed payments and variable payments that are
based on an index or rate.
Some property leases contain variable payment terms that are linked to sales generated from a store. Variable lease payments that depend on sales are
recognised in profit or loss in the period in which the condition that triggers those payments occurs.
Payments associated with short-term leases and leases of low-value assets, such as IT equipment, are recognised on a straight-line basis as an expense
in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Critical accounting estimate - Determining the lease term
Extension options are included in a number of leases across the Group. In determining the lease term, the Group considers all facts and circumstances
that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to
be extended. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects
this assessment, and is within the control of the Group.
The Group has lease agreements for properties and various items of equipment used in its operations. The carrying amounts of the right-of-use assets and
movements during the period are set out below:
At 28 July 2019
Additions, modifications and other reassessments
Depreciation
Impairment1
At 25 July 2020
At 25 July 2020
Additions, modifications and other reassessments
Depreciation
At 31 July 2021
Property leases
$m
1,449.6
8.6
(132.9)
(53.0)
1,272.3
1,272.3
81.7
(129.9)
1,224.1
1. In 2020, an impairment of Myer store right-of-use assets was recognised. Refer to note A3 and C2 for more information.
The carrying amounts of the lease liabilities and movements during the period are set out below:
At 28 July 2019
Additions, modifications and other reassessments
Cash payments
Interest expense
At 25 July 2020
Current
Non-current
At 25 July 2020
Additions, modifications and other reassessments
Cash payments
Interest expense
At 31 July 2021
Current
Non-current
The following amounts have been recognised in the consolidated income statement during the period:
Depreciation of right-of-use assets1
Interest expense on lease liabilities1
Short-term leases expense2
Variable lease payments3
Property leases
$m
1,899.3
(3.5)
(190.7)
89.2
1,794.3
167.1
1,627.2
1,794.3
81.1
(227.1)
87.2
1,735.5
156.2
1,579.3
Equipment
leases
$m
0.7
-
(0.4)
-
0.3
0.3
-
(0.3)
-
Equipment
leases
$m
0.8
-
(0.5)
0.1
0.4
0.4
-
0.4
-
(0.4)
-
-
-
-
Total
$m
1,450.3
8.6
(133.3)
(53.0)
1,272.6
1,272.6
81.7
(130.2)
1,224.1
Total
$m
1,900.1
(3.5)
(191.2)
89.3
1,794.7
167.5
1,627.2
1,794.7
81.1
(227.5)
87.2
1,735.5
156.2
1,579.3
2021
53 weeks
$m
2020
52 weeks
$m
124.1
85.5
3.8
1.5
214.9
127.1
87.6
7.3
1.1
223.1
1. The depreciation and interest expense associated with certain leases is recognised in cost of sales in the consolidated income statement.
2. Short-term leases expense are included in selling and administration expenses in the consolidated income statement.
3. Some property leases contain variable payment terms that are linked to sales generated from a store and are recognised in selling expenses in the
consolidated income statement in the period in which the condition that triggers those payments occurs.
COVID-19 related rent concessions
The Group has adopted the practical expedient for rent concessions and elected not to account for changes to lease payments negotiated as a
consequence of COVID-19 as a lease modification. During the period, the total rent concessions recognised as a reduction in selling and administration
expenses in the consolidated income statement was $17.1 million. This has been reflected as an adjustment to the carrying amount of the lease liabilities
in additions, modifications and other reassessments in the movement table above.
68
69
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
D . N E T D E B T
This section provides additional information regarding lines in the financial statements that are most relevant to explaining the net debt position and
structure of the Group's borrowings for the period, which are key to financing the Group's activities both now and for the future.
The net debt/(cash) of the Group as at 31 July 2021 and 25 July 2020 is as follows:
Borrowings
Less: cash and cash equivalents
Net debt/(cash) at end of period (excluding lease liabilities)
Plus: lease liabilities
Net debt at end of period
The movement in net debt/(cash) excluding lease liabilities is as follows:
Opening balance
Net increase in cash and cash equivalents
Repayment of borrowings, net of transaction costs
Other non-cash movements
Closing balance
D 1 C A S H A N D C A S H E Q U I V A L E N T S
Cash on hand
Cash at bank
2021
$m
66.8
(178.6)
(111.8)
1,735.5
1,623.7
(7.9)
(92.1)
(12.6)
0.8
(111.8)
2021
$m
2.0
176.6
178.6
2020
$m
78.6
(86.5)
(7.9)
1,794.7
1,786.8
38.7
(39.1)
(10.0)
2.5
(7.9)
2020
$m
1.9
84.6
86.5
Accounting policy
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial
institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value, and bank overdrafts.
D 2 R E C O N C I L I A T I O N O F C A S H F L O WS F R O M O P E R A T I N G A C T I V I T I E S
Profit/(loss) for the period
Depreciation, amortisation and impairment, including lease incentives and contributions
Interest income
Interest expense
Share-based payments expense
Net exchange differences
Change in operating assets and liabilities
Decrease/(increase) in trade and other receivables and prepayments
(Increase)/decrease in inventories
Increase/(decrease) in deferred tax assets/liabilities
Decrease/(increase) in derivative financial instruments
(Decrease)/increase in trade and other payables
Increase/(decrease) in current tax receivable/payable
Increase/(decrease) in provisions
Increase/(decrease) in other liabilities
Net cash inflow from operating activities
2021
53 weeks
$m
46.4
210.3
(0.3)
2.9
2.3
0.6
34.5
(54.7)
3.7
5.3
(6.8)
23.5
9.3
-
277.0
2020
52 weeks
$m
(172.4)
406.0
(0.4)
2.4
0.6
(0.1)
(31.3)
91.0
(64.4)
1.6
(29.2)
(5.3)
(6.7)
(0.2)
191.6
D 3 B O R R O WI N G S
(a) Structure of debt
The debt funding of the Group at 31 July 2021 is a syndicated facility, which contains an amortising term loan tranche and a revolving tranche. This facility
was established on 23 November 2018, drawn down on 26 November 2018 and amended and extended on 28 August 2020. As at 31 July 2021, the
following amounts were drawn:
Current
Bank loans
Less: transaction costs
Non-current
Bank loans
Less: transaction costs
Borrowings
2021
$m
-
-
70.0
(3.2)
66.8
2020
$m
80.0
(1.4)
-
-
78.6
The terms and conditions of the Group's revolving cash advance facility is as follows:
Amortising term loan - Tranche A1
Revolving - Tranche B2
Total syndicated facility
Amount
$70 million
$218 million
$288 million
Term
2 years
2 years
Expiry date
31 August 2022
31 August 2022
1. Tranche A is required to be fully drawn during its term. The limit steps down by $20 million during the period ending 30 July 2022. The Group has the
discretion to draw Tranche B to at least the equivalent of the step downs in Tranche A at all times.
2. Tranche B is revolving and amounts repaid may be redrawn during their term. The tranche limit was $260 million when the facility was amended and
extended, with step-downs and cancellations occurring during the period. There are further step downs of $40 million during the period ending 30 July
2022.
(b) Security
The syndicated facility in place at 31 July 2021 is secured. The syndicated facility is subject to various representations, undertakings, events of default and
review events.
(c) Fair value
The fair value of existing borrowings approximates their carrying amount, as the impact of discounting is not significant.
(d) Risk exposures
Details of the Group's exposure to risks arising from borrowings are set out in note E1.
(e) Debt covenants
Under the terms of the syndicated facility, the Group is required to comply with financial covenants and report compliance on a quarterly basis.
The Group extended the syndicated facility subsequent to the end of the reporting period. Refer to Note H6 for more information.
Accounting policy
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is
probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the
facility to which it relates.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the
reporting period.
Borrowing costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the
asset for its intended use or sale. Other borrowing costs are expensed.
70
71
Myer Annual Report 2021Myer Annual Report 2021 N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 July 2021
for the peri od ended 31 July 2021
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 July 2021
for the peri od ended 31 July 2021
E . R I S K M A N A G E M E N T
This section provides information relating to the Group's exposure to various financial risks, how they could affect the Group's financial position and
performance and how these risks are managed.
E 1 F I N A N C I A L R I S K M A N A G E M E N T
The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange and interest rate risk), credit risk and liquidity risk. The
Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
financial performance of the Group. The Group uses derivative financial instruments such as forward foreign exchange contracts and interest rate swaps to
hedge certain risk exposures. Derivatives are exclusively used for hedging purposes and are not used as trading or other speculative instruments.
The Group’s financial risk management is predominantly controlled by the centralised Group Treasury function under the Group’s financial risk
management policies approved by the Board of Directors. The Group Treasury function is responsible for the identification and management of financial
risks, with the co-operation of other Group functions. The Board provides written principles for overall risk management, as well as policies covering
specific areas such as foreign exchange risk, interest rate risk, and use of financial instruments and non-derivative financial instruments.
Where all relevant criteria are met, hedge accounting is applied to remove the accounting mismatch between the hedging instrument and the hedged item.
This will effectively result in recognising interest expense at a fixed interest rate for the hedged floating rate borrowings and inventory at a fixed foreign
currency rate for the hedged purchases.
Financial Instruments
The Group holds the following financial instruments, classified under the categories in the table below:
E 1 F I N A N C I A L R I S K M A N A G E M E N T (C O N T I N U E D )
(a) Market risk (continued)
(i) Foreign exchange risk (continued)
At the end of the reporting period, the Group is holding the following forward foreign exchange contracts:
Carrying amount - Derivative Financial Instruments (Asset)
Carrying amount - Derivative Financial Instruments (Liability)
Notional amount
Maturity date
Change in fair value of the hedging instrument used as the basis for recognising hedge ineffectiveness
Change in value of hedged item used to determine hedge effectiveness
Weighted average hedged rate (AUD/USD)
Weighted average hedged rate (AUD/EUR)
Exposure
At the end of the reporting period, the Group’s exposure to foreign exchange risk, expressed in AUD, was as follows:
2021
$m
3.8
1.1
169.9
2020
$m
0.3
3.7
147.7
Aug 2021 -
Nov 2022
6.1
(6.1)
0.737
0.620
Aug 2020 -
Oct 2021
(9.2)
9.2
0.709
0.610
Amortised
cost
$m
Fair value
through OCI
$m
Cash and cash equivalents
Trade payables
Forward exchange contracts
USD
$m
9.5
21.0
168.6
2021
EURO
$m
4.1
0.1
1.3
Other
$m
4.5
0.2
-
USD
$m
3.3
9.7
145.3
2020
EURO
$m
2.4
-
2.4
Other
$m
1.8
-
-
At 31 July 2021
Financial assets
Cash and cash equivalents
Trade and other financial receivables
Derivative financial instruments
Total financial assets
Financial liabilities
Trade and other financial payables1
Borrowings
Lease liabilities
Derivative financial instruments
Total financial liabilities
At 25 July 2020
Financial assets
Cash and cash equivalents
Trade and other financial receivables
Derivative financial instruments
Total financial assets
Financial liabilities
Trade and other financial payables1
Borrowings
Lease liabilities
Derivative financial instruments
Total financial liabilities
Note
D1
B1
E1
B3
D3
C4
E1
D1
B1
E1
B3
D3
C4
E1
Total
$m
178.6
16.1
3.8
198.5
262.2
66.8
1,735.5
1.1
2,065.6
86.5
47.5
0.3
134.3
266.6
78.6
1,794.7
3.7
2,143.6
178.6
16.1
-
194.7
262.2
66.8
1,735.5
-
2,064.5
86.5
47.5
-
134.0
266.6
78.6
1,794.7
-
2,139.9
-
-
3.8
3.8
-
-
-
1.1
1.1
-
-
0.3
0.3
-
-
-
3.7
3.7
1. Trade and other financial payables comprise trade payables, other financial payables and accruals.
(a) Market risk
(i) Foreign exchange risk
The Group is exposed to foreign exchange risk when there is mismatch between the currencies in which future commercial transactions and assets and
liabilities recognised are denominated, and the respective functional currency of the Group companies.
The focus of the Group’s foreign exchange risk management activities is on the transaction exposures that arise on the sourcing and purchasing of
inventory overseas, with these transactions primarily denominated in United States Dollar (USD) and some denominated in Euro (EUR). This risk is hedged
with the objective of minimising the volatility of the Australian Dollar (AUD) cost of highly probably forecast inventory purchases.
The Group’s treasury risk management policy is to hedge forecast USD and EUR cash flows for inventory purchases, up to 18 months in advance. The
amount of hedging required is dependent on the timing of the settlement of the forecast inventory purchases, with a higher percentage required to be
hedged for inventory purchases with an earlier settlement.
The Group uses forward foreign exchange contracts to hedge its exposure to foreign currency risk. The Group designates the forward rate of foreign
currency forwards to hedge its currency risk. The Group’s policy is for the critical terms of the forward foreign exchange contracts to align with the hedged
item.
Sensitivity
As shown in the table above, the Group is primarily exposed to changes in USD/AUD and EUR/AUD exchange rates. The table below shows the impact of
reasonably possible foreign exchange movements in the USD and EUR against the AUD and the effect this would have on the measurement of the
financial instruments denominated in these currencies:
Currency
United States Dollar
United States Dollar
Euro
Euro
Sensitivity assumption
+10%
-10%
+10%
-10%
Impact directly on equity
2021
$m
16.5
(13.5)
0.1
(0.1)
2020
$m
12.8
(10.5)
0.2
(0.2)
(ii) Interest rate risk
The Group is exposed to interest rate risk from floating rate long-term bank borrowings. The Group’s policy is to maintain an appropriate mix between fixed
and floating rate borrowings through the use of interest rate swap contracts. This risk is managed through the forecasting of expected borrowings to
determine the level of exposure to floating rates.
Exposure
At the end of the reporting period, the Group’s exposure to interest rate risk was as follows:
Cash and cash equivalents
Floating rate borrowings
At the end of the reporting period the Group held no interest rate swap contracts due to the low interest rate environment.
2021
$m
178.6
66.8
2020
$m
86.5
78.6
72
73
Myer Annual Report 2021Myer Annual Report 2021 N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 July 2021
for the peri od ended 31 July 2021
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 July 2021
for the peri od ended 31 July 2021
E 1 F I N A N C I A L R I S K M A N A G E M E N T (C O N T I N U E D )
E 1 F I N A N C I A L R I S K M A N A G E M E N T (C O N T I N U E D )
(a) Market risk (continued)
(ii) Interest rate risk (continued)
Sensitivity
Applying a sensitivity of 25 basis points to the Group's period end floating interest rate results in an immaterial impact on post tax profit and equity. This
assumes that the change in interest rates is effective from the beginning of the financial period and the net debt position and fixed/floating mix is constant
over the period. However, interest rates and the debt profile of the Group are unlikely to remain constant and therefore the above sensitivity analysis will be
subject to change.
(c) Liquidity risk
The Group adopts a prudent liquidity risk management strategy by seeking to maintain sufficient cash and availability of funding through an adequate
amount of committed credit facilities to meet financial obligations as and when they fall due. The Group’s objective is to maintain flexibility in funding given
the seasonal nature of the retail business.
The Group monitors forecast and actual cash flows and performs sensitivity analysis, to ensure at all times there is an appropriate minimum level of
liquidity available through committed undrawn borrowing facilities and cash and cash equivalents.
(iii) Hedge ineffectiveness
Hedge ineffectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that
an economic relationship exists between the hedged item and hedging instrument.
For hedges of foreign currency purchases, the group enters into hedge relationships where the critical terms of the hedging instrument match exactly with
the terms of the hedged item. The Group therefore performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the
hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Group uses the hypothetical derivative
method to assess effectiveness.
(b) Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. This
arises primarily from the following assets: cash and cash equivalents, trade and other receivables and derivative financial instruments.
Group Treasury manages credit risk from banks and financial institutions, in accordance with Board approved policy. The policy is to limit the Group’s loss
from default by any one counterparty by dealing only with banks and financial institution counterparties whose long-term credit rating is at or above an 'A'
rating.
Trade and other receivables balances outstanding with third parties are primarily ad-hoc in nature and the credit quality of the third party is assessed by
taking into account its financial position, past experience and other relevant factors.
Sales to retail customers are primarily required to be settled in cash or using major credit cards, mitigating credit risk. There are no significant
concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions.
Exposure
At the end of the reporting period, the maximum credit risk exposure is the carrying value of the financial assets below:
Cash and cash equivalents
Trade and other financial receivables
Derivative financial instruments - assets
2021
$m
178.6
16.1
3.8
2020
$m
86.5
47.5
0.3
Trade and other receivables
The Group applies the AASB 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade and
other receivables.
To measure the expected credit losses, trade and other receivables have been grouped based on shared credit risk characteristics and the days past due.
The expected credit loss rates are based on historical observed default rates, adjusted to reflect current and forward looking information on
macroeconomic factors affecting the ability of customers to settle the receivables.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery
include, amongst others, the failure of a debtor to engage in a repayment plan with the Group. Refer to note B1 for more information.
Financing arrangements
The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
Floating rate
Expiring within one year (revolving cash advance facility)
Expiring beyond one year (revolving cash advance facility)
2021
$m
-
217.6
217.6
2020
$m
280.0
-
280.0
Refer to note D3 for more information. The Group's syndicated facility was extended subsequent to the end of the reporting period. Refer to Note H6 for
more information.
Maturities of financial liabilities
The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for:
(a) all non-derivative financial liabilities; and
(b) net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash
flows.
The amounts disclosed in the table are the contractual undiscounted cash flows and therefore may not equal their carrying amount. Balances due within 12
months equal their carrying amounts as the impact of discounting is not significant.
Contractual maturities of
financial liabilities
Less than
6 months
6 - 12
months
Between
1 and 2
years
Between
2 and 5
years
Over 5
years
Total
contractual
cash flows
$m
$m
$m
$m
$m
$m
2021
Non-derivatives
Trade and other payables
Borrowings
Lease liabilities
Total non-derivatives
Derivatives
Gross settled
- (inflow)
- outflow
Total derivatives
2020
Non-derivatives
Trade and other payables
Borrowings
Lease liabilities
Total non-derivatives
Derivatives
Gross settled
- (inflow)
- outflow
Total derivatives
262.2
11.3
108.2
381.7
(84.3)
84.3
(0.0)
266.6
11.1
104.6
382.3
(97.1)
99.1
2.0
-
10.6
104.2
114.8
(70.3)
68.3
(2.0)
-
70.3
104.6
174.9
(43.0)
44.3
1.3
-
50.8
203.3
254.1
(18.0)
17.3
(0.7)
-
-
200.3
200.3
(4.2)
4.3
0.1
-
-
568.4
568.4
-
-
-
-
-
548.2
548.2
-
-
-
-
-
1,246.3
1,246.3
-
-
-
-
-
1,376.8
1,376.8
-
-
-
262.2
72.7
2,230.4
2,565.3
(172.6)
169.9
(2.7)
266.6
81.4
2,334.5
2,682.5
(144.3)
147.7
3.4
The amount disclosed for variable rate instruments is determined by reference to the interest rate at the last re-pricing date.
Carrying
amount
(assets)/
liabilities
$m
262.2
70.0
1,735.5
2,067.7
(3.9)
1.2
(2.7)
266.6
80.0
1,794.7
2,141.3
(0.3)
3.7
3.4
74
75
Myer Annual Report 2021Myer Annual Report 2021 N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 July 2021
for the peri od ended 31 July 2021
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the period ended 31 July 2021
for the peri od ended 31 July 2021
E 1 F I N A N C I A L R I S K M A N A G E M E N T (C O N T I N U E D )
E 1 F I N A N C I A L R I S K M A N A G E M E N T (C O N T I N U E D )
(d) Fair value measurements
The Group has the following derivative financial instruments:
Current assets
Forward foreign exchange contracts
Total current derivative financial instrument assets
Non-current assets
Forward foreign exchange contracts
Total non-current derivative financial instrument assets
Current liabilities
Forward foreign exchange contracts
Total current derivative financial instrument liabilities
Non-current liabilities
Forward foreign exchange contracts
Total non-current derivative financial instrument liabilities
2021
$m
2020
$m
3.1
3.1
0.7
0.7
1.1
1.1
-
-
0.3
0.3
-
-
3.5
3.5
0.2
0.2
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liabilities either directly (as prices) or indirectly
derived from prices; and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
All of the Group’s financial instruments were valued using the Level 2 technique, with no transfers between levels during the period.
The fair value of forward foreign exchange contracts is determined using the present value of future cash flows based on the forward exchange rates at the
end of the reporting period. The fair value of interest rate swaps is determined using the present value of the estimated future cash flows based on
observable yield curves.
Accounting policy - Financial assets and liabilities
Classification
The group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value (either through OCI or through profit or loss); and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held
for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at
fair value through other comprehensive income (FVOCI).
Initial recognition and measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss
(FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
(i) Financial assets at amortised cost (debt instruments)
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at
amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising
on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment
losses are recognised in profit or loss. Trade receivables that do not contain a significant financing component or for which the Group has applied the
practical expedient are measured at the transaction price determined under AASB 15.
(ii) Financial assets at fair value through OCI (debt instruments)
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of
principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or
losses, interest income and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the
cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from
these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other
gains/(losses) and impairment expenses are recognised in profit or loss.
(iii) Financial assets at fair value through profit or loss (debt instruments)
Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured
at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises.
Accounting policy - Financial assets and liabilities (continued)
(iv) Financial assets designated at fair value through OCI (equity instruments)
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses
on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the
investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s right to receive payments is
established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in profit or loss, as applicable. Impairment losses (and reversal
of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The
impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised from initial
recognition of the receivables. Refer to note E1(b) for more information.
Accounting policy - Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the
end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either:
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or
hedges of the cash flows or recognised assets or liabilities and highly probable forecast transactions (cash flow hedges).
The Group documents at the inception of the hedging transaction the economic relationship between hedging instruments and hedged items, as well as its
risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessments, both at hedge inception
and on an ongoing basis, of whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged
items.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12
months. It is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.
(i) Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the consolidated income statement, together
with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating to the effective portion of
interest rate swaps hedging fixed rate borrowings is recognised in profit or loss within finance costs, together with changes in the fair value of the hedged
fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the ineffective portion is recognised in profit or loss.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest
method is used is amortised to profit or loss over the period to maturity using a recalculated effective interest rate.
(ii) Cash flow hedge
The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational and financing
activities.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging
reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.
When forward contracts are used to hedge forecast transactions, the Group designates the full change in fair value of the forward contract (including
forward points) as the hedging instrument. Gains or losses relating to the effective portion of the change in the fair value of the entire forward contracts are
recognised in the cash flow hedge reserve within equity.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss. When the forecast transaction
that is hedged results in the recognition of a non-financial asset (for example, inventory or fixed assets) the gains and losses previously deferred in equity
are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in profit or loss
as cost of goods sold in the case of inventory, or as depreciation in the case of fixed assets.
The gain or loss relating to the effective portion of the interest rate swaps hedging variable rate borrowings is recognised in profit or loss within finance
costs at the same time as the interest expense on the hedged borrowings.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or
loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a
forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.
(iii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge
accounting are recognised immediately in profit or loss.
76
77
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
F . E Q U I T Y
This section provides additional information regarding lines in the financial statements that are most relevant to explaining the equity position of the Group
at the end of the period, including the dividends declared and/or paid during the period.
F 1 C O N T R I B U T E D E Q U I T Y
Ordinary shares - fully paid
Treasury shares
Opening balance
Shares acquired by Myer Equity Plans Trust on market at $0.61
Shares acquired by Myer Equity Plans Trust on market at $0.21
Shares acquired by Myer Equity Plans Trust on market at $0.36
Closing balance of treasury shares
Closing balance
2021
Number of
shares
2020
Number of
shares
821,278,815 821,278,815
(1,376,662) (331,996)
(1,044,666)
-
(931,893) -
(679,432) -
(2,987,987) (1,376,662)
819,902,153
818,290,828
2021
$m
780.0
(41.9)
-
(0.2)
(0.2)
(42.3)
737.7
2020
$m
780.0
(41.2)
(0.7)
-
-
(41.9)
738.1
Ordinary shares
The ordinary shares issued are fully paid. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands, every holder of ordinary shares present at a meeting in person, or
by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
Treasury shares
Treasury shares are shares in Myer Holdings Limited that are held by the Myer Equity Plans Trust for the purposes of issuing shares under the Equity
Incentive Plans. Refer to note H4 for more information.
Employee share schemes
Information relating to the employee share-based payment schemes, including details of shares issued under the schemes, is set out in note H4.
Capital risk management
The Group’s key objective when managing capital is to minimise its weighted average cost of capital while maintaining appropriate financing facilities. This
provides the opportunity to pursue growth and capital management initiatives. In managing its capital structure, the Group also seeks to safeguard its ability
to continue as a going concern in order to provide appropriate returns to shareholders and benefits for other stakeholders.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue
new shares or sell assets to reduce debt.
F 2 A C C U M U L A T E D L O S S E S A N D R E S E R V E S
(a) Accumulated losses
Movements in Accumulated losses were as follows:
Balance at beginning of period
Adjustment on initial application of AASB 16, net of tax
Adjustment on change to accounting policy, net of tax (refer to note I)
Restated balance at beginning of period
Profit/(loss) for the period
Balance at end of period
(b) Reserves
Share-based payments (i)
Cash flow hedges (ii)
Other reserve (iii)
Foreign currency translation (iv)
Movements in reserves were as follows:
Share-based payments
Balance at beginning of period
Share-based payments (credit)/expense recognised (note H4)
Income tax (note A4)
Balance at end of period
Cash flow hedges
Balance at beginning of period
Net gain/(loss) on revaluation
Transfer to net profit
Balance at end of period
Foreign currency translation
Balance at beginning of period
Exchange differences on translation of foreign operations during the period
Balance at end of period
2021
$m
(560.4)
-
-
(560.4)
46.4
(514.0)
29.3
3.2
(25.6)
(3.7)
3.2
27.5
2.3
(0.5)
29.3
(2.7)
6.1
(0.2)
3.2
(4.3)
0.6
(3.7)
2020
$m
(138.6)
(247.9)
(1.5)
(388.0)
(172.4)
(560.4)
27.5
(2.7)
(25.6)
(4.3)
(5.1)
27.0
0.6
(0.1)
27.5
4.7
(9.1)
1.7
(2.7)
(4.2)
(0.1)
(4.3)
(i) Share-based payments
The share-based payments reserve is used to recognise the fair value of options and rights granted to employees under the employee share plans. Further
information on share-based payments is set out in note H4.
Consistent with others in the industry, the Group monitors capital on the basis of various balance sheet ratios including the gearing ratio. This ratio is
calculated as net debt/(cash) divided by total capital. Net debt/(cash) is calculated as total borrowings less cash and cash equivalents. Total capital is
calculated as equity as shown in the balance sheet plus net debt/(cash).
(ii) Cash flow hedges
The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly in equity, as described in
note E1. Amounts are recognised in the consolidated income statement when the associated hedged transaction affects profit or loss.
The gearing ratios at 31 July 2021 and 25 July 2020 were as follows:
Borrowings (note D3)
Less: cash and cash equivalents (note D1)
Net cash at end of period (excluding lease liabilities)
Plus: lease liabilities
Net debt at end of period
Total equity
Total capital (excluding lease liabilities)
Total capital
Gearing ratio (excluding lease liabilities)
Gearing ratio
Accounting policy
Ordinary shares are classified as equity.
2021
$m
66.8
(178.6)
(111.8)
1,735.5
1,623.7
226.9
115.1
1,850.6
-97.2%
87.7%
2020
$m
78.6
(86.5)
(7.9)
1,794.7
1,786.8
172.6
164.7
1,951.4
-4.8%
91.6%
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Company's equity instruments; for example, as the result of a share buy-back or a share-based payment plan,
the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of Myer
Holdings Limited as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration
received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of
Myer Holdings Limited.
(iii) Other reserve
The Group acquired 65% of the sass & bide business in 2011, and the non-controlling shareholders held a put option over the remaining 35%. This
resulted in the Group recognising a financial liability for the put option and a corresponding amount in other reserve. In 2014, upon acquisition of the
remaining 35% of sass & bide, the cash payment of $33.4m was recorded against the financial liability and non-controlling interests balances were
recorded against other reserve.
(iv) Foreign currency translation
Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income and accumulated in a separate
reserve within equity. The cumulative amount is reclassified to the consolidated income statement when the net investment is disposed of.
Accounting policy
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which
the entity operates ('the functional currency'). The consolidated financial statements are presented in Australian dollars, which is Myer Holdings Limited’s
functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation at end of period exchange rates of monetary assets
and liabilities denominated in foreign currencies are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow
hedges.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was
determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation
differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair
value gain or loss and translation differences on non-monetary assets such as equities classified as available-for-sale financial assets are recognised in
other comprehensive income.
78
79
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
F 2 A C C U M U L A T E D L O S S E S A N D R E S E R V E S (C O N T I N U E D )
Accounting policy (continued)
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation currency as follows:
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
income and expenses for each consolidated income statement and statement of comprehensive income are translated at the rates prevailing on the
transaction dates; and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, when a foreign operation is sold, the associated exchange difference is reclassified to profit or loss, as part of the gain or loss on sale.
F 3 D I V I D E N D S
(a) Ordinary shares
Total dividends paid
(b) Dividends not recognised at the end of the reporting period
The directors have determined that no final dividend will be payable (2020: no final dividend).
2021
$m
-
2020
$m
-
(c) Franked dividends
The franked portions of final dividends recommended after 31 July 2021 will be franked out of existing franking credits or out of franking credits arising from
the payment of income tax in the period ended 31 July 2021:
Franking credits available for subsequent reporting periods based on a tax rate of 30% (2020: 30%)
50.6
67.0
The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted for franking credits and debits
that will arise from the settlement of liabilities or receivables for income tax and dividends after the end of the reporting period.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of subsidiaries were paid as dividends.
G . G R O U P S T R U C T U R E
This section summarises how the Group structure affects the financial position and performance of the Group as a whole.
G 1 S U B S I D I A R I E S
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy
described below:
Name of entity
NB Elizabeth Pty Ltd
NB Russell Pty Ltd
NB Lonsdale Pty Ltd
NB Collins Pty Ltd
Warehouse Solutions Pty Ltd
Myer Group Pty Ltd
Myer Pty Ltd
Myer Group Finance Limited
The Myer Emporium Pty Ltd
ACT Employment Services Pty Ltd
Myer Employee Share Plan Pty Ltd
Myer Travel Pty Ltd
Myer Sourcing Asia Ltd
Shanghai Myer Service Company Ltd
Boogie & Boogie Pty Ltd
sass & bide Pty Ltd
sass & bide Retail Pty Ltd
sass & bide Retail (NZ) Pty Ltd
sass & bide USA inc.
sass & bide inc.
Marcs David Lawrence Pty Ltd
Notes
(1), (3)
(2), (3)
(2), (3)
(1), (3)
(2), (3)
(1), (3)
(1), (3)
(1), (3)
(2), (3)
(2)
(2)
(2)
(2), (3)
(2), (3)
(2), (3)
(2), (3)
(1), (3)
Country of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Hong Kong
China
Australia
Australia
Australia
Australia
USA
USA
Australia
Class of shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity
holdings(4)
2021
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Equity
holdings(4)
2020
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Accounting policy
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end
of the financial period but not distributed at balance date.
(1) Each of these entities have been granted relief from the necessity to prepare financial statements in accordance with ASIC Corporations (Wholly-
owned Companies) Instrument 2016/785.
(2) Each of these entities is classified as small proprietary and therefore relieved from the requirement to prepare and lodge financial reports with ASIC.
(3) Each of these entities is party to a deed of cross guarantee, refer to note G2.
(4) The proportion of ownership interest is equal to the proportion of voting power held.
Accounting policy
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Myer Holdings Limited ('Company' or 'parent entity') as at
31 July 2021 and the results of all subsidiaries for the period then ended.
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control
ceases. The acquisition method of accounting is used to account for business combinations by the Group (refer to note C2).
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also
eliminated unless the transaction provides evidence of impairment of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement of comprehensive
income, balance sheet and statement of changes in equity respectively.
Employee Share Trust
The Group has the Myer Equity Plans Trust to administer the Group's employee share scheme. This trust is consolidated, as the substance of the
relationship is that the trust is controlled by the Group. Shares in Myer Holdings Limited held by the trust are disclosed as treasury shares and deducted
from contributed equity.
80
81
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
G 2 D E E D O F C R O S S G U A R A N T E E
G 2 D E E D O F C R O S S G U A R A N T E E (C O N T I N U E D )
The following entities are parties to a deed of cross guarantee under which each company guarantees the debts of the others:
Myer Holdings Limited
NB Elizabeth Pty Ltd
NB Russell Pty Ltd
Myer Group Pty Ltd
NB Lonsdale Pty Ltd
NB Collins Pty Ltd
Warehouse Solutions Pty Ltd
Myer Pty Ltd
Myer Group Finance Limited
The Myer Emporium Pty Ltd
Boogie & Boogie Pty Ltd
sass & bide Pty Ltd
sass & bide Retail Pty Ltd
sass & bide Retail (NZ) Pty Ltd
Marcs David Lawrence Pty Ltd
By entering into the deed, the wholly-owned entities within note reference 1 in note G1 have been relieved from the requirements to prepare a financial
report and directors' report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
The above companies represent a 'closed group' for the purposes of the ASIC Legislative Instrument, and as there are no other parties to the deed of cross
guarantee that are controlled by Myer Holdings Limited, they also represent the 'extended closed group'.
(a) Consolidated income statement, statement of comprehensive income and summary of movements in consolidated accumulated losses
Set out below is a consolidated income statement, statement of comprehensive income and a summary of movements in consolidated accumulated losses
for the closed group for the period ended 31 July 2021:
Income statement
Total sales
Concession sales
Sale of goods
Sales revenue deferred under customer loyalty program
Revenue from sale of goods
Other operating revenue
Cost of goods sold
Operating gross profit
Other income
Selling expenses
Administration expenses
Restructuring, impairment of assets and other significant items
Earnings before interest and tax
Finance revenue
Finance costs
Net finance costs
Profit/(loss) before income tax
Income tax (expense)/benefit
Profit/(loss) for the period attributable to Deed of Cross Guarantee group
Statement of comprehensive income
Profit/(loss) for the period
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss:
Cash flow hedges
Exchange differences on translation of foreign operations
Other comprehensive income/(loss) for the period, net of tax
Total comprehensive income/(loss) for the period
Summary of movements in accumulated losses
Balance at beginning of period
Adjustment on initial application of AASB 16, net of tax
Adjustment on change to accounting policy, net of tax
Restated balance at beginning of period
Profit/(loss) for the period
Balance at end of period
2021
53 weeks
$m
2020
52 weeks
$m
2,658.3
(505.5)
2,152.8
(36.3)
2,116.5
133.6
(1,194.6)
1,055.5
2.4
(648.3)
(239.3)
(7.6)
162.7
0.3
(96.4)
(96.1)
66.6
(20.2)
46.4
2,519.4
(445.2)
2,074.2
(26.3)
2,047.9
111.5
(1,204.5)
954.9
3.1
(635.8)
(246.9)
(220.8)
(145.5)
0.4
(98.6)
(98.2)
(243.7)
69.3
(174.4)
46.4
(174.4)
5.9
0.5
6.4
52.8
(556.9)
-
-
(556.9)
46.4
(510.5)
(7.4)
(0.2)
(7.6)
(182.0)
(133.1)
(247.9)
(1.5)
(382.5)
(174.4)
(556.9)
(b) Consolidated balance sheet
Set out below is a consolidated balance sheet as at 31 July 2021 of the closed group:
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables and prepayments
Inventories
Derivative financial instruments
Current tax assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Derivative financial instruments
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Derivative financial instruments
Current tax liabilities
Other liabilities
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Accumulated losses
Reserves
Total equity
1 Comparative information has been restated due to a change in accounting policy. Refer to note I for more information.
2021
$m
176.2
28.1
304.0
3.1
-
511.4
318.3
1,223.7
304.4
112.2
0.7
2.7
1,962.0
2,473.4
352.9
-
156.0
63.1
1.1
16.4
0.2
589.7
66.8
1,579.1
4.8
-
1,650.7
2,240.4
233.0
737.7
(510.5)
5.8
233.0
20201
$m
85.6
66.2
254.5
0.3
7.2
413.8
346.7
1,272.0
316.4
116.1
-
3.2
2,054.4
2,468.2
354.1
78.6
167.3
55.0
3.5
-
0.2
658.7
-
1,626.7
3.6
0.2
1,630.5
2,289.2
179.0
738.1
(556.9)
(2.2)
179.0
82
83
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
G 3 P A R E N T E N T I T Y F I N A N C I A L I N F O R M A T I O N
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
H . O T H E R F I N A N C I A L I N F O R M A T I O N
This section of the notes includes other financial information that must be disclosed to comply with the accounting standards and other pronouncements,
but that is not immediately related to individual line items in the financial statements. This section also provides information about items that are not
recognised in the financial statements as they do not (yet) satisfy the recognition criteria.
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders' equity
Issued capital
Reserves
Other reserves
Share-based payments
Retained profits reserve - pre 2018
Accumulated losses reserve - 2018
Retained profits reserve - 2019
Accumulated losses reserve - 2020
Retained profits reserve - 2021
Profit/(loss) for the period
Total comprehensive income/(loss) for the period1
(b) Guarantees entered into by the parent entity
Carrying amount included in current liabilities
2021
$m
171.6
370.7
37.4
104.2
737.7
(2.7)
23.9
78.9
(406.7)
6.0
(170.6)
-
-
-
-
2020
$m
147.0
357.7
14.5
93.1
738.1
(2.7)
21.6
78.9
(406.7)
6.0
(170.6)
-
(170.6)
(170.6)
-
1. In 2020, the loss for the period reflects the impairment recognised on the investments held in subsidiaries within the Group. Refer to note C2 for more
information.
The parent entity is the borrowing entity under the Group's financing facilities. Under these facilities, the parent entity is party to a cross-guarantee with
various other Group entities, who guarantee the repayment of the facilities in the event that the parent entity is in default.
The parent entity is also party to the deed of cross guarantee. The details of the deed of cross guarantee are set out in note G2. At the end of the reporting
period, no liability has been recognised in relation to these guarantees on the basis that the potential exposure is not considered material.
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 31 July 2021 or 25 July 2020.
(d) Contractual commitments for the acquisition of property, plant or equipment
The parent entity did not have any contractual commitments for the acquisition of property, plant or equipment as at 31 July 2021 or 25 July 2020.
(e) Event subsequent to balance date
Refer to note H6 for additional events which have occurred after the financial reporting date.
Accounting policy
The financial information that is disclosed for the parent entity, Myer Holdings Limited, has been prepared on the same basis as the consolidated financial
statements, except as set out below.
(i) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of Myer Holdings Limited.
(ii) Tax consolidation legislation
Myer Holdings Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Myer Holdings Limited, and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax
amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Myer Holdings Limited also recognises the current tax liabilities (or assets) and the deferred tax
assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Myer Holdings Limited for any current
tax payable assumed and are compensated by Myer Holdings Limited for any current tax receivable and deferred tax assets relating to unused tax losses
or unused tax credits that are transferred to Myer Holdings Limited under the tax consolidation legislation. The funding amounts are determined by
reference to the amounts recognised in the wholly-owned entities’ financial statements.
The funding amounts are recognised as current intercompany receivables or payables.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other
entities in the Group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or
distribution from) wholly-owned tax consolidated entities.
H 1 C O N T I N G E N C I E S
Contingent liabilities
The Group had contingent liabilities at 31 July 2021 in respect of:
Guarantees
The Group has issued bank guarantees amounting to $33.2 million (2020: $38.0 million), of which $16.5 million (2020: $18.0 million) represents guarantees
supporting workers' compensation self insurance licences in various jurisdictions.
For information about other guarantees given by entities within the Group, including the parent entity, refer to notes G2 and G3.
There can be legal claims and exposures which arise from the ordinary course of business. There is significant uncertainty as to whether a future liability
will arise in respect of these items, or the amount of any such liability.
H 2 C O M M I T M E N T S
Capital commitments
Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
Property, plant, equipment and software
Payable:
Within one year
Later than one year but not later than five years
Later than five years
2021
$m
15.9
-
-
15.9
2020
$m
19.8
-
-
19.8
As at 31 July 2021, the Group also had commitments relating to lease agreements that have not yet commenced. The future lease payments
(undiscounted) for non-cancellable periods are $1.0 million within one year, $34.0 million between one and five years and $39.0 million thereafter. The
commitments relate to lease agreements associated with the National Distribution Centre and the Support Office.
H 3 R E L A T E D P A R T Y T R A N S A C T I O N S
(a) Parent entities
The parent entity within the Group is Myer Holdings Limited, a listed public company, incorporated in Australia.
(b) Subsidiaries
Interests in subsidiaries are set out in note G1.
(c) Key Management Personnel
(i) Compensation
Key Management Personnel compensation for the period ended 31 July 2021 is set out below. The Key Management Personnel of the Group are persons
having the authority for planning, directing and controlling the Company's activities directly or indirectly, including the directors of Myer Holdings Limited.
Short term employee benefits
Post employment benefits
Long term benefits
Share-based payments
2021
$
4,999,650
87,051
73,466
1,422,374
6,582,541
2020
$
3,983,303
111,875
7,519
722,776
4,825,473
Detailed remuneration disclosures are provided in the Remuneration Report on pages 25 to 49.
(ii) Loans
In 2021 and 2020 there were no loans made to directors of Myer Holdings Limited and other Key Management Personnel of the Group, including their
related parties.
(iii) Other transactions
The transactions with Key Management Personnel or entities related to them are as disclosed in the Remuneration Report.
(d) Transactions with other related parties
There were no material transactions with other related parties during the current period.
84
85
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
H 4 S H A R E - B A S E D P A YM E N T S
H 4 S H A R E - B A S E D P A YM E N T S (C O N T I N U E D )
(a) Long Term Incentive Plan
The Myer Long Term Incentive Plan (LTIP) is an incentive that is intended to promote alignment between executive and shareholder interests over the
longer term. Under the LTIP, performance rights and options may be offered annually to the Chief Executive Officer and nominated executives. The
employees invited to participate in the plan include executives who are considered to play a leading role in achieving the Group’s long term strategic and
operational objectives.
Each right and option offered is an entitlement to one fully paid ordinary share in the Company, subject to adjustment for capital actions, on terms and
hurdles determined by the Board, including hurdles linked to Company performance and service. Performance rights and options vest and are
automatically exercised on a net settlement basis.
The LTIP is delivered via a grant of performance rights or options. The number of performance rights or options that vest is not determined until after the
end of the performance period. The performance right or option will therefore not provide any value to the holder between the date the performance right or
option is granted until after the end of the vesting period, if the performance hurdles and restriction period (if applicable) are satisfied. Performance rights
and options do not carry entitlements to ordinary dividends or other shareholder rights until the end of the vesting period.
Set out below is a summary of performance rights and options granted under the plan:
2021
Performance rights
Performance options
Total
Weighted average exercise price
2020
Performance rights
Performance options
Total
Weighted average exercise price
Balance
25 July 2020
Granted
7,049,241 14,140,544
57,444,948
-
64,494,189 14,140,544
$0.00
$0.43
Exercised
Expired and
lapsed
- (4,061,254)
- (3,141,624)
- (7,202,878)
$0.21
$0.00
Balance
27 July 2019
Granted
-
8,820,637
34,272,272 30,264,866
43,092,909 30,264,866
$0.55
$0.33
Exercised
Expired and
lapsed
- (1,771,396)
- (7,092,190)
- (8,863,586)
$0.39
$0.00
Balance
31 July 2021
17,128,531
54,303,324
71,431,855
$0.36
Balance
25 July 2020
7,049,241
57,444,948
64,494,189
$0.43
The weighted average remaining contractual life of share rights and options outstanding at the end of the period was 1.0 year (2020: 1.6 years).
Fair value of performance rights granted
The assessed fair value at grant date of rights granted during the period is noted below. Fair value varies depending on the period to vesting date. The fair
values at grant dates were independently determined using a Monte Carlo simulation pricing model that takes into account the exercise price, the term of
the rights, the impact of dilution, the fair value of shares in the Company at grant date and expected volatility of the underlying share, the expected dividend
yield and the risk-free interest rate for the term of the right. The fair values and model inputs for performance rights granted during the period included:
(a) Fair value of performance rights granted
(b) Grant date
(c) Expiry date
(d) Share price at grant date
(e) Expected price volatility of the Group’s shares
(f) Expected dividend yield
(g) Risk-free interest rate
2021 LTIP
Rights (TSR)
$0.19
9-Nov-20
9-Nov-24
$0.27
75%
0%
0.16%
2021 LTIP
Rights (EPS)
$0.22
9-Nov-20
9-Nov-24
$0.27
75%
0%
0.16%
The expected price volatility is based on the historic volatility (based on the remaining life of the performance options), adjusted for any expected changes
to future volatility due to publicly available information.
Where rights are issued to employees of subsidiaries within the Group, the subsidiaries compensate the Company for the amount recognised as an
expense in relation to these rights.
(b) Deferred Rights - Transformation Incentive (TI) Plan
The Transformative Incentive (TI) Plan was introduced to replace the normal STI plan for a period of 2 years, starting in FY21. Under the TI plan, the Chief
Executive Officer and nominated executives receive 50% of the annual TI achieved in cash and 50% in the form of deferred rights to shares in the
Company. Deferred rights granted under the FY21 TI plan will be issued in two tranches, 50% will be subject to a one-year disposal restriction and 50% will
be subject to a two-year disposal restriction. Deferred rights will convert to Shares on the first day following the end of the respective restriction period, that
occurs during a trading window under the Company’s Security Dealing Policy and subject to ongoing employment at that date.
The deferred rights automatically convert into one ordinary share on vesting at an exercise price of nil. There is no entitlement to receive dividends nor any
voting rights in relation to the deferred rights during the vesting period. If an executive ceases to be employed by the Group within this period, the rights will
be forfeited, except in circumstances that are approved by the board on a case-by-case basis.
The number of rights to be issued is determined based on the currency value of the achieved TI award divided by the weighted average price at which the
Company’s shares are over the five trading days immediately following the release to the market of the company's full year FY21 results.
(c) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:
Rights and options issued under the LTIP
Deferred rights issued under the TIP
2020
2021
$m
$m
0.6
1.8
0.5 -
Share-based payment transaction expenses represent the amount recognised in the period in relation to share-based remuneration plans. Where
expectations of the number of rights or options expected to vest changes, the life to date expense is adjusted, which can result in a negative expense for
the period due to the reversal of amounts recognised in prior periods.
Accounting policy
Share-based compensation benefits are provided to employees through the Myer Long Term Incentive Plan (LTIP) and Transformation Incentive Plan
(TIP).
The fair value of rights and options granted under a plan are recognised as an employee benefit expense with a corresponding increase in equity. The total
amount to be expensed is determined by reference to the fair value of the rights and options granted, which includes any market performance conditions
but excludes the impact of any services and non-market performance vesting conditions and the impact of any non-vesting conditions.
Non-market vesting conditions are included in assumptions about the number of rights and options that are expected to vest. The total expense is
recognised over the vesting period, which is the period over which all the specified vesting conditions are to be satisfied. At the end of each period, the
Group revises its estimates of the number of rights or options that are expected to vest based on the non-market vesting conditions. It recognises the
impact of revisions to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
The LTIP and TIP are administered by the Myer Equity Plan Trust (refer to note G1). When rights or options are vested, the trust transfers the appropriate
number of shares to the employee. The proceeds received net of any directly attributable transaction costs are credited directly to equity.
H 5 R E M U N E R A T I O N O F A U D I T O R S
During the period, the following fees were paid or payable for services provided by the auditor of the Group, and its related practices:
(a) PwC Australia
(i) Assurance services
Audit services
Audit and review of financial statements
Other assurance services
Audit of rent certificates
Total remuneration for audit and other assurance services
(ii) Taxation services
Tax compliance services
(iii) Other services
Consulting services
Total remuneration of PwC Australia
(b) Overseas practices of PwC
(i) Assurance services
Audit services
Audit and review of financial statements
Total remuneration for overseas practices of PwC
2021
$
2020
$
561,000
426,000
29,283
590,283
38,519
464,519
3,000
3,000
-
593,283
10,799
478,318
66,452
66,452
69,067
69,067
86
87
Myer Annual Report 2021Myer Annual Report 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
N OT E S TO T HE CO N S O L I D AT E D F I N A N C I A L S TAT EM E N T S
for the peri od ended 31 July 2021
for the period ended 31 July 2021
H 6 E V E N T S O C C U R R I N G A F T E R T H E R E P O R T I N G P E R I O D
Dividends on the Company's ordinary shares
The directors have determined that no final dividend will be payable for the period ended 31 July 2021.
Extension of debt facility
On 24 August 2021, the Group entered into an amendment and extension of the syndicated facility, with the facility extended to 30 November 2022. The
key terms are noted below:
(a) Structure of debt
Amortising term loan - Tranche A1
Revolving - Tranche B2,3
Total syndicated facility
Amount
$70 million
$218 million
$288 million
Expiry date
30 November 2022
30 November 2022
1. Tranche A steps down by $30 million during the period ending 30 July 2022.
2. Tranche B steps down by $40 million during the period ending 30 July 2022.
3. On 30 August 2021, a further $25m of Tranche B limit was cancelled due to over-performance.
(b) Security
The syndicated facility is secured, subject to various representations, undertakings, events of default and review events.
(c) Debt covenants
Under the terms of the syndicated facility, the Group is required to comply with financial covenants and report compliance on a quarterly basis.
COVID-19 restrictions
Following the period end, Myer has been impacted by temporary store closures across four States as a result of Government mandated restrictions in
response to the ongoing COVID-19 pandemic. Stores have continued to fulfil online and zero contact click-and-collect orders with actions taken to prioritise
the health and wellbeing of our customers, staff members and the broader communities in which these stores operate.
I . O T H E R A C C O U N T I N G P O L I C I E S
This section provides a list of other accounting policies adopted in the preparation of these consolidated financial statements. Specific accounting policies
are disclosed in their respective notes to the financial statements. This section also provides information on the impacts of new accounting standards,
amendments and interpretations, and whether they are effective in the current or future reporting periods.
The principal accounting policies adopted in the preparation of these consolidated financial statements ('financial statements' or 'financial report') are set
out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. The financial statements are for the
consolidated entity consisting of Myer Holdings Limited and its subsidiaries ('Group').
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) and the Corporations Act 2001. Myer Holdings Limited is a for-profit entity for the purpose of preparing the
financial statements.
Compliance with IFRS
The consolidated financial statements of Myer Holdings Limited group also comply with International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB).
Historical cost convention
The preparation of financial statements in conformity with accounting standards requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in notes A2, B2, C2 and C4.
Working capital position
As at 31 July 2021, the Group has a net current liability position of $83.4 million. This includes the recognition of current lease liabilities of $156.2 million
from the adoption of AASB 16 Leases . The Group has an undrawn borrowing facility of $217.6 million, which will enable the Group to pay its debts as and
when they become due and payable.
(b) Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 and, except where otherwise
stated, amounts in the consolidated financial statements have been rounded off to the nearest hundred thousand dollars.
(c) New accounting standards and interpretations
The Group has adopted the IFRS Interpretations Committee (IFRIC) final agenda decision in relation to Software-as-a-Service arrangements. None of the
other new standards or amendments to existing standards that are mandatory for the first time for the 31 July 2021 reporting period materially affect any of
the amounts recognised in the current period or prior period, and are not likely to significantly affect future periods.
Software-as-a-Service ("SaaS") arrangements
IFRIC issued the final agenda decision on the accounting for configuration and customisation costs in SaaS arrangements in the period. The Group has
revised its accounting policy to reflect the treatment for configuration and customisation costs in line with the agenda, which is to recognise those costs as
an intangible asset only if the Group has control and obtains all the future economic benefit from the underlying asset in accordance with AASB 138
Intangible Assets . Costs that do not result in intangible assets are expensed as incurred, unless they are paid to the suppliers of the SaaS arrangement to
significantly customise the cloud-based software for the group, in which case the costs are recorded as a prepayment for services and amortised over the
expected renewable term of the arrangement.
As a result of the change in accounting policy, the Group has determined that costs relating to the implementation of SaaS arrangements would need to be
expensed when they were incurred. In addition, the group also reclassified costs paid to the suppliers of the SaaS arrangements from intangible assets to
prepayments.
The change in accounting policy has been applied retrospectively and comparative information has been restated. The following reflects the impact of the
amounts reflected in the financial statements.
Consolidated Balance Sheet (extract)
Intangible assets
Trade and other receivables and prepayments
Deferred tax assets
Retained earnings/(accumulated losses)
2021
$m
(2.4)
0.6
0.8
1.0
2020
$m
(3.2)
0.7
1.0
1.5
88
89
Myer Annual Report 2021Myer Annual Report 2021
DIRECTORS’ DECLARATION
DIRECTORS’ DECL ARATION
In the directors’ opinion:
(a)
the financial statements and notes set out on pages 51 to 89 are in accordance with the Corporations Act 2001, including:
i)
ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
giving a true and fair view of the consolidated entity’s financial position as at 31 July 2021 and of its performance for the
financial period ended on that date; 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; and
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group will be
able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee
described in note G2.
Note I. (a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer required by section 295A
of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
JoAnne Stephenson
Chairman
Melbourne, 16 September 2021
Independent auditor’s report
To the members of Myer Holdings Limited
Independent auditor’s report
Independent auditor’s report
Report on the audit of the financial report
To the members of Myer Holdings Limited
To the members of Myer Holdings Limited
Report on the audit of the financial report
Our opinion
Report on the audit of the financial report
In our opinion:
Our opinion
The accompanying financial report of Myer Holdings Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
In our opinion:
Our opinion
In our opinion:
(a) giving a true and fair view of the Group's financial position as at 31 July 2021 and of its financial
The accompanying financial report of Myer Holdings Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
The accompanying financial report of Myer Holdings Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
performance for the period 26 July 2020 to 31 July 2021
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(a) giving a true and fair view of the Group's financial position as at 31 July 2021 and of its financial
(a) giving a true and fair view of the Group's financial position as at 31 July 2021 and of its financial
performance for the period 26 July 2020 to 31 July 2021
performance for the period 26 July 2020 to 31 July 2021
What we have audited
The Group financial report comprises:
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
the consolidated balance sheet as at 31 July 2021
the consolidated balance sheet as at 31 July 2021
the consolidated income statement for the period 26 July 2020 to 31 July 2021
the consolidated income statement for the period 26 July 2020 to 31 July 2021
•
What we have audited
What we have audited
•
The Group financial report comprises:
The Group financial report comprises:
•
•
•
•
•
•
•
•
•
•
•
the consolidated statement of comprehensive income for the period 26 July 2020 to 31 July
•
the consolidated balance sheet as at 31 July 2021
2021
•
the consolidated income statement for the period 26 July 2020 to 31 July 2021
the consolidated statement of changes in equity for the period 26 July 2020 to 31 July 2021
•
the consolidated statement of comprehensive income for the period 26 July 2020 to 31 July
the consolidated statement of cash flows for the period 26 July 2020 to 31 July 2021
2021
the notes to the consolidated financial statements, which include significant accounting policies
•
the consolidated statement of changes in equity for the period 26 July 2020 to 31 July 2021
and other explanatory information
•
the consolidated statement of cash flows for the period 26 July 2020 to 31 July 2021
the directors’ declaration.
•
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the consolidated statement of comprehensive income for the period 26 July 2020 to 31 July
2021
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the consolidated statement of changes in equity for the period 26 July 2020 to 31 July 2021
the consolidated statement of cash flows for the period 26 July 2020 to 31 July 2021
Basis for opinion
•
•
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
Basis for opinion
report section of our report.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
report section of our report.
our opinion.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
the directors’ declaration.
the directors’ declaration.
Basis for opinion
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
Independence
our opinion.
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Independence
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
fulfilled our other ethical responsibilities in accordance with the Code.
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
90
Liability limited by a scheme approved under Professional Standards Legislation.
Liability limited by a scheme approved under Professional Standards Legislation.
91
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
PricewaterhouseCoopers, ABN 52 780 433 757
PricewaterhouseCoopers, ABN 52 780 433 757
Liability limited by a scheme approved under Professional Standards Legislation.
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Myer Annual Report 2021Myer Annual Report 2021
Our audit approach
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
Auditor’s responsibilities for the audit of the financial report
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of 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
Materiality
Our opinion on the remuneration report
•
For the purpose of our audit we used overall Group materiality of $3.3 million, which represents
approximately 5% of the Group’s profit before tax.
We have audited the remuneration report included in pages 25 to 49 of the directors’ report for the
period 26 July 2020 to 31 July 2021.
• We applied this threshold, together with qualitative considerations, to determine the scope of our audit
and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on
the financial report as a whole.
In our opinion, the remuneration report of Myer Holdings Limited for the period 26 July 2020 to 31
July 2021 complies with section 300A of the Corporations Act 2001.
• We chose Group profit before tax because, in our view, it is the benchmark against which the performance
of the Group is most commonly measured.
Responsibilities
• We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
Audit Scope
• Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
•
The Group is principally involved in retailing through department stores across Australia and online. The
accounting processes are structured around the Group's finance function at its Melbourne support office.
PricewaterhouseCoopers
Alison Tait
Partner
Melbourne
16 September 2021
Key audit matters
Independent auditor’s report
To the members of Myer Holdings Limited
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit 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. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Our opinion
Audit, Finance and Risk Committee.
Report on the audit of the financial report
In our opinion:
Key audit matter
How our audit addressed the key audit
The accompanying financial report of Myer Holdings Limited (the Company) and its controlled
matter
entities (together the Group) is in accordance with the Corporations Act 2001, including:
Carrying value of non-financial assets
(Refer to notes C1, C2 and C4)
performance for the period 26 July 2020 to 31 July 2021
(a) giving a true and fair view of the Group's financial position as at 31 July 2021 and of its financial
To assess the Group’s value-in-use impairment model
(the model) we performed the following procedures,
amongst others:
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
• evaluated whether the allocation of the Group’s
The Group’s non-financial assets include, amongst
others, intangible assets with indefinite lives,
What we have audited
representing brands and trademarks, property, plant
The Group financial report comprises:
and equipment, software and right-of-use assets.
the consolidated income statement for the period 26 July 2020 to 31 July 2021
the consolidated balance sheet as at 31 July 2021
•
The Group performed an impairment assessment by
preparing a value-in-use model to determine if the
carrying value of the assets in the Myer Group cash
generating unit was supported by forecast future cash
flows, discounted to present value (the "model").
the consolidated statement of comprehensive income for the period 26 July 2020 to 31 July
2021
the consolidated statement of changes in equity for the period 26 July 2020 to 31 July 2021
assets into CGUs was consistent with our
knowledge of the Group’s operations and internal
Group reporting
together with PwC experts, evaluated the
appropriateness of the Group’s method for
developing the estimate of recoverable amount by
reference to the nature of the estimate, the
requirements of Australian Accounting Standards,
and the business, industry and environment in
which the Group operates
the consolidated statement of cash flows for the period 26 July 2020 to 31 July 2021
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
performed testing over the mathematical accuracy
of the model on a sample basis
•
Significant judgement is required by the Group to
estimate the key assumptions used in the model to
determine the recoverable amount of the CGU. The
key assumptions applied by the Group include:
the directors’ declaration.
•
•
•
•
•
•
•
•
•
•
terminal growth rate
Basis for opinion
average EBITDA margin
•
compared the Group’s forecast cash flows to
Board approved budgets, externally available
economic data and historical actual results
the discount rates adopted in the model.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
compared the Group’s terminal growth rates to
external benchmark data
•
The Group assessed there were no indicators of
impairment for individual stores.
•
evaluated the appropriateness of significant
assumptions used in the model, including forecast
EBITDA margins, discount rates and terminal
growth rates
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
This was a key audit matter due to the financial
significance of non-financial assets and the significant
judgements and assumptions applied by the Group in
estimating future cash flows and in the assessment of
indicators of impairment.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
assessed the Group’s historical ability to forecast
cash flows by comparing budgets to reported
actual results for the past three years
•
•
together with PwC valuation experts, evaluated
the appropriateness of the discount rates used in
the model by comparing them to market data,
comparable companies, and industry research
92
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
93
Myer Annual Report 2021Myer Annual Report 2021
Key audit matter
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
How our audit addressed the key audit
matter
•
assessed the Group’s determination that there
were no impairment indicators for Myer stores at
31 July 2021, including comparing actual store
profitability to budget and assessing the impact of
temporary closures
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
evaluated the reasonableness of the disclosures
made in note C2, including the key assumptions
and sensitivities to changes in such assumptions,
in light of the requirements of Australian
Accounting Standards.
•
Inventory valuation and provisions
(Refer to note B2)
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
The Group held inventory of $305.2 million at
our auditor's report.
31 July 2021. As described in note B2 to the
consolidated financial statements, inventories are
valued at the lower of cost and net realisable value.
evaluated the design and tested the operating
effectiveness of a sample of relevant inventory
controls
To assess the Group’s judgements and assumptions
applied in calculating its inventory provisions we
performed the following procedures, amongst others:
Report on the remuneration report
•
•
Our opinion on the remuneration report
The Group recognises a provision where it expects the
net realisable value of inventory to fall below its cost
price. This will occur where inventory becomes aged,
We have audited the remuneration report included in pages 25 to 49 of the directors’ report for the
damaged or obsolete and will be sold below its cost
period 26 July 2020 to 31 July 2021.
price in order to clear.
attended inventory counts at two distribution
centres and four retail stores and inspected the
results of a sample of other inventory counts
performed in the period
•
In our opinion, the remuneration report of Myer Holdings Limited for the period 26 July 2020 to 31
July 2021 complies with section 300A of the Corporations Act 2001.
assessed the Group’s inventory provisioning
policy by considering the levels of aged inventory
and the Group’s inventory clearance strategy
We considered this a key audit matter because the
Group applies judgements and assumptions in
forecasting future selling prices and inventory sell
through rates to estimate the value of inventory likely
to sell below cost in the future.
Responsibilities
•
for a sample of inventory items, compared the
current selling price (net realisable value) to the
recorded cost
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
evaluated the appropriateness of the Group’s
markdown assumptions when considered against
current and forecast promotional activity
•
PricewaterhouseCoopers
Alison Tait
Partner
•
considered the historical accuracy of the Group’s
inventory provisioning by comparing the prior
period inventory provision to inventory sold
below cost or written off in the current period.
Evaluated the reasonableness of the disclosures made
in note B2, in light of the requirements of Australian
Accounting Standards.
Melbourne
16 September 2021
Key audit matter
Independent auditor’s report
How our audit addressed the key audit
matter
To the members of Myer Holdings Limited
Refinancing and debt covenants
(Refer to notes D3 and H6)
Report on the audit of the financial report
Obtained confirmations directly from the Group’s
banks to confirm the borrowings’ balance, tenure and
conditions at 31 July 2021.
Read the signed agreements between the Group and
its lenders to develop an understanding of the terms
associated with the extension of the Group’s facilities
and the amount of facility available for drawdown.
Our opinion
The Group has external borrowings of $66.8 million
and cash and cash equivalents of $178.6 million as at
31 July 2021. The Group’s syndicated facility was
extended post balance sheet date.
In our opinion:
Given the financial significance of the borrowings
balance, the cyclical financing demands of the
business and the importance of capital in supporting
the Group’s strategy, accounting for the Group’s
borrowings and the associated disclosure within the
financial report was considered a key audit matter.
What we have audited
The Group financial report comprises:
The accompanying financial report of Myer Holdings Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
Evaluated whether the debt was classified as current
(a) giving a true and fair view of the Group's financial position as at 31 July 2021 and of its financial
or non-current in accordance with Australian
performance for the period 26 July 2020 to 31 July 2021
Accounting Standards
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Evaluated whether the disclosures made in notes D3
and H6 were consistent with the requirements of
Australian Accounting Standards.
•
•
•
•
the consolidated balance sheet as at 31 July 2021
•
Other information
•
•
the consolidated income statement for the period 26 July 2020 to 31 July 2021
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the period 26 July 2020 to 31 July 2021, but does not
include the financial report and our auditor’s report thereon. Prior to the date of this auditor's report,
the other information we obtained included the directors' report. We expect the remaining other
information to be made available to us after the date of this auditor's report.
the consolidated statement of comprehensive income for the period 26 July 2020 to 31 July
2021
the consolidated statement of changes in equity for the period 26 July 2020 to 31 July 2021
the consolidated statement of cash flows for the period 26 July 2020 to 31 July 2021
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon.
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Responsibilities of the directors for the financial report
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action to take.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
94
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
95
Myer Annual Report 2021Myer Annual Report 2021
SHAREHOLDER INFORMATION
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of 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.
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
Report on the remuneration report
Our opinion on the remuneration report
Our opinion on the remuneration report
As at 17 September 2021.
Myer has one class of shares on issue (being ordinary shares). All the Company’s shares are listed on the Australian Securities
Exchange.
Issued Capital
Number of Shareholders
Minimum Parcel Price
Holders with less than a marketable parcel
Distribution of shareholders and shareholdings
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable parcels
Number
821,278,815
42,985
$0.575
19,473
Units
629,877,450
125,521,125
24,160,882
31,452,158
10,267,200
%
76.69
15.28
2.94
3.83
1.25
Holders
486
4,073
3,023
13,952
21,451
%
1.13
9.48
7.03
32.46
49.90
821,278,815
100.00
42,985
100.00
Minimum
Holders
Units
Parcel Size
Minimum $500.00 parcel at $0.575 per unit
870
19,473
8,332,551
We have audited the remuneration report included in pages 25 to 49 of the directors’ report for the
period 26 July 2020 to 31 July 2021.
We have audited the remuneration report included in pages 25 to 49 of the directors’ report for the
period 26 July 2020 to 31 July 2021.
Twenty largest shareholders
Rank Name
In our opinion, the remuneration report of Myer Holdings Limited for the period 26 July 2020 to 31
July 2021 complies with section 300A of the Corporations Act 2001.
In our opinion, the remuneration report of Myer Holdings Limited for the period 26 July 2020 to 31
July 2021 complies with section 300A of the Corporations Act 2001.
Responsibilities
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
PricewaterhouseCoopers
Alison Tait
Partner
Alison Tait
Partner
Melbourne
16 September 2021
Melbourne
16 September 2021
96
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
CITICORP NOMINEES PTY LIMITED
METALGROVE PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
SPROUT GROUP PTY LTD
HAPPY SABA GROUP NO 1 PTY LTD
CANNES MANAGEMENT PTY LTD
TSOU ENTERPRISE PTY LTD
AM GLORY PTY LTD
COMSEC NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
ACE PROPERTY HOLDINGS PTY LTD
BRISPOT NOMINEES PTY LTD
SRH SUPER PTY LTD
MR JOHN ANTHONY KING
MR PAT O'NEILL
MUTUAL TRUST PTY LTD
20
BNP PARIBAS NOMS PTY LTD
Total
Balance of register
Grand total
Units
% of Units
171,910,515
129,514,605
60,150,632
25,548,607
23,627,137
7,425,000
6,790,985
6,396,553
5,776,500
5,676,195
5,297,321
4,793,899
4,678,348
4,500,000
4,242,511
3,600,000
3,582,432
3,478,649
3,469,225
2,770,472
20.93
15.77
7.32
3.11
2.88
0.90
0.83
0.78
0.70
0.69
0.65
0.58
0.57
0.55
0.52
0.44
0.44
0.42
0.42
0.34
483,229,586
338,049,229
821,278,815
58.84
41.16
100.00
97
Myer Annual Report 2021Myer Annual Report 2021 S H A R E H O L D E R I N FO R M AT I O N
Continued
CORPORATE DIRECTORY
REGISTERED OFFICE
MYER CUSTOMER SERVICE CENTRE
Substantial shareholders
As at 17 September 2021, there are four substantial shareholders that Myer is aware of:
Premier Investments
Wilson Asset Management
Dimensional Fund Advisors
Mitsubishi UFJ Financial Group Inc
Total
Date of last notice
6 July 2021
27 May 2019
2 December 2016
15 September 2021
Number of securities
in last notice
129,514,605
63,748,538
57,539,611
45,357,793
%
15.77
7.76
7.01
5.52
36.06
The above table sets out the number and percentage of securities held by substantial shareholders in Myer as disclosed in their last
Myer Holdings Limited
Level 7
800 Collins Street
Docklands VIC 3008
MYER POSTAL ADDRESS
Myer Holdings Limited
PO Box 869J
Melbourne VIC 3001
substantial shareholder’s notice. Note that those shareholders may have acquired or disposed of securities in Myer since the date of
COMPANY SECRETARY
that notice. A substantial shareholder is only required to disclose acquisitions or disposals where there has been a movement of at
least 1% in their shareholding.
VOTING RIGHTS
Shareholders may vote at a meeting of shareholders in person, directly or by proxy, attorney or representative, depending on
whether the shareholder is an individual or a company. Subject to any rights or restrictions attaching to shares, on a show of hands
each shareholder present in person or by proxy, attorney or representative has one vote and, on a poll, has one vote for each fully
paid share held.
Presently, Myer has only one class of fully paid ordinary shares and these do not have any voting restrictions. If shares are not fully
paid, on a poll the number of votes attaching to the shares is pro-rated accordingly. Options and performance rights do not carry
any voting rights.
PERFORMANCE OPTIONS AND RIGHTS
Myer has unlisted performance options and rights on issue. As at 17 September 2021, there were 26 holders of performance options
and rights.
Paul Morris
General Counsel and Company Secretary
SHAREHOLDER ENQUIRIES:
SHARE REGISTRY
Link Market Services Limited
Postal Address
Locked Bag A14
Sydney South NSW 1235
MYER SHAREHOLDER
INFORMATION LINE
Australian Telephone: 1300 820 260
International Telephone: +61 1300 820 260
Facsimile: +61 2 9287 0309
www.linkmarketservices.com.au
INVESTOR RELATIONS
AND MEDIA ENQUIRIES
Email: myer.corporate.affairs@myer.com.au
SUSTAINABILITY
Email: sustainability@myer.com.au
98
Designed and produced at www.twelvecreative.com.au
PO Box 869J
Melbourne VIC 3001
Phone: 13 69 37 (within Australia)
AUDITOR
PricewaterhouseCoopers
2 Riverside Quay
Southbank VIC 3006
SECURITIES EXCHANGE LISTING
Myer Holdings Limited (MYR) shares are listed
on the Australian Securities Exchange (ASX)
WEBSITES
myer.com.au
myerone.com.au
myer.com.au/investor
FIND US HERE
Facebook.com/myer
Instagram.com/myer
Twitter.com/myer
Youtube.com/myer
M
y
e
r
A
n
n
u
a
l
R
e
p
o
r
t
2
0
2
1
99
Myer Annual Report 2021
ANNUAL REPORT 2021