Annual Report 2014
A Premier Investments Limited
The official opening of the group’s first UK store at Westfield Stratford in February, 2014.
John Cheston
Managing Director, Smiggle
Solomon Lew
Chairman
Mark McInnes
CEO Premier Retail
FRONT COVER: Features Jessica Hart,
International model and Portmans
Brand Ambassador.
Chairman’s Report
The Directors of Premier Investments Limited (“Premier’) have pleasure in
submitting to shareholders the Group’s Annual Report for the financial
year ended 26 July 2014 (“FY14”).
STRONG FINANCIAL PERFORMANCE
Premier reported consolidated underlying net profit
before tax (NPBT) of $106.0 million for the year1, up
10.3% on the previous financial year, despite continued
international and domestic economic uncertainty and
consequent volatility in consumer confidence. Premier’s
reported net profit after tax (NPAT) was $73.0 million,
an increase of 5.3% on last year after adjusting for a
one-off reclassification gain incurred during the
2013 financial year.
This result is largely attributable to the continued strong
performance of Premier Retail. In an increasingly
competitive marketplace Premier Retail continues to
outperform its peers.
MANAGEMENT FOCUS
Premier Retail’s underlying profit before tax (PBT)
increased 13.4% to $87 million2, reflecting
Management’s relentless focus on the continued
successful implementation of Premier Retail’s six-point
transformation strategy which spans both core business
and growth initiatives.
Total sales for the group were up 6.2% to
$888.4 million3 and like-for-like (LFL) sales were up
4.7% across the group, with all seven brands
experiencing positive LFL sales in the second half.
Premier Retail reported underlying earnings before
interest and tax (EBIT) of $92.8 million, up 10.9% on
FY132 Underlying EBIT margin improved 44 basis points
to 10.4%3.
Premier Retail’s gross margin of 62%3 continues to be
very strong despite a highly competitive market. Cost
of doing business (as a percentage of sales) reduced
by 38 basis points as a result of Management’s
ongoing cost efficiency program.
1 Underlying NPBT excludes the one off gain due to
the reclassification of Breville Group in FY13 and
the non-recurring investment costs in FY14
associated with Smiggle UK market entry and
supply chain transformation.
2 Underlying EBIT and PBT excludes the non-recurring
investment costs associated with Smiggle UK entry
and supply chain transformation.
3 Sales and cost of sales exclude sales to South African
Joint Venture.
DELIVERING ON GROWTH BRANDS
During the year, Premier Retail continued to implement
its growth plans with a focus on Smiggle’s entry into the
large UK market, growing Peter Alexander in Australia
and New Zealand and investing further in the continuing
growth of our online businesses.
Your Directors are pleased to note the following
achievements for the financial year:
» Delivered record sales at Smiggle with sales growth
of 17.4% and revenue surpassing $100 million for
the first time
» Successfully launched Smiggle UK, with eight stores
currently trading and very pleasing consumer
acceptance. A total of 18 stores to be open by
Christmas 2014
» Opened five new Smiggle stores in Australia and two
new Smiggle stores in Singapore
» Delivered sales growth of 21.4% at Peter Alexander
» Opened eight new Peter Alexander stores in Australia
and nine concession stores
» Expanded the Peter Alexander range
into childrenswear
» Launched peteralexander.co.nz with local
NZ fulfillment
» Delivered online sales growth of 30.5% (with 2H14
growth of 37.5%) across the portfolio, with Dotti
and Portmans achieving outstanding online
sales performance
» Launched a “store to door” multichannel offer across
the portfolio
» Transformation underway of a fit-for-purpose, Premier
owned, Australian distribution centre to support our
growth strategies and aspirations
Annual Report 2014 1
Chairman’s Report continued
CORE BUSINESS REJUVENATION
There remains a great deal of potential upside in
Premier’s existing portfolio of iconic brands and the
Premier Retail team remains committed to realising this
value for shareholders. The Board believes that each
brand now has outstanding leadership and management
teams capable of delivering this objective.
On behalf of the Board and all Shareholders, I would
like to thank Mark McInnes, his senior team and our
more than 6,000 talented employees across Australia,
New Zealand, Singapore and the United Kingdom for
delivering a strong result in a challenging
environment which tested the broader retail
industry and our competitors.
All of Premier Retail’s brands delivered positive
like-for-like growth in the second half of the year,
demonstrating your group’s continued investment in
core brands, product offering and store experience.
During FY14, Management undertook targeted
capital investment in 322 stores to support
continued sales growth.
FINANCIAL STRENGTH
At the end of the financial year, Premier had free cash
on hand of $313.3 million and Premier’s equity
accounted investment in Breville appears on the balance
sheet at an accounted for value of $187.1 million whilst
the market value was $264.9 million.
Due to the continued strength of the balance sheet and
the strong performance of Premier Retail, your Board
has declared a final fully franked dividend of 20 cents
per share, bringing the full year dividend to 40 cents per
share – an increase of 2 cents per share over the
previous year. The final dividend will be payable on
20 November 2014.
Premier continues to use its strong balance sheet to fund
the expansion of its growth brands, while still retaining
the flexibility to pursue other opportunities that may
arise in the future. Your Board takes a patient and
disciplined approach to assessing growth opportunities
and will only act on acquisitions where there is a clear
and long-term benefit for shareholders.
I would also like to thank my fellow directors for their
dedication and service during the past year and for the
experience, support and guidance they provide.
Finally and most importantly, I would like to thank all
shareholders for their continued support and investment.
As I have said previously, the Premier Board fully
understands that our shareholders are the owners of the
company who have entrusted to us at risk capital which
they expect to be managed prudently to achieve strong
investment returns and long term wealth creation.
I encourage all shareholders to attend the Annual
General Meeting on 5 December 2014 and I look
forward to updating you on the performance of your
company in that forum.
Solomon Lew
Chairman and Non-Executive Director
2 Premier Investments Limited
The Directors
Solomon Lew
Chairman and
Non-Executive Director
Frank W. Jones
FCA, CPA, ACIS
Deputy Chairman and
Non-Executive Director
Timothy Antonie
Non-Executive Director
David M. Crean
Non-Executive Director
Lindsay E. Fox AC
Non-Executive Director
Sally Herman
Non-Executive Director
Henry D. Lanzer
B. COM., LLB (Melb)
Non-Executive Director
Mark McInnes
Executive Director
Michael R.I. McLeod
Non-Executive Director
Gary H. Weiss LLM, J.S.D.
Non-Executive Director
Annual Report 2014 3
Chairman’s Report continued
Solomon Lew
Mr. Lew was appointed as Non-Executive Director and
Chairman of Premier on 31 March 2008. For many
years, Mr. Lew has been a director of Century Plaza
Investments Pty. Ltd., the largest shareholder in
Premier and was previously Chairman of Premier from
1987 to 1994.
Mr. Lew has over 40 years’ experience in the
manufacture, importation, wholesaling and retailing of
textiles, apparel and general merchandise. Mr. Lew’s
success in the clothing industry has been largely due to
his ability to read fashion trends and interpret them in
the Australian market and to efficiently and
cost-effectively produce quality garments. Property
development and the acquisition and disposal of equity
investments have proven to be a profitable and
consistent activity for Mr. Lew’s family entities. He has,
through those family entities, made a number of
investments in publicly listed companies over the years,
including investments in Coles Myer Limited, Colorado
Group Limited and Country Road Limited to name a
few. Where these investments have been sold, it has
resulted in substantial profits.
He is the past Chairman of the Mount Scopus College
Foundation, a current member of the Prime Minister’s
Business Advisory Council, Board of Trustees of the
Sport and Tourism Youth Foundation, a life member of
The Duke of Edinburgh’s Award World Fellowship, a
Patron of Opera Australia and a Chairman or director of
several philanthropic organisations.
Mr. Lew was a director of Coles Myer Limited from 1985
to 2002, serving as Vice Chairman from 1989, Chairman
from 1991 to 1995, Executive Chairman in 1995 and
Vice Chairman in 1995 and 1996. He was also a director
of the Reserve Bank of Australia from 1992 to 1997.
Frank W. Jones FCA, CPA, ACIS
Mr. Jones is a Fellow of Chartered Accountants Australia
and New Zealand and an Associate of CPA Australia and
the Governance Institute of Australia. Mr. Jones has
extensive experience as a financial and general advisor
to some of Australia’s leading importing and retailing
companies.
Mr. Jones served as Chairman of Premier from 1999 to
2002 and, more recently, from 2007 to 2008. He is a
member of the Audit and Risk Committee of Premier
and was the Committee’s chairman until 31 July 2010.
Timothy Antonie
Mr. Antonie was appointed to the Board of Directors on
1 December 2009. He holds a Bachelor of Economics
degree from Monash University and qualified as a
Chartered Accountant with Price Waterhouse. He has
20 years’ experience in investment banking and formerly
held positions of Managing Director from 2004 to 2008
and Senior Adviser in 2009 at UBS Investment Banking,
with particular focus on large scale mergers and
acquisitions and capital raisings in the Australian retail,
consumer, media and entertainment sectors. Mr
Antonie is also a non-executive director of Village
Roadshow Limited and Breville Group Limited.
David M. Crean
Dr. Crean was appointed Chairman of the Hydro Electric
Corporation (Hydro Tasmania) in September 2004. He is
also Chairman of the Business Risk Committee at Hydro
Tasmania, member of the Audit Committee and
Chairman of the Corporate Governance Committee.
David was Tasmania’s State Treasurer from August 1998
to his retirement from the position in February 2004. He
was also Minister for Employment from July 2002 to
February 2004. He was a Member for Buckingham in
the Legislative Council from 1992 to February 1999, and
then for Elwick until May 2004.
From 1989 to 1992 he was the member for Denison in
the House of Assembly. From 1993-1998 he held
Shadow Portfolios of State Development, Public Sector
Management, Finance and Treasury. David graduated
from Monash University in 1976 with a Bachelor of
Medicine and Bachelor of Surgery. Dr. Crean was
appointed to the position of Chairman of the Audit and
Risk Committee as from 1 August 2010.
Lindsay E. Fox A.C.
Mr. Fox has extensive experience in all aspects of the
transport, distribution and warehousing industries. He is
the founder of the Linfox Group of Companies. Today,
the Linfox Group is one of the largest supply chain
services groups with operations in 10 countries. The
Linfox Group employs over 23,000 people, operates 4.8
million square metres of warehouses and a fleet of more
than 5,000 vehicles and carries out distribution
operations for leading companies across the Asia-Pacific
region. The Linfox Group includes operations in the
areas of transport and logistics, airport operations,
property development and cash management services.
Mr. Fox has extensive involvement in Australian and
international circles and, apart from his business
interests, is well recognised and active in sport and
charity work.
In 2010, Victoria University admitted Mr. Fox to the
degree of Doctor of the University honoris causa for his
outstanding achievements in the transport industry, for
his contribution to the community through his sustained
efforts to reduce unemployment and his campaign
against youth suicide.
In January 2008, Mr Fox was awarded a Companion of
the Order of Australia (AC) for continued service to the
transport and logistics industries, to business through
the development and promotion of youth traineeships
and to the community through a range of
philanthropic endeavours.
4 Premier Investments Limited
He was awarded an Officer of the Order of Australia
(AO) in 1992 for his contribution to the transport
industry and the community and he received a
Centenary Medal for services to the transport
industry in 2001.
From September 1992 to December 1993, Mr. Fox
together with Mr. Bill Kelty introduced a national
campaign called ‘Work for Australia’. This campaign
encouraged companies and local communities to
generate jobs for unemployed with the aid of
government subsidies and programs. More than
60,000 jobs were pledged through their efforts and
Mr. Fox and Mr. Kelty were awarded ‘Victorians of the
Year’ by the Sunday Age.
Sally Herman
Ms. Sally Herman has more than 25 years’ executive
experience in financial services in both Australia and in
the United States, including 16 years with the Westpac
Group running major business units in almost every
operation division of the Group. Ms Herman ran
Corporate Affairs and Sustainability for Westpac during
the merger with St. George. Prior to Westpac, she held
senior roles at Macquarie Bank.
Ms. Herman now is a company director and consultant,
and sits on the board of Breville Group Limited, ME
Bank Pty Limited, FSA Group Limited, and is the
Chairman of Urbis Pty Ltd, a large urban planning and
property advisory firm. She also sits on several not for
profit boards.
Ms. Herman holds a BA from the University of NSW and
is a Graduate of the Australian Institute of Company
Directors.
Henry D. Lanzer B. COM., LLB (Melb)
Mr. Lanzer is Managing Partner of Arnold Bloch
Leibler–a leading Australian commercial law firm–and
has over 30 years’ experience in providing legal and
strategic advice to some of Australia’s leading
companies. He is a Director of Just Group Limited, a
Director of Thorney Opportunities Limited and also a
director of the TarraWarra Museum of Art. He is a Life
Governor of the Mount Scopus College Council. Mr.
Lanzer is Chairman of the Remuneration and
Nomination Committee for Premier Investments Limited.
Mark McInnes
Mr. McInnes is a career retailer with a long track record
of success in every role he has occupied. Like many
great retailers, Mark started his career from the shop
floor as a company cadet for Grace Brothers. Mark has
been directly responsible for some of Australia’s greatest
retail success stories – including as a co-founder of the
Officeworks concept which is today Australia’s largest
office supply superstore.
13 years at David Jones – 6 years as Merchandise &
Marketing Director and 7 years as CEO. From 2003 to
2010, Mark as CEO and Executive Director of David
Jones turned the company into a fashion and financial
powerhouse, creating in excess of $2 billion of
shareholder value.
Mark was appointed CEO of Premier Retail in April
2011, and has set about transforming the company to
compete in an industry under great structural pressure.
Premier Retail today has a clear path and a clear focus.
In December 2012, Mark was appointed as an Executive
Director of Premier Investments Limited. Mark holds an
MBA from the University of Melbourne.
Michael R.I. McLeod
Mr. McLeod is a former Executive Director of the
Century Plaza Group and has been involved with the
Group since 1996 as an advisor in the areas of corporate
strategy, investment, public affairs and is a director of a
number of associated companies. He has been a
Non-Executive Director of Premier Investments Limited
since 2002 and a Non-Executive Director of Just Group
Limited from 2007 to 2013. Past experience includes the
Board of a fund manager (Scudder, Stevens and Clark
Australia Limited), chief of staff to a Federal Cabinet
Minister and statutory appointments including as a
Commission Member of the National Occupational
Health and Safety Commission.
He holds a Bachelor of Arts (First Class Honours
and University Medal) from the University of
New South Wales.
Gary H. Weiss LL.M, J.S.D.
Dr. Weiss holds the degrees of LL.B (Hons) and LL.M
(with dist.) from Victoria University of Wellington, as
well as a Doctor of Juridical Science (JSD) from Cornell
University, New York. Dr Weiss has extensive
international business experience and has been involved
in numerous cross-border mergers and acquisitions.
Dr Weiss is Chairman of Clearview Wealth Limited and
Secure Parking Pty Ltd, Executive Director of Ariadne
Australia Ltd, and a director of Premier Investments
Limited, Ridley Corporation Ltd, Mercantile Investment
Company Limited, Pro-Pac Packaging Limited, Tag Pacific
Limited, Thorney Opportunities Limited and The Straits
Trading Company Ltd. He was Chairman of Coats Plc
from 2003 until April 2012 and executive director of
Guinness Peat Group Plc from 1990 to April 2011 and
has held directorships of numerous companies,
including Westfield Group,
Tower Australia Ltd, Australian Wealth Management
Limited, Tyndall Australia Ltd (Deputy Chairman), Joe
White Maltings Ltd (Chairman), CIC Ltd, Whitlam
Turnbull & Co Ltd and Industrial Equity Ltd.
Prior to joining Premier, Mark led David Jones to its most
successful time as a public listed company. Mark spent
He has authored numerous articles on a variety of legal
and commercial topics.
Annual Report 2014 5
Strategic Review Premier Retail
Management continued the rigorous implementation of the six key initiatives outlined in the 2011 Strategic Review.
Focus Area
Status
1
Rejuvenate and
reinvigorate all five
core apparel brands.
2 Organisation-wide cost
efficiency program.
3
4
Two phase gross
margin expansion
program.
Expand and grow the
internet business.
5 Grow Peter Alexander
significantly.
6 Grow Smiggle
significantly.
6 Premier Investments Limited
Continued solid results were achieved in all five core brands in
FY14. The group delivered +4.7% LFL growth in FY14 with all
brands delivering positive LFL growth in 2H14. The turnaround at
Just Jeans continues under Matthew McCormack’s leadership, Jay
Jays delivered three out of four quarters of positive LFL growth,
whilst Dotti, Portmans and Jacqui E all delivered solid growth. The
group continues to invest in upgrading its existing store network
through targeted investment that deliver returns to shareholders.
Cost of doing business continued to improve in FY14 and the
group reduced its cost of doing business by 38 basis points in
FY14. Rent expense decreased by 31 basis points despite landlord
pressure for rent increases. Salaries continued to be tightly
controlled with improved labour productivity offsetting most of the
EBA increase. Our DC transformation is underway with three
brands now operating out of the Premier Investments owned new
facility based at Truganina on the outskirts of Melbourne.
Premier Retail’s gross margin of 62% continues to be very strong in
a highly competitive market. Despite a sharp slowdown post the
federal budget in May 2014 and trading through one of the
warmest Winters on record, the management team cleared the
inventory to ensure we started the new year with fresh
merchandise. All brands have implemented detailed strategies to
offset the fall in the Australian Dollar in FY15.
Total online sales grew 30.5% in FY14 well above the industry
growth of 8.6%. Pleasingly in 2H14, our online growth was
37.5%. We have maintained local leadership by offering global
best practice websites to our customers. Premier Retail will
continue to invest in IT, people, processes, marketing and supply
chain initiatives to achieve our aspirational goal of 10% of total
group sales being achieved from our multi-channel platform.
Peter Alexander achieved outstanding growth of 21% in FY14.
As part of our FY13 result, we announced plans to increase our
business by 40-50% by FY16. The company remains on track for
this result.
Smiggle global sales grew by 17.4% in FY14. Pleasingly, the
company achieved LFL growth in all core countries (Australia, New
Zealand and Singapore) whilst expanding to the UK. The company
opened its first UK store in February 2014 and aims to have
18 stores up and operating by this Christmas. The UK market
has enormous potential with the personal stationery market
valued at $2.4 billion.
Brand Performance Premier Retail
Peter Alexander delivered outstanding growth of 21% in FY14. Judy Coomber, Managing Director
Peter Alexander and Peter Alexander, Creative Director have forged a strong partnership to deliver
on our three year plan objectives.
Smiggle achieved exceptional growth of 17.4% in FY14. John Cheston, Managing Director of
Smiggle has built a strong team and delivered an outstanding result in Australia, New Zealand and
Singapore whilst launching Smiggle UK. Management remains confident in the size of the
opportunity available to Smiggle and our capability to achieve it.
Dotti, led by David Bull, delivered another strong result in a highly competitive market. The brand
has a world class digital offering and continues to lead the way in the local market, offering
customers a world class multi-channel experience.
Jade Holgate and team delivered another strong result with total sales up 3.9% in FY14 and LFL
significantly higher. The group continues to invest in refurbishing the chain whilst ensuring our
multi-channel capability is world class.
Jacqui E has continued to deliver material sales and profit growth in FY14 under Karen Russell’s
strong leadership and product focus. The focus on product excellence, supported by a strong
brand campaign, led by our ambassador Tara Moss, has continued to deliver exceptional results.
Under Matthew McCormack’s leadership, the brand has rebounded in FY14. Total sales
were up 5.4% in the full year with the winter half delivering sales growth of 7.8%.
Maintaining strong product focus has delivered a change in the brands momentum and
our aim is to restore Just Jeans to its rightful place as the iconic jeans destination in
Australia, New Zealand and online.
The Jay Jays turnaround is on track and pleasingly we achieved positive LFL sales growth in three of
the four quarters in FY14 whilst significantly improving margin throughout the year. Chris Thomas
was appointed Group General Manager in March this year with a long track record of success in
the Youth Apparel market. Premier Retail is confident in the turnaround of the brand.
Annual Report 2014 7
Internet
» Online sales up 30.5% for FY14;
2H14 online sales up 37.5%.
Portmans and Dotti online
sales grew by 40% and
60% respectively.
» Online channel is very profitable
and continuing to grow.
» Mobile optimised, enhanced
sites and emails deployed for
all brands.
» We will continue to invest in IT,
people, processes, marketing,
and supply chain initiatives to
achieve our 10% of total
sales aspirations from our
multi-channel platform.
8 Premier Investments Limited
Ethical Sourcing Statement for
Premier Retail (“Group”)
OUR COMMITMENT
The Premier Retail Group (“Group”) has 40 years history
of Ethical Sourcing. We use three models for sourcing all
of our product:
» Via Li & Fung (largest global public sourcing company)
» Via importers
» Direct with factories
The Group operate with strict principles which are
outlined below.
The Group Ethical Sourcing and Supply Code (“The
Code”) supports the commitment to sourcing
merchandise that is produced according to our strict
principles regardless of origin. That is, in safe working
conditions where human rights are respected and
people have free right of association. The Group
complies with all laws in the countries in which product
is sourced. Our sourcing framework supports adherence,
identifies non-compliance and supports corrective action
and continuous improvement.
All suppliers are trained in The Code. Along with factory
inspections, understanding and adherence to The Code
is regularly monitored. The contracts we issue make it
legally binding on manufacturers and suppliers to adhere
to The Code.
PRINCIPLES
1. The Group complies with all relevant laws in the
countries in which we source and operate.
2. Thorough background and ongoing checks for
compliance in factories are conducted by Li & Fung,
the world’s largest global sourcing agent and a
publicly listed company.
ACTIVITIES TO SUPPORT PRINCIPLES &
ASSURANCES
Our activities support our Principles and Assurances
generally. However, we have a particular focus on audit
and compliance in Bangladesh where the Ready Made
Garment Industry is approximately 80% of all export
earnings, a major contributor to GDP and employing
4.2 million workers, most of whom are women. Whilst
Bangladesh is a very minor portion of our overall
sourcing mission we have created a sourcing framework
with strict guidelines and checks for that market. We
joined the Alliance for Bangladesh Worker Safety (www.
bangladeshworkersafety.org) in October 2013, together
with some of the world’s biggest and best known
retailers including Nordstrom, Macy’s, Gap, Sears and
JC Penney with whom we work to improve workplace
safety in a results oriented, measurable and verifiable
way in Bangladesh.
Audit & Compliance in Bangladesh
Labour
Factories with which we do business are inspected by
independent Qualified Assessment Firms for social
compliance, wages, hours and training.
» Personnel records including age contracts, leave
2. The Group insists upon workers legal rights including
register and infirmary logs
worker empowerment and free association.
» Shifts, operating hours, breaks and average hours
3. The Group has zero tolerance for child labour.
4. The Group has zero tolerance for bribery and
corruption.
ASSURANCES
1. The Group inspects all factories who manufacture
for us.
» Personal visits to all factories are conducted by
senior management prior to commencing business
and regularly thereafter to ensure our principles are
strictly administered.
» Internationally recognised independent Qualified
Assessment and Audit Firms verify all local laws and
safety conditions - including labour, fire and building
integrity - are complied with.
worked
» Emergency preparedness
» Payroll audit
Worker representatives are invited to participate in
factory inspections and shadow assessments.
The Group supports the worker’s right to refuse unsafe
work and the right to free association.
Safety
All factories are inspected by independent Qualified
Assessment Firms to ensure they are compliant with
agreed international standards for occupational health
and safety for workers. All factories undergo relevant
training. Follow up is conducted to ensure a safe
environment is maintained.
Annual Report 2014 9
Ethical Sourcing Statement for
Premier Retail (“Group”) (Continued)
Fire
ONGOING FOCUS 2015
Re-audit, Remediation and Training in Bangladesh
» The Group will focus on the annual audit and
compliance programme as well as active participation
in the CAP meetings where remediation is required.
» The Group will continue to work with The Alliance and
Alliance Members on the training initiatives around fire
and safety.
» We will also continue our regular senior management
and executive factory inspections and programme
building, as well as the development of our
Bangladesh team and mission in country.
Whilst Bangladesh will remain a small portion of our
overall sourcing we will continue the heightened level of
process to ensure adherence and compliance.
All factories are inspected and audited for appropriate
fire equipment and training. Sprinkler systems, egress
and hydrants are all audited. Extensive training for all
workers is scheduled and followed up to ensure it
takes place.
To increase fire and safety awareness, The Alliance has
ensured over 1,000,000 workers and managers have
been trained, with 100% of the Group’s factories
included in the training.
Building Integrity
All factories are inspected and audited by independent
Qualified Assessment Firms.
Certificate of occupancy are reviewed along with
structural engineering and documentation for
conformance with applicable international model codes,
compliance with wind loading and storm surge loadings,
expansion and extension integrity and approval, and
structural configuration.
The Alliance for Bangladesh Worker Safety has
developed and implemented the country’s first
harmonised Fire Safety and Structural Integrity Standard.
Operational Processes in Bangladesh
» In keeping with our own principles and assurances we
have, as noted above, joined The Alliance for
Bangladesh Worker Safety with some of the world’s
largest international retailers including Nordstrom,
Macy’s, Gap, Sears and JC Penney among others with
whom we work to improve the transparency of
conditions and safety of workers in Bangladesh. This is
done through the inspections, training, audits,
Corrective Action Plans and continuous improvement
in the Bangladesh Ready Made Garment Factories.
» The Group has its own office in Bangladesh which
reports to Australia and is operated on the same
ethical principles as Australia. We employ a team of
expatriates and Bangladeshi nationals. Strict
supervision and a rotating staff management system is
used to prevent conditions for corruption arising.
» Corrective Action Plan (CAP) meetings are held
between factory, The Alliance and the Group. These
CAPs are rigorous in the follow up.
10 Premier Investments Limited
Premier Investments Limited
A.C.N. 006 727 966
Financial Report
For the Period
28 July 2013 To 26 July 2014
Annual Report 2014 A
Contents
Directors’ Report
Auditor’s Independence Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes In Equity
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report to the
Members of Premier Investments Limited
Corporate Governance Statement
2
27
28
29
30
31
32
95
96
99
ASX Additional Information
111
DIRECTORS’ REPORT
The Board of Directors of Premier Investments Limited (A.C.N. 006 727 966) has pleasure in submitting its
report in respect of the financial period ended 26 July 2014.
The directors present their report together with the consolidated financial report of Premier Investments
Limited (the “Company”) and its controlled entities for the period 28 July 2013 to 26 July 2014, together with
the independent audit report to the members thereon.
DIRECTORS
The names and details of the Company’s directors in office during the financial period and until the date of the
report are as follows. Directors were in office for this entire period unless otherwise stated.
Solomon Lew Chairman and Non-Executive Director
Mr. Lew was appointed as Non-Executive Director and Chairman of Premier on 31 March 2008. For many
years, Mr. Lew has been a director of Century Plaza Investments Pty. Ltd., the largest shareholder in Premier
and was previously Chairman of Premier from 1987 to 1994.
Mr. Lew has over 40 years’ experience in the manufacture, importation, wholesaling and retailing of textiles,
apparel and general merchandise. Mr. Lew’s success in the clothing industry has been largely due to his
ability to read fashion trends and interpret them in the Australian market and to efficiently and cost-effectively
produce quality garments. Property development and the acquisition and disposal of equity investments have
proven to be a profitable and consistent activity for Mr. Lew’s family entities. He has, through those family
entities, made a number of investments in publicly listed companies over the years, including investments in
Coles Myer Limited, Colorado Group Limited and Country Road Limited to name a few. Where these
investments have been sold, it has resulted in substantial profits.
He is the past Chairman of the Mount Scopus College Foundation, a current member of the Prime Minister’s
Business Advisory Council, Board of Trustees of the Sport and Tourism Youth Foundation, a life member of
The Duke of Edinburgh’s Award World Fellowship, a Patron of Opera Australia and a Chairman or director of
several philanthropic organisations.
Mr. Lew was a director of Coles Myer Limited from 1985 to 2002, serving as Vice Chairman from 1989,
Chairman from 1991 to 1995, Executive Chairman in 1995 and Vice Chairman in 1995 and 1996. He was
also a director of the Reserve Bank of Australia from 1992 to 1997.
Frank W. Jones FCA, CPA, ACIS, Deputy Chairman and Non-Executive Director
Mr. Jones is a Fellow of Chartered Accountants Australia and New Zealand and an Associate of CPA
Australia and the Governance Institute of Australia. Mr. Jones has extensive experience as a financial and
general advisor to some of Australia’s leading importing and retailing companies.
Mr. Jones served as Chairman of Premier from 1999 to 2002 and, more recently, from 2007 to 2008. He is a
member of the Audit and Risk Committee of Premier and was the Committee’s chairman until 31 July 2010.
1 Premier Investments Limited
2
DIRECTORS’ REPORT
The Board of Directors of Premier Investments Limited (A.C.N. 006 727 966) has pleasure in submitting its
report in respect of the financial period ended 26 July 2014.
The directors present their report together with the consolidated financial report of Premier Investments
Limited (the “Company”) and its controlled entities for the period 28 July 2013 to 26 July 2014, together with
the independent audit report to the members thereon.
DIRECTORS
The names and details of the Company’s directors in office during the financial period and until the date of the
report are as follows. Directors were in office for this entire period unless otherwise stated.
Solomon Lew Chairman and Non-Executive Director
Mr. Lew was appointed as Non-Executive Director and Chairman of Premier on 31 March 2008. For many
years, Mr. Lew has been a director of Century Plaza Investments Pty. Ltd., the largest shareholder in Premier
and was previously Chairman of Premier from 1987 to 1994.
Mr. Lew has over 40 years’ experience in the manufacture, importation, wholesaling and retailing of textiles,
apparel and general merchandise. Mr. Lew’s success in the clothing industry has been largely due to his
ability to read fashion trends and interpret them in the Australian market and to efficiently and cost-effectively
produce quality garments. Property development and the acquisition and disposal of equity investments have
proven to be a profitable and consistent activity for Mr. Lew’s family entities. He has, through those family
entities, made a number of investments in publicly listed companies over the years, including investments in
Coles Myer Limited, Colorado Group Limited and Country Road Limited to name a few. Where these
investments have been sold, it has resulted in substantial profits.
He is the past Chairman of the Mount Scopus College Foundation, a current member of the Prime Minister’s
Business Advisory Council, Board of Trustees of the Sport and Tourism Youth Foundation, a life member of
The Duke of Edinburgh’s Award World Fellowship, a Patron of Opera Australia and a Chairman or director of
several philanthropic organisations.
Mr. Lew was a director of Coles Myer Limited from 1985 to 2002, serving as Vice Chairman from 1989,
Chairman from 1991 to 1995, Executive Chairman in 1995 and Vice Chairman in 1995 and 1996. He was
also a director of the Reserve Bank of Australia from 1992 to 1997.
Frank W. Jones FCA, CPA, ACIS, Deputy Chairman and Non-Executive Director
Mr. Jones is a Fellow of Chartered Accountants Australia and New Zealand and an Associate of CPA
Australia and the Governance Institute of Australia. Mr. Jones has extensive experience as a financial and
general advisor to some of Australia’s leading importing and retailing companies.
Mr. Jones served as Chairman of Premier from 1999 to 2002 and, more recently, from 2007 to 2008. He is a
member of the Audit and Risk Committee of Premier and was the Committee’s chairman until 31 July 2010.
Annual Report 2014 2
2
DIRECTORS’ REPORT
DIRECTORS’ REPORT
(CONTINUED)
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
Mark McInnes Executive Director
Mark McInnes Executive Director
Mr. McInnes is a career retailer with a long track record of success in every role he has occupied. Like many
great retailers, Mark started his career from the shop floor as a company cadet for Grace Brothers. Mark has
Mr. McInnes is a career retailer with a long track record of success in every role he has occupied. Like many
been directly responsible for some of Australia’s greatest retail success stories – including as a co-founder of
great retailers, Mark started his career from the shop floor as a company cadet for Grace Brothers. Mark has
the Officeworks concept which is today Australia’s largest office supply superstore.
been directly responsible for some of Australia’s greatest retail success stories – including as a co-founder of
the Officeworks concept which is today Australia’s largest office supply superstore.
Prior to joining Premier, Mark led David Jones to its most successful time as a public listed company. Mark
spent 13 years at David Jones – 6 years as Merchandise & Marketing Director and 7 years as CEO. From
Prior to joining Premier, Mark led David Jones to its most successful time as a public listed company. Mark
2003 to 2010, Mark as CEO and Executive Director of David Jones turned the company into a fashion and
spent 13 years at David Jones – 6 years as Merchandise & Marketing Director and 7 years as CEO. From
financial powerhouse, creating in excess of $2 billion of shareholder value.
2003 to 2010, Mark as CEO and Executive Director of David Jones turned the company into a fashion and
financial powerhouse, creating in excess of $2 billion of shareholder value.
Mark was appointed CEO of Premier Retail in April 2011, and has set about transforming the company to
compete in an industry under great structural pressure. Premier Retail today has a clear path and a clear
Mark was appointed CEO of Premier Retail in April 2011, and has set about transforming the company to
focus.
compete in an industry under great structural pressure. Premier Retail today has a clear path and a clear
focus.
In December 2012, Mark was appointed as an Executive Director of Premier Investments Limited. Mark holds
an MBA from the University of Melbourne.
In December 2012, Mark was appointed as an Executive Director of Premier Investments Limited. Mark holds
an MBA from the University of Melbourne.
Timothy Antonie Non-Executive Director
Timothy Antonie Non-Executive Director
Mr. Antonie was appointed to the Board of Directors on 1 December 2009. He holds a Bachelor of Economics
degree from Monash University and qualified as a Chartered Accountant with Price Waterhouse. He has 20
Mr. Antonie was appointed to the Board of Directors on 1 December 2009. He holds a Bachelor of Economics
years’ experience in investment banking and formerly held positions of Managing Director from 2004 to 2008
degree from Monash University and qualified as a Chartered Accountant with Price Waterhouse. He has 20
and Senior Adviser in 2009 at UBS Investment Banking, with particular focus on large scale mergers and
years’ experience in investment banking and formerly held positions of Managing Director from 2004 to 2008
acquisitions and capital raisings in the Australian retail, consumer, media and entertainment sectors. Mr
and Senior Adviser in 2009 at UBS Investment Banking, with particular focus on large scale mergers and
Antonie is also a non-executive director of Village Roadshow Limited and Breville Group Limited.
acquisitions and capital raisings in the Australian retail, consumer, media and entertainment sectors. Mr
Antonie is also a non-executive director of Village Roadshow Limited and Breville Group Limited.
David Crean Non-Executive Director
David Crean Non-Executive Director
Dr. Crean was appointed Chairman of the Hydro Electric Corporation (Hydro Tasmania) in September 2004.
He is also Chairman of the Business Risk Committee at Hydro Tasmania, member of the Audit Committee
Dr. Crean was appointed Chairman of the Hydro Electric Corporation (Hydro Tasmania) in September 2004.
and Chairman of the Corporate Governance Committee. David was Tasmania’s State Treasurer from August
He is also Chairman of the Business Risk Committee at Hydro Tasmania, member of the Audit Committee
1998 to his retirement from the position in February 2004. He was also Minister for Employment from July
and Chairman of the Corporate Governance Committee. David was Tasmania’s State Treasurer from August
2002 to February 2004. He was a Member for Buckingham in the Legislative Council from 1992 to February
1998 to his retirement from the position in February 2004. He was also Minister for Employment from July
1999, and then for Elwick until May 2004. From 1989 to 1992 he was the member for Denison in the House of
2002 to February 2004. He was a Member for Buckingham in the Legislative Council from 1992 to February
Assembly. From 1993-1998 he held Shadow Portfolios of State Development, Public Sector Management,
1999, and then for Elwick until May 2004. From 1989 to 1992 he was the member for Denison in the House of
Finance and Treasury. David graduated from Monash University in 1976 with a Bachelor of Medicine and
Assembly. From 1993-1998 he held Shadow Portfolios of State Development, Public Sector Management,
Bachelor of Surgery. Dr. Crean was appointed to the position of Chairman of the Audit and Risk Committee
Finance and Treasury. David graduated from Monash University in 1976 with a Bachelor of Medicine and
as from 1 August 2010.
Bachelor of Surgery. Dr. Crean was appointed to the position of Chairman of the Audit and Risk Committee
as from 1 August 2010.
Sally Herman Non-Executive Director
Sally Herman Non-Executive Director
Ms. Sally Herman has more than 25 years’ executive experience in financial services in both Australia and in
the United States, including 16 years with the Westpac Group running major business units in almost every
Ms. Sally Herman has more than 25 years’ executive experience in financial services in both Australia and in
operation division of the Group. Ms Herman ran Corporate Affairs and Sustainability for Westpac during the
the United States, including 16 years with the Westpac Group running major business units in almost every
merger with St. George. Prior to Westpac, she held senior roles at Macquarie Bank.
operation division of the Group. Ms Herman ran Corporate Affairs and Sustainability for Westpac during the
merger with St. George. Prior to Westpac, she held senior roles at Macquarie Bank.
Ms. Herman now is a company director and consultant, and sits on the board of Breville Group Limited, ME
Bank Pty Limited, FSA Group Limited, and is the Chairman of Urbis Pty Ltd, a large urban planning and
Ms. Herman now is a company director and consultant, and sits on the board of Breville Group Limited, ME
property advisory firm. She also sits on several not for profit boards.
Bank Pty Limited, FSA Group Limited, and is the Chairman of Urbis Pty Ltd, a large urban planning and
property advisory firm. She also sits on several not for profit boards.
Ms. Herman holds a BA from the University of NSW and is a Graduate of the Australian Institute of Company
Directors.
Ms. Herman holds a BA from the University of NSW and is a Graduate of the Australian Institute of Company
Directors.
Lindsay E. Fox A.C. Non-Executive Director
Mr. Fox has extensive experience in all aspects of the transport, distribution and warehousing industries. He
is the founder of the Linfox Group of Companies. Today, the Linfox Group is one of the largest supply chain
services groups with operations in 10 countries. The Linfox Group employs over 23,000 people, operates 4.8
million square metres of warehouses and a fleet of more than 5,000 vehicles and carries out distribution
operations for leading companies across the Asia-Pacific region. The Linfox Group includes operations in the
areas of transport and logistics, airport operations, property development and cash management services.
Mr. Fox has extensive involvement in Australian and international circles and, apart from his business
interests, is well recognised and active in sport and charity work.
In 2010, Victoria University admitted Mr. Fox to the degree of Doctor of the University honoris causa for his
outstanding achievements in the transport industry, for his contribution to the community through his
sustained efforts to reduce unemployment and his campaign against youth suicide.
In January 2008, Mr Fox was awarded a Companion of the Order of Australia (AC) for continued service to
the transport and logistics industries, to business through the development and promotion of youth
traineeships and to the community through a range of philanthropic endeavours.
He was awarded an Officer of the Order of Australia (AO) in 1992 for his contribution to the transport industry
and the community and he received a Centenary Medal for services to the transport industry in 2001.
From September 1992 to December 1993, Mr. Fox together with Mr. Bill Kelty introduced a national campaign
called ‘Work for Australia’. This campaign encouraged companies and local communities to generate jobs for
unemployed with the aid of government subsidies and programs. More than 60,000 jobs were pledged
through their efforts and Mr. Fox and Mr. Kelty were awarded ‘Victorians of the Year’ by the Sunday Age.
Henry D. Lanzer B. COM., LLB (Melb), Non-Executive Director
Mr. Lanzer is Managing Partner of Arnold Bloch Leibler - a leading Australian commercial law firm - and has
over 30 years’ experience in providing legal and strategic advice to some of Australia’s leading companies.
He is a Director of Just Group Limited, a Director of Thorney Opportunities Limited and also a director of the
TarraWarra Museum of Art. He is a Life Governor of the Mount Scopus College Council. Mr. Lanzer is
Chairman of the Remuneration and Nomination Committee for Premier Investments Limited.
Michael R.I. McLeod Non-Executive Director
Mr. McLeod is a former Executive Director of the Century Plaza Group and has been involved with the Group
since 1996 as an advisor in the areas of corporate strategy, investment, public affairs and is a director of a
number of associated companies. He has been a Non-Executive Director of Premier Investments Limited
since 2002 and a Non-Executive Director of Just Group Limited from 2007 to 2013. Past experience includes
the Board of a fund manager (Scudder, Stevens and Clark Australia Limited), chief of staff to a Federal
Cabinet Minister and statutory appointments including as a Commission Member of the National Occupational
Health and Safety Commission.
Wales.
He holds a Bachelor of Arts (First Class Honours and University Medal) from the University of New South
3 Premier Investments Limited
3
3
4
DIRECTORS’ REPORT
(CONTINUED)
Lindsay E. Fox A.C. Non-Executive Director
Mr. Fox has extensive experience in all aspects of the transport, distribution and warehousing industries. He
is the founder of the Linfox Group of Companies. Today, the Linfox Group is one of the largest supply chain
services groups with operations in 10 countries. The Linfox Group employs over 23,000 people, operates 4.8
million square metres of warehouses and a fleet of more than 5,000 vehicles and carries out distribution
operations for leading companies across the Asia-Pacific region. The Linfox Group includes operations in the
areas of transport and logistics, airport operations, property development and cash management services.
Mr. Fox has extensive involvement in Australian and international circles and, apart from his business
interests, is well recognised and active in sport and charity work.
In 2010, Victoria University admitted Mr. Fox to the degree of Doctor of the University honoris causa for his
outstanding achievements in the transport industry, for his contribution to the community through his
sustained efforts to reduce unemployment and his campaign against youth suicide.
In January 2008, Mr Fox was awarded a Companion of the Order of Australia (AC) for continued service to
the transport and logistics industries, to business through the development and promotion of youth
traineeships and to the community through a range of philanthropic endeavours.
He was awarded an Officer of the Order of Australia (AO) in 1992 for his contribution to the transport industry
and the community and he received a Centenary Medal for services to the transport industry in 2001.
From September 1992 to December 1993, Mr. Fox together with Mr. Bill Kelty introduced a national campaign
called ‘Work for Australia’. This campaign encouraged companies and local communities to generate jobs for
unemployed with the aid of government subsidies and programs. More than 60,000 jobs were pledged
through their efforts and Mr. Fox and Mr. Kelty were awarded ‘Victorians of the Year’ by the Sunday Age.
Henry D. Lanzer B. COM., LLB (Melb), Non-Executive Director
Mr. Lanzer is Managing Partner of Arnold Bloch Leibler - a leading Australian commercial law firm - and has
over 30 years’ experience in providing legal and strategic advice to some of Australia’s leading companies.
He is a Director of Just Group Limited, a Director of Thorney Opportunities Limited and also a director of the
TarraWarra Museum of Art. He is a Life Governor of the Mount Scopus College Council. Mr. Lanzer is
Chairman of the Remuneration and Nomination Committee for Premier Investments Limited.
Michael R.I. McLeod Non-Executive Director
Mr. McLeod is a former Executive Director of the Century Plaza Group and has been involved with the Group
since 1996 as an advisor in the areas of corporate strategy, investment, public affairs and is a director of a
number of associated companies. He has been a Non-Executive Director of Premier Investments Limited
since 2002 and a Non-Executive Director of Just Group Limited from 2007 to 2013. Past experience includes
the Board of a fund manager (Scudder, Stevens and Clark Australia Limited), chief of staff to a Federal
Cabinet Minister and statutory appointments including as a Commission Member of the National Occupational
Health and Safety Commission.
He holds a Bachelor of Arts (First Class Honours and University Medal) from the University of New South
Wales.
Annual Report 2014 4
4
DIRECTORS’ REPORT
(CONTINUED)
Gary H. Weiss LL.M, J.S.D., Non-Executive Director
Dr. Weiss holds the degrees of LL.B (Hons) and LL.M (with dist.) from Victoria University of Wellington, as
well as a Doctor of Juridical Science (JSD) from Cornell University, New York. Dr Weiss has extensive
international business experience and has been involved in numerous cross-border mergers and acquisitions.
Dr Weiss is Chairman of Clearview Wealth Limited and Secure Parking Pty Ltd, Executive Director of Ariadne
Australia Ltd, and a director of Premier Investments Limited, Ridley Corporation Ltd, Mercantile Investment
Company Limited, Pro-Pac Packaging Limited, Tag Pacific Limited, Thorney Opportunities Limited and The
Straits Trading Company Ltd. He was Chairman of Coats Plc from 2003 until April 2012 and executive
director of Guinness Peat Group Plc from 1990 to April 2011 and has held directorships of numerous
companies, including Westfield Group, Tower Australia Ltd, Australian Wealth Management Limited, Tyndall
Australia Ltd (Deputy Chairman), Joe White Maltings Ltd (Chairman), CIC Ltd, Whitlam Turnbull & Co Ltd and
Industrial Equity Ltd.
He has authored numerous articles on a variety of legal and commercial topics.
COMPANY SECRETARY
Kim F. Davis Non-Executive Alternate Director
Mr. Davis was appointed as Alternate Director on 10 July 2008 for Mr. Jones. Mr. Davis has been the
Company Secretary of Premier Investments Limited for 20 years. Prior to holding this position, Mr Davis had
15 years’ experience within the accounting industry as a tax and financial advisor.
DIRECTORS’ REPORT
(CONTINUED)
PRINCIPAL ACTIVITIES
The consolidated entity operates a number of specialty retail fashion chains within the specialty retail fashion
markets in Australia, New Zealand, Singapore, United Kingdom and via a joint venture entity in South Africa.
The Group also has significant investments in listed securities and money market deposits.
DIVIDENDS
Final Dividend recommended for 2014
Dividends paid in the year: Interim for the half-year
Final for 2013 shown as recommended in the 2013 report
OPERATING AND FINANCIAL REVIEW
Group Overview:
CENTS
20.00
20.00
19.00
$’000
31,143
31,063
29,499
The Company acquired a controlling interest in Just Group Limited the (“Just Group”), a listed company on
the Australian Securities Exchange in August 2008. Just Group is a leading speciality fashion retailer in
Australia, New Zealand, Singapore and the United Kingdom and operates in South Africa through a joint
venture. The Just Group has a portfolio of well-recognised retail brands, consisting of Just Jeans, Jay Jays,
Jacqui E, Portmans, Dotti, Peter Alexander and Smiggle. Currently, these seven unique brands are trading
from more than 990 stores throughout four countries and online. During the year, the Smiggle brand
commenced operations in the United Kingdom, opening eight stores during the second half of the financial
year.
The Group’s emphasis is on a range of brands that provide diversification through breadth of target
demographic and sufficiently broad appeal to enable a national footprint. Over 90% of the product range is
designed, sourced and sold under its own brands. There is a continuing investment in these brands to
ensure they remain relevant to changing customer tastes and remain at the forefront of their respective
target markets.
Group Operating Results:
The Group’s reported revenue from the sale of goods, total income and net profit after income tax for the 52
week period ended 26 July 2014 (2013: 27 July 2013) are summarised below:
2014
$’000
2013
$’000
% CHANGE
Revenue from the sale of goods
Total other income
Total income
892,570
17,400
909,970
843,172
175,072
1,018,244
5.9%
(90.1%)
(10.6%)
Net profit after income tax
73,000
174,473
(58.2%)
5 Premier Investments Limited
5
6
DIRECTORS’ REPORT
(CONTINUED)
PRINCIPAL ACTIVITIES
The consolidated entity operates a number of specialty retail fashion chains within the specialty retail fashion
markets in Australia, New Zealand, Singapore, United Kingdom and via a joint venture entity in South Africa.
The Group also has significant investments in listed securities and money market deposits.
DIVIDENDS
Final Dividend recommended for 2014
Dividends paid in the year: Interim for the half-year
Final for 2013 shown as recommended in the 2013 report
OPERATING AND FINANCIAL REVIEW
Group Overview:
CENTS
20.00
20.00
19.00
$’000
31,143
31,063
29,499
The Company acquired a controlling interest in Just Group Limited the (“Just Group”), a listed company on
the Australian Securities Exchange in August 2008. Just Group is a leading speciality fashion retailer in
Australia, New Zealand, Singapore and the United Kingdom and operates in South Africa through a joint
venture. The Just Group has a portfolio of well-recognised retail brands, consisting of Just Jeans, Jay Jays,
Jacqui E, Portmans, Dotti, Peter Alexander and Smiggle. Currently, these seven unique brands are trading
from more than 990 stores throughout four countries and online. During the year, the Smiggle brand
commenced operations in the United Kingdom, opening eight stores during the second half of the financial
year.
The Group’s emphasis is on a range of brands that provide diversification through breadth of target
demographic and sufficiently broad appeal to enable a national footprint. Over 90% of the product range is
designed, sourced and sold under its own brands. There is a continuing investment in these brands to
ensure they remain relevant to changing customer tastes and remain at the forefront of their respective
target markets.
Group Operating Results:
The Group’s reported revenue from the sale of goods, total income and net profit after income tax for the 52
week period ended 26 July 2014 (2013: 27 July 2013) are summarised below:
2014
$’000
2013
$’000
% CHANGE
Revenue from the sale of goods
Total other income
Total income
892,570
17,400
909,970
843,172
175,072
1,018,244
5.9%
(90.1%)
(10.6%)
Net profit after income tax
73,000
174,473
(58.2%)
Annual Report 2014 6
6
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Group Operating Results (continued):
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Retail Segment (continued):
The main components of total other income for the current and prior financial years are presented below:
During the financial year, the Retail Segment incurred non-recurring investment costs associated with the
Total interest income
Total dividend income
Fair value gain on available-for-sale financial
assets reclassified from equity to profit and loss
Other revenues
Total other income
2014
$’000
11,139
-
-
6,261
17,400
2013
$’000
13,856
3,862
149,803
7,551
175,072
% CHANGE
(19.6 %)
(100%)
(100%)
(17.1 %)
The Group’s other income for the 2013 financial year included a reclassification adjustment of $149,803,000.
The net impact of the reclassification adjustment on the Group’s net profit after income tax was
$105,151,000. The non-cash adjustment related to the cumulative fair value gain on available-for-sale
financial assets, which were reclassified from equity to profit and loss. The reclassification was as a result of
a change in accounting for the Group’s investment in Breville Group Limited, whereby the Group
commenced equity accounting for its 25.7% interest in Breville Group Limited as of the 1st of March 2013.
Prior to the 1st of March 2013, the investment was classified as an available-for-sale financial asset, and was
accounted for at fair value as at the relevant reporting date, with gains or losses on fair value movements
recognised as a separate component of equity.
As a result of equity accounting, as of the 1st of March 2013, the Group recognises dividend income from its
investment in Breville Group Limited as a reduction to the carrying amount of the investment.
Excluding the net reclassification adjustment, the Group’s net profit after income tax for the 2013 financial
year was $69,322,000.
Retail Segment:
As Premier’s core business, the Just Group was the key contributor to the Group’s operating results for the
financial year. Key financial indicators for the retail segment are highlighted below:
RETAIL SEGMENT
Sale of goods
Total segment revenue
2014
$’000
2013
$’000
% CHANGE
892,570
899,265
843,172
847,886
5.9%
6.1%
Supply chain transformation expense
4,482
-
100%
Segment net profit before income tax
79,299
76,686
3.4%
Capital expenditure
48,164
19,231
The Retail Segment contributed $79.3 million to the Group’s net profit before income tax, up 3.4% on the
prior financial year. The increase in profit before income tax is a reflection of the Group’s continued efforts to
transform its core brands, the implementation of its organisation-wide cost efficiency program, as well as the
focus on its growth initiatives, both locally and internationally.
Group’s supply chain transformation as well as the Smiggle UK market entry. These investment costs are
further detailed below. Adjusting for these non-recurring investment costs, the Retail Segment’s net profit
before tax increased 13.4% on the prior financial year.
Supply Chain Transformation
The Group announced its intention to consolidate its Australian Distribution Centres into one National
Distribution Centre during the 2013 calendar year. The development and purchase of the new Distribution
Centre was completed during the 2014 financial year, and a one-off capital expense of $18.2 million was
incurred to acquire the land and buildings. A further capital investment of $8 million was incurred in relation
to plant and equipment for the new Distribution Centre. The internal fit-out of the new Distribution Centre is
expected to be completed in early 2015.
The Group is currently in the process of transitioning all brands to the new National Distribution Centre. As a
consequence, the Group incurred non-recurring transformation expenses amounting to $4.5 million during
the 2014 financial year. The existing distribution centre at Huntingwood, New South Wales, have closed and
the existing distribution centre in Altona, Victoria, is expected to close in early 2015.
Smiggle UK Expansion
During the financial year, the Smiggle brand expanded its operations into the United Kingdom, with the first
store opening in February 2014. As at the reporting date, the Group operates eight Smiggle stores within the
United Kingdom, with a further ten stores expected to open in the first half of the 2015 financial year.
Included in the Retail Segment’s profit before income tax are initial market entry investment expenses,
amounting to $3.1 million. The Smiggle brand has operations across four countries – Australia, New
Zealand, Singapore and the United Kingdom.
GROUP PERFORMANCE
The Group is pleased to report that despite tough economic conditions, it continued to generate strong
returns to shareholders. The dividends declared for the year reaffirm the confidence the directors have in the
future performance and underline Premier’s commitment to enhancing shareholder value through capital
management and business investment.
2014
2013
2012
2011
2010
Basic earnings per share (cents)
47.0
112.4
Dividend paid per share (cents)
39.0
37.0
44.0
36.0
26.1
36.0
52.8
66.0
Return on equity (%)
5.6%
13.4%
5.5%
3.4%
6.6%
Net debt/equity ratio (%)
(14.9%)
(16.2%)
(13.7%)
(14.6%)
(17.8%)
7 Premier Investments Limited
7
8
DIRECTORS’ REPORT
(CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Retail Segment (continued):
During the financial year, the Retail Segment incurred non-recurring investment costs associated with the
Group’s supply chain transformation as well as the Smiggle UK market entry. These investment costs are
further detailed below. Adjusting for these non-recurring investment costs, the Retail Segment’s net profit
before tax increased 13.4% on the prior financial year.
Supply Chain Transformation
The Group announced its intention to consolidate its Australian Distribution Centres into one National
Distribution Centre during the 2013 calendar year. The development and purchase of the new Distribution
Centre was completed during the 2014 financial year, and a one-off capital expense of $18.2 million was
incurred to acquire the land and buildings. A further capital investment of $8 million was incurred in relation
to plant and equipment for the new Distribution Centre. The internal fit-out of the new Distribution Centre is
expected to be completed in early 2015.
The Group is currently in the process of transitioning all brands to the new National Distribution Centre. As a
consequence, the Group incurred non-recurring transformation expenses amounting to $4.5 million during
the 2014 financial year. The existing distribution centre at Huntingwood, New South Wales, have closed and
the existing distribution centre in Altona, Victoria, is expected to close in early 2015.
Smiggle UK Expansion
During the financial year, the Smiggle brand expanded its operations into the United Kingdom, with the first
store opening in February 2014. As at the reporting date, the Group operates eight Smiggle stores within the
United Kingdom, with a further ten stores expected to open in the first half of the 2015 financial year.
Included in the Retail Segment’s profit before income tax are initial market entry investment expenses,
amounting to $3.1 million. The Smiggle brand has operations across four countries – Australia, New
Zealand, Singapore and the United Kingdom.
GROUP PERFORMANCE
The Group is pleased to report that despite tough economic conditions, it continued to generate strong
returns to shareholders. The dividends declared for the year reaffirm the confidence the directors have in the
future performance and underline Premier’s commitment to enhancing shareholder value through capital
management and business investment.
2014
2013
2012
2011
2010
Basic earnings per share (cents)
47.0
112.4
Dividend paid per share (cents)
39.0
37.0
44.0
36.0
26.1
36.0
52.8
66.0
Return on equity (%)
5.6%
13.4%
5.5%
3.4%
6.6%
Net debt/equity ratio (%)
(14.9%)
(16.2%)
(13.7%)
(14.6%)
(17.8%)
Annual Report 2014 8
8
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
SHARES ISSUED DURING THE FINANCIAL YEAR
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
A total of 454,396 shares (2013: nil) were issued during the year pursuant to the Group’s Performance Rights
Plan.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Group during the financial period ended
26 July 2014.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
During September 2014, the Group’s core debt facility relating to its unsecured bank loans was refinanced for
a further three years.
Subsequent to year-end, Premier Investments Limited increased its shareholding in Breville Group Limited
from 25.7% to 27.3% by purchasing a further 2.1 million shares for $15.2 million.
On 16 September 2014, the directors of Premier Investments Limited declared a final dividend in respect
of the 2014 financial year. The total amount of the dividend is $31,143,000 (2013: $29,499,000) which
represents a fully franked dividend of 20 cents per share (2013: 19 cents per share). The dividend has not
been provided for in the 26 July 2014 financial statements.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Certain likely developments in the operations of the Group and the expected results of those operations in
financial years subsequent to the period ended 26 July 2014 are referred to in the preceding operating and
financial review. No additional information is included on the likely developments in the operations of the
economic entity and the expected results of those operations as the directors reasonably believe that the
disclosure of such information would be likely to result in unreasonable prejudice to the economic entity if
included in this report, and it has therefore been excluded in accordance with section 299(3) of the
Corporations Act 2001.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group’s operations are not subject to any significant environmental obligations or regulations.
SHARE OPTIONS
Unissued Shares:
As at the date of this report, there were 1,849,080 unissued ordinary shares under options/performance rights
(1,849,080 at the reporting date). Refer to the remuneration report for further details of the options
outstanding.
Shares Issued as a Result of the Exercise of Options:
No shares were issued as a result of the exercise of options during the financial year and to the date of this
report.
To the extent permitted by law, the company indemnifies every person who is or has been a director or officer
of the company or of a wholly-owned subsidiary of the company against liability for damages awarded or
judgments entered against them and legal defence costs and expenses, arising out of a wrongful act, incurred
by that person whilst acting in their capacity as a director or officer provided there has been no admission, or
judgment, award or other finding by a court, tribunal or arbitrator which establishes improper use of position,
or committing of any criminal, dishonest, fraudulent or malicious act.
The officers include the directors, as named earlier in this report, the company secretary and other officers,
being the executive senior management team. Details of the nature of the liabilities covered or the amount of
the premium paid in respect of the directors, and officers, liability insurance contracts are not disclosed as
such disclosure is prohibited under the terms of the contracts.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the company has agreed to indemnify its auditors, Ernst & Young, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial
INTERESTS IN SHARES AND OPTIONS OF THE COMPANY
At the date of this report, the interests of the directors in the shares and options of the company were:
year.
S. Lew
F.W. Jones
L.E. Fox
S. Herman
H.D. Lanzer
G. H. Weiss
M. McInnes
4,437,699 ordinary shares**
207,592 ordinary shares
2,577,014 ordinary shares
8,000 ordinary shares
27,665 ordinary shares
6,000 ordinary shares
800,000 performance rights
M.R.I. McLeod
28,186 ordinary shares
**Mr. Lew is an associate of Century Plaza Investments Pty. Ltd. and Metrepark Pty. Ltd (Associated Entities).
The Associated Entities, collectively, have a relevant interest in 59,804,731 shares in the company. However,
Mr. Lew does not have a relevant interest in the shares of the company held by the Associated Entities.
9 Premier Investments Limited
9
10
DIRECTORS’ REPORT
(CONTINUED)
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
To the extent permitted by law, the company indemnifies every person who is or has been a director or officer
of the company or of a wholly-owned subsidiary of the company against liability for damages awarded or
judgments entered against them and legal defence costs and expenses, arising out of a wrongful act, incurred
by that person whilst acting in their capacity as a director or officer provided there has been no admission, or
judgment, award or other finding by a court, tribunal or arbitrator which establishes improper use of position,
or committing of any criminal, dishonest, fraudulent or malicious act.
The officers include the directors, as named earlier in this report, the company secretary and other officers,
being the executive senior management team. Details of the nature of the liabilities covered or the amount of
the premium paid in respect of the directors, and officers, liability insurance contracts are not disclosed as
such disclosure is prohibited under the terms of the contracts.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the company has agreed to indemnify its auditors, Ernst & Young, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial
year.
INTERESTS IN SHARES AND OPTIONS OF THE COMPANY
At the date of this report, the interests of the directors in the shares and options of the company were:
S. Lew
F.W. Jones
L.E. Fox
S. Herman
H.D. Lanzer
4,437,699 ordinary shares**
207,592 ordinary shares
2,577,014 ordinary shares
8,000 ordinary shares
27,665 ordinary shares
M.R.I. McLeod
28,186 ordinary shares
G. H. Weiss
M. McInnes
6,000 ordinary shares
800,000 performance rights
**Mr. Lew is an associate of Century Plaza Investments Pty. Ltd. and Metrepark Pty. Ltd (Associated Entities).
The Associated Entities, collectively, have a relevant interest in 59,804,731 shares in the company. However,
Mr. Lew does not have a relevant interest in the shares of the company held by the Associated Entities.
Annual Report 2014 10
10
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ MEETINGS
The number of meetings of the Board of Directors during the financial year, and the number of meetings
attended by each director were as follows:
BOARD MEETINGS
AUDIT AND RISK COMMITTEE
REMUNERATION AND
NOMINATION COMMITTEE
DIRECTOR
MEETINGS
HELD WHILE A
DIRECTOR
NUMBER
ATTENDED
MEETINGS
ATTENDED AS
COMMITTEE
MEMBER
NUMBER
ATTENDED
MEETINGS
ATTENDED AS
COMMITTEE
MEMBER
NUMBER
ATTENDED
Mr S Lew
Mr F W Jones
Mr M McInnes
Mr T Antonie
Dr D Crean
Mr L E Fox
Ms S Herman
Mr H D Lanzer
Mr M R I McLeod
Dr G H Weiss
ROUNDING
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
-
4
-
-
4
-
-
-
-
4
-
4
-
3
4
-
4
2
1
4
2
-
-
-
-
-
-
2
-
2
2
-
-
-
-
-
-
2
-
2
The company is a company of the kind specified in Australian Securities and Investment Commission’s class
order 98/0100. In accordance with that class order amounts in the financial statements and the Directors’
Report have been rounded to the nearest thousand dollars unless specifically stated to be otherwise.
AUDITOR INDEPENDENCE
The directors received the declaration on page 27 from the auditor of Premier Investments Limited.
NON-AUDIT SERVICES
The directors are satisfied that the provision of non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-
audit service provided means that independence was not compromised.
Details of non-audit services provided by the entity’s auditor, Ernst & Young, can be found in Note 24 of the
Financial Report.
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED)
The remuneration report for the 52 weeks ended 26 July 2014 outlines the director and executive remuneration
arrangements of the Group in accordance with the requirements of the Corporations Act 2001 and its
Regulations. This information has been audited as required by section 308 (3C) of the Act.
For the purposes of this report, key management personnel (KMP) of the Group are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Group, directly
or indirectly, including any director (whether executive or otherwise) of the parent company.
For the purposes of this report, the term “executive” encompasses the chief executive, senior executives, general
managers and secretaries of the Group.
DETAILS OF KEY MANAGEMENT PERSONNEL
(i) Non-Executive Directors
Mr. S. Lew
Mr. F.W. Jones
Mr. T. Antonie
Dr. D. Crean
Mr. L.E. Fox
Ms. S. Herman
Mr. H.D. Lanzer
Mr. M.R.I. McLeod
Dr. G.H. Weiss
(ii) Executive Directors
Mr. M. McInnes
(iii) Executives
Mr. K.F. Davis
Mr. A. Gardner
Ms. C. Garnsey
Chairman and Non-Executive Director
Deputy Chairman and Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executive Director and Chief Executive Officer Premier
Retail
Company Secretary and Non-Executive Alternate Director
Chief Financial Officer, Just Group Limited
Core Brand Director, Just Group Limited
There were no changes to key management personnel after the reporting date and before the date the financial
report was authorised for issue.
REMUNERATION AND NOMINATION COMMITTEE
The remuneration and nomination committee of the Board of Directors of the Group is responsible for determining
and reviewing remuneration arrangements for the directors and executives. The remuneration and nomination
committee comprises of three Non-Executive Directors.
The remuneration and nomination committee assesses the appropriateness of the nature and amount of
remuneration of directors and executives on a periodic basis by reference to relevant employment market
conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality,
high performing directors and executive team.
11 Premier Investments Limited
11
12
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED)
The remuneration report for the 52 weeks ended 26 July 2014 outlines the director and executive remuneration
arrangements of the Group in accordance with the requirements of the Corporations Act 2001 and its
Regulations. This information has been audited as required by section 308 (3C) of the Act.
For the purposes of this report, key management personnel (KMP) of the Group are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Group, directly
or indirectly, including any director (whether executive or otherwise) of the parent company.
For the purposes of this report, the term “executive” encompasses the chief executive, senior executives, general
managers and secretaries of the Group.
DETAILS OF KEY MANAGEMENT PERSONNEL
(i) Non-Executive Directors
Mr. S. Lew
Mr. F.W. Jones
Mr. T. Antonie
Dr. D. Crean
Mr. L.E. Fox
Ms. S. Herman
Mr. H.D. Lanzer
Mr. M.R.I. McLeod
Dr. G.H. Weiss
(ii) Executive Directors
Mr. M. McInnes
(iii) Executives
Mr. K.F. Davis
Mr. A. Gardner
Ms. C. Garnsey
Chairman and Non-Executive Director
Deputy Chairman and Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executive Director and Chief Executive Officer Premier
Retail
Company Secretary and Non-Executive Alternate Director
Chief Financial Officer, Just Group Limited
Core Brand Director, Just Group Limited
There were no changes to key management personnel after the reporting date and before the date the financial
report was authorised for issue.
REMUNERATION AND NOMINATION COMMITTEE
The remuneration and nomination committee of the Board of Directors of the Group is responsible for determining
and reviewing remuneration arrangements for the directors and executives. The remuneration and nomination
committee comprises of three Non-Executive Directors.
The remuneration and nomination committee assesses the appropriateness of the nature and amount of
remuneration of directors and executives on a periodic basis by reference to relevant employment market
conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality,
high performing directors and executive team.
Annual Report 2014 12
12
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION PHILOSOPHY
The Group operates in the Retail Industry with revenues mainly earned in its traditional domestic markets of
Australia and New Zealand whilst currently increasing its revenues from international growth. The industry in
Australia in New Zealand has seen significant structural change over recent years from changes in technology,
increased international competitors entering the Australian and New Zealand Retail Industry and significant
changes in the general consumer sentiment. At the same time, the market for skilled and experienced executives
in the industry has become increasingly competitive and international in nature.
The Board believe that, given these structural changes and growth of the Group’s international business, it is
critical and in the best interests of shareholders to attract and retain the best possible executive team by offering
appropriate remuneration packages.
REMUNERATION STRUCTURE
In accordance with best practice corporate governance, the structure of non-executive director and executive
remuneration is separate and distinct.
NON-EXECUTIVE DIRECTOR REMUNERATION
Objective
The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors
shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is
then divided between the directors as agreed. The latest determination was at the Annual General Meeting held
on 25 November 2008 when shareholders approved an aggregate remuneration of an amount not exceeding
$1,000,000 per year.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned among directors is reviewed annually.
Current total remuneration for non-executive directors remains below the shareholder approved limit. The
Chairman of the Group, consistent with his past practice, has declined to accept any remuneration for his role as
a director.
EXECUTIVE REMUNERATION
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the company by:
-
-
-
-
rewarding executives for Group, business unit and individual performance against targets set by reference
to appropriate benchmarks;
aligning the interests of executives to those of shareholders;
linking reward with the strategic goals and performance of the Group; and
ensuring total remuneration is competitive by market standards.
EXECUTIVE REMUNERATION (CONTINUED)
Structure
In determining the level and make-up of executive remuneration, the remuneration and nomination committee
periodically engages an external consultant to provide independent advice detailing market levels of
remuneration for comparable executive roles. This provides input to the Committee, which after feedback from
management makes its recommendations to the Board.
It is the Committee’s policy that service agreements are entered into with the Board by Directors and Executives.
Remuneration consists of the following key elements:
-
-
-
Fixed Remuneration
Short-Term Incentives (STI)
Long-Term Incentives (LTI)
- Discretionary bonuses
FIXED REMUNERATION
Objective
The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives) for
each executive is set out on pages 17 and 18 of this report.
Fixed remuneration is reviewed annually by the committee. The process consists of a review of Group, business
unit and individual performance, relevant comparative remuneration externally and internally and, where
appropriate, external advice on policies and practices. As noted above, the committee has access to external
advice independent of management.
During the 2011 financial year the Board reviewed the structural issues and opportunities facing the Group and
the industry in which it operates. The Board made a key strategic decision to appoint Mr McInnes as CEO of
Premier Retail. Mr McInnes has a long track record of success in every role he has occupied. He was directly
responsible for some of Australia’s greatest retail success stories – including as co-founder of the Officeworks
concept. Prior to being appointed as CEO of Premier Retail, Mr McInnes led David Jones to its most successful
time as a public listed company. From 2003 to 2010, he was CEO and executive Director of David Jones turning
David Jones into a fashion and financial powerhouse, creating in excess of $2 billion of shareholder value. The
Board believes that Mr McInnes’ remuneration package is appropriate for an executive of his skills and
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including
cash and fringe benefits such as motor vehicles and expense payments. It is intended that the manner of
payment chosen will be optimal for the recipient without creating any additional cost for the Group.
experience.
Structure
SHORT-TERM INCENTIVE (STI)
Objective
The objective of the STI program is to link the achievement of the Group’s operational targets with the
remuneration received by the executives charged with meeting those targets. The total potential STI available is
set at a level so as to provide sufficient incentive to the executives to achieve the operational targets and such
that the cost to the Group is reasonable in the circumstances.
13 Premier Investments Limited
13
14
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
EXECUTIVE REMUNERATION (CONTINUED)
Structure
In determining the level and make-up of executive remuneration, the remuneration and nomination committee
periodically engages an external consultant to provide independent advice detailing market levels of
remuneration for comparable executive roles. This provides input to the Committee, which after feedback from
management makes its recommendations to the Board.
It is the Committee’s policy that service agreements are entered into with the Board by Directors and Executives.
Remuneration consists of the following key elements:
Fixed Remuneration
Short-Term Incentives (STI)
Long-Term Incentives (LTI)
-
-
-
- Discretionary bonuses
The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives) for
each executive is set out on pages 17 and 18 of this report.
FIXED REMUNERATION
Objective
Fixed remuneration is reviewed annually by the committee. The process consists of a review of Group, business
unit and individual performance, relevant comparative remuneration externally and internally and, where
appropriate, external advice on policies and practices. As noted above, the committee has access to external
advice independent of management.
During the 2011 financial year the Board reviewed the structural issues and opportunities facing the Group and
the industry in which it operates. The Board made a key strategic decision to appoint Mr McInnes as CEO of
Premier Retail. Mr McInnes has a long track record of success in every role he has occupied. He was directly
responsible for some of Australia’s greatest retail success stories – including as co-founder of the Officeworks
concept. Prior to being appointed as CEO of Premier Retail, Mr McInnes led David Jones to its most successful
time as a public listed company. From 2003 to 2010, he was CEO and executive Director of David Jones turning
David Jones into a fashion and financial powerhouse, creating in excess of $2 billion of shareholder value. The
Board believes that Mr McInnes’ remuneration package is appropriate for an executive of his skills and
experience.
Structure
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including
cash and fringe benefits such as motor vehicles and expense payments. It is intended that the manner of
payment chosen will be optimal for the recipient without creating any additional cost for the Group.
SHORT-TERM INCENTIVE (STI)
Objective
The objective of the STI program is to link the achievement of the Group’s operational targets with the
remuneration received by the executives charged with meeting those targets. The total potential STI available is
set at a level so as to provide sufficient incentive to the executives to achieve the operational targets and such
that the cost to the Group is reasonable in the circumstances.
Annual Report 2014 14
14
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
SHORT-TERM INCENTIVE (STI) (CONTINUED)
Structure
Actual STI payments granted to each executive depend on the extent to which specific targets set at the
beginning of the financial year are met. The STI targets were based on growth in Segment EBIT and a number of
individual KPI’s.
DISCRETIONARY BONUSES
Bonuses are payable at the discretion of the board of directors upon the recommendation of the committee.
These discretionary bonuses can be paid by way of cash or performance rights. It is the intention that
discretionary bonuses only be given in exceptional circumstances when in the best interest of the Group. No
discretionary bonuses were paid during the 2014 financial year.
LONG-TERM INCENTIVE (LTI)
Objective
The objective of the LTI plan is to reward executives in a manner aligned with the creation of shareholder wealth.
Structure
LTI grants to executives are delivered in the form of performance rights, through the Group’s Performance Rights
Plan (“PRP”).
The PRP provides a remuneration element designed to attract and retain key senior executives and employees
and link rewards with the Group’s long-term performance and maximisation of shareholder wealth.
During the current financial period, grants were made on 11 December 2013. All offers are made subject to the
terms of the PRP rules, which confer various powers to the board to add to or vary any of the plan rules, subject
to the requirements of the Australian Securities Exchange.
An offer under the PRP grants an individual the right to a certain number of ordinary shares in the company. This
right may vest and be convertible into shares, conditional on the satisfaction of the ‘Total Shareholder Return’
(TSR) performance condition and that the TSR over the testing period is positive.
The Group uses relative Total Shareholder Return (TSR) as the performance hurdle for the long-term incentive
plan. TSR is the return to shareholders provided by share price appreciation plus reinvested dividends,
expressed as a percentage of investment.
The use of a relative TSR-based hurdle is widely considered market best practice as it ensures an alignment
between comparative shareholder return and reward for executives. Relative TSR is to be compared to a group
of companies consisting of those in the S&P/ASX 200 Industrials, excluding overseas and resource companies.
The Group receives an independent assessment of whether the performance criteria are met.
The actual number of shares, if any, provided to participants will depend on the extent to which the performance
condition has been met. The first condition required for any shares to vest is that the TSR over the testing period
is positive. It is possible for each participant to be allocated either no shares (if the performance condition is not
met) or anywhere between 25% and 100% of their initial offered amount, depending on the level of achievement
against the performance condition as detailed in the following table.
15 Premier Investments Limited
15
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
LONG-TERM INCENTIVE (LTI) (CONTINUED)
Target
Below 50th percentile
50th percentile
Between 50th and 62.5th percentile
62.5th percentile
Between 62.5th and 75th percentile
75th percentile and above
Conversion ratio of rights to shares available to vest
under the TSR Performance Condition
0%
25%
Pro Rata
50%
Pro Rata
100%
Generally the rights are eligible to vest three years from the date of the grant, with the exception of grants given
to Mr Mark McInnes and Ms Colette Garnsey. The performance rights issued on 10 May 2011 to Mr McInnes are
eligible to vest in three tranches, on 4 April 2014, 4 April 2015 and 4 April 2016.
The performance rights issued to Ms Garnsey on 18 April 2013 were issued to replace certain performance rights
that she was entitled to in her previous employment. The performance rights issued to Ms Garnsey are eligible to
vest in three tranches on 20 June 2015, 20 June 2016 and 20 June 2017.
Any rights which do not vest but the TSR was between the 40th and 50th percentile, may be retested once, 12
months after the initial vesting date. Once rights have been allocated, disposal of performance shares is subject
to restrictions whereby board approval is required to sell shares granted within 7 years under this plan. An
unvested performance right will lapse if it fails to meet the TSR performance condition over the prescribed period.
Holders of performance rights are not entitled to vote or receive dividends or other distributions.
Generally, all outstanding unvested rights are forfeited upon an executive resigning from the company. In the
event of Mr. McInnes resigning such that his contractual notice period would expire within a 14 day period prior to
a particular vesting date, those performance rights issued on 10 May 2011 to Mr. McInnes which would have
been eligible to vest on that vesting date will be unaffected by the resignation. All other outstanding unvested
rights are forfeited.
Executives are prohibited from entering into transactions to hedge or limit the economic risk of the securities
allocated to them under the PRP, either before vesting or after vesting while the securities are held subject to
restriction. Executives are only able to hedge securities that have vested and continue to be subject to a trading
restriction and a seven-year lock, with the prior consent of the board.
No employees have any hedging arrangements in place.
PERFORMANCE RIGHTS TESTED DURING THE 2014 FINANCIAL YEAR
During the 2014 financial year, two tranches of LTI performance rights issued were tested.
In October 2013, a tranche of 515,242 LTI performance rights issued during the 2011 financial year was tested.
380,332 of these performance rights lapsed due to the respective executives no longer being employed by the
company.
The testing period began on 1 October 2010. At this date, Premier Investments’ share price was $7.08 per share.
During the three year testing period, Premier Investments declared a total of $1.09 fully franked dividends per
share. The historical data concerning the Group in respect of the 2014 financial period and the four previous
financial periods is set out on page 8 of the Directors’ Report under the heading “Group Performance”. The
testing period ended on 1 October 2013 when the share price was $8.65 per share.
Annual Report 2014 16
16
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
PERFORMANCE RIGHTS TESTED DURING THE 2014 FINANCIAL YEAR (CONTINUED)
The Group received an independent assessment of the performance over the three year testing period. The
assessment concluded that Premier Investments’ TSR was both positive and between the 50th and 62.5th
percentile of the comparator group. As a result, 54,396 performance rights vested and converted into 54,396
newly issued ordinary shares. This is in line with the LTI scheme rules and represents a 40.3% conversion ratio
for those individual executives. The balance of 80,514 performance rights lapsed.
In April 2014, a first tranche of 600,000 LTI performance rights issued to Mr McInnes in May 2011 were tested.
The testing period began on 24 March 2011, being the day prior to the announced appointment of Mr McInnes. At
this date, Premier Investments’ share price was $5.88 per share. During the three year testing period, Premier
Investments declared a total of $1.11 fully franked dividends per share. The historical data concerning the Group
in respect of the 2014 financial period and the four previous financial periods is set out on page 8 of the Directors’
Report under the heading “Group Performance”. The testing period ended on 3 April 2014 when the share price
was $9.84 per share.
The Group received an independent assessment of the performance over the three year testing period. The
assessment concluded that Premier Investments’ TSR was both positive and above the 75th percentile of the
comparator group.
Under the LTI scheme rules, a test above the 75th percentile would have resulted in 100% conversion and vesting
into 600,000 ordinary shares. However, in terms of Mr McInnes’ contract in relation to this tranche of performance
rights, one third of the performance rights had an additional 12 month retention clause. As a result, 400,000
performance rights vested and converted into 400,000 newly issued ordinary shares. The balance of 200,000
performance rights, in relation to this specific tranche, having already passed the 100% qualifying TSR test, will
now be subject to a retention test to be performed in March 2015.
.
17 Premier Investments Limited
17
%
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M
Annual Report 2014 20
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Additional disclosures relating to Rights and Shares (Continued)
b)
Value of options awarded, exercised and lapsed during the year
2014
Key management
personnel
Mr. M. McInnes
Mr. A. Gardner
Value of rights
granted during the
year
$
Value of rights
exercised during the
year
$
Value of rights
lapsed during the
year
$
Remuneration
consisting of rights
for the year
%
-
275,007
3,944,000
197,085
-
323,095
12.93
14.90
There were no alterations to the terms and conditions of rights awarded as remuneration since their award
date.
c)
Shares issued on exercise of options
2014
Key management
personnel
Mr. M. McInnes
Mr. A. Gardner
Shares issued
No
Paid per share
$
Unpaid per share
$
400,000
25,235
-
-
-
-
There were no alterations to the terms and conditions of rights awarded as remuneration since their award
date.
21 Premier Investments Limited
21
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Annual Report 2014 22
)
I
D
E
U
N
T
N
O
C
(
)
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T
D
U
A
(
T
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(
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Additional disclosures relating to Rights and Shares (Continued)
e)
Number of Shares held in Premier Investments Limited
BALANCE
28 JULY 2013
ORDINARY
SHARE
PURCHASE
ORDINARY
SHARES
ACQUIRED
UNDER
PERFORMANCE
RIGHTS PLAN
ORDINARY
4,437,699
197,592
-
-
5,577,014
-
27,665
28,186
10,000
-
-
84,763
-
-
10,000
-
-
-
8,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
400,000
-
25,235
-
NET CHANGE
OTHER
ORDINARY
BALANCE
26 JULY 2014
ORDINARY
-
-
-
-
4,437,699
207,592
-
-
(3,000,000)
2,577,014
-
-
-
-
-
-
-
-
8,000
27,665
28,186
10,000
400,000
-
109,998
-
10,362,919
18,000
425,235
(3,000,000)
7,806,154
2014
NON-EXECUTIVE
DIRECTORS
Mr. S. Lew**
Mr. F.W. Jones
Mr. T. Antonie
Dr. D. Crean
Mr. L.E. Fox
Ms. S. Herman
Mr. H.D. Lanzer
Mr. M.R.I. McLeod
Dr. G.H. Weiss
EXECUTIVES
Mr. M. McInnes
Mr. K.F. Davis
Mr. A. Gardner
Ms. C. Garnsey
TOTAL 2014
** Mr. Lew is an associate of Century Plaza Investments Pty. Ltd. and Metrepark Pty. Ltd (Associated Entities). The
Associated Entities, collectively, have a relevant interest in 59,804,731 (2013: 59,804,731) shares in the company.
However, Mr. Lew does not have a relevant interest in the shares in the company held by the Associated Entities.
Additional disclosures relating to transactions and balances with key management personnel
f)
Other transactions and balances with key management personnel
Details and terms and conditions of other transactions with key management personnel and their related
parties:
Mr. Lanzer is a partner of the legal firm Arnold Bloch Leibler. Group companies use the services of
Arnold Bloch Leibler from time to time. Legal services totalling $1,216,100 (2013: $1,022,348), including
Mr. Lanzer's directors fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the
consolidated group. The fees paid for these services were all at arm's length and on normal commercial
terms.
23 Premier Investments Limited
23
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Additional disclosures relating to Rights and Shares (Continued)
Additional disclosures relating to transactions and balances with key management personnel (continued)
e)
Number of Shares held in Premier Investments Limited
f)
Other transactions and balances with key management personnel (continued)
BALANCE
28 JULY 2013
ORDINARY
SHARE
PURCHASE
ORDINARY
NET CHANGE
OTHER
ORDINARY
BALANCE
26 JULY 2014
ORDINARY
SHARES
ACQUIRED
UNDER
PERFORMANCE
RIGHTS PLAN
ORDINARY
4,437,699
197,592
5,577,014
27,665
28,186
10,000
-
-
-
-
-
-
84,763
10,000
8,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
400,000
25,235
(3,000,000)
2,577,014
-
-
-
-
-
-
-
-
-
-
-
-
4,437,699
207,592
-
-
8,000
27,665
28,186
10,000
400,000
109,998
-
-
10,362,919
18,000
425,235
(3,000,000)
7,806,154
2014
NON-EXECUTIVE
DIRECTORS
Mr. S. Lew**
Mr. F.W. Jones
Mr. T. Antonie
Dr. D. Crean
Mr. L.E. Fox
Ms. S. Herman
Mr. H.D. Lanzer
Mr. M.R.I. McLeod
Dr. G.H. Weiss
EXECUTIVES
Mr. M. McInnes
Mr. K.F. Davis
Mr. A. Gardner
Ms. C. Garnsey
TOTAL 2014
** Mr. Lew is an associate of Century Plaza Investments Pty. Ltd. and Metrepark Pty. Ltd (Associated Entities). The
Associated Entities, collectively, have a relevant interest in 59,804,731 (2013: 59,804,731) shares in the company.
However, Mr. Lew does not have a relevant interest in the shares in the company held by the Associated Entities.
Additional disclosures relating to transactions and balances with key management personnel
f)
Other transactions and balances with key management personnel
Details and terms and conditions of other transactions with key management personnel and their related
parties:
terms.
Mr. Lanzer is a partner of the legal firm Arnold Bloch Leibler. Group companies use the services of
Arnold Bloch Leibler from time to time. Legal services totalling $1,216,100 (2013: $1,022,348), including
Mr. Lanzer's directors fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the
consolidated group. The fees paid for these services were all at arm's length and on normal commercial
Mr. Lanzer is a director of Loch Awe Pty Ltd. During the year operating lease payments totalling $378,629
(2013: $364,067) including GST was paid to Loch Awe Pty Ltd. The payments were at arm’s length and
on normal commercial terms.
Mr. Lew is a director of Voyager Distributing Company Pty Ltd and family companies associated with Mr.
Lew have a controlling interest in Playcorp Pty Ltd and Sky Chain Trading Limited. During the year,
purchases totalling $20,332,905 (2013: $20,250,393) including GST have been made by Group
companies from Voyager Distributing Co. Pty Ltd, Playcorp Pty Ltd and Sky Chain Trading Limited, with
$1,436,941 (2013: $1,430,634) remaining outstanding at year-end. The purchases were all at arm’s
length and on normal commercial terms. Additionally, fabric sales of $nil (2013: $276,687), inclusive of
GST, have been made by Group companies to Voyager Distributing Co. Pty Ltd. Sales were at arm’s
length and on normal commercial terms.
Mr. Lew is a director of Century Plaza Trading Pty. Ltd. The company and Century Plaza Trading Pty Ltd
are parties to a Services Agreement to which Century Plaza Trading agrees to provide certain services to
the company to the extent required and requested by the company. The company is required to
reimburse Century Plaza Trading for costs it incurs in providing the company with the services under the
Service Agreement. The company reimbursed a total of $412,718 (2013: $352,570) costs including GST
incurred by Century Plaza Trading Pty Ltd.
Amounts recognised in the financial report at the reporting date in relation to other transactions:
i)
Amounts included within Assets and Liabilities
Current Liabilities
Trade and other payables
ii) Amounts included within Profit or Loss
Expenses
Purchases/ Cost of goods sold
Operating lease rental expense
Legal fees
Other expenses
Total expenses
2014
$’000
1,437
1,437
2014
$’000
18,724
344
1,100
413
20,581
23
Annual Report 2014 24
24
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
AUDITOR INDEPENDENCE
SERVICE AGREEMENTS
Remuneration and other terms of employment for key management personnel and other executives are
formalised in written service agreements (with the exception of Mr. Kim Davis, whose relevant terms of
employment are set out below). Major provisions of the agreements are set out below:
Termination benefits
A copy of the Auditor’s Independence Declaration in relation to the audit for the financial year is provided on page
27 of this report.
Signed in accordance with a resolution of the board of directors.
Start date
Term of
agreement
Review
period
Period of
written
notice
required
from the
company
Upon
company
initiated
Upon
diminution
of role
Open
Annual
12 months 12 months
Nil
TFR
including
notice
Period of
written notice
required from
employee
6 months (in
first 12
months of
employment)
12 months
thereafter
Solomon Lew
Chairman
17 October 2014
Mr. M. McInnes
04-Apr-
2011
Mr. K. F. Davis
Mr. A. Gardner
17-Nov-
1993
02-Jan-
2007
Ms. C. Garnsey
20-Sep-
2012
Open
Annual
3 months
Nil
Nil
3 months
Open
Annual
12 months 12 months
Nil
12 months
TFR
including
notice
Open
Annual
12 months 12 months
Nil
12 months
TFR
including
notice
25 Premier Investments Limited
25
26
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
AUDITOR INDEPENDENCE
A copy of the Auditor’s Independence Declaration in relation to the audit for the financial year is provided on page
27 of this report.
Signed in accordance with a resolution of the board of directors.
Period of
written notice
required from
employee
6 months (in
first 12
months of
employment)
12 months
thereafter
Solomon Lew
Chairman
17 October 2014
SERVICE AGREEMENTS
Remuneration and other terms of employment for key management personnel and other executives are
formalised in written service agreements (with the exception of Mr. Kim Davis, whose relevant terms of
employment are set out below). Major provisions of the agreements are set out below:
Termination benefits
Term of
Start date
agreement
Review
period
Upon
company
initiated
Upon
diminution
of role
Period of
written
notice
required
from the
company
Mr. M. McInnes
Open
Annual
12 months 12 months
Nil
04-Apr-
2011
1993
02-Jan-
2007
2012
Mr. K. F. Davis
17-Nov-
Open
Annual
3 months
Nil
Nil
3 months
Mr. A. Gardner
Open
Annual
12 months 12 months
Nil
12 months
Ms. C. Garnsey
20-Sep-
Open
Annual
12 months 12 months
Nil
12 months
TFR
including
notice
TFR
including
notice
TFR
including
notice
25
Annual Report 2014 26
26
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67
Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013
Auditor’s Independence Declaration to the Directors of Premier
Investments Limited
In relation to our audit of the financial report of Premier Investments Limited for the financial year ended
26 July 2014 to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
Brent Simonis
Partner
17 October 2014
27 Premier Investments Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
CONSOLIDATED
NOTES
2014
$’000
2013
$’000
892,570
11,624
904,194
5,776
909,970
(341,078)
(225,716)
(186,061)
(21,941)
(12,193)
(6,311)
(4,482)
(26,608)
(824,390)
12,785
98,365
(25,365)
73,000
-
-
(21,436)
728
(896)
6,431
(15,173)
Changes in inventories of finished goods and work in progress and
Continuing operations
Revenue from sale of goods
Other revenue
Total revenue
Other income
Total income
raw materials used
Employee expenses
Operating lease rental expense
Depreciation, impairment and amortisation
Advertising and direct marketing
Finance costs
Supply chain transformation
Other expenses
Total expenses
Share of profit of associates
Profit from continuing operations before income tax
Income tax expense
Net profit for the period attributable to owners
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net fair value gains on available-for-sale financial assets
Fair value gain on available-for-sale financial assets reclassified
from equity to profit and loss
Cash flow hedges
Foreign currency translation
Net movement in other comprehensive income of associates
Income tax on items of other comprehensive income
Other comprehensive loss for the period, net of tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
ATTRIBUTABLE TO THE OWNERS
Earnings per share for profit from continuing operations
attributable to the ordinary equity holders of the parent:
- basic for profit for the year (cents per share)
- diluted for profit for the year (cents per share)
4
4
4
5
5
5
5
13
6
19
19
19
19
19
19
30
30
The accompanying notes form an integral part of this Statement of Comprehensive Income.
843,172
18,239
861,411
156,833
1,018,244
(321,813)
(210,775)
(178,343)
(19,187)
(12,481)
(6,988)
-
(25,815)
(775,402)
3,114
245,956
(71,483)
174,473
32,115
(149,803)
18,270
1,211
1,219
29,589
(67,399)
28
57,827
107,074
46.98
46.36
112.37
111.07
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013
CONSOLIDATED
NOTES
2014
$’000
2013
$’000
Continuing operations
Revenue from sale of goods
Other revenue
Total revenue
Other income
Total income
Changes in inventories of finished goods and work in progress and
raw materials used
Employee expenses
Operating lease rental expense
Depreciation, impairment and amortisation
Advertising and direct marketing
Finance costs
Supply chain transformation
Other expenses
Total expenses
Share of profit of associates
Profit from continuing operations before income tax
Income tax expense
Net profit for the period attributable to owners
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net fair value gains on available-for-sale financial assets
Fair value gain on available-for-sale financial assets reclassified
from equity to profit and loss
Cash flow hedges
Foreign currency translation
Net movement in other comprehensive income of associates
Income tax on items of other comprehensive income
Other comprehensive loss for the period, net of tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
ATTRIBUTABLE TO THE OWNERS
Earnings per share for profit from continuing operations
attributable to the ordinary equity holders of the parent:
- basic for profit for the year (cents per share)
- diluted for profit for the year (cents per share)
4
4
4
5
5
5
5
13
6
19
19
19
19
19
19
30
30
The accompanying notes form an integral part of this Statement of Comprehensive Income.
892,570
11,624
904,194
5,776
909,970
(341,078)
(225,716)
(186,061)
(21,941)
(12,193)
(6,311)
(4,482)
(26,608)
(824,390)
12,785
98,365
(25,365)
73,000
843,172
18,239
861,411
156,833
1,018,244
(321,813)
(210,775)
(178,343)
(19,187)
(12,481)
(6,988)
-
(25,815)
(775,402)
3,114
245,956
(71,483)
174,473
-
32,115
-
(21,436)
728
(896)
6,431
(15,173)
(149,803)
18,270
1,211
1,219
29,589
(67,399)
57,827
107,074
46.98
46.36
112.37
111.07
Annual Report 2014 28
28
STATEMENT OF FINANCIAL POSITION
AS AT 26 JULY 2014 AND 27 JULY 2013
STATEMENT OF CASH FLOWS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013
NOTES
CONSOLIDATED
2014
$’000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial instruments
Other current assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Intangible assets
Deferred tax assets
Investments in associates
Other financial instruments
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Interest-bearing liabilities
Other financial instruments
Income tax payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Interest-bearing liabilities
Deferred tax liabilities
Provisions
Other financial instruments
Other
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
25
8
9
29
10
8
11
12
6
13
29
14
15
29
16
17
15
6
16
29
17
18
19
20
2013
$’000
313,157
6,858
83,959
13,625
4,676
422,275
1,929
83,402
854,529
10,928
185,534
3,417
313,308
12,155
98,496
1,517
5,215
430,691
1,004
109,028
854,572
12,147
188,418
79
1,165,248
1,595,939
1,139,739
1,562,014
62,520
100,529
6,798
24,642
16,558
4,221
215,268
19,014
52,586
1,462
3
9,077
82,142
297,410
1,298,529
608,615
2,514
687,400
54,514
48
28
13,463
16,764
4,771
89,588
101,920
58,295
1,467
159
10,219
172,060
261,648
1,300,366
608,615
16,789
674,962
1,298,529
1,300,366
NET CASH FLOWS FROM OPERATING ACTIVITIES
25(b)
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Dividends received
Interest received
Borrowing costs paid
Income taxes paid
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of financial instruments
Dividends received from associates
Payment for trademarks
Proceeds from sale of property, plant and equipment
Payment for property, plant and equipment and leasehold
premiums
ACTIVITIES
NET CASH FLOWS (USED IN) FROM INVESTING
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividends paid
Proceeds from borrowings
Repayment of borrowings
Payment of finance lease liabilities
NET CASH FLOWS USED IN FINANCING ACTIVITIES
NET INCREASE IN CASH HELD
Cash at the beginning of the financial period
CASH AT THE END OF THE FINANCIAL PERIOD
25(a)
The accompanying notes form an integral part of this Statement of Cash Flows.
NOTES
CONSOLIDATED
2014
$’000
985,643
(894,487
-
11,692
(5,815)
(13,653)
83,380
8,698
(106)
-
-
(60,562)
83,000
(67,000)
(55)
(44,617)
151
313,157
313,308
2013
$’000
931,411
(844,709)
3,862
13,404
(6,386)
(8,474)
89,108
20,247
4,683
(96)
7
(57,446)
22,000
(45,000)
(107)
(80,553)
18,989
294,168
313,157
(47,204)
(14,407)
(38,612)
10,434
The accompanying notes form an integral part of this Statement of Financial Position.
29 Premier Investments Limited
29
30
STATEMENT OF CASH FLOWS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
NOTES
Dividends received
Interest received
Borrowing costs paid
Income taxes paid
NET CASH FLOWS FROM OPERATING ACTIVITIES
25(b)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of financial instruments
Dividends received from associates
Payment for trademarks
Proceeds from sale of property, plant and equipment
Payment for property, plant and equipment and leasehold
premiums
NET CASH FLOWS (USED IN) FROM INVESTING
ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividends paid
Proceeds from borrowings
Repayment of borrowings
Payment of finance lease liabilities
NET CASH FLOWS USED IN FINANCING ACTIVITIES
NET INCREASE IN CASH HELD
Cash at the beginning of the financial period
CASH AT THE END OF THE FINANCIAL PERIOD
25(a)
The accompanying notes form an integral part of this Statement of Cash Flows.
CONSOLIDATED
2014
$’000
985,643
(894,487
-
11,692
(5,815)
(13,653)
83,380
-
8,698
(106)
-
2013
$’000
931,411
(844,709)
3,862
13,404
(6,386)
(8,474)
89,108
20,247
4,683
(96)
7
(47,204)
(14,407)
(38,612)
10,434
(60,562)
83,000
(67,000)
(55)
(44,617)
151
313,157
313,308
(57,446)
22,000
(45,000)
(107)
(80,553)
18,989
294,168
313,157
Annual Report 2014 30
30
STATEMENT OF CHANGES IN EQUITY
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013
STATEMENT OF CHANGES IN EQUITY
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013
CONSOLIDATED
CONTRIBUTED
EQUITY
$’000
CAPITAL
PROFITS
RESERVE
$’000
PERFORMANCE
RIGHTS
RESERVE
$’000
CONSOLIDATED
CASH FLOW
HEDGE
RESERVE
$’000
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$’000
FAIR
VALUE
RESERVE
$’000
RETAINED
PROFITS
$’000
TOTAL
$’000
CONTRIBUTED
EQUITY
$’000
608,615
CAPITAL
PROFITS
RESERVE
$’000
-
PERFORMANCE
RIGHTS
RESERVE
$’000
464
-
CASH FLOW
HEDGE
RESERVE
$’000
-
2,383
11,440
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$’000
-
2,502
FAIR
VALUE
RESERVE
$’000
-
RETAINED
PROFITS
$’000
-
TOTAL
$’000
674,962
1,300,366
-
-
73,000
73,000
-
(15,173)
674,962
1,300,366
73,000
-
73,000
73,000
57,827
-
(15,173)
73,000
57,827
-
-
-
-
898
(60,562)
(60,562)
687,400
1,298,529
-
898
(60,562)
(60,562)
82,618
557,935
1,249,806
687,400
-
1,298,529
174,473
174,473
-
-
-
-
-
-
-
At 28 July 2013
Net Profit for the period
Other comprehensive loss
At 28 July 2013
Total comprehensive
608,615
Net Profit for the period
income for the period
Other comprehensive loss
Transactions with owners
Total comprehensive
in their capacity as
income for the period
owners:
Transactions with owners
Performance rights issued
in their capacity as
Dividends Paid
-
-
-
-
-
-
-
-
-
(15,005)
(168)
11,440
2,502
-
(15,005)
-
(168)
(15,005)
(168)
2,383
-
-
-
(15,005)
(168)
898
-
-
-
-
-
464
3,281
(3,565)
2,334
-
-
-
-
464
-
-
-
-
-
owners:
Balance as at 26 July 2014
608,615
Performance rights issued
Dividends Paid
At 29 July 2012
Balance as at 26 July 2014
Net Profit for the period
-
-
608,615
898
-
-
-
-
-
464
1,451
(1,349)
608,615
464
3,281
(3,565)
2,334
-
72
-
-
-
-
1,451
-
-
-
464
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other comprehensive income
At 29 July 2012
(loss)
608,615
Net Profit for the period
Total comprehensive
Other comprehensive income
income for the period
(loss)
Transactions with
Total comprehensive
owners in their capacity
income for the period
as owners:
Transactions with
Performance rights issued
owners in their capacity
Dividends Paid
as owners:
Balance as at 27 July 2013
Performance rights issued
Dividends Paid
932
-
-
-
-
-
608,615
464
2,383
11,440
2,502
-
-
-
-
932
-
-
-
-
-
2,502
-
-
-
(1,349)
12,789
72
2,430
82,618
(82,618)
557,935
1,249,806
-
(67,399)
-
-
-
174,473
174,473
12,789
2,430
(82,618)
174,473
107,074
12,789
2,430
(82,618)
-
(67,399)
12,789
2,430
(82,618)
174,473
107,074
Balance as at 27 July 2013
464
The accompanying notes form an integral part of this Statement of Changes in Equity
608,615
11,440
2,383
The accompanying notes form an integral part of this Statement of Changes in Equity
31 Premier Investments Limited
-
-
-
-
932
(57,446)
(57,446)
674,962
1,300,366
-
932
(57,446)
(57,446)
674,962
1,300,366
31
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013
1
CORPORATE INFORMATION
The financial report of Premier Investments Limited for the 52 weeks ended 26 July 2014 was
authorised for issue in accordance with a resolution of the directors on 17 October 2014.
Premier Investments Limited is a for profit company limited by shares incorporated in Australia
whose shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’
Report.
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial report is prepared for the 52 weeks beginning 28 July 2013 to
26 July 2014.
(a)
BASIS OF PREPARATION
The financial report is a general-purpose financial report, which has been prepared in
accordance with the requirements of the Corporations Act 2001, Australian Accounting
Standards and other authoritative pronouncements of the Australian Accounting Standards
Board. The financial report has been prepared on a historical cost basis, except for other
financial instruments, which have been measured at fair value as explained in the accounting
policies below.
The financial report is presented in Australian dollars and all values are rounded to the
nearest thousand dollars ($’000) under the option available to the company under Australian
Securities and Investments Commission (ASIC) Class Order 98/0100. The Group is an entity
to which the Class Order applies.
(b)
STATEMENT OF COMPLIANCE
The financial report complies with Australian Accounting Standards and International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB).
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
Changes in accounting policies, disclosures, standards and interpretations
The accounting policies adopted are consistent with those of the previous financial year
except as follows:
As of the beginning of the financial year, the Group has adopted the following new and
amended Australian Accounting Standards and AASB Interpretations that are relevant to the
Group and its operations and that are effective for the current annual reporting period.
(i)
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual
Key Management Personnel Disclosure Requirements: This amendment deletes from
AASB 124 Related Party Disclosures individual key management personnel disclosure
requirements for all disclosing entities in relation to equity holdings, loans and other
related party transactions. In the current year, individual key management personnel
disclosure relating to equity holdings and other related party transactions is now
disclosed in the Remuneration Report, due to an amendment to the Corporations
Regulations 2001 issued in June 2013.
32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013
1
CORPORATE INFORMATION
The financial report of Premier Investments Limited for the 52 weeks ended 26 July 2014 was
authorised for issue in accordance with a resolution of the directors on 17 October 2014.
Premier Investments Limited is a for profit company limited by shares incorporated in Australia
whose shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’
Report.
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial report is prepared for the 52 weeks beginning 28 July 2013 to
26 July 2014.
(a)
BASIS OF PREPARATION
The financial report is a general-purpose financial report, which has been prepared in
accordance with the requirements of the Corporations Act 2001, Australian Accounting
Standards and other authoritative pronouncements of the Australian Accounting Standards
Board. The financial report has been prepared on a historical cost basis, except for other
financial instruments, which have been measured at fair value as explained in the accounting
policies below.
The financial report is presented in Australian dollars and all values are rounded to the
nearest thousand dollars ($’000) under the option available to the company under Australian
Securities and Investments Commission (ASIC) Class Order 98/0100. The Group is an entity
to which the Class Order applies.
(b)
STATEMENT OF COMPLIANCE
The financial report complies with Australian Accounting Standards and International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB).
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
Changes in accounting policies, disclosures, standards and interpretations
The accounting policies adopted are consistent with those of the previous financial year
except as follows:
As of the beginning of the financial year, the Group has adopted the following new and
amended Australian Accounting Standards and AASB Interpretations that are relevant to the
Group and its operations and that are effective for the current annual reporting period.
(i)
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual
Key Management Personnel Disclosure Requirements: This amendment deletes from
AASB 124 Related Party Disclosures individual key management personnel disclosure
requirements for all disclosing entities in relation to equity holdings, loans and other
related party transactions. In the current year, individual key management personnel
disclosure relating to equity holdings and other related party transactions is now
disclosed in the Remuneration Report, due to an amendment to the Corporations
Regulations 2001 issued in June 2013.
Annual Report 2014 32
32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
(vii) AASB 13 Fair Value Measurements: The standard establishes a single source of
guidance for fair value measurements and disclosures about fair value measurements.
AASB 13 does not change when an entity is required to use fair value, but rather,
provides guidance on how to determine fair value when fair value is required or
permitted. AASB 13 also expands the disclosure requirements for all assets or
liabilities carried at fair value. The standard requires prospective application from 1
January 2013. In addition, specific transitional provisions were given to entities such
that they need not apply the disclosure requirements set out in the Standard in
comparative information provided for periods before the initial application of the
Standard. In accordance with these provisions, the Group has not made any new
disclosures required by AASB 13 for the comparative period ending 27 July 2013.
Other than the expanded disclosure requirements, AASB 13 does not have any
material impact on the amounts recognised in the consolidated financial statements.
The Group has elected to early adopt the following New Standards or amendments for this
financial year:
(i)
AASB 2013-3 Amendments to AASB 136 – Recoverable amount disclosures for Non-
Financial Assets: These amendments remove the unintended consequences of AASB
13 Fair Value Measurements on the disclosure required under AASB 136 Impairment
of Assets. In addition, these amendments require disclosure of the recoverable
amounts for the assets or cash-generating units for which impairment losses have
been recognised or reversed during the period. These amendments are effective
retrospectively for annual reporting periods beginning on or after 1 January 2014 with
earlier application permitted, provided AASB 13 is also applied. The Group has early
adopted these amendments to AASB 136 in the current period. Accordingly, these
amendments have been incorporated in the disclosures for non-financial assets in
Note 12. The amendments will continue to be applicable for future disclosures.
Adoption of these new and revised Standards did not have any effect on the financial position
or performance of the Group.
(ii)
(iii)
(iv)
(v)
(vi)
AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures –
Offsetting Financial Assets and Financial Liabilities: The Standard principally amends
AASB 7 Financial Instruments: Disclosures to require disclosure of the effect or
potential effect of set-off arrangements. As the Group does not have any offsetting
arrangements in place, the application of the amendment does not have any material
impact on the consolidated financial statements.
AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual
Improvements 2009 – 2011 Cycle: Key amendments include the clarification of the
requirements of comparative information as well as interim reports and segment
information for total assets and total liabilities.
AASB 2012-9 Amendments to AASB 1048 arising from the withdrawal of Australian
Interpretation 1039: The amendments evidence the withdrawal of Australian
Interpretation 1039 Substantive Enactment of Major Tax Bills in Australia. The
adoption of this amending standard does not have any material impact on the
consolidated financial statements.
AASB 119 Employee Benefits: The revised standard distinguishes between short term
and other long term employee benefits based on whether the benefits are expected to
be settled wholly within 12 months after reporting date. The application of the revised
standard does not have any material impact on the consolidated financial statements.
New and revised Standards on consolidation, joint arrangements, associates and
disclosures: In August 2011, a package of five standards on consolidation, joint
arrangements, associates and disclosures was issued comprising AASB 10
Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12
Disclosure of Interests in Other Entities, AASB 127 (as revised in 2011) Separate
Financial Statements, and AASB 128 (as revised in 2011) Investments in Associates
and Joint Ventures. Subsequent to the issue of these standards, amendments to
AASB 10, AASB 11 and AASB 12 were issued to clarify certain transitional guidance
on the first-time application of the standards.
In the current year, the Group has applied for the first time AASB 10, AASB 11, AASB
12 and AASB 127 (as revised in 2011) together with the amendments to AASB 10,
AASB 11 and AASB 12 regarding transitional guidance. AASB 127 (as revised in
2011) is not applicable to the Group as it only relates to separate financial statements.
AASB 10 establishes a new control model that applies to all entities. The new control
model broadens the situations when an entity is considered to be controlled by
another entity and includes new guidance for applying the model to specific situations.
AASB 11 uses the principle of control in AASB 10 to define joint control. It further
removes the option to account for jointly controlled entities using proportionate
consolidation. The application of these standards have not had an impact on the
current composition of the Group.
AASB 12 is a new disclosure standard and is applicable to entities that have interests
in subsidiaries, joint arrangements and associates. The application of AASB 12 has
not materially impacted the disclosures presented in the consolidated financial
statements.
33 Premier Investments Limited
33
34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
(vii) AASB 13 Fair Value Measurements: The standard establishes a single source of
guidance for fair value measurements and disclosures about fair value measurements.
AASB 13 does not change when an entity is required to use fair value, but rather,
provides guidance on how to determine fair value when fair value is required or
permitted. AASB 13 also expands the disclosure requirements for all assets or
liabilities carried at fair value. The standard requires prospective application from 1
January 2013. In addition, specific transitional provisions were given to entities such
that they need not apply the disclosure requirements set out in the Standard in
comparative information provided for periods before the initial application of the
Standard. In accordance with these provisions, the Group has not made any new
disclosures required by AASB 13 for the comparative period ending 27 July 2013.
Other than the expanded disclosure requirements, AASB 13 does not have any
material impact on the amounts recognised in the consolidated financial statements.
The Group has elected to early adopt the following New Standards or amendments for this
financial year:
(i)
AASB 2013-3 Amendments to AASB 136 – Recoverable amount disclosures for Non-
Financial Assets: These amendments remove the unintended consequences of AASB
13 Fair Value Measurements on the disclosure required under AASB 136 Impairment
of Assets. In addition, these amendments require disclosure of the recoverable
amounts for the assets or cash-generating units for which impairment losses have
been recognised or reversed during the period. These amendments are effective
retrospectively for annual reporting periods beginning on or after 1 January 2014 with
earlier application permitted, provided AASB 13 is also applied. The Group has early
adopted these amendments to AASB 136 in the current period. Accordingly, these
amendments have been incorporated in the disclosures for non-financial assets in
Note 12. The amendments will continue to be applicable for future disclosures.
Adoption of these new and revised Standards did not have any effect on the financial position
or performance of the Group.
Annual Report 2014 34
34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
Accounting Standards and Interpretations issued but not yet effective
Accounting Standards and Interpretations issued but not yet effective
Recently issued or amended Australian Accounting Standards and Interpretations that have
been identified as those which may be relevant to the Group in future reporting periods, but
are not yet effective and have not been adopted by the Group for the reporting period ending
26 July 2014, are outlined in the table below:
Recently issued or amended Australian Accounting Standards and Interpretations that have
been identified as those which may be relevant to the Group in future reporting periods, but
are not yet effective and have not been adopted by the Group for the reporting period ending
26 July 2014, are outlined in the table below:
Title
Summary
Title
Summary
AASB 2012-3
Amendments
to Australian
Accounting
Standards –
Offsetting
Financial
Assets and
Financial
Liabilities
AASB 2012-3 adds application
guidance to AASB 132 Financial
Instruments: Presentation to address
inconsistencies identified in applying
some of the offsetting criteria of AASB
132, including clarifying the meaning of
“currently has a legally enforceable
right to set-off” and that some gross
settlement systems may be considered
equivalent to net settlement.
AASB 2012-3 adds application
guidance to AASB 132 Financial
Instruments: Presentation to address
inconsistencies identified in applying
some of the offsetting criteria of AASB
132, including clarifying the meaning of
“currently has a legally enforceable
right to set-off” and that some gross
settlement systems may be considered
equivalent to net settlement.
AASB 2012-3
Amendments
to Australian
Accounting
Standards –
Offsetting
Financial
Assets and
Financial
Liabilities
AASB 2013-4
Amendments
AASB 2013-4
to Australian
Amendments
Accounting
to Australian
Standards –
Accounting
Novation of
Standards –
Derivatives
Novation of
and
Derivatives
Continuation of
and
Hedge
Continuation of
Accounting
Hedge
Accounting
AASB 2013-4 amends AASB 139
Financial Instruments: Recognition and
AASB 2013-4 amends AASB 139
Measurement to permit the
Financial Instruments: Recognition and
continuation of hedge accounting in
Measurement to permit the
specified circumstances where a
continuation of hedge accounting in
derivative, which has been designated
specified circumstances where a
as a hedging instrument, is novated
derivative, which has been designated
from one counterparty to a central
as a hedging instrument, is novated
counterparty as a consequence of laws
from one counterparty to a central
or regulations.
counterparty as a consequence of laws
or regulations.
AASB 1031
Materiality
AASB 1031
Materiality
AASB 2013-9
Amendments
to Australian
Accounting
Standards –
Conceptual
Framework,
Materiality and
Financial
Instruments
AASB 2013-9
Amendments
to Australian
Accounting
Standards –
Conceptual
Framework,
Materiality and
Financial
Instruments
The revised AASB 1031 is an interim
standard that cross-references to other
The revised AASB 1031 is an interim
Standards and the Framework (issued
standard that cross-references to other
December 2013) that contain guidance
Standards and the Framework (issued
on materiality. AASB 1031 will be
December 2013) that contain guidance
withdrawn when references to AASB
on materiality. AASB 1031 will be
1031 in all Standards and
withdrawn when references to AASB
Interpretations have been removed.
1031 in all Standards and
Interpretations have been removed.
The standard contains 3 main parts
and makes amendments to a number
of other Standards and Interpretations:
Part A makes consequential
amendments arising from the
issuance of AASB CF 2013-1
Amendments to the Australian
Conceptual Framework.
Part B makes amendments to
The standard contains 3 main parts
and makes amendments to a number
of other Standards and Interpretations:
Part A makes consequential
amendments arising from the
issuance of AASB CF 2013-1
Amendments to the Australian
Conceptual Framework.
Part B makes amendments to
particular Australian Accounting
Standards to delete references to
particular Australian Accounting
AASB 1031 Materiality and also
Standards to delete references to
makes minor editorial amendments
AASB 1031 Materiality and also
to various other standards.
makes minor editorial amendments
Part C makes amendments to a
to various other standards.
number of Australian Accounting
Part C makes amendments to a
Standards, including incorporating
number of Australian Accounting
Chapter 6 Hedge Accounting into
Standards, including incorporating
AASB 9 Financial Instruments.
Chapter 6 Hedge Accounting into
AASB 9 Financial Instruments.
Impact on Group
financial report
Impact on Group
financial report
Effective for
annual reporting
Effective for
periods beginning
annual reporting
on or after
periods beginning
on or after
1 January 2014
1 January 2014
Expected to be
initially applied
by the Group
for the financial
year beginning
27 July 2014
Expected to be
initially applied
by the Group
for the financial
year beginning
27 July 2014
The Group has not yet
determined the
potential effects of the
standard.
The Group has not yet
determined the
potential effects of the
standard.
1 January 2014
27 July 2014
1 January 2014
27 July 2014
The Group does not
expect the amendment
to have a significant
impact on the current
reported results
position of the Group.
The Group does not
expect the amendment
to have a significant
impact on the current
reported results
position of the Group.
1 January 2014
27 July 2014
1 January 2014
27 July 2014
The Group has not yet
determined the
potential effects of the
standard.
The Group has not yet
determined the
potential effects of the
standard.
The application of Part
A does not have any
The application of Part
material impact on the
A does not have any
consolidated financial
material impact on the
statements.
consolidated financial
statements.
The application
dates of AASB
2013-9 for the
Group are as
follows:
The application
dates of AASB
2013-9 for the
Group are as
follows:
Part A: 28 July
The Group has not yet
2013
determined the
Part A: 28 July
potential effects of Part
2013
B or part C of the
amendment.
Part B: 27 July
2014
Part B: 27 July
2014
The Group has not yet
determined the
potential effects of Part
B or part C of the
amendment.
Part C: 26 July
2015
Part C: 26 July
2015
Part A: periods
ending on or after
20 December 2013
The application
dates of AASB
2013-9 are as
follows:
The application
dates of AASB
2013-9 are as
follows:
Part A: periods
ending on or after
20 December 2013
Part B: periods
beginning on or
after 1 January
2014
Part B: periods
beginning on or
after 1 January
2014
Part C: periods
beginning on or
after 1 January
2015
Part C: periods
beginning on or
after 1 January
2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Title
Summary
Effective for
Impact on Group
annual reporting
financial report
periods beginning
on or after
Expected to be
initially applied
by the Group
for the financial
year beginning
Interpretation
This interpretation confirms that a
1 January 2014
The Group has not yet
27 July 2014
21
Levies
liability to pay a levy is only recognised
when the activity that triggers the
payment occurs. Applying the going
concern assumption does not create a
constructive obligation.
determined the
potential effects of the
standard.
Annual
This Standard sets out amendments to
1 July 2014
The Group has not yet
27 July 2014
Improvements
International Financial Reporting
to IFRS 2010 –
Standards and the related bases for
2012 Cycle
conclusions and guidance made during
determined the
potential effects of the
standard.
the IASB Annual Improvements
Process. These amendments have not
yet been adopted by the AASB. Key
amendments, applicable to the Group,
include:
IFRS 2: Clarifies the definition of a
“vesting condition” and “market
condition”.
IFRS 8: Requires entities to
disclose factors used to identify the
entity’s reportable segments when
operating segments have been
aggregated.
IAS 16 and IAS 38: Clarifies that
the determination of accumulated
depreciation does not depend on
the selection of valuation technique
and that it is calculated as the
difference between gross and net
carrying amounts.
IAS 24: Defines a management
entity providing Key Management
Personnel (KMP) services as a
related party of the reporting entity.
Payments made to a management
entity in respect of KMP services
should be separately disclosed.
the IASB Annual Improvements
Process. These amendments have not
yet been adopted by the AASB. Key
amendments, applicable to the Group,
include:
IFRS 13: Clarifies that the portfolio
exception in par 52 of IFRS 13
applies to all contracts within the
scope of IAS 39 or IFRS 9.
Annual
This standard sets out amendments to
1 July 2014
The Group has not yet
27 July 2014
Improvements
International Financial Reporting
to IFRS 2011 –
Standards and the related bases for
2013 Cycle
conclusions and guidance made during
determined the
potential effects of the
standard.
35 Premier Investments Limited
35
35
36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Title
Title
Summary
Summary
Interpretation
21
Levies
Interpretation
21
Levies
Annual
Improvements
to IFRS 2010 –
2012 Cycle
Annual
Improvements
to IFRS 2010 –
2012 Cycle
Impact on Group
financial report
Impact on Group
financial report
Effective for
Effective for
annual reporting
annual reporting
periods beginning
periods beginning
on or after
on or after
1 January 2014
1 January 2014
Expected to be
initially applied
by the Group
for the financial
year beginning
27 July 2014
Expected to be
initially applied
by the Group
for the financial
year beginning
27 July 2014
The Group has not yet
The Group has not yet
determined the
determined the
potential effects of the
potential effects of the
standard.
standard.
1 July 2014
1 July 2014
This interpretation confirms that a
This interpretation confirms that a
liability to pay a levy is only recognised
liability to pay a levy is only recognised
when the activity that triggers the
when the activity that triggers the
payment occurs. Applying the going
payment occurs. Applying the going
concern assumption does not create a
concern assumption does not create a
constructive obligation.
constructive obligation.
This Standard sets out amendments to
This Standard sets out amendments to
International Financial Reporting
International Financial Reporting
Standards and the related bases for
Standards and the related bases for
conclusions and guidance made during
conclusions and guidance made during
the IASB Annual Improvements
the IASB Annual Improvements
Process. These amendments have not
Process. These amendments have not
yet been adopted by the AASB. Key
yet been adopted by the AASB. Key
amendments, applicable to the Group,
amendments, applicable to the Group,
include:
include:
IFRS 2: Clarifies the definition of a
IFRS 2: Clarifies the definition of a
“vesting condition” and “market
“vesting condition” and “market
condition”.
condition”.
IFRS 8: Requires entities to
IFRS 8: Requires entities to
disclose factors used to identify the
disclose factors used to identify the
entity’s reportable segments when
entity’s reportable segments when
operating segments have been
operating segments have been
aggregated.
aggregated.
IAS 16 and IAS 38: Clarifies that
IAS 16 and IAS 38: Clarifies that
the determination of accumulated
the determination of accumulated
depreciation does not depend on
depreciation does not depend on
the selection of valuation technique
the selection of valuation technique
and that it is calculated as the
and that it is calculated as the
difference between gross and net
difference between gross and net
carrying amounts.
carrying amounts.
IAS 24: Defines a management
IAS 24: Defines a management
entity providing Key Management
entity providing Key Management
Personnel (KMP) services as a
Personnel (KMP) services as a
related party of the reporting entity.
related party of the reporting entity.
Payments made to a management
Payments made to a management
entity in respect of KMP services
entity in respect of KMP services
should be separately disclosed.
should be separately disclosed.
This standard sets out amendments to
This standard sets out amendments to
International Financial Reporting
International Financial Reporting
Standards and the related bases for
Standards and the related bases for
conclusions and guidance made during
conclusions and guidance made during
the IASB Annual Improvements
the IASB Annual Improvements
Process. These amendments have not
Process. These amendments have not
yet been adopted by the AASB. Key
yet been adopted by the AASB. Key
amendments, applicable to the Group,
amendments, applicable to the Group,
include:
include:
IFRS 13: Clarifies that the portfolio
exception in par 52 of IFRS 13
applies to all contracts within the
scope of IAS 39 or IFRS 9.
IFRS 13: Clarifies that the portfolio
exception in par 52 of IFRS 13
applies to all contracts within the
scope of IAS 39 or IFRS 9.
Annual
Improvements
to IFRS 2011 –
2013 Cycle
Annual
Improvements
to IFRS 2011 –
2013 Cycle
1 July 2014
1 July 2014
The Group has not yet
The Group has not yet
determined the
determined the
potential effects of the
potential effects of the
standard.
standard.
27 July 2014
27 July 2014
The Group has not yet
The Group has not yet
determined the
determined the
potential effects of the
potential effects of the
standard.
standard.
27 July 2014
27 July 2014
Annual Report 2014 36
36
36
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impact on Group
financial report
Impact on Group
financial report
Effective for
Effective for
annual reporting
annual reporting
periods beginning
periods beginning
on or after
on or after
1 January 2018
1 January 2018
Expected to be
initially applied
by the Group
for the financial
year beginning
29 July 2018
Expected to be
initially applied
by the Group
for the financial
year beginning
29 July 2018
The Group has not yet
The Group has not yet
determined the
determined the
potential effects of the
potential effects of the
standard.
standard.
Retrospective
Retrospective
application is generally
application is generally
required.
required.
Title
Title
Summary
Summary
AASB 9
AASB 9
Financial
Financial
Instruments,
Instruments,
AASB 2009-11
AASB 2009-11
Amendments
Amendments
to Australian
to Australian
Accounting
Accounting
Standards
Standards
arising from
arising from
AASB 9, AASB
AASB 9, AASB
2010-7
2010-7
Amendments
Amendments
to Australian
to Australian
Accounting
Accounting
Standards
Standards
arising from
arising from
AASB 9, AASB
AASB 9, AASB
2012-6
2012-6
Amendments
Amendments
to Australian
to Australian
Accounting
Accounting
Standards –
Standards –
Mandatory
Mandatory
Effective Date
Effective Date
of AASB 9 and
of AASB 9 and
Transition
Transition
Disclosures
Disclosures
AASB 9 introduces new requirements
for classifying and measuring financial
assets. It was further amended by
AASB 2010-7 to reflect amendments to
the accounting for financial liabilities.
These measures improve and simplify
the approach for classification and
measurement of financial assets. The
main changes are described below:
Debt instruments will be classified
AASB 9 introduces new requirements
for classifying and measuring financial
assets. It was further amended by
AASB 2010-7 to reflect amendments to
the accounting for financial liabilities.
These measures improve and simplify
the approach for classification and
measurement of financial assets. The
main changes are described below:
Debt instruments will be classified
based on the objective of the entity’s
based on the objective of the entity’s
business model for managing the
business model for managing the
financial asset, and the
financial asset, and the
characteristics of the contractual
characteristics of the contractual
cash flows.
cash flows.
Allows an irrevocable election on
Allows an irrevocable election on
initial recognition to present gains
initial recognition to present gains
and losses on investments in equity
and losses on investments in equity
instruments that are not held for
instruments that are not held for
trading in other comprehensive
trading in other comprehensive
income. Dividends in respect of
income. Dividends in respect of
these investments that are a return
these investments that are a return
on investment can be recognised in
on investment can be recognised in
profit or loss and there is no
profit or loss and there is no
impairment or recycling on disposal
impairment or recycling on disposal
of the instrument.
of the instrument.
Financial assets can be designated
Financial assets can be designated
and measured at fair value through
and measured at fair value through
profit or loss at initial recognition if
profit or loss at initial recognition if
doing so eliminates or significantly
doing so eliminates or significantly
reduces a measurement or
reduces a measurement or
recognition inconsistency that would
recognition inconsistency that would
arise from measuring assets or
arise from measuring assets or
liabilities, or recognising the gains
liabilities, or recognising the gains
and losses on them, on different
and losses on them, on different
bases.
bases.
New requirements apply where an
New requirements apply where an
entity chooses to measure a liability
entity chooses to measure a liability
at fair value through profit or loss. In
at fair value through profit or loss. In
these cases, the portion of the
these cases, the portion of the
change in fair value related to
change in fair value related to
changes in the entity’s own credit
changes in the entity’s own credit
risk is presented in other
risk is presented in other
comprehensive income rather than
comprehensive income rather than
within profit or loss.
within profit or loss.
The AASB issued a revised version of
The AASB issued a revised version of
AASB 9 (AASB 2013-9) during
AASB 9 (AASB 2013-9) during
December 2013. The revised standard
December 2013. The revised standard
incorporates three primary changes:
incorporates three primary changes:
New hedge accounting
New hedge accounting
requirements including changes to
requirements including changes to
hedge effectiveness testing,
hedge effectiveness testing,
treatment of hedging costs, risk
treatment of hedging costs, risk
components that can be hedged
components that can be hedged
and disclosures.
and disclosures.
Entities may elect to apply only the
Entities may elect to apply only the
accounting for gains and losses
accounting for gains and losses
from own credit risk without
from own credit risk without
applying the other requirements of
applying the other requirements of
AASB 9 at the same time.
AASB 9 at the same time.
In February 2014, the IASB
In February 2014, the IASB
tentatively decided that the
tentatively decided that the
mandatory effective date for AASB
mandatory effective date for AASB
9 will be 1 January 2018.
9 will be 1 January 2018.
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
Title
Title
Summary
Summary
Effective for
Effective for
annual reporting
annual reporting
periods beginning
periods beginning
on or after
on or after
Impact on Group
Impact on Group
financial report
financial report
Expected to be
Expected to be
initially applied
initially applied
by the Group
by the Group
for the financial
for the financial
year beginning
year beginning
1 January 2017
1 January 2017
The Group has not yet
The Group has not yet
30 July 2017
30 July 2017
IFRS 15
IFRS 15
Revenue from
Revenue from
Contracts with
Contracts with
Customers
Customers
IFRS 15 establishes principles for
IFRS 15 establishes principles for
reporting useful information to users of
reporting useful information to users of
financial statements about the nature,
financial statements about the nature,
timing and uncertainty of revenue and
timing and uncertainty of revenue and
determined the
determined the
potential effects of the
potential effects of the
standard.
standard.
cash flows arising from an entity’s
cash flows arising from an entity’s
contracts with customers. The core
contracts with customers. The core
principle of IFRS 15 is that an entity
principle of IFRS 15 is that an entity
recognises revenue to depict the
recognises revenue to depict the
transfer of promised goods or services
transfer of promised goods or services
to customers in an amount that reflects
to customers in an amount that reflects
the consideration to which the entity
the consideration to which the entity
expects to be entitled in exchange for
expects to be entitled in exchange for
those goods or services. IFRS 15
those goods or services. IFRS 15
supersedes IAS 18 Revenue and
supersedes IAS 18 Revenue and
IFRIC 13 Customer Loyalty
IFRIC 13 Customer Loyalty
Programmes.
Programmes.
(d)
(d)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Group’s consolidated financial statements requires management to
The preparation of the Group’s consolidated financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts in the
make judgements, estimates and assumptions that affect the reported amounts in the
financial statements. Management continually evaluates its judgements and estimates in
financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases
its judgement and estimates on historical experience and on other various factors it believes
its judgement and estimates on historical experience and on other various factors it believes
to be reasonable under the circumstances, the result of which form the basis of the carrying
to be reasonable under the circumstances, the result of which form the basis of the carrying
values of assets and liabilities that are not readily apparent from other sources.
values of assets and liabilities that are not readily apparent from other sources.
Management has identified the following critical accounting policies for which significant
Management has identified the following critical accounting policies for which significant
judgements, estimates and assumptions are made. Actual results may differ from those
judgements, estimates and assumptions are made. Actual results may differ from those
estimated under different assumptions and conditions and may materially affect financial
estimated under different assumptions and conditions and may materially affect financial
results or the financial position reported in future periods.
results or the financial position reported in future periods.
Further details of the nature of these assumptions and conditions may be found in the
Further details of the nature of these assumptions and conditions may be found in the
relevant notes to the financial statements.
relevant notes to the financial statements.
(i)
Significant accounting judgements
Significant accounting judgements
(i)
Recovery of deferred tax assets
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences as
Deferred tax assets are recognised for deductible temporary differences as
management considers that is it probable that future taxable profits will be available to
management considers that is it probable that future taxable profits will be available to
utilise those temporary differences. Significant management judgement is required to
utilise those temporary differences. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the
determine the amount of deferred tax assets that can be recognised, based upon the
likely timing and the level of future taxable profits over the next two years together with
likely timing and the level of future taxable profits over the next two years together with
future tax planning strategies.
future tax planning strategies.
Classification of assets and liabilities as held for sale
Classification of assets and liabilities as held for sale
The Group classifies assets and liabilities as held for sale when the carrying amount
The Group classifies assets and liabilities as held for sale when the carrying amount
will be recovered through a sale transaction. The assets and liabilities must be
will be recovered through a sale transaction. The assets and liabilities must be
available for immediate sale and the Group must be committed to selling the asset
available for immediate sale and the Group must be committed to selling the asset
either through entering into a contractual sale agreement or through the activation and
either through entering into a contractual sale agreement or through the activation and
commitment to a program to locate a buyer and dispose of the assets and liabilities.
commitment to a program to locate a buyer and dispose of the assets and liabilities.
37 Premier Investments Limited
37
37
38
38
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
Impact on Group
financial report
Impact on Group
financial report
Effective for
Effective for
annual reporting
annual reporting
periods beginning
periods beginning
on or after
on or after
1 January 2017
1 January 2017
Expected to be
initially applied
by the Group
for the financial
year beginning
30 July 2017
Expected to be
initially applied
by the Group
for the financial
year beginning
30 July 2017
The Group has not yet
The Group has not yet
determined the
determined the
potential effects of the
potential effects of the
standard.
standard.
Title
Title
Summary
Summary
IFRS 15
Revenue from
Contracts with
Customers
IFRS 15
Revenue from
Contracts with
Customers
IFRS 15 establishes principles for
reporting useful information to users of
financial statements about the nature,
timing and uncertainty of revenue and
cash flows arising from an entity’s
contracts with customers. The core
principle of IFRS 15 is that an entity
recognises revenue to depict the
transfer of promised goods or services
to customers in an amount that reflects
the consideration to which the entity
expects to be entitled in exchange for
those goods or services. IFRS 15
supersedes IAS 18 Revenue and
IFRIC 13 Customer Loyalty
Programmes.
IFRS 15 establishes principles for
reporting useful information to users of
financial statements about the nature,
timing and uncertainty of revenue and
cash flows arising from an entity’s
contracts with customers. The core
principle of IFRS 15 is that an entity
recognises revenue to depict the
transfer of promised goods or services
to customers in an amount that reflects
the consideration to which the entity
expects to be entitled in exchange for
those goods or services. IFRS 15
supersedes IAS 18 Revenue and
IFRIC 13 Customer Loyalty
Programmes.
(d)
(d)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Group’s consolidated financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts in the
financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases
its judgement and estimates on historical experience and on other various factors it believes
to be reasonable under the circumstances, the result of which form the basis of the carrying
values of assets and liabilities that are not readily apparent from other sources.
The preparation of the Group’s consolidated financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts in the
financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases
its judgement and estimates on historical experience and on other various factors it believes
to be reasonable under the circumstances, the result of which form the basis of the carrying
values of assets and liabilities that are not readily apparent from other sources.
Management has identified the following critical accounting policies for which significant
judgements, estimates and assumptions are made. Actual results may differ from those
estimated under different assumptions and conditions and may materially affect financial
results or the financial position reported in future periods.
Management has identified the following critical accounting policies for which significant
judgements, estimates and assumptions are made. Actual results may differ from those
estimated under different assumptions and conditions and may materially affect financial
results or the financial position reported in future periods.
Further details of the nature of these assumptions and conditions may be found in the
relevant notes to the financial statements.
Further details of the nature of these assumptions and conditions may be found in the
relevant notes to the financial statements.
(i)
Significant accounting judgements
(i)
Significant accounting judgements
Recovery of deferred tax assets
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences as
management considers that is it probable that future taxable profits will be available to
utilise those temporary differences. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the
likely timing and the level of future taxable profits over the next two years together with
future tax planning strategies.
Deferred tax assets are recognised for deductible temporary differences as
management considers that is it probable that future taxable profits will be available to
utilise those temporary differences. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the
likely timing and the level of future taxable profits over the next two years together with
future tax planning strategies.
Classification of assets and liabilities as held for sale
Classification of assets and liabilities as held for sale
The Group classifies assets and liabilities as held for sale when the carrying amount
will be recovered through a sale transaction. The assets and liabilities must be
available for immediate sale and the Group must be committed to selling the asset
either through entering into a contractual sale agreement or through the activation and
commitment to a program to locate a buyer and dispose of the assets and liabilities.
The Group classifies assets and liabilities as held for sale when the carrying amount
will be recovered through a sale transaction. The assets and liabilities must be
available for immediate sale and the Group must be committed to selling the asset
either through entering into a contractual sale agreement or through the activation and
commitment to a program to locate a buyer and dispose of the assets and liabilities.
Annual Report 2014 38
38
38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(CONTINUED)
(d)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(CONTINUED)
Impairment of non-financial assets other than goodwill and indefinite life intangibles
Share-based payment transactions
The Group assesses impairment of all assets at each reporting date by evaluating
conditions specific to the Group and to the particular asset that may lead to
impairment. These include product and manufacturing performance, technology,
economic and political environments and future product expectations. If an impairment
trigger exists, the recoverable amount of the asset is determined. Given the current
uncertain economic environment, management considered that the indicators of
impairment were significant enough and as such these assets have been tested for
impairment in this financial period.
Taxation
The Group's accounting policy for taxation requires management's judgement as to the
types of arrangements considered to be a tax on income in contrast to an operating
cost. Judgement is also required in assessing whether deferred tax assets and certain
deferred tax liabilities are recognised in the statement of financial position. Deferred
tax assets, including those arising from un-recouped tax losses, capital losses and
temporary differences, are recognised only where it is considered more likely than not
that they will be recovered, which is dependent on the generation of sufficient future
taxable profits. Deferred tax liabilities arising from temporary differences in
investments, caused principally by retained earnings held in foreign tax jurisdictions,
are recognised unless repatriation of retained earnings can be controlled and are not
expected to occur in the foreseeable future.
Assumptions about the generation of future taxable profits and repatriation of retained
earnings depend on management's estimates of future cash flows. These depend on
estimates of future production and sales volumes, operating costs, restoration costs,
capital expenditure, dividends and other capital management transactions.
Judgements are also required about the application of income tax legislation.
These judgements and assumptions 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 and deferred tax liabilities recognised on the
statement of financial position and the amount of other tax losses and temporary
differences not yet recognised. In such circumstances, some or all of the carrying
amounts of recognised deferred tax assets and liabilities may require adjustment,
resulting in a corresponding credit or charge to the statement of comprehensive
income.
(ii)
Significant accounting estimates and assumptions
Estimated impairment of goodwill and intangibles with indefinite useful lives
The Group tests whether goodwill and intangibles with indefinite useful lives have
suffered any impairment annually, in accordance with the accounting policies stated in
note 2(n) and note 2(o). The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations. These calculations require the use of
assumptions. Refer to note 12 for details of these assumptions and the potential
impact of changes to the assumptions.
The Group measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which they are
granted. The fair value is determined at grant date using the Black-Scholes Model and
taking into account the terms and conditions upon which the instruments were granted.
The related assumptions are detailed in note 27.
The accounting estimates and assumptions relating to equity-settled share-based
payments would have no impact on the carrying amounts of assets and liabilities within
the next annual reporting period but may impact expenses and equity.
Estimation of useful lives of assets
The estimation of the useful lives of assets has been based on historical experience as
well as manufacturers' warranties (for plant and equipment), lease terms (for leased
equipment) and turnover policies (for motor vehicles). In addition, the condition of the
assets is assessed at least once per year and considered against the remaining useful
life. Adjustments to useful lives are made when considered necessary.
Depreciation charges are included in note 5.
Estimated gift card redemption rates
The key assumption in measuring the liability for gift cards and vouchers is the
expected redemption rates by customers. Expected redemption rates are reviewed
annually, and adjustments are made to the expected redemption rates when
considered necessary.
Onerous lease provisions
The Group provides for onerous contracts when the expected benefits to be derived by
the Group from a contract are lower than the unavoidable cost of meeting its
obligations under the contract. The Group considers whether a lease is potentially
onerous by reference to the profitability and projected profitability of a store, and
whether the store has been identified for closure prior to lease expiry. The Group
estimates the present value of the future lease payments that the Group is presently
obligated to make under non-cancellable onerous lease contracts.
Supply chain transformation provisions
The Group’s consolidation process of its Australian Distribution Centres into one
national distribution centre in Truganina, Victoria have resulted in a supply chain
transformation provision in which judgements and estimations were made. The Group
follows the guidance of AASB 137 Provisions, Contingent Liabilities and Contingent
Assets to determine whether a provision is required. A restructuring provision is
recognised when a detailed formal plan about the business or part of the business
concerned, the location and number of employees affected, a detailed estimate of the
associated costs, and appropriate time lines have been established. The people
affected have a valid expectation that the restructuring is being carried out or the
implementation has been initiated already.
39 Premier Investments Limited
39
40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(CONTINUED)
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which they are
granted. The fair value is determined at grant date using the Black-Scholes Model and
taking into account the terms and conditions upon which the instruments were granted.
The related assumptions are detailed in note 27.
The accounting estimates and assumptions relating to equity-settled share-based
payments would have no impact on the carrying amounts of assets and liabilities within
the next annual reporting period but may impact expenses and equity.
Estimation of useful lives of assets
The estimation of the useful lives of assets has been based on historical experience as
well as manufacturers' warranties (for plant and equipment), lease terms (for leased
equipment) and turnover policies (for motor vehicles). In addition, the condition of the
assets is assessed at least once per year and considered against the remaining useful
life. Adjustments to useful lives are made when considered necessary.
Depreciation charges are included in note 5.
Estimated gift card redemption rates
The key assumption in measuring the liability for gift cards and vouchers is the
expected redemption rates by customers. Expected redemption rates are reviewed
annually, and adjustments are made to the expected redemption rates when
considered necessary.
Onerous lease provisions
The Group provides for onerous contracts when the expected benefits to be derived by
the Group from a contract are lower than the unavoidable cost of meeting its
obligations under the contract. The Group considers whether a lease is potentially
onerous by reference to the profitability and projected profitability of a store, and
whether the store has been identified for closure prior to lease expiry. The Group
estimates the present value of the future lease payments that the Group is presently
obligated to make under non-cancellable onerous lease contracts.
Supply chain transformation provisions
The Group’s consolidation process of its Australian Distribution Centres into one
national distribution centre in Truganina, Victoria have resulted in a supply chain
transformation provision in which judgements and estimations were made. The Group
follows the guidance of AASB 137 Provisions, Contingent Liabilities and Contingent
Assets to determine whether a provision is required. A restructuring provision is
recognised when a detailed formal plan about the business or part of the business
concerned, the location and number of employees affected, a detailed estimate of the
associated costs, and appropriate time lines have been established. The people
affected have a valid expectation that the restructuring is being carried out or the
implementation has been initiated already.
Annual Report 2014 40
40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(CONTINUED)
(e)
BASIS OF CONSOLIDATION (CONTINUED)
Fair value of financial instruments
Some of the Group’s assets and liabilities are measured at fair value for financial
reporting purposes. In estimating the fair value of an asset or a liability, the Group uses
market-observable data to the extent possible, but where this is not feasible, a degree
of judgement is required in establishing fair values. The fair value disclosures are
detailed in note 3.
(e)
BASIS OF CONSOLIDATION
The consolidated financial statements are those of the consolidated entity, comprising
Premier Investments Limited (the parent entity) and its subsidiaries ('the Group') as at the end
of each financial year. Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the ability to affect those
returns through its power over the investee. Specifically, the Group controls an investee if and
only if the Group has:
-
-
-
Power over the investee (i.e. existing rights that give it the current ability to direct the
relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the
Group considers all relevant facts and circumstances in assessing whether it has power over
an investee, including:
-
-
-
The contractual arrangement with the other vote holders of the investee;
Rights arising from other contractual arrangements;
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control. Consolidation
of a subsidiary begins when the Group obtains control over the subsidiary and ceases when
the Group loses control of the subsidiary.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the
year are included in the statement of comprehensive income from the date the Group gains
control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the equity
holders of the parent of the Group and to the non-controlling interest, even if this results in the
non-controlling interests having a deficit balance. When necessary, adjustments are made to
the financial statements of subsidiaries to bring their accounting policies into line with the
Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of the Group are eliminated in full
on consolidation.
(f)
INVESTMENT IN ASSOCIATES
Investments in subsidiaries held by Premier Investments Limited are accounted for at cost in
the separate financial statements of the parent entity less any impairment losses. Dividends
received from subsidiaries are recorded as a component of other revenues in the separate
income statement of the parent entity, and do not impact the recorded cost of the investment.
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as
an equity transaction. If the Group loses control over a subsidiary, it:
-
-
-
-
-
-
De-recognises the assets (including goodwill) and liabilities of the subsidiary;
De-recognises the carrying amount of any non-controlling interests;
De-recognises the cumulative translation differences recorded in equity;
Recognises the fair value of the consideration received and of any investment retained,
Recognises the surplus or deficit in profit or loss;
Reclassifies the parent’s share of components previously recognised in other
comprehensive income to profit or loss or retained earnings, as appropriate, as would be
required if the Group had directly disposed of the related assets or liabilities.
An associate is an entity over which the Group has significant influence. Significant influence
is the power to participate in the financial and operating policy decisions of the investee, but is
not control or joint control over those policies.
The considerations made in determining significant influence are similar to those necessary to
determine control over subsidiaries.
The Group’s investments in its associates are accounted for using the equity method of
accounting in the consolidated financial statements.
Under the equity method, investments in the associates are initially recognised at deemed
cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s
share of net assets of the associate since the acquisition date. Goodwill relating to an
associate is included in the carrying amount of the investment and is not amortised. After
application of the equity method, the Group determines whether it is necessary to recognise
any impairment loss with respect to the Group’s net investment in the associate.
The Group’s share of profit or loss of an associate is recognised in the statement of
comprehensive income and represents profit or loss after tax and non-controlling interest in
the subsidiaries of the associate. When there has been a change recognised directly in the
equity of the associate, the Group recognises its share of any change, when applicable, in the
statement of changes in equity. Dividends receivable from the associate is recognised in the
parent entity’s statement of comprehensive income, while in the consolidated financial
statements they reduce the carrying amount of the investment.
When the Group’s share of losses in an associate equals or exceeds its interest in the
associate, including any unsecured long-term receivables and loans, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate.
41 Premier Investments Limited
41
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
BASIS OF CONSOLIDATION (CONTINUED)
Investments in subsidiaries held by Premier Investments Limited are accounted for at cost in
the separate financial statements of the parent entity less any impairment losses. Dividends
received from subsidiaries are recorded as a component of other revenues in the separate
income statement of the parent entity, and do not impact the recorded cost of the investment.
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as
an equity transaction. If the Group loses control over a subsidiary, it:
-
-
-
-
-
-
De-recognises the assets (including goodwill) and liabilities of the subsidiary;
De-recognises the carrying amount of any non-controlling interests;
De-recognises the cumulative translation differences recorded in equity;
Recognises the fair value of the consideration received and of any investment retained,
Recognises the surplus or deficit in profit or loss;
Reclassifies the parent’s share of components previously recognised in other
comprehensive income to profit or loss or retained earnings, as appropriate, as would be
required if the Group had directly disposed of the related assets or liabilities.
(f)
INVESTMENT IN ASSOCIATES
An associate is an entity over which the Group has significant influence. Significant influence
is the power to participate in the financial and operating policy decisions of the investee, but is
not control or joint control over those policies.
The considerations made in determining significant influence are similar to those necessary to
determine control over subsidiaries.
The Group’s investments in its associates are accounted for using the equity method of
accounting in the consolidated financial statements.
Under the equity method, investments in the associates are initially recognised at deemed
cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s
share of net assets of the associate since the acquisition date. Goodwill relating to an
associate is included in the carrying amount of the investment and is not amortised. After
application of the equity method, the Group determines whether it is necessary to recognise
any impairment loss with respect to the Group’s net investment in the associate.
The Group’s share of profit or loss of an associate is recognised in the statement of
comprehensive income and represents profit or loss after tax and non-controlling interest in
the subsidiaries of the associate. When there has been a change recognised directly in the
equity of the associate, the Group recognises its share of any change, when applicable, in the
statement of changes in equity. Dividends receivable from the associate is recognised in the
parent entity’s statement of comprehensive income, while in the consolidated financial
statements they reduce the carrying amount of the investment.
When the Group’s share of losses in an associate equals or exceeds its interest in the
associate, including any unsecured long-term receivables and loans, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate.
Annual Report 2014 42
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f)
INVESTMENT IN ASSOCIATE (CONTINUED)
After application of the equity method, the Group determines whether it is necessary to
recognise an impairment loss on its investment in associates. At each reporting period, the
Group determines whether there is objective evidence that the investment in associate is
impaired. If there is such evidence, the Group calculates the amount of impairment as the
difference between the recoverable amount of the associate and its carrying value, then
recognises the loss in the statement of comprehensive income.
Upon loss of significant influence over the associate, the Group measures and recognises
any retained investment at its fair value. Any differences between the carrying amount of the
associate upon loss of significant influence and the fair value of the retained investment and
proceeds from disposal is recognised in profit or loss.
The reporting date of the associates are currently 30 June and the associates’ accounting
policies materially conform to those used by the Group for like transactions and events in
similar circumstances.
(g)
BUSINESS COMBINATIONS
Business combinations are accounted for using the acquisition method. The consideration
transferred in a business combination shall be measured at fair value, which shall be
calculated as the sum of the acquisition-date fair values of the assets transferred by the
acquirer, the liabilities incurred by the acquirer to former owners of the acquiree and the equity
issued by the acquirer, and the amount of any non-controlling interest in the acquiree either at
fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-
related costs are expensed as incurred.
When the Group acquires a business, it assesses the financial assets and liabilities assumed
for appropriate classification and designation in accordance with the contractual terms,
economic conditions, the Group’s operating and accounting policies and other pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in
host contracts by the acquiree. If the business combination is achieved in stages, the
acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is
remeasured at fair value as at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value
at the acquisition date. Subsequent changes to the fair value of the contingent consideration
which is deemed to be an asset or liability will be recognised in accordance with AASB 139
either in profit or loss or in other comprehensive income. If the contingent consideration is to
be classified as equity, it should not be remeasured until it is finally settled within equity.
(h)
CURRENT VERSUS NON-CURRENT CLASSIFICATION
The Group presents assets and liabilities in the statement of financial position based on
current/non-current classification. An asset is current when it is:
-
-
Expected to be realised or intended to be sold in the normal operating cycle, or primarily
held for the purpose of trading, or is expected to be realised within twelve months after
the reporting period, or;
Cash and cash equivalents unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period.
(h)
CURRENT VERSUS NON-CURRENT CLASSIFICATION (CONTINUED)
All other assets are classified as non-current. A liability is current when it is:
-
-
Expected to be settled in the normal operating cycle, or primarily held for the purpose of
trading, or is due to be settled within twelve months after the reporting period, or;
There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period.
All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified
as non-current.
(i)
OPERATING SEGMENTS
(j)
FOREIGN CURRENCY TRANSLATION
The Group determines and presents operating segments based on the information that is
internally provided and used by the chief operating decision maker in assessing the
performance of the entity and in determining the allocation of resources.
An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that relate
to transactions with any of the Group’s other components. All operating segments’ operating
results are regularly reviewed by the chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance, and for which discreet
financial information is available.
Segment results that are reported to the chief operating decision maker include items directly
attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly of corporate assets, head office expenses and income tax
assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property,
plant and equipment, and intangible assets other than goodwill.
Both the functional and presentation currency of Premier Investments Limited and its
Australian subsidiaries is in Australian dollars.
Transactions in foreign currencies are initially recorded in the functional currency by applying
the exchange rates ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange ruling at the
reporting date. All exchange differences in the consolidated financial report are taken to the
statement of comprehensive income.
The New Zealand subsidiaries’ functional currency is New Zealand Dollars. The Singapore
subsidiaries’ functional currency is Singapore Dollars. The United Kingdom subsidiaries’
functional currency is Pound Sterling. Just Kor Fashion Group (Pty) Ltd, the South African
joint venture, has a functional currency of South African Rand.
As at the reporting date the assets and liabilities of the overseas subsidiary are translated into
the presentation currency of Premier Investments Limited at the rate of exchange ruling at the
reporting date and the statements of comprehensive incomes are translated at the weighted
average exchange rates for the period.
Exchange variations resulting from the translation are recognised in the foreign currency
translation reserve in equity.
43 Premier Investments Limited
43
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h)
CURRENT VERSUS NON-CURRENT CLASSIFICATION (CONTINUED)
All other assets are classified as non-current. A liability is current when it is:
-
-
Expected to be settled in the normal operating cycle, or primarily held for the purpose of
trading, or is due to be settled within twelve months after the reporting period, or;
There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period.
All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified
as non-current.
(i)
OPERATING SEGMENTS
The Group determines and presents operating segments based on the information that is
internally provided and used by the chief operating decision maker in assessing the
performance of the entity and in determining the allocation of resources.
An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that relate
to transactions with any of the Group’s other components. All operating segments’ operating
results are regularly reviewed by the chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its performance, and for which discreet
financial information is available.
Segment results that are reported to the chief operating decision maker include items directly
attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly of corporate assets, head office expenses and income tax
assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property,
plant and equipment, and intangible assets other than goodwill.
(j)
FOREIGN CURRENCY TRANSLATION
Both the functional and presentation currency of Premier Investments Limited and its
Australian subsidiaries is in Australian dollars.
Transactions in foreign currencies are initially recorded in the functional currency by applying
the exchange rates ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange ruling at the
reporting date. All exchange differences in the consolidated financial report are taken to the
statement of comprehensive income.
The New Zealand subsidiaries’ functional currency is New Zealand Dollars. The Singapore
subsidiaries’ functional currency is Singapore Dollars. The United Kingdom subsidiaries’
functional currency is Pound Sterling. Just Kor Fashion Group (Pty) Ltd, the South African
joint venture, has a functional currency of South African Rand.
As at the reporting date the assets and liabilities of the overseas subsidiary are translated into
the presentation currency of Premier Investments Limited at the rate of exchange ruling at the
reporting date and the statements of comprehensive incomes are translated at the weighted
average exchange rates for the period.
Exchange variations resulting from the translation are recognised in the foreign currency
translation reserve in equity.
Annual Report 2014 44
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k)
CASH AND CASH EQUIVALENTS
(n)
GOODWILL
Cash and cash equivalents in the statement of financial position comprise cash on hand and
in banks, money market investments readily convertible to cash within two working days and
short-term deposits with an original maturity 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.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash
and cash equivalents as defined above, net of outstanding bank overdrafts.
(l)
INVENTORIES
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and conditions are accounted
for as follows:
-
-
Raw materials - purchase cost on a first-in, first-out basis;
Impairment losses recognised for goodwill are not subsequently reversed.
Finished goods and work-in-progress - purchase cost plus a proportion of the purchasing
department, freight, handling and warehouse costs incurred to deliver the goods to the
point of sale.
(o)
INTANGIBLE ASSETS (excluding goodwill)
Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated direct costs necessary to make the sale.
(m)
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and equipment is stated at historical cost less accumulated depreciation and
any accumulated impairment losses. Depreciation is calculated on a straight-line basis over
the estimated useful life of the asset as follows:
-
-
-
-
Buildings 40 years
Store plant and equipment 3 to 8 years
Leased plant and equipment 2 to 5 years
Other plant and equipment 2 to 20 years
Freehold land is not depreciated.
The carrying values of property, plant and equipment are reviewed for impairment annually
for events or changes in circumstances that may indicate the carrying value may not be
recoverable. For an asset that does not generate largely independent cash inflows, the
recoverable amount is determined for the cash-generating unit to which the asset belongs.
If an indication of impairment exists, and where the carrying values exceed the estimated
recoverable amount, the assets or cash-generating units are written down to their recoverable
amount.
The recoverable amount of property, plant and equipment is the greater of fair value less
costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are
discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the assets.
Goodwill acquired in a business combination is initially measured at cost, being the excess of
the cost of the business combination over the Group’s interest in the net fair value of the
acquiree’s identifiable assets, liabilities and contingent liabilities. Following initial recognition,
goodwill is measured at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. For the purposes of
assessing impairment, goodwill acquired in a business combination is, from the date of
acquisition, allocated to each of the Group’s cash-generating units that are expected to
benefit from the synergies of the combination. Impairment is determined by assessing the
recoverable amount of the cash-generating unit to which the goodwill relates.
Where the recoverable amount of the cash-generating unit is less than the carrying amount,
an impairment loss is recognised.
Intangible assets acquired separately or in a business combination are initially measured at
cost. The cost of an intangible asset acquired in a business combination is its fair value as at
the date of acquisition. Following initial recognition, intangible assets are carried at cost less
any accumulated amortisation and any accumulated impairment losses.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets are tested for impairment where an indicator of impairment exists, and in the
case of intangibles with indefinite lives impairment is tested annually or where an indicator of
impairment exists, either individually or at the cash-generating unit level.
Where the carrying amount of an intangible asset exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount. Recoverable amount is
the greater of fair value less costs to sell and value-in-use.
The recoverable amount is determined for an individual asset, unless the asset’s value-in-use
cannot be estimated to be close to its fair value, less costs to sell and it does not generate
cash inflows that are largely independent of those from other assets or groups of assets, in
which case, the recoverable amount is determined for the cash-generating unit to which the
asset belongs.
In assessing value-in-use, the estimated future cash flows are discounted to their present
value using a post-tax discount rate that reflects current market assessments of the time-
value of money and the risks specific to the asset.
45 Premier Investments Limited
45
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n)
GOODWILL
Goodwill acquired in a business combination is initially measured at cost, being the excess of
the cost of the business combination over the Group’s interest in the net fair value of the
acquiree’s identifiable assets, liabilities and contingent liabilities. Following initial recognition,
goodwill is measured at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. For the purposes of
assessing impairment, goodwill acquired in a business combination is, from the date of
acquisition, allocated to each of the Group’s cash-generating units that are expected to
benefit from the synergies of the combination. Impairment is determined by assessing the
recoverable amount of the cash-generating unit to which the goodwill relates.
Where the recoverable amount of the cash-generating unit is less than the carrying amount,
an impairment loss is recognised.
Impairment losses recognised for goodwill are not subsequently reversed.
(o)
INTANGIBLE ASSETS (excluding goodwill)
Intangible assets acquired separately or in a business combination are initially measured at
cost. The cost of an intangible asset acquired in a business combination is its fair value as at
the date of acquisition. Following initial recognition, intangible assets are carried at cost less
any accumulated amortisation and any accumulated impairment losses.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets are tested for impairment where an indicator of impairment exists, and in the
case of intangibles with indefinite lives impairment is tested annually or where an indicator of
impairment exists, either individually or at the cash-generating unit level.
Where the carrying amount of an intangible asset exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount. Recoverable amount is
the greater of fair value less costs to sell and value-in-use.
The recoverable amount is determined for an individual asset, unless the asset’s value-in-use
cannot be estimated to be close to its fair value, less costs to sell and it does not generate
cash inflows that are largely independent of those from other assets or groups of assets, in
which case, the recoverable amount is determined for the cash-generating unit to which the
asset belongs.
In assessing value-in-use, the estimated future cash flows are discounted to their present
value using a post-tax discount rate that reflects current market assessments of the time-
value of money and the risks specific to the asset.
Annual Report 2014 46
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o)
INTANGIBLE ASSETS (excluding goodwill) (CONTINUED)
(q)
OTHER FINANCIAL LIABILITIES
A summary of the policies applied to the Group’s intangible assets is as follows:
Brands
Premiums paid on
acquisition of
leaseholds
Trademarks &
Licences
Useful life
Indefinite
Finite
Finite
Method used
Internally
generated/acquired
Impairment
test/recoverable
amount testing
Not amortised or
revalued
Amortised over the
term of the lease
Amortised over the
estimated useful life
Acquired
Acquired
Acquired
Annually; for
indicators of
impairment
Amortisation method
reviewed at each
financial year end;
reviewed annually
for indicators of
impairment
Amortisation method
reviewed at each
financial year end;
reviewed annually
for indicators of
impairment
(p)
OTHER FINANCIAL ASSETS
(iii) Offsetting of financial instruments
A financial instrument is any contract that give rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
All financial assets are recognised initially at fair value plus, in the case of financial assets not
recorded at fair value through profit or loss, transaction costs that are attributable to the
acquisition of the financial asset.
(i)
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. After initial measurement, such
assets are recognised at cost and amortised using the effective interest method. Gains
and losses are recognised in profit or loss when the loans and receivables are
derecognised or impaired.
(ii)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for
trading and financial assets designated upon initial recognition at fair value through
profit or loss. Financial assets are classified as held for trading if they are acquired for
the purpose of selling or repurchasing in the near term. Derivatives, including
separated embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments as defined by AASB 139.
Financial assets at fair value through profit or loss are carried in the statement of
financial position at fair value with net changes in fair value recognised in profit or loss.
All financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.
(i)
Trade and other payables
Liabilities for trade creditors and other amounts are recognised and carried at original
invoice cost, which is the fair value of the consideration to be paid in the future for
goods and services received whether or not billed to the consolidated entity.
Trade liabilities are normally settled on terms of between 7 and 90 days.
(ii)
Loans and borrowings
All loans, borrowings and interest-bearing payables are initially recognised at the fair
value of the consideration received net of issue costs associated with the borrowing.
After initial recognition, such items are subsequently measured at amortised cost using
the effective interest method. Amortised cost is calculated by taking into account any
issue costs, and any discount or premium on settlement.
Fees paid on the establishment of loan facilities are amortised over the life of the
facility. On-going borrowing costs are expensed as incurred.
Financial assets and financial liabilities are offset and the net amount is reported in the
consolidated statement of financial position if there is a currently enforceable legal
right to offset the recognised amounts and there is an intention to settle on a net basis,
to realise the assets and settle the liabilities simultaneously.
(r)
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
The Group uses derivative financial instruments (including forward currency contracts and
foreign exchange options) to hedge its risks associated with foreign currency fluctuations.
Such derivative financial instruments are initially recognised at fair value on the date on which
the derivative contract is entered into and are subsequently re-measured at fair value. Any
derivative financial instruments acquired through business combinations are re-designated.
Derivatives are carried as financial assets when their fair value is positive and as financial
liabilities when their fair value is negative. Any gains or losses arising from changes in the fair
value of derivatives, except for those that qualify as cash flow hedges, are taken directly to
profit or loss for the period.
Cash flow hedges
Cash flow hedges are hedges of the Group’s exposure to variability in cash flows that is
attributable to a particular risk associated with a recognised asset or liability that is a firm
commitment and that could affect the statement of comprehensive income. The Group’s cash
flow hedges that meet the strict criteria for hedge accounting are accounted for by
recognising the effective portion of the gain or loss on the hedging instrument directly in
equity, while the ineffective portion is recognised in profit or loss. Amounts taken to equity are
transferred out of equity and included in the measurement of the hedge transaction (finance
costs or inventory purchases) when the forecast transaction occurs.
47 Premier Investments Limited
47
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q)
OTHER FINANCIAL LIABILITIES
All financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.
(i)
Trade and other payables
Liabilities for trade creditors and other amounts are recognised and carried at original
invoice cost, which is the fair value of the consideration to be paid in the future for
goods and services received whether or not billed to the consolidated entity.
Trade liabilities are normally settled on terms of between 7 and 90 days.
(ii)
Loans and borrowings
All loans, borrowings and interest-bearing payables are initially recognised at the fair
value of the consideration received net of issue costs associated with the borrowing.
After initial recognition, such items are subsequently measured at amortised cost using
the effective interest method. Amortised cost is calculated by taking into account any
issue costs, and any discount or premium on settlement.
Fees paid on the establishment of loan facilities are amortised over the life of the
facility. On-going borrowing costs are expensed as incurred.
(iii) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the
consolidated statement of financial position if there is a currently enforceable legal
right to offset the recognised amounts and there is an intention to settle on a net basis,
to realise the assets and settle the liabilities simultaneously.
(r)
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
The Group uses derivative financial instruments (including forward currency contracts and
foreign exchange options) to hedge its risks associated with foreign currency fluctuations.
Such derivative financial instruments are initially recognised at fair value on the date on which
the derivative contract is entered into and are subsequently re-measured at fair value. Any
derivative financial instruments acquired through business combinations are re-designated.
Derivatives are carried as financial assets when their fair value is positive and as financial
liabilities when their fair value is negative. Any gains or losses arising from changes in the fair
value of derivatives, except for those that qualify as cash flow hedges, are taken directly to
profit or loss for the period.
Cash flow hedges
Cash flow hedges are hedges of the Group’s exposure to variability in cash flows that is
attributable to a particular risk associated with a recognised asset or liability that is a firm
commitment and that could affect the statement of comprehensive income. The Group’s cash
flow hedges that meet the strict criteria for hedge accounting are accounted for by
recognising the effective portion of the gain or loss on the hedging instrument directly in
equity, while the ineffective portion is recognised in profit or loss. Amounts taken to equity are
transferred out of equity and included in the measurement of the hedge transaction (finance
costs or inventory purchases) when the forecast transaction occurs.
Annual Report 2014 48
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(r)
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING (CONTINUED)
(v)
ONEROUS LEASE PROVISIONS
The Group tests each of the designated cash flow hedges for effectiveness on an ongoing
basis both retrospectively and prospectively using the ratio offset method. If the testing falls
within the 80% to 125% range, the hedge is considered to be highly effective and continues to
be designated as a cash flow hedge.
At each reporting date, the Group measures ineffectiveness using the ratio offset method. For
foreign currency cash flow hedges if the risk is over-hedged, the ineffective portion is taken
immediately to other income/expense in the statement of comprehensive income.
If the forecast transaction is no longer expected to occur, amounts recognised in equity are
transferred to the statement of comprehensive income.
If the hedging instrument expires or is sold, terminated or exercised without replacement or
rollover, or if its designation as a hedge is revoked (due to being ineffective), amounts
previously recognised in equity remain in equity until the forecast transaction occurs.
(s)
LEASES
Finance leases, which transfer to the Group substantially all the risks and benefits incidental
to ownership of the leased item, are capitalised at the inception of the lease at the fair value
of the leased asset or, if lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease
liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are recognised as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the
asset and the lease term if there is no reasonable certainty that the Group will obtain
ownership by the end of the lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line
basis over the lease term. Operating lease incentives are recognised as a liability when
received and subsequently reduced by allocating lease payments between rental expense
and reduction of the liability.
(t)
BORROWING COSTS
Borrowing costs directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended use are
capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period
in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of the funds.
(u)
PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or constructive) as
a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
If the effect of the time-value of money is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of
the time-value of money and, where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time is recognised as
a finance cost.
A provision for onerous contracts is recognised when the expected benefits to be derived by
the Group from the contract are lower than the unavoidable cost of meeting its obligations
under the contract. The provision is measured at the present value of the lower of the
expected cost of terminating the contract and the expected net cost of continuing with the
contract. Before a provision is established, the Group recognises any impairment loss on the
assets associated with the contract.
(w)
SUPPLY CHAIN TRANSFORMATION PROVISIONS
Restructuring provisions are only recognised when general recognition criteria for provisions
are fulfilled. Additionally, the Group needs to follow a detailed formal plan about the business
or part of the business concerned, the location and number of employees affected, a detailed
estimate of the associated costs, and appropriate time line. The people affected have a valid
expectation that the restructuring is being carried out or the implementation has been initiated
already.
(x)
EMPLOYEE BENEFITS
(i) Wages, salaries and annual leave
The provisions for employee entitlements to wages, salaries and annual leave
represent the amount which the Group has a present obligation to pay, resulting from
employees’ services provided up to the reporting date. The provisions have been
calculated at nominal amounts based on current wage and salary rates, and include
related on-costs.
(ii)
Long service leave
The liability for long service leave 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 reporting date. Consideration is
given to expected future wage and salary levels, experience of employee departures,
and periods of service. Related on-costs have also been included in the liability.
Expected future payments are discounted using market yields at the reporting date on
national government bonds with terms to maturity that match as closely as possible the
estimated cash outflow.
(iii) Retirement benefit obligations
All employees of the Group are entitled to benefits from the Group’s superannuation
plan on retirement, disability or death. The Group operates a defined contribution
plan. Contributions to the plan are recognised as an expense as they become
payable. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payment is made available.
(y)
DEFERRED INCOME
(i)
Lease Incentives
Lease incentives are capitalised in the financial statements when received and
credited to revenue over the term of the store lease to which they relate.
49 Premier Investments Limited
49
50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(v)
ONEROUS LEASE PROVISIONS
A provision for onerous contracts is recognised when the expected benefits to be derived by
the Group from the contract are lower than the unavoidable cost of meeting its obligations
under the contract. The provision is measured at the present value of the lower of the
expected cost of terminating the contract and the expected net cost of continuing with the
contract. Before a provision is established, the Group recognises any impairment loss on the
assets associated with the contract.
(w)
SUPPLY CHAIN TRANSFORMATION PROVISIONS
Restructuring provisions are only recognised when general recognition criteria for provisions
are fulfilled. Additionally, the Group needs to follow a detailed formal plan about the business
or part of the business concerned, the location and number of employees affected, a detailed
estimate of the associated costs, and appropriate time line. The people affected have a valid
expectation that the restructuring is being carried out or the implementation has been initiated
already.
(x)
EMPLOYEE BENEFITS
(i) Wages, salaries and annual leave
The provisions for employee entitlements to wages, salaries and annual leave
represent the amount which the Group has a present obligation to pay, resulting from
employees’ services provided up to the reporting date. The provisions have been
calculated at nominal amounts based on current wage and salary rates, and include
related on-costs.
(ii)
Long service leave
The liability for long service leave 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 reporting date. Consideration is
given to expected future wage and salary levels, experience of employee departures,
and periods of service. Related on-costs have also been included in the liability.
Expected future payments are discounted using market yields at the reporting date on
national government bonds with terms to maturity that match as closely as possible the
estimated cash outflow.
(iii) Retirement benefit obligations
All employees of the Group are entitled to benefits from the Group’s superannuation
plan on retirement, disability or death. The Group operates a defined contribution
plan. Contributions to the plan are recognised as an expense as they become
payable. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payment is made available.
(y)
DEFERRED INCOME
(i)
Lease Incentives
Lease incentives are capitalised in the financial statements when received and
credited to revenue over the term of the store lease to which they relate.
Annual Report 2014 50
50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(y)
DEFERRED INCOME (CONTINUED)
(ii)
Deferred rent
Operating lease expenses are recognised on a straight-line basis over the lease term,
which includes the impact of annual fixed rate percentage increases.
(z)
REVENUE RECOGNITION
Revenue is recognised and measured at the fair value of the consideration received or
receivable to the extent it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The following specific recognition criteria must also be met
before revenue is recognised.
(i)
Sale of goods
Revenue from the sale of goods is recognised when the significant risks and rewards
of ownership of the goods have passed to the customer. Risks and rewards are
considered passed to the customer at the point-of-sale in retail stores and at the time
of delivery to catalogue and wholesale customers.
(ii)
Interest revenue
Revenue is recognised as interest accrues using the effective interest method. This is
a method of calculating the amortised cost of a financial asset and allocating the
interest income over the relevant period using the effective interest rate, which is the
rate that exactly discounts estimated future cash receipts through the expected life of
the financial asset to the net carrying amount of the financial asset.
(iii) Dividends
Revenue is recognised when the Group’s right to receive the payment is established.
(iv)
Lay-by sales
The Group has a history of most lay-by sales in retail stores being completed following
receipt of an initial deposit. Therefore, the Group has elected to recognise revenue on
lay-by sales upon receipt of a deposit.
(v)
Gift cards
Revenue from the sale of gift cards is recognised upon redemption of the gift card, or
when the card is no longer expected to be redeemed, based on analysis of historical
non-redemption rates.
(aa)
INCOME TAX
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities based on the current
period’s taxable income. The tax rates and tax laws used to compute the amount are those
that are enacted or substantially enacted by the reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and
not in the income statement. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.
(aa)
INCOME TAX (CONTINUED)
Deferred income tax is provided on all temporary differences at the reporting date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
-
-
Deferred income tax liabilities are recognised for all taxable temporary differences except:
When the deferred income tax liability arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
When the taxable temporary difference is associated with investments in subsidiaries,
associates and interests in joint ventures, and the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax credits and unused tax losses, to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the
carry-forward of unused tax credits and unused tax losses, can be utilised except:
-
When the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; and
-
Where the deductible temporary difference is associated with investments in
subsidiaries, associates and interest in joint ventures, in which case a deferred tax asset
is only recognised to the extent that it is probable that the temporary difference will
reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and
recognised to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply to the year when the asset is realised or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred tax assets
and liabilities relate to the same taxable entity and the same taxation authority.
51 Premier Investments Limited
51
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(aa)
INCOME TAX (CONTINUED)
Deferred income tax is provided on all temporary differences at the reporting date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
-
-
When the deferred income tax liability arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
When the taxable temporary difference is associated with investments in subsidiaries,
associates and interests in joint ventures, and the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax credits and unused tax losses, to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the
carry-forward of unused tax credits and unused tax losses, can be utilised except:
-
-
When the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; and
Where the deductible temporary difference is associated with investments in
subsidiaries, associates and interest in joint ventures, in which case a deferred tax asset
is only recognised to the extent that it is probable that the temporary difference will
reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and
recognised to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply to the year when the asset is realised or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred tax assets
and liabilities relate to the same taxable entity and the same taxation authority.
Annual Report 2014 52
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ee)
SHARE-BASED REMUNERATION SCHEMES
The Group provides benefits to its employees in the form of share-based payments, whereby
employees render services in exchange for shares or rights over shares (equity-settled
transactions). The plans in place to provide these benefits are a long-term incentive plan
known as the performance rights plan (PRP).
The cost of these equity-settled transactions with employees is measured by reference to the
fair value of the equity instrument at the date at which they are granted.
The cost of equity-settled transactions is recognised, together with a corresponding increase
in equity, over the period in which the performance and/or service conditions are fulfilled (the
vesting period), ending on the date on which the relevant employees become fully entitled to
the award (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of
comprehensive income is the product of:
(i)
The grant date fair value of the award;
(ii)
The extent to which the vesting period has expired; and
(iii)
The current best estimate of the number of awards that will vest as at the grant date.
The charge to profit and loss for the period is the cumulative amount as calculated above less
the amounts already charged in previous periods. There is a corresponding entry to equity.
No expense is recognised for awards that do not ultimately vest, except for equity settled
transactions for which vesting is conditional upon a market or non-vesting condition. These
are treated as vested, irrespective of whether or not the market or non-vesting condition is
satisfied, provided that all other performance and service conditions are met.
(ff)
COMPARATIVES
The current reporting period, 28 July 2013 to 26 July 2014, represents 52 weeks and the
comparative reporting period is from 29 July 2012 to 27 July 2013 which also represents 52
weeks. From time to time, management may change prior year comparatives to reflect
classifications applied in the current year.
(aa)
INCOME TAX (CONTINUED)
Tax consolidation
Effective 1 July 2003, Premier Investments Limited and its wholly owned Australian controlled
entities implemented a tax consolidation group. The head entity, Premier Investments Limited
and the controlled entities continue to account for their own current and deferred tax amounts.
The Group has applied the Group allocation approach to determining the appropriate amount
of current taxes and deferred taxes to allocate to members of the tax consolidated group. The
agreement provides for the allocation of income tax liabilities between the entities should the
head entity default on its tax payment obligations. At reporting date the possibility of default is
remote.
In addition to its own current and deferred tax amounts, Premier Investments 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.
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.
(bb)
OTHER TAXES
Revenues, expenses and assets are recognised net of the amount of goods and services tax
(GST) except:
-
-
When the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable; and
Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as
part of receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST
component of cash flows arising from investing and financing activities, which is recoverable
from, or payable to, the taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the taxation authority.
(cc)
CONTRIBUTED EQUITY
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(dd)
EARNINGS PER SHARE
Basic earnings per share are calculated as net profit attributable to members of the parent
divided by the weighted average number of ordinary shares.
Diluted earnings per share is calculated as net profit attributable to members of the parent,
adjusted for costs of servicing equity, the after tax effect of dividends and interest associated
with dilutive potential ordinary shares that have been recognised as expenses, and other non-
discretionary changes in revenue or expenses during the period that would result from the
dilution of potential ordinary shares, divided by the weighted average number of ordinary
shares and dilutive potential ordinary shares.
53 Premier Investments Limited
53
54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(ee)
SHARE-BASED REMUNERATION SCHEMES
The Group provides benefits to its employees in the form of share-based payments, whereby
employees render services in exchange for shares or rights over shares (equity-settled
transactions). The plans in place to provide these benefits are a long-term incentive plan
known as the performance rights plan (PRP).
The cost of these equity-settled transactions with employees is measured by reference to the
fair value of the equity instrument at the date at which they are granted.
The cost of equity-settled transactions is recognised, together with a corresponding increase
in equity, over the period in which the performance and/or service conditions are fulfilled (the
vesting period), ending on the date on which the relevant employees become fully entitled to
the award (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of
comprehensive income is the product of:
(i)
The grant date fair value of the award;
(ii)
The extent to which the vesting period has expired; and
(iii)
The current best estimate of the number of awards that will vest as at the grant date.
The charge to profit and loss for the period is the cumulative amount as calculated above less
the amounts already charged in previous periods. There is a corresponding entry to equity.
No expense is recognised for awards that do not ultimately vest, except for equity settled
transactions for which vesting is conditional upon a market or non-vesting condition. These
are treated as vested, irrespective of whether or not the market or non-vesting condition is
satisfied, provided that all other performance and service conditions are met.
(ff)
COMPARATIVES
The current reporting period, 28 July 2013 to 26 July 2014, represents 52 weeks and the
comparative reporting period is from 29 July 2012 to 27 July 2013 which also represents 52
weeks. From time to time, management may change prior year comparatives to reflect
classifications applied in the current year.
Annual Report 2014 54
54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
The Group’s principal financial instruments comprise cash and short-term deposits, derivative financial
instruments, receivables, payables, bank overdraft, interest-bearing liabilities and finance leases.
RISK EXPOSURES AND RESPONSES
The Group manages its exposure to key financial risks in accordance with Board-approved policies
which are reviewed annually including, liquidity risk, foreign currency risk, interest rate risk and credit
risk. The objective of the policy is to support the delivery of the Group’s financial targets whilst
protecting future financial security.
The Group uses different methods to measure and manage different types of risks to which it is
exposed. These include, monitoring levels of exposure to interest rate and foreign exchange risk and
assessment of market forecasts for interest rate and foreign exchange prices. Ageing analyses and
monitoring of specific credit allowances are undertaken to manage credit risk, liquidity risk is monitored
through development of future cash flow forecast projections.
Details of the significant accounting policies and methods adopted, including the criteria for recognition,
the basis of measurement and the basis on which income and expenses are recognised, in respect of
each class of financial asset, financial liability and equity instrument are disclosed in note 2 of the
financial statements.
Interest rate risk
The Group’s exposure to market interest rates relates primarily to its cash and cash equivalents that it
holds and long term debt obligations.
At reporting date, the Group had the following mix of financial assets and liabilities exposed to variable
interest rate risk that are not designated in cash flow hedges:
Financial Assets
Cash
Other receivables
Financial Liabilities
Finance lease liability
Bank loans AUD
Bank loans (NZD 20.0 million)
Net Financial Assets
NOTES
25
8
22
15
15
CONSOLIDATED
2014
$’000
313,308
3,596
316,904
66
101,000
18,477
119,543
197,361
2013
$’000
313,157
4,321
317,478
113
85,000
17,240
102,353
215,125
(CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Interest rate risk (Continued)
The Group’s objective of managing interest rate risk is to minimise the entity’s exposure to fluctuations
in interest rates that might impact its interest revenue and cash flow. To manage this risk, the Group
locks a portion of the Group’s cash and cash equivalents into term deposits. The maturity of term
deposits is determined based on the Group’s cash flow forecast.
The Group has conducted a sensitivity analysis of the Group’s exposure to interest rate risk. The
sensitivity analysis below has been determined based on the exposure to interest rates from financial
instruments at the reporting date and the stipulated change taking place at the beginning of the
financial year and being held constant throughout the reporting period, holding all other variables
constant. A 100 (2013:100) basis point increase and decrease in Australian interest rates represents
management's assessment of the possible change in interest rates. A positive number indicates an
increase in profit after tax and equity, whilst a negative number indicates a reduction in profit after tax
and equity.
POST-TAX PROFIT
OTHER COMPREHENSIVE INCOME
HIGHER/(LOWER)
HIGHER/(LOWER)
2014
$000
1,357
(1,357)
2013
$000
1,476
(1,476)
2014
$000
-
-
2013
$000
-
-
Judgements of reasonably
possible movements:
CONSOLIDATED
+1.0% (100 basis points)
-1.0% (100 basis points)
cash balances.
The movement in profits are due to lower interest cost revenue from variable rates and net
Significant assumptions used in the interest rate sensitivity analysis include:
Reasonably possible movements in interest rates were determined based on the
Group’s current credit rating and mix of debt in Australian and foreign countries,
relationships with financial institutions, the level of debt that is expected to be
renewed as well as a review of the last two year’s historical movements and
economic forecasters expectations.
The net exposure at reporting date is representative of what the Group was and is
expecting to be exposed to in the next twelve months.
The effect on other comprehensive income is the effect on the cash flow hedge
reserve.
55 Premier Investments Limited
55
56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
(CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Interest rate risk (Continued)
The Group’s objective of managing interest rate risk is to minimise the entity’s exposure to fluctuations
in interest rates that might impact its interest revenue and cash flow. To manage this risk, the Group
locks a portion of the Group’s cash and cash equivalents into term deposits. The maturity of term
deposits is determined based on the Group’s cash flow forecast.
The Group has conducted a sensitivity analysis of the Group’s exposure to interest rate risk. The
sensitivity analysis below has been determined based on the exposure to interest rates from financial
instruments at the reporting date and the stipulated change taking place at the beginning of the
financial year and being held constant throughout the reporting period, holding all other variables
constant. A 100 (2013:100) basis point increase and decrease in Australian interest rates represents
management's assessment of the possible change in interest rates. A positive number indicates an
increase in profit after tax and equity, whilst a negative number indicates a reduction in profit after tax
and equity.
POST-TAX PROFIT
OTHER COMPREHENSIVE INCOME
HIGHER/(LOWER)
HIGHER/(LOWER)
Judgements of reasonably
possible movements:
CONSOLIDATED
+1.0% (100 basis points)
-1.0% (100 basis points)
2014
$000
1,357
(1,357)
2013
$000
1,476
(1,476)
2014
$000
-
-
2013
$000
-
-
The movement in profits are due to lower interest cost revenue from variable rates and net
cash balances.
Significant assumptions used in the interest rate sensitivity analysis include:
Reasonably possible movements in interest rates were determined based on the
Group’s current credit rating and mix of debt in Australian and foreign countries,
relationships with financial institutions, the level of debt that is expected to be
renewed as well as a review of the last two year’s historical movements and
economic forecasters expectations.
The net exposure at reporting date is representative of what the Group was and is
expecting to be exposed to in the next twelve months.
The effect on other comprehensive income is the effect on the cash flow hedge
reserve.
Annual Report 2014 56
56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
(CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
(CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Credit risk
The overwhelming majority of the Group’s sales are on cash or cash equivalent terms with settlement
within 24 hours. As such, the Group’s exposure to credit risk is minimal. The Group trades only with
recognised, creditworthy third parties. It is the Group’s policy that all customers who wish to trade on
credit terms are subject to credit verification procedures. In addition, receivable balances are
monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.
There are no significant concentrations of credit risk within the Group and financial instruments are
spread amongst a number of financial institutions.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash
and cash equivalents and certain derivative instruments, the Group’s exposure to credit risk arises
from default of the counter party, with a maximum exposure equal to the carrying amount of these
instruments. Since the Group trades only with recognised creditworthy third parties, there is no
requirement for collateral by either party.
Credit risk for the Group also arises from financial guarantees that members of the Group act as
guarantor. At 26 July 2014, the maximum exposure to credit risk of the Group is the amount
guaranteed as disclosed in note 33.
Foreign operations
The Group has operations in New Zealand. As a result, movements in the Australian Dollar and New
Zealand Dollar (“AUD/NZD”) exchange rate affect the Group’s statement of financial position and
results from operations. The Group has obtained New Zealand Dollar denominated financing facilities
from a financial institution to provide a natural hedge of the Group’s exposure to movements in the
AUD/NZD on translation of the New Zealand statement of financial position. In addition, the Group, on
occasion, hedges its cash flow exposure to movements in the AUD/NZD.
The Group has an investment and long-term receivables denominated in South African Rand (ZAR)
arising from its investment in Just Kor Fashion Group (Pty) Ltd. As a result of these transactions,
movements in the AUD/ZAR exchange rates can affect the Group’s statement of financial position.
The Group does not consider this risk to be material and, as such, has not sought to hedge this
exposure.
The Group also has operations in Singapore. As a result, movement in the Australian Dollar and
Singapore Dollar (“AUD/SGD”) exchange rates can affect the Group’s statement of financial position
and results from operations. The Group does not consider this risk to be material, and as such, has
not sought to hedge this exposure.
Operations in the United Kingdom commenced in this current financial year. Movement in the
Australian Dollar and Pound Sterling (“AUD/GBP”) exchange rates can affect the Group’s statement of
financial position and results from operations. The Group does not consider this risk to be material,
and as such, has not sought to hedge this exposure.
Foreign currency transactions
The Group has exposures to foreign currencies principally arising from purchases by operating entities
in currencies other than the functional currency. Approximately 60% of the Group’s purchases are
denominated in USD, which is not the functional currency of the Australian, New Zealand, Singapore
or United Kingdom operating entities.
RISK EXPOSURES AND RESPONSES (CONTINUED)
Foreign currency transactions (Continued)
The Group considers its exposure to USD arising from the purchases of inventory to be a long-
term and ongoing exposure.
As such, the Group’s foreign currency risk management policy provides guidelines for the term over
which foreign currency hedging will be undertaken for part or all of the risk. This term cannot exceed
two years. Factors taken into account include:
the implied market volatility for the currency exposure being hedged and the cost of hedging,
relative to long-term indicators;
the level of the Australian Dollar and New Zealand Dollar against the currency risk being
hedged, relative to long-term indicators;
the company’s strategic decision-making horizon; and
-
other factors considered relevant by the board.
-
-
-
The policy requires periodic reporting to the Audit and Risk Committee, and its application is subject to
oversight from the Chairman of the Audit and Risk Committee or the Chairman of the Board. The
policy allows the use of forward exchange contracts and foreign currency options.
At reporting date, the Group had the following exposures to movements in the United States Dollar,
Singapore Dollar, South African Rand and Pound Sterling:
USD EXPOSURE
SGD EXPOSURE
ZAR EXPOSURE
GBP EXPOSURE
CONSOLIDATED
CONSOLIDATED
CONSOLIDATED
CONSOLIDATED
2014
$’000
2013
$’000
2014
$’000
2013
$’000
2014
$’000
2013
$’000
2014
$’000
2013
$’000
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
648
340
5
36
Derivative financial assets
(cash flow hedges)
1,596
17,042
1,750
1,106
-
4,044
2,157
2,399
-
-
-
-
2,584
17,083
1,750
1,106
2,157
2,399
4,044
Trade and other payables
(20,765)
(20,537)
(111)
(202)
FINANCIAL LIABILITIES
Derivative financial liabilities
(cash flow hedges)
(6,801)
(187)
-
-
(27,566)
(20,724)
(111)
(202)
Net exposure
(24,982)
(3,641)
1,639
904
2,157
2,399
4,031
The Group has forward currency contracts and foreign currency options designated as cash flow
hedges that are subject to movements through equity and profit and loss respectively as foreign
exchange rates move (refer to Note 29).
-
-
-
-
-
-
-
(13)
-
(13)
-
-
-
-
-
-
-
-
-
-
-
-
57 Premier Investments Limited
57
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
(CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Foreign currency transactions (Continued)
The Group considers its exposure to USD arising from the purchases of inventory to be a long-
term and ongoing exposure.
As such, the Group’s foreign currency risk management policy provides guidelines for the term over
which foreign currency hedging will be undertaken for part or all of the risk. This term cannot exceed
two years. Factors taken into account include:
-
-
-
the implied market volatility for the currency exposure being hedged and the cost of hedging,
relative to long-term indicators;
the level of the Australian Dollar and New Zealand Dollar against the currency risk being
hedged, relative to long-term indicators;
the company’s strategic decision-making horizon; and
-
other factors considered relevant by the board.
The policy requires periodic reporting to the Audit and Risk Committee, and its application is subject to
oversight from the Chairman of the Audit and Risk Committee or the Chairman of the Board. The
policy allows the use of forward exchange contracts and foreign currency options.
At reporting date, the Group had the following exposures to movements in the United States Dollar,
Singapore Dollar, South African Rand and Pound Sterling:
USD EXPOSURE
SGD EXPOSURE
ZAR EXPOSURE
GBP EXPOSURE
CONSOLIDATED
CONSOLIDATED
CONSOLIDATED
CONSOLIDATED
2014
$’000
2013
$’000
2014
$’000
2013
$’000
2014
$’000
2013
$’000
2014
$’000
2013
$’000
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
648
340
5
36
Derivative financial assets
(cash flow hedges)
1,596
17,042
1,750
1,106
-
-
4,044
-
-
-
-
2,157
2,399
-
-
-
-
2,584
17,083
1,750
1,106
2,157
2,399
4,044
FINANCIAL LIABILITIES
Trade and other payables
(20,765)
(20,537)
(111)
(202)
Derivative financial liabilities
(cash flow hedges)
(6,801)
(187)
-
-
(27,566)
(20,724)
(111)
(202)
-
-
-
-
-
-
(13)
-
(13)
Net exposure
(24,982)
(3,641)
1,639
904
2,157
2,399
4,031
-
-
-
-
-
-
-
-
The Group has forward currency contracts and foreign currency options designated as cash flow
hedges that are subject to movements through equity and profit and loss respectively as foreign
exchange rates move (refer to Note 29).
Annual Report 2014 58
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
(CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
(CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Foreign currency risk
The following sensitivity is based on the foreign exchange risk exposures in existence at the reporting date:
Judgements of
reasonably possible
movements:
CONSOLIDATED
AUD/USD + 2.5%
AUD/USD – 10.0%
AUD/ZAR + 2.5%
AUD/ZAR – 10.0%
AUD/SGD + 2.5%
AUD/SGD –10.0%
AUD/GBP + 2.5%
AUD/GBP –10.0%
POST-TAX PROFIT
HIGHER/(LOWER)
OTHER COMPREHENSIVE INCOME
HIGHER/(LOWER)
2014
$000
401
(1,829)
(53)
240
(40)
182
(98)
448
2013
$000
361
(1,628)
(59)
267
(22)
100
-
-
2014
$000
(4,063)
18,417
-
-
-
-
-
-
2013
$000
(4,488)
21,010
-
-
-
-
-
-
Significant assumptions used in the foreign currency exposure sensitivity analysis include:
Reasonably possible movements in foreign exchange rates were determined based on a
review of the last two years historical movements and economic forecaster’s expectations.
The net exposure at reporting date is representative of what the Group was and is expecting
to be exposed to in the next twelve months from reporting date.
The effect on other comprehensive income is the effect on the cash flow hedge reserve,
and/or the foreign currency translation reserve.
The sensitivity does not include financial instruments that are non-monetary items as these
are not considered to give rise to currency risk.
Liquidity risk
Liquidity risk refers to the risk of encountering difficulties in meeting obligations associated with
financial liabilities. Liquidity risk management is associated with ensuring that there are sufficient funds
available to meet financial commitments in a timely manner and planning for unforeseen events which
may curtail cash flows and cause pressure on liquidity. The Group keeps its short, medium and long
term funding requirements under constant review. Its policy is to have sufficient committed funds
available to meet medium term requirements, with flexibility and headroom to make acquisitions for
cash in the event an opportunity should arise.
Liquidity risk (Continued)
The Group has at balance date $27 million (2013: $31 million) cash held in deposit with 11am at call
term and the remaining $286 million (2013: $282 million) cash held in deposit with maturity terms
ranging from 30 to 180 days. Hence management believe there is no significant exposure to liquidity
risk at 26 July 2014 and 27 July 2013.
The Group aims to maintain a balance between continuity of funding and flexibility through the
use of bank overdrafts, bank loans and finance leases with a variety of counterparties.
The remaining contractual maturities of the Group’s financial liabilities are:
Maturity < 6 months
Maturity 6–12 months *
Maturity 12–24 months
Maturity > 24 months
CONSOLIDATED
2014
$’000
170,086
203,773
27,565
19,000
420,424
2013
$’000
147,931
99,329
186,087
14
433,361
*
Refer to Note 32 for details regarding the subsequent to year end extension of the Group’s core debt facility.
Fair value of financial assets and liabilities
The Group measures financial instruments, such as derivatives, at fair value at each reporting date. Fair
value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset or transfer the liability takes place in either the
principal market for the asset or liability or, in the absence of a principal market, the most advantageous
market for the asset or liability, which is accessible to the Group.
The fair value of an asset or liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best
interest. The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
The fair value of financial assets and financial liabilities is based on market prices (where a market
exists) or using other widely accepted methods of valuation.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, as described below, based on the lowest level input that is
significant to the fair value measurement as a whole:
Level 1 – the fair value is calculated using quoted price in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on
observable market data.
59 Premier Investments Limited
59
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
(CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Liquidity risk (Continued)
The Group has at balance date $27 million (2013: $31 million) cash held in deposit with 11am at call
term and the remaining $286 million (2013: $282 million) cash held in deposit with maturity terms
ranging from 30 to 180 days. Hence management believe there is no significant exposure to liquidity
risk at 26 July 2014 and 27 July 2013.
The Group aims to maintain a balance between continuity of funding and flexibility through the
use of bank overdrafts, bank loans and finance leases with a variety of counterparties.
The remaining contractual maturities of the Group’s financial liabilities are:
Maturity < 6 months
Maturity 6–12 months *
Maturity 12–24 months
Maturity > 24 months
CONSOLIDATED
2014
$’000
170,086
203,773
27,565
19,000
420,424
2013
$’000
147,931
99,329
186,087
14
433,361
*
Refer to Note 32 for details regarding the subsequent to year end extension of the Group’s core debt facility.
Fair value of financial assets and liabilities
The Group measures financial instruments, such as derivatives, at fair value at each reporting date. Fair
value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset or transfer the liability takes place in either the
principal market for the asset or liability or, in the absence of a principal market, the most advantageous
market for the asset or liability, which is accessible to the Group.
The fair value of an asset or liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best
interest. The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
The fair value of financial assets and financial liabilities is based on market prices (where a market
exists) or using other widely accepted methods of valuation.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, as described below, based on the lowest level input that is
significant to the fair value measurement as a whole:
Level 1 – the fair value is calculated using quoted price in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on
observable market data.
Annual Report 2014 60
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
(CONTINUED)
Fair value of financial assets and liabilities (Continued)
The fair value of the financial instruments as well as the methods used to estimate the fair value are
summarised in the table below.
CONSOLIDATED
FINANCIAL PERIOD ENDED 26 JULY 2014
FINANCIAL PERIOD ENDED 27 JULY 2013
QUOTED
MARKET
PRICE
VALUATION
TECHNIQUE –
MARKET
OBSERVABLE
INPUTS
VALUATION
TECHNIQUE –
NON MARKET
OBSERVABLE
INPUTS
TOTAL
QUOTED
MARKET
PRICE
VALUATION
TECHNIQUE –
MARKET
OBSERVABLE
INPUTS
VALUATION
TECHNIQUE –
NON MARKET
OBSERVABLE
INPUTS
TOTAL
(LEVEL 1)
(LEVEL 2)
(LEVEL 3)
(LEVEL 1)
(LEVEL 2)
(LEVEL 3)
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
-
-
-
-
1,596
1,596
6,801
6,801
-
-
-
-
1,596
1,596
6,801
6,801
-
-
-
-
17,042
17,042
-
17,042
- 17,042
187
187
-
-
187
187
Financial Assets
Foreign Exchange
Contracts
Financial
Liabilities
Foreign Exchange
Contracts
There have been no transfers between Level 1 and Level 2 during the financial period.
At 26 July 2014 and 27 July 2013 the fair value of cash and cash equivalents, short-term receivables
and payables approximates their carrying value. The carrying value of interest bearing liabilities is
assumed to approximate the fair value, being the amount at which the liability could be settled in a
current transaction between willing parties.
Foreign exchange contracts are initially recognised in the statement of financial position at cost, and
subsequently remeasured to fair value. Accordingly, the carrying amounts of forward exchange
contracts approximate their fair values at the reporting date.
Foreign exchange contracts are measured based on observable spot exchange rates, the yield curves
of the respective currencies as well as the currency basis spread between the respective currencies.
4
REVENUE
REVENUE
Revenue from sale of goods
Revenue from sale of goods to associate
TOTAL REVENUE FROM SALE OF GOODS
OTHER REVENUE
Membership program fees
Other sundry revenue
INTEREST
Other persons
Associate
Total Interest
DIVIDENDS
Other listed companies
Total Dividends
TOTAL OTHER REVENUE
TOTAL REVENUE
OTHER INCOME
Amortisation of deferred income
Gain on ineffective cash flow hedges
Net gain on financial instruments
Royalty and licence fees
Other persons
Associate
Insurance proceeds
Other
TOTAL OTHER INCOME
TOTAL INCOME
Fair value gain on available-for-sale financial assets
reclassified from equity to profit and loss
CONSOLIDATED
2014
$’000
2013
$’000
888,426
4,144
892,570
465
20
10,848
291
11,139
11,624
904,194
3,836
-
-
-
-
-
821
266
427
426
5,776
909,970
836,454
6,718
843,172
521
-
13,520
336
13,856
3,862
3,862
18,239
861,411
2,539
632
3,350
149,803
377
-
-
132
156,833
1,018,244
61 Premier Investments Limited
61
62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
4
REVENUE
REVENUE
Revenue from sale of goods
Revenue from sale of goods to associate
TOTAL REVENUE FROM SALE OF GOODS
OTHER REVENUE
Membership program fees
Other sundry revenue
INTEREST
Other persons
Associate
Total Interest
DIVIDENDS
Other listed companies
Total Dividends
TOTAL OTHER REVENUE
TOTAL REVENUE
OTHER INCOME
Amortisation of deferred income
Gain on ineffective cash flow hedges
Net gain on financial instruments
Fair value gain on available-for-sale financial assets
reclassified from equity to profit and loss
Royalty and licence fees
Other persons
Associate
Insurance proceeds
Other
TOTAL OTHER INCOME
TOTAL INCOME
CONSOLIDATED
2014
$’000
2013
$’000
888,426
4,144
892,570
465
20
10,848
291
11,139
-
-
11,624
904,194
3,836
-
-
-
821
266
427
426
836,454
6,718
843,172
521
-
13,520
336
13,856
3,862
3,862
18,239
861,411
2,539
632
3,350
149,803
377
-
-
132
5,776
909,970
156,833
1,018,244
Annual Report 2014 62
62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
CONSOLIDATED
NOTES
2014
$’000
2013
$’000
CONSOLIDATED
2014
$’000
2013
$’000
5
EXPENSES AND LOSSES
EXPENSES
11
11
11
12
DEPRECIATION AND IMPAIRMENT OF
NON-CURRENT ASSETS
Depreciation of property, plant and equipment
Amortisation of property, plant and equipment
under lease
Impairment of property, plant and equipment
TOTAL DEPRECIATION AND IMPAIRMENT
OF NON-CURRENT ASSETS
AMORTISATION OF NON-CURRENT ASSETS
Amortisation of leasehold premiums
TOTAL AMORTISATION OF NON-CURRENT
ASSETS
TOTAL DEPRECIATION, IMPAIRMENT AND
AMORTISATION
FINANCE COSTS
Finance charges payable under finance leases
Interest on bank loans and overdraft
Provision for discount adjustment on onerous
leases
TOTAL FINANCE COSTS
OPERATING LEASE EXPENSES
Minimum lease payments – operating leases
Contingent rentals
TOTAL OPERATING LEASE EXPENSES
OTHER EXPENSES INCLUDES
Share-based payments expense
Foreign exchange losses
Loss on ineffective cash flow hedges
Net loss on disposal of property, plant and
equipment
21,132
18,804
47
697
53
262
21,876
19,119
Deferred income tax reclassified from equity to profit
65
65
68
68
21,941
19,187
25
6,245
41
6,311
158,415
27,646
186,061
898
345
625
426
36
6,198
754
6,988
152,533
25,810
178,343
932
243
-
352
MARKET ENTRY COSTS
During the financial year, Smiggle commenced operations in the United Kingdom. As a consequence,
included in other expenses are costs amounting to $3.1 million incurred as a result of the Group’s entry
into the UK market.
SUPPLY CHAIN TRANSFORMATION
The Group is currently in the process of consolidating its Australian Distribution Centres into one
national distribution centre in Truganina, Victoria. As a result of this transformation, expenses totalling
$4.5 million have been incurred in the 2014 financial year. As a consequence of this transformation, the
existing distribution centre at Huntingwood, NSW closed in June 2014. The existing distribution centre in
Altona, Victoria, is expected to close in early 2015.
63 Premier Investments Limited
63
6
INCOME TAX
The major components of income tax expense are:
(a)
INCOME TAX RECOGNISED IN PROFIT AND LOSS
CURRENT INCOME TAX
Current income tax charge
previous years
DEFERRED INCOME TAX
Adjustment in respect of current income tax of
Relating to origination and reversal of temporary
differences
and loss
INCOME TAX EXPENSE REPORTED IN THE
STATEMENT OF COMPREHENSIVE INCOME
(b)
STATEMENT OF CHANGES IN EQUITY
Deferred income tax related to items charged
(credited) directly to equity:
Net deferred income tax on movements on cash-
flow hedges
profit and loss
Unrealised gain on available-for-sale investments
Deferred income tax reclassified from equity to
AGGREGATE TAX EXPENSE RECOGNISED IN THE
STATEMENT OF COMPREHENSIVE INCOME AND
TAX EXPENSE CALCULATED PER THE
STATUTORY INCOME TAX RATE
A reconciliation between tax expense and the product
of accounting profit before tax multiplied by the
Group’s applicable income tax rate is as follows:
Accounting profit before income tax
At the Parent Entity’s statutory income tax rate of
30% (2013: 30%)
previous years
Adjustment in respect of current income tax of
Items not recognised in deferred tax balances
Expenditure not allowable for income tax purposes
Income not assessable for tax purposes
AGGREGATE INCOME TAX EXPENSE
INCOME TAX BENEFIT REPORTED IN EQUITY
(6,431)
(c)
NUMERICAL RECONCILIATION BETWEEN
25,936
(74)
(497)
-
25,365
(6,431)
-
-
98,365
29,510
(74)
(179)
39
(3,931)
25,365
21,111
(279)
5,999
44,652
71,483
5,481
9,582
(44,652)
(29,589)
245,956
73,787
(279)
(447)
424
(2,002)
71,483
64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
CONSOLIDATED
2014
$’000
2013
$’000
6
INCOME TAX
The major components of income tax expense are:
(a)
INCOME TAX RECOGNISED IN PROFIT AND LOSS
CURRENT INCOME TAX
Current income tax charge
Adjustment in respect of current income tax of
previous years
DEFERRED INCOME TAX
Relating to origination and reversal of temporary
differences
Deferred income tax reclassified from equity to profit
and loss
INCOME TAX EXPENSE REPORTED IN THE
STATEMENT OF COMPREHENSIVE INCOME
(b)
STATEMENT OF CHANGES IN EQUITY
Deferred income tax related to items charged
(credited) directly to equity:
Net deferred income tax on movements on cash-
flow hedges
Unrealised gain on available-for-sale investments
Deferred income tax reclassified from equity to
profit and loss
25,936
(74)
(497)
-
25,365
(6,431)
-
-
INCOME TAX BENEFIT REPORTED IN EQUITY
(6,431)
(c)
NUMERICAL RECONCILIATION BETWEEN
AGGREGATE TAX EXPENSE RECOGNISED IN THE
STATEMENT OF COMPREHENSIVE INCOME AND
TAX EXPENSE CALCULATED PER THE
STATUTORY INCOME TAX RATE
A reconciliation between tax expense and the product
of accounting profit before tax multiplied by the
Group’s applicable income tax rate is as follows:
Accounting profit before income tax
At the Parent Entity’s statutory income tax rate of
30% (2013: 30%)
Adjustment in respect of current income tax of
previous years
Items not recognised in deferred tax balances
Expenditure not allowable for income tax purposes
Income not assessable for tax purposes
AGGREGATE INCOME TAX EXPENSE
98,365
29,510
(74)
(179)
39
(3,931)
25,365
21,111
(279)
5,999
44,652
71,483
5,481
9,582
(44,652)
(29,589)
245,956
73,787
(279)
(447)
424
(2,002)
71,483
Annual Report 2014 64
64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
6
(d)
INCOME TAX (CONTINUED)
RECOGNISED DEFERRED TAX ASSETS AND
LIABILITIES
DEFERRED TAX RELATES TO THE FOLLOWING:
Intangibles
Foreign currency balances
Potential capital gains tax on financial investments
Deferred gains and losses on foreign exchange
contracts
Inventory provisions
Deferred income
Employee provisions
Other receivables and prepayments
Property, plant and equipment
R&D depreciation equipment
Leased plant and equipment
Other
Lease liability
CONSOLIDATED
2014
$’000
2013
$’000
(969)
204
(44,637)
1,589
468
3,962
4,874
(96)
(6,539)
(33)
(18)
736
20
(943)
(4,998)
(44,637)
-
235
4,465
5,211
(316)
(7,134)
(113)
(32)
861
34
NET DEFERRED TAX LIABILITIES
(40,439)
(47,367)
REFLECTED IN THE STATEMENT OF FINANCIAL
POSITION AS FOLLOWS:
Deferred tax assets
Deferred tax liabilities
NET DEFERRED TAX LIABILITIES
12,147
(52,586)
(40,439)
10,928
(58,295)
(47,367)
7
DIVIDENDS PAID AND PROPOSED
RECOGNISED AMOUNTS
Declared and paid during the year
Interim franked dividends for 2014:
20 cents per share (2013: 19 cents)
Final franked dividends for 2013:
19 cents per share (2012: 18 cents)
UNRECOGNISED AMOUNTS
Final franked dividend for 2014:
FRANKING CREDIT BALANCE
The amount of franking credits available for the
subsequent financial year are:
-
-
franking account balance as at the end of the
financial year at 30% (2013: 30%)
franking credits that will arise from the payment
of income tax payable (receivable) as at the
end of the financial year
-
franking debits that will arise from the payment
of dividends as at the end of the financial year
TOTAL FRANKING CREDIT BALANCE
CONSOLIDATED
2014
$’000
2013
$’000
31,063
29,499
29,499
27,947
204,477
213,809
23,035
13,141
(13,347)
214,165
(12,642)
214,308
20 cents per share (2013: 19 cents)
31,143
29,499
The tax rate at which paid dividends have been franked is 30% (2013: 30%). Dividends proposed will be franked
at the rate of 30% (2013: 30%).
65 Premier Investments Limited
65
66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
7
DIVIDENDS PAID AND PROPOSED
RECOGNISED AMOUNTS
Declared and paid during the year
Interim franked dividends for 2014:
20 cents per share (2013: 19 cents)
Final franked dividends for 2013:
19 cents per share (2012: 18 cents)
UNRECOGNISED AMOUNTS
Final franked dividend for 2014:
CONSOLIDATED
2014
$’000
2013
$’000
31,063
29,499
29,499
27,947
20 cents per share (2013: 19 cents)
31,143
29,499
FRANKING CREDIT BALANCE
The amount of franking credits available for the
subsequent financial year are:
-
-
-
franking account balance as at the end of the
financial year at 30% (2013: 30%)
franking credits that will arise from the payment
of income tax payable (receivable) as at the
end of the financial year
franking debits that will arise from the payment
of dividends as at the end of the financial year
TOTAL FRANKING CREDIT BALANCE
204,477
213,809
23,035
13,141
(13,347)
214,165
(12,642)
214,308
The tax rate at which paid dividends have been franked is 30% (2013: 30%). Dividends proposed will be franked
at the rate of 30% (2013: 30%).
Annual Report 2014 66
66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
8
TRADE AND OTHER RECEIVABLES
CURRENT
Sundry debtors
Associate
Carrying amount of trade and other receivables
NON-CURRENT
Associate
Carrying amount of trade and other receivables
(a)
Impairment losses
CONSOLIDATED
2014
$’000
2013
$’000
11,002
1,153
12,155
1,004
1,004
6,388
470
6,858
1,929
1,929
Receivables are non-interest-bearing and are generally on 30 to 60 day terms. A provision
for impairment loss is recognised where there is objective evidence that an individual
receivable balance is impaired. No impairment loss has been recognised by the Group
during the financial period ended 26 July 2014 (2013: $nil). During the year, a bad debt
expense of $nil (2013: $nil) was recognised.
Other balances within trade and other receivables do not contain impaired assets and are
not past due. It is expected that these other balances will be received when due.
(b)
Related party receivables
For terms and conditions of related party receivables refer to Note 26.
(c)
Fair value and credit risk
Due to the short-term nature of these receivables, their carrying value is assumed to
approximate their fair value.
(d)
Foreign exchange and interest rate risk
Detail regarding foreign exchange and interest rate risk is disclosed in Note 3.
9
INVENTORIES
The valuation policy adopted in respect of
the following is set out in Note 2(l)
Raw materials
Finished goods
TOTAL INVENTORIES AT THE LOWER OF
COST AND NET REALISABLE VALUE
67 Premier Investments Limited
CONSOLIDATED
2014
$’000
2013
$’000
491
98,005
98,496
989
82,970
83,959
67
10
OTHER ASSETS
CURRENT
Deposits and prepayments
TOTAL OTHER CURRENT ASSETS
11
PROPERTY, PLANT AND EQUIPMENT
Land – at cost
Buildings – at cost
Less: accumulated depreciation and impairment
Plant and equipment – at cost
Less: accumulated depreciation and impairment
Capitalised leased assets – at cost
Less: accumulated depreciation and impairment
Total
Total
Total
Capital works in progress
TOTAL PROPERTY, PLANT AND EQUIPMENT
RECONCILIATIONS
Reconciliations of the carrying amounts for each
class of plant and equipment are set out below:
At beginning of the financial period
Net carrying amount at end of financial period
At beginning of financial period
Transferred from capital works in progress
Land
Additions
Buildings
Additions
Depreciation
Net carrying amount at end of financial period
Plant and equipment
At beginning of the financial period
Additions
Disposals
Exchange differences
Impairment – plant and equipment
Impairment – supply chain transformation
Depreciation
Net carrying amount at end of financial period
5
5
5
5
CONSOLIDATED
NOTES
2014
$’000
2013
$’000
5,215
5,215
4,676
4,676
3,203
14,985
(57)
14,928
192,492
(101,654)
90,838
343
(284)
59
-
109,028
3,203
3,203
-
-
2,173
12,812
(57)
14,928
81,123
32,149
(845)
433
(697)
(250)
(21,075)
90,838
169,726
(88,603)
81,123
343
(237)
106
2,173
83,402
-
-
-
-
-
-
-
-
-
-
-
-
80,083
19,231
(360)
1,235
(262)
-
(18,804)
81,123
68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
CONSOLIDATED
NOTES
2014
$’000
2013
$’000
5,215
5,215
4,676
4,676
10
OTHER ASSETS
CURRENT
Deposits and prepayments
TOTAL OTHER CURRENT ASSETS
11
PROPERTY, PLANT AND EQUIPMENT
Land – at cost
Buildings – at cost
Less: accumulated depreciation and impairment
Total
Plant and equipment – at cost
Less: accumulated depreciation and impairment
Total
Capitalised leased assets – at cost
Less: accumulated depreciation and impairment
Total
Capital works in progress
TOTAL PROPERTY, PLANT AND EQUIPMENT
RECONCILIATIONS
Reconciliations of the carrying amounts for each
class of plant and equipment are set out below:
Land
At beginning of the financial period
Additions
Net carrying amount at end of financial period
Buildings
At beginning of financial period
Transferred from capital works in progress
Additions
Depreciation
Net carrying amount at end of financial period
Plant and equipment
At beginning of the financial period
Additions
Disposals
Exchange differences
Impairment – plant and equipment
Impairment – supply chain transformation
Depreciation
Net carrying amount at end of financial period
5
5
5
5
3,203
14,985
(57)
14,928
192,492
(101,654)
90,838
343
(284)
59
-
109,028
-
3,203
3,203
-
2,173
12,812
(57)
14,928
81,123
32,149
(845)
433
(697)
(250)
(21,075)
90,838
-
-
-
-
169,726
(88,603)
81,123
343
(237)
106
2,173
83,402
-
-
-
-
-
-
-
-
80,083
19,231
(360)
1,235
(262)
-
(18,804)
81,123
Annual Report 2014 68
68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
CONSOLIDATED
12
INTANGIBLES
NOTES
2014
$’000
2013
$’000
RECONCILIATION OF CARRYING AMOUNTS AT THE BEGINNING AND END
OF THE PERIOD
11
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
RECONCILIATIONS (CONTINUED)
Leased plant and equipment
At beginning of the financial period
Disposals
Amortisation
Net carrying amount at end of financial period
Capital works in progress
At beginning of the financial period
Additions
Transferred to Buildings
Net carrying amount at end of financial period
TOTAL PROPERTY PLANT AND EQUIPMENT
5
106
-
(47)
59
2,173
-
(2,173)
-
109,028
243
(84)
(53)
106
-
2,173
-
2,173
83,402
LAND AND BUILDINGS
During the year ending 27 July 2013, the Group entered into an agreement to acquire a property in
Truganina Victoria, to establish a National Distribution Centre. As at 27 July 2013, the Group
recognised capital works in progress amounting to $2,173,000 in relation to the Distribution Centre.
Settlement of the Distribution Centre occurred on 16 January 2014, and the internal fit-out of the
property was completed in May 2014.
The land and buildings with a combined carrying amount of $18,131,000 have been pledged to secure
certain interest-bearing borrowings of the Group (refer to note 15).
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT
On an individual store basis, identified to be the cash-generating units (CGU) of the Group’s retail
segment, the recoverable amount was estimated for certain items of plant and equipment. The
recoverable amount estimation was based on a value in use calculation and was determined at the
CGU level.
These calculations use cash flow projections based on financial budgets approved by management,
covering a three year period. Cash flows beyond the three year period are extrapolated using the
growth rate stated below. The growth rate does not exceed the long-term average growth rate for the
business in which the CGU operates.
The post-tax discount rate applied to the cash flow projections is 10.5% (2013: 10.5%) and the cash
flows beyond the five year period are extrapolated using a growth rate of 3%. The discount rate used
reflects management’s estimate of the time value of money and risks specific to each unit not already
reflected in the cash flow. In determining the appropriate discount rate, regard has been given to the
weighted average cost of capital for the retail segment.
When considering the recoverable amount, the net present value of cash flows has been compared to
reasonable earnings multiples for comparable companies. An impairment review was conducted
based on a store by store review. As a result, a net impairment loss of $697,000 was recognised
during the financial year (2013: $262,000).
YEAR ENDED 26 JULY 2014
As at 28 July 2013 net of
accumulated amortisation and
impairment
Trademark registrations
Amortisation
Exchange differences
As at 26 July 2014 net of
accumulated amortisation and
impairment
AS AT 26 JULY 2014
Cost (gross carrying amount)
Accumulated amortisation and
impairment
Net carrying amount
YEAR ENDED 27 JULY 2013
As at 29 July 2012 net of
accumulated amortisation and
impairment
Trademark registrations
Amortisation
Exchange differences
As at 27 July 2013 net of
accumulated amortisation and
impairment
AS AT 27 JULY 2013
Cost (gross carrying amount)
Accumulated amortisation and
impairment
Net carrying amount
CONSOLIDATED
GOODWILL
$’000
BRAND
NAMES
$’000
TRADEMARK
$’000
LEASEHOLD
PREMIUMS
$’000
TOTAL
$’000
477,085
376,179
89
-
(65)
2
854,529
106
(65)
2
477,085
376,179
1,282
26
854,572
477,085
376,179
797
855,343
477,085
376,179
(771)
(771)
26
854,572
477,085
376,179
146
-
(68)
11
854,490
96
(68)
11
477,085
376,179
1,176
89
854,529
477,085
376,179
768
855,208
477,085
376,179
(679)
(679)
89
854,529
-
-
-
-
-
-
-
-
1,176
106
-
1,282
-
1,282
1,080
96
-
-
1,176
-
1,176
-
-
-
-
-
-
-
-
GOODWILL AND BRAND NAMES
After initial recognition, goodwill and indefinite-life brand names acquired in a business combination are
measured at cost less any accumulated impairment losses. Goodwill and brand names are not
amortised but are subject to impairment testing on an annual basis or whenever there is an indication of
impairment.
Brand names with a carrying value of approximately $376,179,000 are assessed as having an indefinite
useful life. The indefinite-useful life reflects management’s intention to continue to operate these brands
to generate net cash inflows into the foreseeable future.
69 Premier Investments Limited
69
70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
12
INTANGIBLES
RECONCILIATION OF CARRYING AMOUNTS AT THE BEGINNING AND END
OF THE PERIOD
YEAR ENDED 26 JULY 2014
As at 28 July 2013 net of
accumulated amortisation and
impairment
Trademark registrations
Amortisation
Exchange differences
As at 26 July 2014 net of
accumulated amortisation and
impairment
AS AT 26 JULY 2014
Cost (gross carrying amount)
Accumulated amortisation and
impairment
Net carrying amount
YEAR ENDED 27 JULY 2013
As at 29 July 2012 net of
accumulated amortisation and
impairment
Trademark registrations
Amortisation
Exchange differences
As at 27 July 2013 net of
accumulated amortisation and
impairment
AS AT 27 JULY 2013
Cost (gross carrying amount)
Accumulated amortisation and
impairment
Net carrying amount
CONSOLIDATED
GOODWILL
$’000
BRAND
NAMES
$’000
TRADEMARK
$’000
LEASEHOLD
PREMIUMS
$’000
TOTAL
$’000
477,085
-
376,179
-
-
-
-
-
1,176
106
-
89
-
(65)
2
854,529
106
(65)
2
477,085
376,179
1,282
26
854,572
477,085
376,179
-
-
477,085
376,179
477,085
-
376,179
-
-
-
-
-
1,282
-
1,282
1,080
96
-
-
797
855,343
(771)
(771)
26
854,572
146
-
(68)
11
854,490
96
(68)
11
477,085
376,179
1,176
89
854,529
477,085
376,179
-
-
477,085
376,179
1,176
-
1,176
768
855,208
(679)
(679)
89
854,529
GOODWILL AND BRAND NAMES
After initial recognition, goodwill and indefinite-life brand names acquired in a business combination are
measured at cost less any accumulated impairment losses. Goodwill and brand names are not
amortised but are subject to impairment testing on an annual basis or whenever there is an indication of
impairment.
Brand names with a carrying value of approximately $376,179,000 are assessed as having an indefinite
useful life. The indefinite-useful life reflects management’s intention to continue to operate these brands
to generate net cash inflows into the foreseeable future.
Annual Report 2014 70
70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
12
INTANGIBLES (CONTINUED)
IMPAIRMENT TESTING OF GOODWILL
12
INTANGIBLES (CONTINUED)
IMPAIRMENT TESTING OF BRAND NAMES (CONTINUED)
Impairment of goodwill acquired in a business combination is determined by assessing the recoverable
amount of the cash-generating units (CGU) to which it relates. When the recoverable amount of the
CGU is less than the carrying amount, an impairment loss is recognised.
The key factors contributing to the goodwill relate to the synergies existing within the acquired business
and also synergies expected to be achieved as a result of combining Just Group Limited with the rest of
the Group. Accordingly, goodwill is assessed at a retail segment level.
The recoverable amount of the CGU has been determined based upon a value in use calculation, using
cash flow projections as at July 2014 for a period of five years plus a terminal value. The cash flow
projections are based on financial estimates approved by the senior management and the Board for the
2015 financial year and are projected for a further four years based on estimated growth rates of 3.4%
to 3.5% (2013: 3.4% to 3.6%). As part of the annual impairment test for goodwill, management assesses
the reasonableness of growth rate assumptions by reviewing historical cash flow projections as well as
future growth objectives.
Cash flows beyond the five year period are extrapolated using a growth rate of 3% which reflects the
long-term growth expectation beyond the five year projection.
The post-tax discount rate applied to these cash flow projections is 10.8% (2013: 11.1%). The discount
rate has been determined using the weighted average cost of capital which incorporates both the cost of
debt and the cost of capital.
Management has considered the possible change in expected sales growth, forecast Earnings Before
Interest, Tax and Amortisation (EBITA) and discount rates applied within the CGU to which goodwill
relate, each of which have been subject to sensitivities. A reasonably possible adverse change in these
key assumptions on which the recoverable amount is based would not cause the carrying amount of the
CGU to exceed its recoverable amount.
IMPAIRMENT TESTING OF BRAND NAMES
Brand names acquired through business combinations have been allocated to the following CGU groups
($’000) as no individual brand name is considered significant:
Casual wear - $188,975
Women’s wear - $137,744
Non Apparel - $49,460
The recoverable amounts of brand names acquired in a business combination are determined on an
individual brand basis based upon a value in use calculation. The value in use calculation has been
determined based upon the relief from royalty method using cash flow projections as at July 2014 for a
period of five years plus a terminal value. The cash flow projections are based on financial estimates
approved by senior management and the Board for the 2015 financial year and are projected for a
further four years based on estimated growth rates.
Casual wear
Women’s wear
Non Apparel
objectives.
The extrapolated growth rates at which cash flows have been discounted or the individual brands within
each of the CGU groups have been summarised below:
CGU
AVERAGE GROWTH RATES APPLIED
TERMINAL VALUE GROWTH
TO PROJECTED CASH FLOWS
RATE
3% to 4%
3% to 11%
4% to 8%
3%
3%
3%
As part of the annual impairment test for brand names, management assesses the reasonableness of
growth rate assumptions by reviewing historical cash flow projections as well as future growth
Cash flows beyond the five year period are extrapolated using a growth rate of 3%, which reflects the
long-term growth expectation beyond the five year projection.
The post-tax discount rate applied to the cash flow projections for each of the three CGU groups is 9.8%
(2013: 10.1%). The discount rate has been determined using the weighted average cost of capital which
incorporates both the cost of debt and cost of capital.
Royalty rates have been determined for each brand within the CGU groups by considering the brand’s
history and future expected performance. Factors such as the profitability of the brand, market share,
brand recognition and general conditions in the industry have also been considered in determining an
appropriate royalty rate for each brand. Consideration is also given to the industry norms relating to
royalty rates by analysing market derived data for comparable brands and by considering the notional
royalty payments as a percentage of the divisional earnings before interest and taxation generated by
the division in which the Brand names are used. Net royalty rates applied across the three CGU groups
range between 3.5% and 8.5%.
Management has considered reasonable possible adverse changes in key assumptions applied to
brands within the relevant CGU groups, each of which have been subjected to sensitivities.
In particular, one brand within the Women’s Wear CGU group with a carrying value of $31.6 million,
which approximates its recoverable amount, indicated sensitivity to a reasonably possible adverse
change in forecast sales growth, as well as indicating sensitivity to a reasonably possible adverse
change to the post-tax discount rate applied to the cash flow projections.
It is estimated that a 5% reduction in forecast sales growth could result in a decrease in the recoverable
amount of the brand within the particular CGU group leading to a potential impairment of $2.8 million.
Similarly, an estimated 50 basis point increase in the 9.8% post-tax discount rate applied to the cash
flow projections could result in a decrease in the recoverable amount of the brand within the CGU group
leading to a possible impairment of $3.4 million. The potential impairment losses as a result of the
reasonably possible adverse changes to these key assumptions are not considered material to the
overall recoverable amount of the CGU group to which the brand relates.
71 Premier Investments Limited
71
72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
12
INTANGIBLES (CONTINUED)
IMPAIRMENT TESTING OF BRAND NAMES (CONTINUED)
The extrapolated growth rates at which cash flows have been discounted or the individual brands within
each of the CGU groups have been summarised below:
CGU
AVERAGE GROWTH RATES APPLIED
TERMINAL VALUE GROWTH
TO PROJECTED CASH FLOWS
RATE
Casual wear
Women’s wear
Non Apparel
3% to 4%
3% to 11%
4% to 8%
3%
3%
3%
As part of the annual impairment test for brand names, management assesses the reasonableness of
growth rate assumptions by reviewing historical cash flow projections as well as future growth
objectives.
Cash flows beyond the five year period are extrapolated using a growth rate of 3%, which reflects the
long-term growth expectation beyond the five year projection.
The post-tax discount rate applied to the cash flow projections for each of the three CGU groups is 9.8%
(2013: 10.1%). The discount rate has been determined using the weighted average cost of capital which
incorporates both the cost of debt and cost of capital.
Royalty rates have been determined for each brand within the CGU groups by considering the brand’s
history and future expected performance. Factors such as the profitability of the brand, market share,
brand recognition and general conditions in the industry have also been considered in determining an
appropriate royalty rate for each brand. Consideration is also given to the industry norms relating to
royalty rates by analysing market derived data for comparable brands and by considering the notional
royalty payments as a percentage of the divisional earnings before interest and taxation generated by
the division in which the Brand names are used. Net royalty rates applied across the three CGU groups
range between 3.5% and 8.5%.
Management has considered reasonable possible adverse changes in key assumptions applied to
brands within the relevant CGU groups, each of which have been subjected to sensitivities.
In particular, one brand within the Women’s Wear CGU group with a carrying value of $31.6 million,
which approximates its recoverable amount, indicated sensitivity to a reasonably possible adverse
change in forecast sales growth, as well as indicating sensitivity to a reasonably possible adverse
change to the post-tax discount rate applied to the cash flow projections.
It is estimated that a 5% reduction in forecast sales growth could result in a decrease in the recoverable
amount of the brand within the particular CGU group leading to a potential impairment of $2.8 million.
Similarly, an estimated 50 basis point increase in the 9.8% post-tax discount rate applied to the cash
flow projections could result in a decrease in the recoverable amount of the brand within the CGU group
leading to a possible impairment of $3.4 million. The potential impairment losses as a result of the
reasonably possible adverse changes to these key assumptions are not considered material to the
overall recoverable amount of the CGU group to which the brand relates.
Annual Report 2014 72
72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
CONSOLIDATED
2014
$’000
2013
$’000
13
INVESTMENTS IN ASSOCIATES (CONTINUED)
Breville Group Limited
13
INVESTMENTS IN ASSOCIATES
Movements in carrying amounts
Carrying amount at the beginning of the
financial year
Fair value of investment in Breville Group
Limited at commencement of equity accounting
Share of profit after income tax
Share of other comprehensive income
Foreign currency translation of investment
Dividends received
Investments in associates
Just Kor Fashion Group (Pty) Ltd
185,534
1,484
-
12,785
(896)
(307)
(8,698)
188,418
184,326
3,114
1,219
74
(4,683)
185,534
Just Jeans Group Pty Ltd, a subsidiary of Premier Investments Limited, has a 50% interest in a joint
venture entity, Just Kor Fashion Group (Pty) Ltd, which is involved in retailing of the Jay Jays concept in
South Africa. Just Kor Fashion Group (Pty) Ltd is a small proprietary company incorporated in South
Africa. Its functional currency is South African Rand.
There were no impairment losses relating to the investment in the associate and no capital
commitments or other commitments relating to the associate. The Group’s share of the profit in its
investment in the associate for the year was $247,215 (2013: loss of $132,554).
The following table illustrates summarised financial information relating to the Group’s investment in Just
Kor Fashion Group (Pty) Ltd:
GROUP’S SHARE OF THE ASSOCIATE’S STATEMENT OF
FINANCIAL POSITION
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
NET ASSETS
Share of associates net assets
GROUP’S SHARE OF THE ASSOCIATE’S STATEMENT OF
COMPREHENSIVE INCOME
Revenue
Profit (Loss) after income tax
2014
$’000
4,211
1,359
5,570
(2,833)
(1,381)
(4,214)
1,356
2014
$’000
12,744
247
73 Premier Investments Limited
2013
$’000
3,373
1,539
4,912
(1,436)
(2,050)
(3,486)
1,426
2013
$’000
12,663
(133)
73
As at 26 July 2014, Premier Investments Limited holds 25.7% (2013: 25.7%) of Breville Group Limited, a
company incorporated in Australia whose shares are quoted on the Australian Stock Exchange. The
principal activities of Breville Group Limited involves the innovation, development, marketing and
distribution of small electrical appliances.
The Group commenced equity accounting for its investment in Breville Group Limited on 1 March 2013,
which was considered the date that the Group gained significant influence. The fair value of the Group’s
investment in Breville Group Limited on 1 March 2013 amounted to $184,325,534.
As at 26 July 2014, the fair value of the Group’s interest in Breville Group Limited as determined based
on the quoted market price was $264,947,047 (2013: $248,889,650).
There were no impairment losses relating to the investment in associate and no capital commitments or
other commitments relating to the associate. The Group’s share of the profit in its investment in
associate for the year was $12,537,482 (2013: apportioned from 1 March 2013 $3,246,659).
The financial year end date of Breville Group Limited is 30 June. For the purpose of applying the equity
method of accounting, the financial statements of Breville Group Limited for the year ended
30 June 2014 have been used.
The following table illustrates summarised financial information relating to the Group’s investment in
GROUP’S SHARE OF THE ASSOCIATE’S STATEMENT OF
Breville Group Limited:
FINANCIAL POSITION
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
NET ASSETS
Share of associates net assets
54,775
51,728
APPORTIONED FROM
1 MARCH 2013
GROUP’S SHARE OF THE ASSOCIATE’S STATEMENT OF
COMPREHENSIVE INCOME
Revenue
Profit after income tax
Other comprehensive (loss) income
2014
$’000
63,593
22,860
86,453
(25,172)
(6,506)
(31,678)
2014
$’000
139,249
12,538
(886)
2013
$’000
63,863
23,152
87,015
(30,351)
(4,936)
(35,287)
$’000
39,976
3,247
1,219
74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
13
INVESTMENTS IN ASSOCIATES (CONTINUED)
Breville Group Limited
As at 26 July 2014, Premier Investments Limited holds 25.7% (2013: 25.7%) of Breville Group Limited, a
company incorporated in Australia whose shares are quoted on the Australian Stock Exchange. The
principal activities of Breville Group Limited involves the innovation, development, marketing and
distribution of small electrical appliances.
The Group commenced equity accounting for its investment in Breville Group Limited on 1 March 2013,
which was considered the date that the Group gained significant influence. The fair value of the Group’s
investment in Breville Group Limited on 1 March 2013 amounted to $184,325,534.
As at 26 July 2014, the fair value of the Group’s interest in Breville Group Limited as determined based
on the quoted market price was $264,947,047 (2013: $248,889,650).
There were no impairment losses relating to the investment in associate and no capital commitments or
other commitments relating to the associate. The Group’s share of the profit in its investment in
associate for the year was $12,537,482 (2013: apportioned from 1 March 2013 $3,246,659).
The financial year end date of Breville Group Limited is 30 June. For the purpose of applying the equity
method of accounting, the financial statements of Breville Group Limited for the year ended
30 June 2014 have been used.
The following table illustrates summarised financial information relating to the Group’s investment in
Breville Group Limited:
GROUP’S SHARE OF THE ASSOCIATE’S STATEMENT OF
FINANCIAL POSITION
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
NET ASSETS
2014
$’000
63,593
22,860
86,453
(25,172)
(6,506)
(31,678)
2013
$’000
63,863
23,152
87,015
(30,351)
(4,936)
(35,287)
Share of associates net assets
54,775
51,728
GROUP’S SHARE OF THE ASSOCIATE’S STATEMENT OF
COMPREHENSIVE INCOME
Revenue
Profit after income tax
Other comprehensive (loss) income
2014
$’000
139,249
12,538
(886)
APPORTIONED FROM
1 MARCH 2013
$’000
39,976
3,247
1,219
Annual Report 2014 74
74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
14
TRADE AND OTHER PAYABLES
CURRENT
Trade creditors
Other creditors and accruals
TOTAL CURRENT
(a)
Fair values
CONSOLIDATED
NOTES
2014
$’000
2013
$’000
35,118
27,402
62,520
34,808
19,706
54,514
Due to the short-term nature of these payables, their carrying value is equal to their fair value.
(b)
Interest rate, foreign exchange rate and liquidity risk
Detail regarding interest rate, foreign exchange and liquidity risk is disclosed in Note 3.
15
INTEREST-BEARING LIABILITIES
CURRENT
Lease liability
22
Bank loans* unsecured ^
Bank loans* unsecured (NZ$20.0 million) ^
Net bank loans
TOTAL CURRENT
52
82,000
18,477
100,477
100,529
48
-
-
-
48
^ Details regarding the subsequent to year end extension of the Just Group Ltd finance facilities is disclosed in Note 32.
22
NON-CURRENT
Lease liability
Bank loans ** secured
Bank loans* unsecured
Bank loans* unsecured (NZ$20.0 million)
Less directly attributable borrowing costs
Net bank loans
TOTAL NON-CURRENT
14
19,000
-
-
19,000
-
19,000
19,014
65
-
85,000
17,240
102,240
(385)
101,855
101,920
* Bank loans are subject to a negative pledge and cross guarantee within the Just Group Ltd group. Premier Investments
Limited is not a participant or guarantor of the Just Group Ltd financing facilities.
** Premier Investments Limited obtained a bank borrowing amounting to $19 million. The borrowing is secured by a
mortgage over the newly acquired National Distribution Centre in Truganina, Victoria. The proceeds from the loan were
used to facilitate settlement of the Distribution Centre. The borrowing is repayable in full at the end of 5 years.
(a)
Fair values
The carrying value of the Group’s current and non-current borrowings approximates their fair value.
(b)
Interest rate, foreign exchange rate and liquidity risk
Detail regarding interest rate, foreign exchange and liquidity risk is disclosed in Note 3.
(c)
Defaults and breaches
During the current and prior years, there were no defaults or breaches on any of the loans.
75 Premier Investments Limited
75
Employee entitlements – Long Service Leave
1,462
1,467
Supply chain transformation, onerous lease and employee entitlements provisions
Refer to note 2(u), 2(v), 2(w) and 2(x) for the relevant accounting policy and a discussion of significant
estimations and assumptions applied in the measurement of these provisions.
16
PROVISIONS
CURRENT
Employee entitlements – Annual Leave
Employee entitlements – Long Service Leave
Supply chain transformation
Onerous leases
TOTAL CURRENT
NON-CURRENT
MOVEMENTS IN PROVISIONS
Supply chain transformation
Opening balance
Charged to Profit and Loss
Utilised during the period
Closing balance
Onerous leases
Opening balance
Charged (credited) to Profit and Loss
Utilised during the period
Closing balance
NATURE AND TIMING OF PROVISIONS
17
OTHER LIABILITIES
CURRENT
Deferred income
TOTAL CURRENT
NON-CURRENT
Deferred income
TOTAL NON-CURRENT
CONSOLIDATED
2014
$’000
2013
$’000
10,011
4,906
1,100
541
16,558
-
4,482
(3,382)
1,100
1,551
248
(1,258)
541
4,221
4,221
9,077
9,077
10,137
5,076
-
1,551
16,764
-
-
-
-
4,739
(927)
(2,261)
1,551
4,771
4,771
10,219
10,219
76
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
16
PROVISIONS
CURRENT
Employee entitlements – Annual Leave
Employee entitlements – Long Service Leave
Supply chain transformation
Onerous leases
TOTAL CURRENT
NON-CURRENT
CONSOLIDATED
2014
$’000
2013
$’000
10,011
4,906
1,100
541
16,558
10,137
5,076
-
1,551
16,764
Employee entitlements – Long Service Leave
1,462
1,467
MOVEMENTS IN PROVISIONS
Supply chain transformation
Opening balance
Charged to Profit and Loss
Utilised during the period
Closing balance
Onerous leases
Opening balance
Charged (credited) to Profit and Loss
Utilised during the period
Closing balance
NATURE AND TIMING OF PROVISIONS
-
4,482
(3,382)
1,100
1,551
248
(1,258)
541
-
-
-
-
4,739
(927)
(2,261)
1,551
Supply chain transformation, onerous lease and employee entitlements provisions
Refer to note 2(u), 2(v), 2(w) and 2(x) for the relevant accounting policy and a discussion of significant
estimations and assumptions applied in the measurement of these provisions.
17
OTHER LIABILITIES
CURRENT
Deferred income
TOTAL CURRENT
NON-CURRENT
Deferred income
TOTAL NON-CURRENT
4,221
4,221
9,077
9,077
4,771
4,771
10,219
10,219
Annual Report 2014 76
76
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
18
CONTRIBUTED EQUITY
19
RESERVES
Ordinary shares
608,615
608,615
CONSOLIDATED
2014
$’000
2013
$’000
(a)
MOVEMENTS IN SHARES ON ISSUE
Shares on issue 28 July 2013
Shares issued during the year (i)
Shares on issue at 26 July 2014
Shares on issue 29 July 2012
Shares issued during the year (i)
Shares on issue at 27 July 2013
NO. (‘000)
$‘000
155,260
454
155,714
155,260
-
155,260
608,615
-
608,615
608,615
-
608,615
Fully paid ordinary shares carry one vote per share and carry the rights to dividends.
(i)
A total of 454,396 shares (2013: nil) were issued in relation to the performance rights plan.
(b)
CAPITAL MANAGEMENT
The Group’s objective is to ensure the entity continues as a going concern as well as to maintain optimal
returns to shareholders The Group also aims to maintain a capital structure that ensures the lowest cost
of capital available to the entity.
The capital structure of the Group consists of debt which includes borrowings as disclosed in Note 15,
cash and cash equivalents as disclosed in Note 25 and equity attributable to the equity holders of the
parent comprising of issued capital, reserves and retained profits as disclosed in Notes 18, 19 and 20
respectively.
The Group operates primarily through its two business segments, investments and retail. The
investments segment is managed and operated through the parent company. The retail segment
operates through subsidiaries established in their respective markets and maintains a central borrowing
facility through a subsidiary, to meet the retail segment’s funding requirements and to enable the Group
to find the optimal debt and equity balance.
The Group’s capital structure is reviewed on a periodic basis in the context of prevailing market
conditions, and appropriate steps are taken to ensure the Group’s capital structure and capital
management initiatives remain in line with the Board’s objectives.
The Group maintains that the dividend paid will represent at least 65% of net profit after tax.
(c)
EXTERNALLY IMPOSED CAPITAL REQUIREMENTS
Just Group Ltd, a subsidiary of Premier Investments Limited, is subject to a number of financial
undertakings as part of its financing facility agreement. These undertakings have been satisfied during
the period.
The Group is not subject to any capital requirements imposed by regulators or other prudential
authorities.
77 Premier Investments Limited
77
RESERVES COMPRISE:
Capital profits reserve (a)
Fair value reserve (b)
Foreign currency translation reserve (c)
Cash flow hedge reserve (d)
Performance rights reserve (e)
TOTAL RESERVES
(a)
CAPITAL PROFITS RESERVE
(i)
Nature and purpose of reserve
The capital profits reserve is used to accumulate
realised capital profits. There were no movements
through the capital profits reserve.
(b)
FAIR VALUE RESERVE
(i)
Nature and purpose of reserve
This reserve is used to record gains and losses on
revaluation to fair value of non-current assets.
(ii)
Movements in the reserve
Opening balance
Increment on revaluation of available-for-sale financial
assets
Net deferred income tax movement on financial assets
Fair value gain on available-for-sale financial assets
reclassified from equity to profit and loss
Net deferred income tax reclassified from equity to
profit and loss
CLOSING BALANCE
(c)
FOREIGN CURRENCY TRANSLATION RESERVE
(i)
Nature and purpose of reserve
This reserve is used to record exchange differences
arising from the translation of the financial statements
of foreign subsidiaries.
(ii)
Movements in the reserve
Opening balance
Foreign currency translation of overseas subsidiaries
Net movement in associate entity’s reserves
CLOSING BALANCE
CONSOLIDATED
2014
$’000
2013
$’000
464
-
2,334
(3,565)
3,281
2,514
464
-
2,502
11,440
2,383
16,789
-
-
-
-
-
-
2,502
728
(896)
2,334
82,618
32,115
(9,582)
(149,803)
44,652
-
72
1,211
1,219
2,502
78
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
19
RESERVES
RESERVES COMPRISE:
Capital profits reserve (a)
Fair value reserve (b)
Foreign currency translation reserve (c)
Cash flow hedge reserve (d)
Performance rights reserve (e)
TOTAL RESERVES
(a)
CAPITAL PROFITS RESERVE
(i)
Nature and purpose of reserve
The capital profits reserve is used to accumulate
realised capital profits. There were no movements
through the capital profits reserve.
(b)
FAIR VALUE RESERVE
(i)
Nature and purpose of reserve
This reserve is used to record gains and losses on
revaluation to fair value of non-current assets.
(ii)
Movements in the reserve
Opening balance
Increment on revaluation of available-for-sale financial
assets
Net deferred income tax movement on financial assets
Fair value gain on available-for-sale financial assets
reclassified from equity to profit and loss
Net deferred income tax reclassified from equity to
profit and loss
CLOSING BALANCE
(c)
FOREIGN CURRENCY TRANSLATION RESERVE
(i)
Nature and purpose of reserve
This reserve is used to record exchange differences
arising from the translation of the financial statements
of foreign subsidiaries.
(ii)
Movements in the reserve
Opening balance
Foreign currency translation of overseas subsidiaries
Net movement in associate entity’s reserves
CLOSING BALANCE
CONSOLIDATED
2014
$’000
2013
$’000
464
-
2,334
(3,565)
3,281
2,514
464
-
2,502
11,440
2,383
16,789
-
-
-
-
-
-
82,618
32,115
(9,582)
(149,803)
44,652
-
2,502
728
(896)
2,334
72
1,211
1,219
2,502
Annual Report 2014 78
78
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
CONSOLIDATED
2014
$’000
2013
$’000
21
OPERATING SEGMENTS
Identification of reportable segments
19
RESERVES (CONTINUED)
(d)
CASH FLOW HEDGE RESERVE
(i)
Nature and purpose of reserve
This reserve records the portion of the gain or loss on a
hedging instrument in a cash flow hedge that is
determined to be an effective hedge.
(ii)
Movements in the reserve
Opening balance
Net losses on cash flow hedges
Transferred from statement of financial
position/comprehensive income
Net deferred income tax movement on cash flow
hedges
CLOSING BALANCE
(e)
PERFORMANCE RIGHTS RESERVE
(i)
Nature and purpose of reserve
This reserve is used to record the cumulative amortised
value of performance rights issued to key senior
employees net of the value of performance shares
acquired under the performance rights plan.
(ii)
Opening balance
Movements in the reserve
Performance rights expense for the year
CLOSING BALANCE
20
RETAINED EARNINGS
Opening balance
Net profit for the period attributable to owners
Dividends paid
CLOSING BALANCE
11,440
(5,355)
(1,349)
(1,712)
(16,081)
19,982
6,431
(3,565)
(5,481)
11,440
2,383
898
3,281
674,962
73,000
(60,562)
687,400
1,451
932
2,383
557,935
174,473
(57,446)
674,962
The Group has identified its operating segments based on the internal reports that are reviewed and
used by the chief operating decision maker in assessing the performance of the company and in
determining the allocation of resources.
The operating segments are identified by management based on the nature of the business
conducted. Discrete financial information about each of these operating businesses is reported to the
chief operating decision maker on at least a monthly basis.
The reportable segments are based on aggregate operating segments determined by the similarity of
the business conducted, as these are the sources of the Group’s major risks and have the most effect
on the rate of return.
Types of products and services
Retail
Investment
dividend income and interest.
Accounting policies
Income tax expense
effective income tax rate.
The retail segment represents the financial performance of a number of speciality retail fashion chains.
The investments segment represents investments in securities for both long and short term gains,
The accounting policies used by the Group in reporting segments internally are the same as those
contained in note 2 to the accounts and in the prior periods.
Income tax expense is calculated based on the segment operating net profit using the Group’s
It is the Group’s policy that if items of revenue and expense are not allocated to operating segments
then any associated assets and liabilities are also not allocated to the segments. This is to avoid
asymmetrical allocations within segments which management believe would be inconsistent.
The following table presents revenue and profit information for reportable segments for the period
ended 26 July 2014 and 27 July 2013.
79 Premier Investments Limited
79
80
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
21
OPERATING SEGMENTS
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and
used by the chief operating decision maker in assessing the performance of the company and in
determining the allocation of resources.
The operating segments are identified by management based on the nature of the business
conducted. Discrete financial information about each of these operating businesses is reported to the
chief operating decision maker on at least a monthly basis.
The reportable segments are based on aggregate operating segments determined by the similarity of
the business conducted, as these are the sources of the Group’s major risks and have the most effect
on the rate of return.
Types of products and services
Retail
The retail segment represents the financial performance of a number of speciality retail fashion chains.
Investment
The investments segment represents investments in securities for both long and short term gains,
dividend income and interest.
Accounting policies
The accounting policies used by the Group in reporting segments internally are the same as those
contained in note 2 to the accounts and in the prior periods.
Income tax expense
Income tax expense is calculated based on the segment operating net profit using the Group’s
effective income tax rate.
It is the Group’s policy that if items of revenue and expense are not allocated to operating segments
then any associated assets and liabilities are also not allocated to the segments. This is to avoid
asymmetrical allocations within segments which management believe would be inconsistent.
The following table presents revenue and profit information for reportable segments for the period
ended 26 July 2014 and 27 July 2013.
Annual Report 2014 80
80
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
21
(a)
OPERATING SEGMENTS (CONTINUED)
OPERATING SEGMENTS
RETAIL
INVESTMENT
ELIMINATION
TOTAL
2014
$’000
2013
$’000
2014
$’000
2013
$’000
2014
$’000
2013
$’000
2014
$’000
2013
$’000
REVENUE
Sale of goods
892,570
843,172
-
-
Interest revenue
Other revenue
Other income
449
470
510
524
10,690
13,346
45,015
45,859
(45,000)
(42,000)
485
4,383
-
-
-
-
892,570
843,172
11,139
13,856
5,776
3,680
-
153,153
-
-
5,776
156,833
Total Segment Revenue
899,265
847,886
55,705
212,358
(45,000)
(42,000)
909,970 1,018,244
Total revenue per the statement of
comprehensive income
RESULTS
Depreciation and
amortisation
Impairment of property
plant and equipment
21,244
18,925
697
262
Interest expense
6,311
6,988
Supply chain
transformation expense
4,482
-
-
-
-
-
-
-
-
-
Share of profit (loss) of
associates
Segment result
Income tax expense
Net profit after tax per the statement of
comprehensive income
ASSETS AND LIABILITIES
909,970 1,018,244
-
-
-
-
-
-
-
-
-
-
21,244
18,925
697
262
6,311
6,988
4,482
-
12,785
3,114
(25,365)
(71,483)
73,000
174,473
247
(133)
12,538
3,247
79,299
76,686
64,066
211,270
(45,000)
(42,000)
98,365
245,956
Segment assets
378,808
345,484
1,279,885 1,269,010
(62,754)
(52,480) 1,595,939 1,562,014
Segment liabilities
247,203
210,913
68,298
58,551
(18,091)
(7,816)
297,410
261,648
Capital expenditure
48,164
19,231
-
2,173
-
-
48,164
21,404
81 Premier Investments Limited
81
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Annual Report 2014 82
t
n
e
m
g
e
S
t
n
e
m
g
e
S
t
n
e
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g
e
S
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m
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e
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s
t
e
s
s
a
s
t
e
s
s
a
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
CONSOLIDATED
NOTES
2014
$’000
2013
$’000
22
EXPENDITURE COMMITMENTS
CAPITAL EXPENDITURE COMMITMENTS
Plant and equipment
Payable within one year
Capital works in progress
Payable within one year
TOTAL CAPITAL EXPENDITURE
LEASE EXPENDITURE COMMITMENTS
(i)
Operating leases
Payable within one year
Payable within one to five years
Payable in more than five years
Total operating leases
(ii)
FINANCE LEASES
Total lease liability – current
Total lease liability – non-current
Total finance leases
FINANCE LEASE COMMITMENTS
Payable within one year
Payable within one to five years
Minimum lease payments
Less future finance charges
TOTAL LEASE LIABILITY
15
15
-
-
-
101,646
138,965
13,554
254,165
52
14
66
55
14
69
(3)
66
-
15,615
15,615
106,685
156,937
4,540
268,162
48
65
113
55
69
124
(11)
113
The Group has entered into commercial operating leases on certain land and buildings, motor vehicles
and items of plant and equipment. These leases have an average life of five years.
The Group has finance leases for various items of plant and equipment. These leases have an average
term of four years with the option to purchase the asset at the completion of the lease term for the
asset’s market value.
23
KEY MANAGEMENT PERSONNEL
COMPENSATION FOR KEY MANAGEMENT PERSONNEL
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
TOTAL
Information regarding individual key management personnel compensation, shareholdings of key
management personnel, as well as other transactions and balances with key management personnel
and their related parties, as required by Regulation 2M.3.03 of the Corporations Regulations 2001 is
provided in the Remuneration Report section of the Directors’ Report.
24
AUDITOR’S REMUNERATION
The auditor of Premier Investments Limited is Ernst
and Young. Amounts received, or due and
receivable, by Ernst and Young (Australia) for:
- An audit or review of the financial report of the
entity and any other entity in the consolidated
group.
Other services in relation to the entity and any other
entity in the consolidated group:
- Taxation advice
- Other
Total – Other services
TOTAL AUDITOR’S REMUNERATION
477,428
558,963
CONSOLIDATED
2014
$
2013
$
6,220,636
145,984
-
795,121
5,092,296
137,935
200,000
772,170
7,161,741
6,202,401
CONSOLIDATED
2014
$
2013
$
431,210
519,709
-
46,218
46,218
906
38,348
39,254
83 Premier Investments Limited
83
84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
23
KEY MANAGEMENT PERSONNEL
COMPENSATION FOR KEY MANAGEMENT PERSONNEL
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
TOTAL
CONSOLIDATED
2014
$
2013
$
6,220,636
145,984
-
795,121
5,092,296
137,935
200,000
772,170
7,161,741
6,202,401
Information regarding individual key management personnel compensation, shareholdings of key
management personnel, as well as other transactions and balances with key management personnel
and their related parties, as required by Regulation 2M.3.03 of the Corporations Regulations 2001 is
provided in the Remuneration Report section of the Directors’ Report.
24
AUDITOR’S REMUNERATION
The auditor of Premier Investments Limited is Ernst
and Young. Amounts received, or due and
receivable, by Ernst and Young (Australia) for:
- An audit or review of the financial report of the
entity and any other entity in the consolidated
group.
Other services in relation to the entity and any other
entity in the consolidated group:
- Taxation advice
- Other
Total – Other services
CONSOLIDATED
2014
$
2013
$
431,210
519,709
-
46,218
46,218
906
38,348
39,254
TOTAL AUDITOR’S REMUNERATION
477,428
558,963
Annual Report 2014 84
84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
25
(a)
NOTES TO THE STATEMENT OF CASH FLOWS
RECONCILIATION OF CASH AND CASH
EQUIVALENTS
Cash at bank and in hand
Short-term deposits
TOTAL CASH ASSETS AND CASH EQUIVALENTS
(b)
RECONCILIATION OF NET CASH FLOWS FROM
OPERATIONS TO NET PROFIT AFTER INCOME TAX
Net profit for the period
Adjustments for:
Fair value gain on available-for-sale financial assets
reclassified from equity to profit and loss, net of tax
Net gain on financial instruments
Amortisation
Depreciation
Impairment and write-off of non-current assets
Foreign exchange losses
Share of profit of associates
Finance charges on capitalised leases
Borrowing costs
Net loss on disposal of property, plant and equipment
Share-based payments expense
Movement in cash flow hedge reserve
Net exchange differences
Changes in assets and liabilities net of the effects from
acquisition and disposal of businesses:
Decrease in income tax receivable
Decrease in provisions
Increase (decrease) in deferred tax liabilities
Increase in trade and other payables
Increase (decrease) in other financial liabilities
Decrease in deferred income
Increase in trade and other receivables
Increase in other current assets
Increase in inventories
Decrease (increase) in other financial assets
(Increase) decrease in deferred tax assets
Increase in income tax payable
NET CASH FLOWS FROM OPERATING ACTIVITIES
85 Premier Investments Limited
CONSOLIDATED
2014
$’000
2013
$’000
27,187
286,121
313,308
31,445
281,712
313,157
73,000
174,473
-
-
112
21,132
947
345
(12,785)
25
387
426
898
(15,005)
(276)
-
(211)
(5,709)
12,086
6,614
(1,692)
(7,244)
(539)
(14,537)
15,446
(1,219)
11,179
83,380
(114,733)
(3,350)
121
18,804
372
243
(3,114)
36
233
352
932
12,790
1,335
3,413
(3,176)
14,351
7,185
(2,114)
(2,976)
(722)
(384)
(12,867)
(16,789)
1,230
13,463
89,108
85
CONSOLIDATED
2014
$’000
2013
$’000
25
NOTES TO THE STATEMENT OF CASH FLOWS
(CONTINUED)
(c)
FINANCE FACILITIES
Working capital and bank overdraft facility
Used
Unused
Used
Unused
Used
Unused
Used
Unused
Finance facility ^
Bank guarantee facility
Interchangeable facility
Leasing facility
Used
Unused
Total facilities
Used
Unused
TOTAL
^ Details regarding the subsequent to year end extension of the Just Group Ltd finance facilities are disclosed in Note 32.
122,284
58,782
181,066
104,293
57,820
162,113
-
12,000
12,000
119,477
39,523
159,000
607
1,393
2,000
2,134
5,866
8,000
66
-
66
-
12,000
12,000
102,240
37,760
140,000
538
1,462
2,000
1,402
6,598
8,000
113
-
113
86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
25
NOTES TO THE STATEMENT OF CASH FLOWS
(CONTINUED)
(c)
FINANCE FACILITIES
Working capital and bank overdraft facility
Used
Unused
Finance facility ^
Used
Unused
Bank guarantee facility
Used
Unused
Interchangeable facility
Used
Unused
Leasing facility
Used
Unused
Total facilities
Used
Unused
TOTAL
CONSOLIDATED
2014
$’000
2013
$’000
-
12,000
12,000
119,477
39,523
159,000
607
1,393
2,000
2,134
5,866
8,000
66
-
66
-
12,000
12,000
102,240
37,760
140,000
538
1,462
2,000
1,402
6,598
8,000
113
-
113
122,284
58,782
181,066
104,293
57,820
162,113
^ Details regarding the subsequent to year end extension of the Just Group Ltd finance facilities are disclosed in Note 32.
Annual Report 2014 86
86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
26
RELATED PARTY DISCLOSURES
The consolidated financial statements include the financial statements of Premier Investments Limited
and the subsidiaries listed in the following table:
(a)
SUBSIDIARIES
COUNTRY OF
INCORPORATION
2014
INTEREST HELD
2013
INTEREST HELD
Kimtara Investments Pty Ltd
Premfin Pty Ltd
Springdeep Investments Pty Ltd
Prempref Pty Ltd
Metalgrove Pty Ltd
Just Group Limited
Just Jeans Group Pty Limited
Just Jeans Pty Limited
Jay Jays Trademark Pty Limited
Just-Shop Pty Limited
Peter Alexander Sleepwear Pty Limited
Old Blues Pty Limited
Kimbyr Investments Limited
Jacqui E Pty Limited
Jacqueline-Eve Fashions Pty Limited
Jacqueline-Eve (Hobart) Pty Limited
Jacqueline-Eve (Retail) Pty Limited
Jacqueline-Eve (Leases) Pty Limited
Sydleigh Pty Limited
Old Favourites Blues Pty Limited
Urban Brands Pty Ltd
Portmans Pty Limited
Dotti Pty Ltd
Smiggle Pty Limited
Just Group International Pty Limited **
Smiggle Singapore Pte Ltd
Just Group International HK Limited**
Smiggle HK Limited**
Just Group USA Inc.**
Peter Alexander USA Inc.**
Smiggle USA Inc.**
Just UK International Limited**
Smiggle UK Limited
Peter Alexander UK Limited**
ETI Holdings Limited**
RSCA Pty Limited**
RSCB Pty Limited**
Just Group Singapore Private Ltd **
Peter Alexander Singapore Private Ltd **
Smiggle Stores Malaysia SDN BHD **
Smiggle Japan KK **
** Not trading as at the date of this report.
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Hong Kong
Hong Kong
USA
USA
USA
UK
UK
UK
New Zealand
Australia
Australia
Singapore
Singapore
Malaysia
Japan
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
87 Premier Investments Limited
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
87
26
26
(b)
(b)
(c)
(c)
(d)
(d)
RELATED PARTY DISCLOSURES (CONTINUED)
RELATED PARTY DISCLOSURES (CONTINUED)
GROUP TRANSACTIONS WITH ASSOCIATES
GROUP TRANSACTIONS WITH ASSOCIATES
The Group has a 50% interest in Just Kor Fashion Group (Pty) Ltd.
The Group has a 50% interest in Just Kor Fashion Group (Pty) Ltd.
(i)
(i)
(ii)
(ii)
(iii)
(iii)
(iv)
(iv)
(v)
(v)
Sale of inventory in the amount of $4,143,973 (2013: $6,717,618).
Sale of inventory in the amount of $4,143,973 (2013: $6,717,618).
Management fee charged for services provided in the amount of $70,901
Management fee charged for services provided in the amount of $70,901
(2013: $71,451).
(2013: $71,451).
Royalty income of $266,180 (2013: $nil) is due for the financial year.
Royalty income of $266,180 (2013: $nil) is due for the financial year.
Information regarding outstanding balances with the associate at year end is disclosed in
Information regarding outstanding balances with the associate at year end is disclosed in
Note 8.
Note 8.
The Group provided a loan to the associate. The loan is denominated in South African
The Group provided a loan to the associate. The loan is denominated in South African
Rand. Interest is charged at a commercial rate and payable monthly. Interest earned on the
Rand. Interest is charged at a commercial rate and payable monthly. Interest earned on the
loan is disclosed in Note 4.
loan is disclosed in Note 4.
KEY MANAGEMENT PERSONNEL
KEY MANAGEMENT PERSONNEL
TERMS AND CONDITIONS
TERMS AND CONDITIONS
Details relating to remuneration paid to key management personnel are included in Note 23.
Details relating to remuneration paid to key management personnel are included in Note 23.
Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash with
Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash with
the exception of the loan provided to the associate as disclosed above.
the exception of the loan provided to the associate as disclosed above.
(e)
(e)
ULTIMATE PARENT
ULTIMATE PARENT
Premier Investments Limited is the ultimate parent entity.
Premier Investments Limited is the ultimate parent entity.
88
88
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
26
26
(b)
(b)
(c)
(c)
(d)
(d)
(e)
(e)
RELATED PARTY DISCLOSURES (CONTINUED)
RELATED PARTY DISCLOSURES (CONTINUED)
(v)
(v)
(iii)
(iii)
(iv)
(iv)
GROUP TRANSACTIONS WITH ASSOCIATES
GROUP TRANSACTIONS WITH ASSOCIATES
The Group has a 50% interest in Just Kor Fashion Group (Pty) Ltd.
The Group has a 50% interest in Just Kor Fashion Group (Pty) Ltd.
(i)
(i)
(ii)
(ii)
Sale of inventory in the amount of $4,143,973 (2013: $6,717,618).
Sale of inventory in the amount of $4,143,973 (2013: $6,717,618).
Management fee charged for services provided in the amount of $70,901
Management fee charged for services provided in the amount of $70,901
(2013: $71,451).
(2013: $71,451).
Royalty income of $266,180 (2013: $nil) is due for the financial year.
Royalty income of $266,180 (2013: $nil) is due for the financial year.
Information regarding outstanding balances with the associate at year end is disclosed in
Information regarding outstanding balances with the associate at year end is disclosed in
Note 8.
Note 8.
The Group provided a loan to the associate. The loan is denominated in South African
The Group provided a loan to the associate. The loan is denominated in South African
Rand. Interest is charged at a commercial rate and payable monthly. Interest earned on the
Rand. Interest is charged at a commercial rate and payable monthly. Interest earned on the
loan is disclosed in Note 4.
loan is disclosed in Note 4.
KEY MANAGEMENT PERSONNEL
KEY MANAGEMENT PERSONNEL
Details relating to remuneration paid to key management personnel are included in Note 23.
Details relating to remuneration paid to key management personnel are included in Note 23.
TERMS AND CONDITIONS
TERMS AND CONDITIONS
Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash with
Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash with
the exception of the loan provided to the associate as disclosed above.
the exception of the loan provided to the associate as disclosed above.
ULTIMATE PARENT
ULTIMATE PARENT
Premier Investments Limited is the ultimate parent entity.
Premier Investments Limited is the ultimate parent entity.
Annual Report 2014 88
88
88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
27
(a)
SHARE-BASED PAYMENT PLANS
RECOGNISED SHARE-BASED PAYMENT EXPENSES
The expense recognised for employee services received during the year is shown in the table
below:
Total Expense arising from equity-settled share-based
payment transactions
(b)
TYPE OF SHARE-BASED PAYMENT PLAN
Performance rights
CONSOLIDATED
2014
$’000
898
2013
$’000
932
The company grants performance rights to executives, thus ensuring that the executives who are
most directly able to influence the company performance are appropriately aligned with the interests
of shareholders.
A performance right is a right to acquire one fully paid ordinary share of the company after meeting a
maximum three year performance period, provided specific performance hurdles are met. The
number of performance rights to vest is determined by a vesting schedule based on the performance
of the company. These performance hurdles have been discussed in the Remuneration Report on
pages 12 - 24.
The fair value of the performance rights has been calculated as at the respective grant dates using
the Black Sholes European option pricing model.
In determining the share-based payments expenses for the period, the number of instruments
expected to vest has been adjusted to reflect the number of executives expected to remain with the
group until the end of the performance period, as well as the probability of not meeting the TSR
performance hurdles.
The following share-based payment arrangements were in existence during the current and prior
reporting periods:
NUMBER
GRANT DATE
FAIR VALUE AT
GRANT DATE
The weighted average fair value of performance rights granted during the year was $4.28 (2013:
The weighted average fair value of performance rights granted during the year was $4.28 (2013:
Granted on 18 December 2009
Granted on 28 June 2010
Granted on 22 November 2010
Granted on 10 May 2011
Granted on 25 May 2012
Granted on 12 April 2013
Granted on 18 April 2013
Granted on 11 December 2013
115,708
24,281
134,910
1,200,000
185,201
304,386
240,000
319,493
18/12/2009
28/06/2010
22/11/2010
10/05/2011
25/05/2012
12/04/2013
18/04/2013
11/12/2013
89 Premier Investments Limited
$4.17
$4.17
$3.60
$3.00
$2.62
$2.88
$4.20
$4.28
89
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
27
27
SHARE-BASED PAYMENT PLANS (CONTINUED)
SHARE-BASED PAYMENT PLANS (CONTINUED)
The following table shows the factors which were considered in determining the fair value of the
The following table shows the factors which were considered in determining the fair value of the
performance rights granted during the current period:
performance rights granted during the current period:
GRANT DATE SHARE PRICE
GRANT DATE SHARE PRICE
OPTION LIFE
OPTION LIFE
DIVIDEND
DIVIDEND
YIELD
YIELD
VOLATILITY
VOLATILITY
RISK-FREE
RISK-FREE
RATE
FAIR VALUE
FAIR VALUE
18/12/2009
18/12/2009
28/06/2010
28/06/2010
22/11/2010
22/11/2010
10/05/2011
10/05/2011
25/05/2012
25/05/2012
12/04/2013
12/04/2013
18/04/2013
18/04/2013
11/12/2013
11/12/2013
$8.34
$8.34
$8.34
$8.34
$7.19
$7.19
$6.00
$6.00
$5.24
$5.24
$5.77
$5.77
$8.40
$8.40
$8.56
$8.56
3.3 years
3.3 years
3.3 years
3.3 years
3.8 years
3.8 years
4-5 years
4-5 years
3.4 years
3.4 years
3.5 years
3.5 years
4.2 years
4.2 years
3.8 years
3.8 years
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
RATE
4.50%
4.50%
4.50%
4.50%
5.23%
5.23%
5.10%
5.10%
2.39%
2.39%
2.81%
2.81%
2.71%
2.71%
2.98%
2.98%
(c)
(c)
SUMMARY OF RIGHTS GRANTED UNDER PERFORMANCE RIGHTS PLANS
SUMMARY OF RIGHTS GRANTED UNDER PERFORMANCE RIGHTS PLANS
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of,
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of,
and movements in, performance rights issued during the year:
and movements in, performance rights issued during the year:
Balance at beginning of the year
Balance at beginning of the year
Granted during the year
Granted during the year
Forfeited during the year
Forfeited during the year
Exercised during the year
Exercised during the year
Expired during the year
Expired during the year
Balance at the end of the year
Balance at the end of the year
2014
2014
No.
No.
2,212,962
2,212,962
319,493
319,493
(148,465)
(148,465)
(454,396)
(454,396)
(80,514)
(80,514)
1,849,080
1,849,080
2014
2014
WAEP
WAEP
-
-
-
-
-
-
-
-
-
-
-
-
2013
2013
No.
No.
1,808,565
1,808,565
544,386
544,386
-
-
-
-
(139,989)
(139,989)
2,212,962
2,212,962
Since the end of the financial year and up to the date of this report, no performance rights have been
Since the end of the financial year and up to the date of this report, no performance rights have been
exercised, no performance rights have been issued, no performance rights have been forfeited and
exercised, no performance rights have been issued, no performance rights have been forfeited and
no performance rights have expired.
no performance rights have expired.
(d)
(d)
WEIGHTED AVERAGE FAIR VALUE
WEIGHTED AVERAGE FAIR VALUE
$3.46).
$3.46).
reports.
reports.
28
28
DEED OF CROSS GUARANTEE
DEED OF CROSS GUARANTEE
Pursuant to Class Order 98/1418, relief has been granted to the wholly-owned subsidiaries listed
Pursuant to Class Order 98/1418, relief has been granted to the wholly-owned subsidiaries listed
below from the Corporations law requirements for preparation, audit and lodgement of financial
below from the Corporations law requirements for preparation, audit and lodgement of financial
As a condition of the class order, Just Group Limited, a subsidiary of Premier Investments Limited,
As a condition of the class order, Just Group Limited, a subsidiary of Premier Investments Limited,
and each of the controlled entities of Just Group Limited entered into a Deed of Cross Guarantee as
and each of the controlled entities of Just Group Limited entered into a Deed of Cross Guarantee as
at 25 June 2009. Premier Investments Limited is not a party to the Deed of Cross Guarantee.
at 25 June 2009. Premier Investments Limited is not a party to the Deed of Cross Guarantee.
$4.17
$4.17
$4.17
$4.17
$3.60
$3.60
$3.00
$3.00
$2.62
$2.62
$2.88
$2.88
$4.20
$4.20
$4.28
$4.28
2013
2013
WAEP
WAEP
-
-
-
-
-
-
-
-
-
-
-
-
90
90
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
27
27
SHARE-BASED PAYMENT PLANS (CONTINUED)
SHARE-BASED PAYMENT PLANS (CONTINUED)
The following table shows the factors which were considered in determining the fair value of the
The following table shows the factors which were considered in determining the fair value of the
performance rights granted during the current period:
performance rights granted during the current period:
GRANT DATE SHARE PRICE
GRANT DATE SHARE PRICE
$8.34
18/12/2009
$8.34
18/12/2009
$8.34
28/06/2010
$8.34
28/06/2010
$7.19
22/11/2010
$7.19
22/11/2010
$6.00
10/05/2011
$6.00
10/05/2011
$5.24
25/05/2012
$5.24
25/05/2012
$5.77
12/04/2013
$5.77
12/04/2013
$8.40
18/04/2013
$8.40
18/04/2013
$8.56
11/12/2013
$8.56
11/12/2013
OPTION LIFE
OPTION LIFE
3.3 years
3.3 years
3.3 years
3.3 years
3.8 years
3.8 years
4-5 years
4-5 years
3.4 years
3.4 years
3.5 years
3.5 years
4.2 years
4.2 years
3.8 years
3.8 years
DIVIDEND
DIVIDEND
YIELD
YIELD
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
VOLATILITY
VOLATILITY
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
40%
RISK-FREE
RISK-FREE
RATE
RATE
4.50%
4.50%
4.50%
4.50%
5.23%
5.23%
5.10%
5.10%
2.39%
2.39%
2.81%
2.81%
2.71%
2.71%
2.98%
2.98%
FAIR VALUE
FAIR VALUE
$4.17
$4.17
$4.17
$4.17
$3.60
$3.60
$3.00
$3.00
$2.62
$2.62
$2.88
$2.88
$4.20
$4.20
$4.28
$4.28
(c)
(c)
SUMMARY OF RIGHTS GRANTED UNDER PERFORMANCE RIGHTS PLANS
SUMMARY OF RIGHTS GRANTED UNDER PERFORMANCE RIGHTS PLANS
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of,
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of,
and movements in, performance rights issued during the year:
and movements in, performance rights issued during the year:
Balance at beginning of the year
Balance at beginning of the year
Granted during the year
Granted during the year
Forfeited during the year
Forfeited during the year
Exercised during the year
Exercised during the year
Expired during the year
Expired during the year
Balance at the end of the year
Balance at the end of the year
2014
2014
No.
No.
2,212,962
2,212,962
319,493
319,493
(148,465)
(148,465)
(454,396)
(454,396)
(80,514)
(80,514)
1,849,080
1,849,080
2014
2014
WAEP
WAEP
-
-
-
-
-
-
-
-
-
-
-
-
2013
2013
No.
No.
1,808,565
1,808,565
544,386
544,386
-
-
-
-
(139,989)
(139,989)
2,212,962
2,212,962
2013
2013
WAEP
WAEP
-
-
-
-
-
-
-
-
-
-
-
-
(d)
(d)
28
28
Since the end of the financial year and up to the date of this report, no performance rights have been
Since the end of the financial year and up to the date of this report, no performance rights have been
exercised, no performance rights have been issued, no performance rights have been forfeited and
exercised, no performance rights have been issued, no performance rights have been forfeited and
no performance rights have expired.
no performance rights have expired.
WEIGHTED AVERAGE FAIR VALUE
WEIGHTED AVERAGE FAIR VALUE
The weighted average fair value of performance rights granted during the year was $4.28 (2013:
The weighted average fair value of performance rights granted during the year was $4.28 (2013:
$3.46).
$3.46).
DEED OF CROSS GUARANTEE
DEED OF CROSS GUARANTEE
Pursuant to Class Order 98/1418, relief has been granted to the wholly-owned subsidiaries listed
Pursuant to Class Order 98/1418, relief has been granted to the wholly-owned subsidiaries listed
below from the Corporations law requirements for preparation, audit and lodgement of financial
below from the Corporations law requirements for preparation, audit and lodgement of financial
reports.
reports.
As a condition of the class order, Just Group Limited, a subsidiary of Premier Investments Limited,
As a condition of the class order, Just Group Limited, a subsidiary of Premier Investments Limited,
and each of the controlled entities of Just Group Limited entered into a Deed of Cross Guarantee as
and each of the controlled entities of Just Group Limited entered into a Deed of Cross Guarantee as
at 25 June 2009. Premier Investments Limited is not a party to the Deed of Cross Guarantee.
at 25 June 2009. Premier Investments Limited is not a party to the Deed of Cross Guarantee.
Annual Report 2014 90
90
90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
CONSOLIDATED
2014
$’000
2013
$’000
29
(a)
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
INSTRUMENTS USED BY THE GROUP (CONTINUED)
(i)
Forward currency contracts – cash flow hedges (continued)
29
OTHER FINANCIAL INSTRUMENTS
CURRENT ASSETS
Derivatives designated as hedging instruments
Forward currency contracts – cash flow hedges
NON -CURRENT ASSETS
Derivatives designated as hedging instruments
Forward currency contracts – cash flow hedges
CURRENT LIABILITIES
Derivatives designated as hedging instruments
Forward currency contracts – cash flow hedges
NON -CURRENT LIABILITIES
Derivatives designated as hedging instruments
Forward currency contracts – cash flow hedges
1,517
1,517
79
79
6,798
6,798
3
3
13,625
13,625
3,417
3,417
28
28
159
159
(a)
INSTRUMENTS USED BY THE GROUP
Derivative financial instruments are used by the Group in the normal course of business in order to
hedge exposure to fluctuations in foreign exchange rates in accordance with the Group’s financial
risk management policies.
(i)
Forward currency contracts – cash flow hedges
The majority of the Group’s inventory purchases are denominated in US Dollars. In order to
protect against exchange rates movements, the Group has entered into forward exchange
contracts to purchase US Dollars.
These contracts are hedging highly probable forecasted purchases and they are timed to
mature when payments are scheduled to be made.
The cash flows are expected to occur between one to twenty four months from 26 July 2014
and the profit and loss within cost of sales will be affected over the next couple of years as
the inventory is sold. At reporting date, the details of the outstanding contracts are:
CONSOLIDATED
2014
$’000
2013
$’000
2014
2013
Buy USD / Sell AUD
Maturity < 6 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Buy USD / Sell NZD
Maturity < 6 months
Maturity 6 – 12 months
Maturity 12 – 24 months
NOTIONAL AMOUNTS $AUD
AVERAGE EXCHANGE RATE
80,467
98,823
14,085
16,685
15,844
15,839
79,021
85,944
77,801
12,539
13,361
5,994
0.9237
0.9006
0.9230
0.7943
0.7822
0.8208
0.9906
0.9978
0.9333
0.8042
0.8167
0.8206
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
The forward currency contracts are considered to be highly effective hedges as they are
matched against forecast inventory purchases and any gain or loss on the contracts
attributable to the hedge risk is taken directly to equity.
When the cash flows occur, the Group adjusts the initial measurement of the component
recognised in the statement of financial position by the related amount deferred in equity.
(b)
INTEREST RATE RISK
(c)
CREDIT RISK
Information regarding interest rate exposure is set out in Note 3.
Information regarding credit risk exposure is set out in Note 3.
91 Premier Investments Limited
91
92
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
29
(a)
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
INSTRUMENTS USED BY THE GROUP (CONTINUED)
(i)
Forward currency contracts – cash flow hedges (continued)
The cash flows are expected to occur between one to twenty four months from 26 July 2014
and the profit and loss within cost of sales will be affected over the next couple of years as
the inventory is sold. At reporting date, the details of the outstanding contracts are:
CONSOLIDATED
2014
$’000
2013
$’000
2014
2013
Buy USD / Sell AUD
Maturity < 6 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Buy USD / Sell NZD
Maturity < 6 months
Maturity 6 – 12 months
Maturity 12 – 24 months
NOTIONAL AMOUNTS $AUD
AVERAGE EXCHANGE RATE
80,467
98,823
14,085
79,021
85,944
77,801
0.9237
0.9006
0.9230
0.9906
0.9978
0.9333
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
16,685
15,844
15,839
12,539
13,361
5,994
0.7943
0.7822
0.8208
0.8042
0.8167
0.8206
The forward currency contracts are considered to be highly effective hedges as they are
matched against forecast inventory purchases and any gain or loss on the contracts
attributable to the hedge risk is taken directly to equity.
When the cash flows occur, the Group adjusts the initial measurement of the component
recognised in the statement of financial position by the related amount deferred in equity.
(b)
INTEREST RATE RISK
Information regarding interest rate exposure is set out in Note 3.
(c)
CREDIT RISK
Information regarding credit risk exposure is set out in Note 3.
Annual Report 2014 92
92
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
CONSOLIDATED
2014
$’000
2013
$’000
30
EARNINGS PER SHARE
The following reflects the income and share data used
in the calculation of basic and diluted earnings per
share:
Net profit for the period
73,000
174,473
subsidiaries amounting to $nil (2013: $nil).
Weighted average number of ordinary shares used in
calculating:
- basic earnings per share
- diluted earnings per share
NUMBER OF
SHARES
‘000
NUMBER OF
SHARES
‘000
155,384
157,455
155,260
157,083
There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of
potential ordinary shares since the reporting date and before the completion of this financial report.
31
PARENT ENTITY INFORMATION
The accounting policies of the parent entity, which have been applied in determining the financial
information shown below, are the same as those applied in the consolidated financial statements.
Refer to note 2 for a summary of the significant accounting policies of the Group.
The individual financial statements for the parent entity show the following aggregate amounts:
(a)
Summary financial information
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
- Foreign currency translation reserve
- Performance rights reserve
Retained earnings
Net profit for the year
Total comprehensive income
93 Premier Investments Limited
2014
$’000
2013
$’000
312,461
1,360,447
23,189
86,759
302,903
1,331,978
14,038
121,187
608,615
608,615
333
3,281
661,459
123,447
(886)
1,219
2,383
598,574
163,557
82,158
93
2014
$’000
2013
$’000
31
PARENT ENTITY INFORMATION (CONTINUED)
(b)
Guarantees entered into by the parent entity
Carrying amount included in current liabilities
-
-
-
-
The parent entity has provided financial guarantees in respect of bank overdrafts and loans of
The parent entity has also given unsecured guarantees in respect of:
(i)
Finance leases of subsidiaries amounting to $nil (2013: $nil).
(ii)
The bank overdraft of a subsidiary amounting to $nil (2013: $nil).
(c)
Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 26 July 2014 or 27 July 2013.
(d)
Contractual commitments for the acquisition of property, plant or equipment
The parent entity did not have any contractual commitments to purchase property, plant and
equipment as at 26 July 2014. During the year ending 27 July 2013, Premier Investments Limited
entered into an agreement to acquire a property in Truganina, Victoria, to establish a National
Distribution Centre. As at 27 July 2013, capital works in progress amounting to $2,173,000 was
recognised by the parent entity. The balance of the purchase price, being $15,615,000, was paid
upon settlement, which occurred on 16 January 2014.
32
EVENTS AFTER THE REPORTING DATE
During September 2014, the Group’s core debt facility relating to its unsecured bank loans was
refinanced for a further three years.
Subsequent to year-end, Premier Investments Limited increased its shareholding in Breville Group
Limited from 25.7% to 27.33% by purchasing a further 2.1 million shares for $15.2 million.
On 16 September 2014, the directors of Premier Investments Limited declared a final dividend in
respect of the 2014 financial year. The total amount of the dividend is $31,143,000 (2013:
$29,499,000) which represents a fully franked dividend of 20 cents per share (2013: 19 cents per
share).
33
CONTINGENT LIABILITIES
Under the terms of the shareholder agreement Just Kor Fashion Group (Pty) Ltd, the Group’s
associate operating in South Africa, has the right to call on each shareholder for additional funding of
up to ZAR15.0 million each. The Group has not provided for this obligation in this financial report.
The Group has bank guarantees totalling $2,740,170 (2013: $1,940,687).
94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 26 JULY 2014 AND 27 JULY 2013 (CONTINUED)
2014
$’000
2013
$’000
31
PARENT ENTITY INFORMATION (CONTINUED)
(b)
Guarantees entered into by the parent entity
Carrying amount included in current liabilities
-
-
-
-
The parent entity has provided financial guarantees in respect of bank overdrafts and loans of
subsidiaries amounting to $nil (2013: $nil).
The parent entity has also given unsecured guarantees in respect of:
(i)
Finance leases of subsidiaries amounting to $nil (2013: $nil).
(ii)
The bank overdraft of a subsidiary amounting to $nil (2013: $nil).
(c)
Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 26 July 2014 or 27 July 2013.
(d)
Contractual commitments for the acquisition of property, plant or equipment
The parent entity did not have any contractual commitments to purchase property, plant and
equipment as at 26 July 2014. During the year ending 27 July 2013, Premier Investments Limited
entered into an agreement to acquire a property in Truganina, Victoria, to establish a National
Distribution Centre. As at 27 July 2013, capital works in progress amounting to $2,173,000 was
recognised by the parent entity. The balance of the purchase price, being $15,615,000, was paid
upon settlement, which occurred on 16 January 2014.
32
EVENTS AFTER THE REPORTING DATE
During September 2014, the Group’s core debt facility relating to its unsecured bank loans was
refinanced for a further three years.
Subsequent to year-end, Premier Investments Limited increased its shareholding in Breville Group
Limited from 25.7% to 27.33% by purchasing a further 2.1 million shares for $15.2 million.
On 16 September 2014, the directors of Premier Investments Limited declared a final dividend in
respect of the 2014 financial year. The total amount of the dividend is $31,143,000 (2013:
$29,499,000) which represents a fully franked dividend of 20 cents per share (2013: 19 cents per
share).
33
CONTINGENT LIABILITIES
Under the terms of the shareholder agreement Just Kor Fashion Group (Pty) Ltd, the Group’s
associate operating in South Africa, has the right to call on each shareholder for additional funding of
up to ZAR15.0 million each. The Group has not provided for this obligation in this financial report.
The Group has bank guarantees totalling $2,740,170 (2013: $1,940,687).
Annual Report 2014 94
94
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Premier Investments Limited, I state that:
DIRECTORS’ DECLARATION
In the directors’ opinion:
(a)
the financial statements and notes of Premier Investments Limited for the financial year ended
26 July 2014 are in accordance with the Corporations Act 2001, including:
In accordance with a resolution of the directors of Premier Investments Limited, I state that:
In the directors’ opinion:
complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
(i)
(a)
(b)
the financial statements and notes of Premier Investments Limited for the financial year ended
(ii)
26 July 2014 are in accordance with the Corporations Act 2001, including:
giving a true and fair view of the consolidated entity’s financial position as at 26 July 2014
and of its performance for the financial year ended on that date, and
(i)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
(c)
giving a true and fair view of the consolidated entity’s financial position as at 26 July 2014
and of its performance for the financial year ended on that date, and
(ii)
in the opinion of the directors, as at the date of this declaration, there are reasonable grounds to
believe that the members of the Closed Group will be able to meet any obligations or liabilities to
which they are or may become subject, by virtue of the Deed of Cross Guarantee.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
(b)
they become due and payable.
Note 2(b) confirms that the financial statements also comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board.
(c)
The directors have been given the declaration by the Chief Financial Officer required by section 295A of the
Corporations Act 2001.
in the opinion of the directors, as at the date of this declaration, there are reasonable grounds to
believe that the members of the Closed Group will be able to meet any obligations or liabilities to
which they are or may become subject, by virtue of the Deed of Cross Guarantee.
Note 2(b) confirms that the financial statements also comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board.
On behalf of the Board
The directors have been given the declaration by the Chief Financial Officer required by section 295A of the
Corporations Act 2001.
On behalf of the Board
Solomon Lew
Chairman
17 October 2014
Solomon Lew
Chairman
17 October 2014
95 Premier Investments Limited
95
95
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67
Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67
Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent auditor's report to the members of Premier Investments
Limited
Report on the financial report
Independent auditor's report to the members of Premier Investments
Limited
We have audited the accompanying financial report of Premier Investments Limited, which comprises the
consolidated statement of financial position as at 26 July 2014, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
Report on the financial report
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors' declaration of the consolidated entity comprising the
We have audited the accompanying financial report of Premier Investments Limited, which comprises the
company and the entities it controlled at the year's end or from time to time during the financial year.
consolidated statement of financial position as at 26 July 2014, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
Directors' responsibility for the financial report
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors' declaration of the consolidated entity comprising the
The directors of the company are responsible for the preparation of the financial report that gives a true
company and the entities it controlled at the year's end or from time to time during the financial year.
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal controls as the directors determine are necessary to enable the preparation of the financial
Directors' responsibility for the financial report
report that is free from material misstatement, whether due to fraud or error. In Note 2 (b), the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
The directors of the company are responsible for the preparation of the financial report that gives a true
the financial statements comply with International Financial Reporting Standards.
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal controls as the directors determine are necessary to enable the preparation of the financial
Auditor's responsibility
report that is free from material misstatement, whether due to fraud or error. In Note 2 (b), the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
the financial statements comply with International Financial Reporting Standards.
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
Auditor's responsibility
reasonable assurance about whether the financial report is free from material misstatement.
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
reasonable assurance about whether the financial report is free from material misstatement.
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and
fair presentation of the financial report in order to design audit procedures that are appropriate in the
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and
presentation of the financial report.
fair presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
our audit opinion.
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
Independence
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
In conducting our audit we have complied with the independence requirements of the Corporations Act
our audit opinion.
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report 2014 96
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67
Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
2
Independent auditor's report to the members of Premier Investments
Limited
Opinion
In our opinion:
Report on the financial report
a.
the financial report of Premier Investments Limited is in accordance with the Corporations Act
2001, including:
We have audited the accompanying financial report of Premier Investments Limited, which comprises the
consolidated statement of financial position as at 26 July 2014, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
giving a true and fair view of the consolidated entity's financial position as at 26 July 2014
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
and of its performance for the year ended on that date; and
other explanatory information, and the directors' declaration of the consolidated entity comprising the
company and the entities it controlled at the year's end or from time to time during the financial year.
i
ii
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
Directors' responsibility for the financial report
b.
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 2 (b).
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 controls as the directors determine are necessary to enable the preparation of the financial
Report on the remuneration report
report that is free from material misstatement, whether due to fraud or error. In Note 2 (b), the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
We have audited the Remuneration Report included in the directors' report for the year ended 26 July
the financial statements comply with International Financial Reporting Standards.
2014. 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
Auditor's responsibility
to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
Opinion
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
In our opinion, the Remuneration Report of Premier Investments Limited for the year ended 26 July
2014, complies with section 300A of the Corporations Act 2001.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and
fair presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
Ernst & Young
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
Brent Simonis
Partner
In conducting our audit we have complied with the independence requirements of the Corporations Act
Melbourne
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
17 October 2014
copy of which is included in the directors’ report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
97 Premier Investments Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
This page has been left blank intentionally.
Annual Report 2014 98
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT
The committee consists of three members, who as at the date of this report are:
The Board of Premier Investments Limited (“Premier”) is responsible for the corporate governance of
the Group. The Board guides and monitors the business of Premier and its subsidiaries on behalf of its
shareholders.
Name
David Crean
Frank Jones
Gary Weiss
Date Appointed
1 August 2010
Premier and its Board continue to be fully committed to achieving and demonstrating the highest
standards of accountability and transparency in their reporting and see the continued development of
a cohesive set of corporate governance policies and practices as fundamental to Premier’s successful
growth.
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
7 September 1995
1 August 2010
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
The Board has included in its corporate governance policies those matters contained in the Australian
Securities Exchange Corporate Governance Council’s Corporate Governance Principles and
Recommendations (“ASX Recommendations”) where applicable. However, the Board also recognises
that full adoption of the ASX Recommendations may not be practical or provide the optimal result
given the particular circumstances of Premier.
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
4.2. Composition
This corporate governance statement outlines Premier’s corporate governance policies and practices
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
for the 2013/14 financial year.
financial year, the Audit and Risk Committee met three times.
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
to the external auditors.
In addition to the policies set out in this statement, Premier’s wholly‑owned subsidiary, Just Group
Limited, has in place its own stringent corporate governance practices.
1
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
Role of the Board
1.1
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
The directors are responsible for protecting the rights and interests of Premier, its shareholders and
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
other stakeholders, including creditors and employees.
and in accordance with relevant accounting standards.
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
The Board’s key responsibilities are set out in its Board Charter, a summary of which is disclosed on
Premier’s website, and include:
protecting and enhancing the value of the assets of Premier;
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
setting strategies, directions and monitoring and reviewing against these strategic objectives;
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
overseeing the conduct of Premier’s business in order to evaluate whether Premier is
adequately managed;
identifying, assessing, monitoring and managing risk and identifying material changes in
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
Premier’s risk profile to ensure it can take advantage of potential opportunities while
managing potential adverse effects;
• the convening of meetings;
• the form and requirements of the notice;
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
approval of transactions relating to acquisitions, divestments and capital expenditure above
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
delegated authority limits;
including:
ensuring the significant risks facing Premier have been identified and adequate control
monitoring and reporting mechanisms are in place;
monitoring Premier’s financial results;
• annual and half‑yearly reports;
determining Premier’s investment policy;
approval of financial statements and dividend policy; and
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
ensuring responsible corporate governance.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
99 Premier Investments Limited
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
1.1
Role of the Board (continued)
The Board is responsible for ensuring that management’s objectives and activities are aligned with the
expectations and risks identified by the board. The Board has a number of mechanisms in place to
ensure this is achieved, including:
The committee consists of three members, who as at the date of this report are:
Name
David Crean
Frank Jones
Gary Weiss
Board approval of strategic plans designed to meet stakeholder’s needs and manage
business risk; and
Date Appointed
1 August 2010
ongoing development of the strategic plans and approving initiatives and strategies designed
to ensure continued growth.
7 September 1995
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
1 August 2010
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
To assist in the execution of the above responsibilities, the Board had in place, throughout the
financial year, an Audit and Risk Committee and a Remuneration and Nomination Committee. Both
Committees have direct access to significant internal and external resources, including direct access
to Premier’s advisers, both internal and external, and are authorised to seek independent professional
or other advice if required. The roles and responsibilities of these committees are discussed
throughout this corporate governance statement.
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
4.2. Composition
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
to the external auditors.
The Board has delegated the responsibility for compliance with the ASX’s disclosure requirements and
for shareholder communication to the Company Secretary. The Company Secretary uses information
provided by the ASX and consults Premier’s professional legal advisers in ensuring compliance with
Premier’s obligations with respect to the ASX Listing Rules and Corporate Governance Principles.
Premier communicates with shareholders through announcements to the ASX (which are also posted
on Premier’s website), general meetings of shareholders, the annual report, and through written and
electronic correspondence from the Company Secretary from time to time.
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
and in accordance with relevant accounting standards.
The Company Secretary is accountable directly to the Board and provides support to the Board and its
committees on all matters to do with the proper functioning of the Board. The role of the Company
Secretary includes:
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
advising the Board and its committees on governance matters;
coordinating the timely completion and dispatch of board and committee papers;
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
ensuring that the business at board and committee meetings are accurately captured in the
minutes; and
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
helping to organise and facilitate the induction of directors.
1.2
Evaluating the Performance of Senior Executives
Each director is able to communicate directly with the Company Secretary. The decision to appoint or
remove the Company Secretary is made by the Board.
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
• the form and requirements of the notice;
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
Until such time that a CEO is appointed, the Board will continue to delegate the responsibilities
allocated to the CEO to other persons, such as:
the Chief Executive Officer of Premier Retail, Mark McInnes;
the Chairman;
external service providers including, without limitation, Century Plaza Trading Pty Ltd; and
• annual and half‑yearly reports;
the existing management team at Just Group.
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
Annual Report 2014 100
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
1.2
Evaluating the Performance of Senior Executives (continued)
Under the Premier Board Charter, the CEO’s responsibilities are:
The committee consists of three members, who as at the date of this report are:
the day‑to‑day leadership and management of Premier;
Name
David Crean
Frank Jones
Gary Weiss
managing and overseeing the interfaces between Premier and the public and to act as the
principal representative for Premier; and
assisting the Board with the strategy and long-term direction of Premier;
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
to report annually to the Board on succession planning and management development.
Date Appointed
1 August 2010
7 September 1995
1 August 2010
As such, these responsibilities have been delegated to the above people by the Board of Premier.
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
The performance of senior executives is reviewed against specific measurable and qualitative
indicators, which include:
4.2. Composition
financial measure of the company’s performance;
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
achievement of strategic objectives; and
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
achievement of key operational targets.
The CEO of Premier Retail and the Board of the relevant subsidiary are responsible for the review of
the performance of senior executives, in line with their respective key performance indicators.
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
to the external auditors.
The Group has an induction process for all senior executives and directors. All new directors are
provided with the key policies and procedures affecting the Group.
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
1.3
Performance Assessments
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
The Board continuously evaluates the performance of those carrying out the responsibilities of CEO in
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
accordance with the Board Charter. The evaluation is based on criteria that include the performance of
and in accordance with relevant accounting standards.
the business, the accomplishment of long-term strategic objectives and other non-quantitative
objectives established at the beginning of each year. A performance evaluation was undertaken on
senior executives during the 2013/14 financial year in accordance with the process disclosed above.
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
The Board of Premier comprises ten directors. The skills, experience and expertise relevant to the
position of director held by each director in office at the date of this report are included in the Directors’
Report. The members of the Board and their positions as at the date of this report are:
2
Director
Appointed
Non-Executive
Timothy Antonie
Solomon Lew (Chairman) March 2008
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
• the form and requirements of the notice;
David Crean
• the chairperson and quorums; and
Lindsay Fox
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
December 2011
December 2009
December 2009
Henry Lanzer
Sally Herman
Independent
Frank Jones
March 2008
April 1987
April 1987
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
Mark McInnes
December 2012
No
• annual and half‑yearly reports;
Michael McLeod
August 2002
Yes
Gary Weiss
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
March 1994
Yes
No
No
Yes
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
101 Premier Investments Limited
1.2
Evaluating the Performance of Senior Executives (continued)
Under the Premier Board Charter, the CEO’s responsibilities are:
the day‑to‑day leadership and management of Premier;
assisting the Board with the strategy and long-term direction of Premier;
managing and overseeing the interfaces between Premier and the public and to act as the
principal representative for Premier; and
to report annually to the Board on succession planning and management development.
As such, these responsibilities have been delegated to the above people by the Board of Premier.
The performance of senior executives is reviewed against specific measurable and qualitative
indicators, which include:
financial measure of the company’s performance;
achievement of strategic objectives; and
achievement of key operational targets.
The CEO of Premier Retail and the Board of the relevant subsidiary are responsible for the review of
the performance of senior executives, in line with their respective key performance indicators.
The Group has an induction process for all senior executives and directors. All new directors are
provided with the key policies and procedures affecting the Group.
1.3
Performance Assessments
The Board continuously evaluates the performance of those carrying out the responsibilities of CEO in
accordance with the Board Charter. The evaluation is based on criteria that include the performance of
the business, the accomplishment of long-term strategic objectives and other non-quantitative
objectives established at the beginning of each year. A performance evaluation was undertaken on
senior executives during the 2013/14 financial year in accordance with the process disclosed above.
2
PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE
The Board of Premier comprises ten directors. The skills, experience and expertise relevant to the
position of director held by each director in office at the date of this report are included in the Directors’
Report. The members of the Board and their positions as at the date of this report are:
Director
Appointed
Non-Executive
Independent
Solomon Lew (Chairman) March 2008
Timothy Antonie
David Crean
Lindsay Fox
Sally Herman
Frank Jones
Henry Lanzer
Mark McInnes
Michael McLeod
Gary Weiss
December 2009
December 2009
April 1987
December 2011
April 1987
March 2008
December 2012
August 2002
March 1994
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
No
Yes
Yes
Yes
Yes
No
No
No
No
Yes
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
2
PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE (CONTINUED)
Mr Frank Jones will retire as non-executive director of Premier at the conclusion of the 2015 financial
year.
The committee consists of three members, who as at the date of this report are:
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the
Directors’ Report on page 2.
2.1
Name
David Crean
Director Independence
Date Appointed
1 August 2010
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
Gary Weiss
Frank Jones
7 September 1995
ASX Recommendation 2.1 recommends that the Board comprise a majority of independent directors.
Premier has adopted the definition of independence set out in the commentary to ASX
Recommendation 2.1 as disclosed in the Director Independence Policy on Premier’s website.
Directors are assessed as independent where they are independent of management and free of any
business or other relationship that could materially interfere, or be perceived to materially interfere,
with the exercise of their unfettered and independent judgement.
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
1 August 2010
4.2. Composition
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
During the 2013/14 financial year, the Board considered that 5 of its 10 directors were independent. In
previous years, Mr Fox has not been considered an independent director due to his previous
substantial shareholding in Premier. However, Mr Fox and companies associated with Mr Fox are no
longer substantial shareholders of Premier, and since sufficient time has passed since Mr Fox ceased
to be a substantial shareholder, the Board elected to consider Mr Fox as an independent director
during this financial year.
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
to the external auditors.
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
The Board is aware of ASX Recommendation 2.1 and is confident that proper processes are in place,
as outlined in its Board Charter, to address needs and expectations with respect to decision-making
and the management of conflicts of interest. The directors on the Board of Premier all add significant
value and expertise in a variety of fields. Given Premier’s unique circumstances and history, a majority
independent Board is not the most appropriate means for achieving Premier’s strategic objectives and
promoting shareholder value. Regardless of whether directors are defined as independent, all
directors are expected to bring independent judgements and views to board deliberations.
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
and in accordance with relevant accounting standards.
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
Premier permits individual directors to engage separate independent counsel or advisors at the
expense of the Group in appropriate circumstances, with the approval of the Chairman or by resolution
of the Board.
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
Chairman of the Board
2.2
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
Mr Lew is Chairman of the Board, which does not comply with ASX Recommendation 2.2 that the
chair should be an independent director. The Board believes that Mr Lew’s position as a director of
Premier’s major shareholder, Century Plaza Investments Pty Ltd, does not prevent him from carrying
out his responsibilities as Chairman of the Board. Given Mr Lew’s industry experience, skills, expertise
and reputation, and his relationship with Premier as its founder, the Board feels that Mr Lew adds the
most value to the Board as its Chairman and that he is the most appropriate person for the position.
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
• the form and requirements of the notice;
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
In October 2014, the Board appointed Mr Antonie as lead independent director. The Board considers
the appointment of a lead independent director as an important step in providing support to the
Chairman in facilitating effective contributions of all directors, and to promote constructive relations
between directors, and between the Board and management.
• annual and half‑yearly reports;
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
Annual Report 2014 102
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
2.3
Role of Chairman and CEO
The committee consists of three members, who as at the date of this report are:
As evidenced from its Board Charter, Premier’s Board supports the separation of the role of the
Chairman from that of the Chief Executive Officer (“CEO”) in accordance with ASX Recommendation
2.3. The Board Charter provides that the Chairman must be a non-executive director, and defines the
key roles of the Chairman as:
Name
David Crean
Frank Jones
Gary Weiss
Date Appointed
managing the Board effectively;
1 August 2010
providing leadership to the Board; and
7 September 1995
interfacing with the CEO.
1 August 2010
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
2.4
Nomination Committee
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
During the 2013/14 year, Premier maintained a nomination committee in accordance with ASX
Recommendation 2.4.
4.2. Composition
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
The Remuneration and Nomination Committee supports and advises the Board on the nomination
policies and practices of Premier. The roles and responsibilities of the Remuneration and Nomination
Committee are set out in Premier’s Board Charter, a summary of which is provided on Premier’s
website.
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
to the external auditors.
The Remuneration and Nomination Committee consists of the following three members:
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
Name
Henry Lanzer
Solomon Lew
Gary Weiss
Appointed
September 2008
September 2008
September 2008
Position in Committee
Chairperson
Non-Executive Director
Non-Executive Director
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
and in accordance with relevant accounting standards.
All of the members of the committee are non-executive directors, one of whom is an independent
director.
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
The nomination purposes of the committee include:
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
reviewing and providing recommendations of plans of succession for executives, non‑
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
executive directors and Premier’s Chief Executive Officer (when appointed);
Board Charter which is summarised on the Company’s website.
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
establishing and maintaining a formal procedure for the selection and appointment of
directors to the Board;
undertaking regular reviews of the structure and size of the Board to ensure that the Board
continues to have a mix of skills and experience necessary to conduct Premier’s business
and to make any consequential recommendations to the Board; and
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
• the form and requirements of the notice;
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
identifying, assessing the suitability of, and investigating the backgrounds of, individuals
qualified to become directors and making recommendations to the Board about potential
nominees.
The Remuneration and Nomination Committee intends to maintain the diversity of knowledge, skills
and experience on the Premier Board across the areas of retailing and manufacturing, accounting,
finance, transport, government and law.
• annual and half‑yearly reports;
The Remuneration and Nomination Committee met twice during the year. The meeting was attended
by all three members.
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
103 Premier Investments Limited
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
2.3
Role of Chairman and CEO
2.5
Term of Office and Performance Evaluation
Premier’s Constitution specifies that all directors must retire from the office at no later than the third
Annual General Meeting following their last election. Where eligible, a director may stand for re-
The committee consists of three members, who as at the date of this report are:
election. The Board shall undertake regular performance evaluation of itself that:
Name
David Crean
Frank Jones
Gary Weiss
evaluates the effectiveness of the Board as a whole, and that of individual directors;
Date Appointed
1 August 2010
compares the performance of the Board with the requirements of its Charter;
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
effects any improvements to the Board Charter deemed necessary or desirable.
sets the goals and objectives of the Board for the upcoming year; and
7 September 1995
1 August 2010
The performance evaluation shall be conducted in such a manner as the Board deems appropriate
and may involve the use of an external consultant.
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
2.6
4.2. Composition
Appointment of New Directors and Re-Election of Directors
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
The responsibilities of Premier’s Remuneration and Nomination Committee include advising the Board
on:
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
criteria for appointment and identification of candidates for appointment as a director;
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
to the external auditors.
the candidates it considers appropriate for appointment as a director; and
the re-appointment of any non-executive director at the conclusion of their term of office.
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
PRINCIPLE 3 – PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING
Code of Conduct
3
3.1
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
and in accordance with relevant accounting standards.
The Board insists on the highest ethical standards from all officers and employees of Premier and is
vigilant to ensure appropriate corporate professional conduct at all times. As such, the Board has
adopted a Code of Conduct to provide a set of guiding principles which are to be observed by all
directors, senior executives and employees of Premier. The Code of Conduct is based on five
principles that define the responsibility of Premier and all directors and employees. These principles
require that all directors and employees:
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
foster a culture in which all stakeholders are treated with respect;
act to ensure there is no conflict of interest between work and private affairs;
As evidenced from its Board Charter, Premier’s Board supports the separation of the role of the
Chairman from that of the Chief Executive Officer (“CEO”) in accordance with ASX Recommendation
2.3. The Board Charter provides that the Chairman must be a non-executive director, and defines the
key roles of the Chairman as:
managing the Board effectively;
providing leadership to the Board; and
interfacing with the CEO.
2.4
Nomination Committee
Recommendation 2.4.
During the 2013/14 year, Premier maintained a nomination committee in accordance with ASX
The Remuneration and Nomination Committee supports and advises the Board on the nomination
policies and practices of Premier. The roles and responsibilities of the Remuneration and Nomination
Committee are set out in Premier’s Board Charter, a summary of which is provided on Premier’s
website.
The Remuneration and Nomination Committee consists of the following three members:
Name
Henry Lanzer
Solomon Lew
Gary Weiss
Appointed
September 2008
September 2008
September 2008
Position in Committee
Chairperson
Non-Executive Director
Non-Executive Director
All of the members of the committee are non-executive directors, one of whom is an independent
director.
The nomination purposes of the committee include:
reviewing and providing recommendations of plans of succession for executives, non‑
executive directors and Premier’s Chief Executive Officer (when appointed);
establishing and maintaining a formal procedure for the selection and appointment of
directors to the Board;
undertaking regular reviews of the structure and size of the Board to ensure that the Board
continues to have a mix of skills and experience necessary to conduct Premier’s business
and to make any consequential recommendations to the Board; and
identifying, assessing the suitability of, and investigating the backgrounds of, individuals
qualified to become directors and making recommendations to the Board about potential
nominees.
The Remuneration and Nomination Committee intends to maintain the diversity of knowledge, skills
and experience on the Premier Board across the areas of retailing and manufacturing, accounting,
finance, transport, government and law.
The Remuneration and Nomination Committee met twice during the year. The meeting was attended
by all three members.
are honest, legal, fair and trustworthy in dealings and relationships; and
develop a culture where professional integrity and ethical behaviour is valued in rewarded.
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
• the form and requirements of the notice;
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
Premier is committed to the safe and ethical manufacture, sourcing and supply of goods and services.
As such, Premier is committed to sourcing merchandise that is produced according to the Group’s
strict principles of safe working conditions, where human rights are respected and people have free
right of association. Premier will only deal with vendors who at least provide the working conditions
and benefits stipulated by law and whose workers (employees and contractors) are treated and
compensated fairly and not exposed to physical harm. Also refer to pages 9 – 10 of the Annual Report
for the group’s Ethical Sourcing Statement.
• annual and half‑yearly reports;
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
provide a safe workplace for employees and visitors;
A copy of the Code of Conduct is provided to all new directors and employees upon joining Premier.
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
Annual Report 2014 104
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
3.1
Code of Conduct (continued)
The committee consists of three members, who as at the date of this report are:
Additionally, standards by which all officers, employees and directors are expected to act are
contained in the Board Charter and in Premier’s share trading policy. These include standards and
expectations relating to:
Name
David Crean
insider trading and employee security trading;
Date Appointed
1 August 2010
conflicts of interest;
Frank Jones
Gary Weiss
confidentiality; and
7 September 1995
privacy.
1 August 2010
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
Under the Group’s share trading policy, an officer or executive must not trade in securities of the
Company at any time while in possession of unpublished, price-sensitive information in relation to
those securities. Before commencing to trade, an executive or officer must first obtain the approval of
the Company Secretary or the Chairman.
4.2. Composition
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
Premier’s share trading policy permits key management personnel and their associates to trade in the
Company’s securities during the following window periods:
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
within 6 weeks after the release of the Company’s half year results to the ASX;
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
within 6 weeks after the release of the Company’s preliminary final report to the ASX; and
to the external auditors.
the rights trading period when the Company has issued a prospectus for those rights.
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
As required by the ASX listing rules, the Company notifies the ASX of any transaction conducted by
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
directors in the securities of the Company.
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
Consistent with the Corporations Act, Premier’s conflict of interest policy requires that where an item of
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
business is proposed to be discussed at any meeting of directors, and discussion of that matter may
and in accordance with relevant accounting standards.
give rise to a conflict of interest on the part of a director, that director must not be present while the
matter is being considered and must not vote on that matter (unless the other directors pass a
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
resolution permitting that director to be present or vote). The Board Charter permits directors who may
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
be in a position of conflict to request that the meeting be postponed or temporarily adjourned to enable
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
him or her to seek legal advice on whether he or she can be present while the matter in question is
Board Charter which is summarised on the Company’s website.
being considered and vote on the matter in question.
3.2
Diversity Policy
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
ASX Recommendation 3.1 recommends that a company disclose its code of conduct or a summary of
that code. Premier has implemented a formal code of conduct and this code, as well as Premier’s
share trading policy, is available on Premier’s website.
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
• the form and requirements of the notice;
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
The Group is an equal opportunity employer, and recognises the value contributed to the organisation
by employing people with varying skills, cultural backgrounds, gender, ethnicity and experience.
Premier believes its diverse workforce is the key to its continued growth, improved productivity and
performance.
• annual and half‑yearly reports;
We actively value and embrace the diversity of our employees and are committed to creating an
inclusive workplace where everyone is treated equally and fairly, and where discrimination,
harassment and inequity are not tolerated. We aim to maintain appropriate standards of behaviour
throughout the organisation, to create a safe workplace free from harassment and discrimination of
any kind, to treat all team members fairly and equitably, and to evaluate employees based on their
performance, skills and abilities.
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
105 Premier Investments Limited
Additionally, standards by which all officers, employees and directors are expected to act are
contained in the Board Charter and in Premier’s share trading policy. These include standards and
expectations relating to:
insider trading and employee security trading;
conflicts of interest;
confidentiality; and
privacy.
Under the Group’s share trading policy, an officer or executive must not trade in securities of the
Company at any time while in possession of unpublished, price-sensitive information in relation to
those securities. Before commencing to trade, an executive or officer must first obtain the approval of
the Company Secretary or the Chairman.
Premier’s share trading policy permits key management personnel and their associates to trade in the
Company’s securities during the following window periods:
within 6 weeks after the release of the Company’s half year results to the ASX;
within 6 weeks after the release of the Company’s preliminary final report to the ASX; and
the rights trading period when the Company has issued a prospectus for those rights.
As required by the ASX listing rules, the Company notifies the ASX of any transaction conducted by
directors in the securities of the Company.
Consistent with the Corporations Act, Premier’s conflict of interest policy requires that where an item of
business is proposed to be discussed at any meeting of directors, and discussion of that matter may
give rise to a conflict of interest on the part of a director, that director must not be present while the
matter is being considered and must not vote on that matter (unless the other directors pass a
resolution permitting that director to be present or vote). The Board Charter permits directors who may
be in a position of conflict to request that the meeting be postponed or temporarily adjourned to enable
him or her to seek legal advice on whether he or she can be present while the matter in question is
being considered and vote on the matter in question.
ASX Recommendation 3.1 recommends that a company disclose its code of conduct or a summary of
that code. Premier has implemented a formal code of conduct and this code, as well as Premier’s
share trading policy, is available on Premier’s website.
3.2
Diversity Policy
The Group is an equal opportunity employer, and recognises the value contributed to the organisation
by employing people with varying skills, cultural backgrounds, gender, ethnicity and experience.
Premier believes its diverse workforce is the key to its continued growth, improved productivity and
performance.
We actively value and embrace the diversity of our employees and are committed to creating an
inclusive workplace where everyone is treated equally and fairly, and where discrimination,
harassment and inequity are not tolerated. We aim to maintain appropriate standards of behaviour
throughout the organisation, to create a safe workplace free from harassment and discrimination of
any kind, to treat all team members fairly and equitably, and to evaluate employees based on their
performance, skills and abilities.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
3.1
Code of Conduct (continued)
3.2
Diversity Policy (continued)
The following steps have been taken to achieve the Board’s diversity objectives:
The committee consists of three members, who as at the date of this report are:
the appointment of Ms Sally Herman in the 2011/12 financial year as an independent non-
executive director; and
4
4.1
Name
David Crean
the appointment of Ms Colette Garnsey in the 2012/13 financial year as the Core Brand
Director, Premier Retail.
Date Appointed
1 August 2010
Frank Jones
At year end, women represented 10% of Premier’s board, 41% of senior executives, 69% at senior
management level and 91% of the Groups’ workforce.
1 August 2010
Gary Weiss
7 September 1995
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
In accordance with the requirements of the Workplace Gender Equality Act 2012, a subsidiary
company of Premier Investments Limited, Just Group Limited lodged its annual compliance report with
the Workplace Gender Equality Agency.
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
4.2. Composition
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
The Board is aware of ASX Recommendations 3.2 and 3.3. Given the high proportion of senior
executives, senior managers and employees of the Group that are women, the Board has determined
not to impose measurable objectives relating to diversity at this stage.
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
Audit Committee
to the external auditors.
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
In accordance with ASX Recommendation 4.1, the Board has established an Audit and Risk
Committee. This committee’s role and responsibilities, as well as composition, structure and
membership requirements, are set out in a formal charter approved by the Board, in accordance with
ASX Recommendation 4.3. A summary of this Charter can be found on Premier’s website.
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
and in accordance with relevant accounting standards.
Premier’s Audit and Risk Committee supports and advises the Board in fulfilling its corporate
governance and oversight responsibilities in relation to Premier’s financial reporting, internal control
structures, ethical standards and risk management framework and systems.
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
The Audit and Risk Committee’s prime responsibilities include:
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
reviewing the appropriateness of the accounting policies and principles, any changes to those
policies and principles and the methods of applying them to ensure that they are in
accordance with Premier’s stated financial reporting framework;
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
reviewing the nomination, performance, independence and competence of the external
auditor;
meeting periodically with key management, external auditors and compliance staff to
understand Premier’s control environment; and
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
• the form and requirements of the notice;
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
examining and evaluating the effectiveness of the internal control system with management
and external auditors.
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee
comprises a majority of independent directors, consists of only non-executive directors and the chair of
the committee is also independent.
Composition
• annual and half‑yearly reports;
4.2
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
Annual Report 2014 106
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
4.2
Composition (continued)
The Audit and Risk Committee Charter requires the committee to be structured so that:
The committee consists of three members, who as at the date of this report are:
all members are financially literate, that is, are able to read and understand financial
statements;
Name
David Crean
Frank Jones
Gary Weiss
at least one member has financial expertise, that is, is an accountant or financial professional
with experience of financial and accounting matters; and
Date Appointed
1 August 2010
some members have an understanding of the industry in which the Group operates.
7 September 1995
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
The committee consists of three members:
1 August 2010
Name
Appointed
Position in Committee
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
August 2010
David Crean
Chairperson
September 1995 (retired October 2014)
Non-Executive Director
4.2. Composition
Frank Jones
Gary Weiss
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
Non-Executive Director
Timothy Antonie
October 2014
August 2010 (retired October 2014)
Non-Executive Director
Sally Herman
October 2014
Non-Executive Director
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
to the external auditors.
The Audit and Risk Committee met on four occasions during the year. Each of the meetings was
attended by all three members of the Committee.
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the
Directors’ Report at page 2.
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. The
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
CEO (when appointed) will have a standing invitation to attend each scheduled meeting of the Audit
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
and Risk Committee and a standing invitation has also been extended to Premier’s external auditors.
and in accordance with relevant accounting standards.
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may
attend if they wish. Other senior managers and external advisers may also be invited to attend
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
meetings of the Audit and Risk Committee. The Audit and Risk Committee may request management
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
and/or others to provide such input and advice as required.
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
External Audit
4.3
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
Under the Audit and Risk Committee Charter, the committee is responsible for establishing procedures
and making Board recommendations regarding external auditors, monitoring the effectiveness and
independence of the external auditor, reviewing the scope of the external audit, discussing with the
external auditor any significant disagreements with management, and meeting with the external
auditor without management present at least twice a year.
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
• the form and requirements of the notice;
In accordance with the Corporations Act, the external audit engagement partner is required to rotate at
• the chairperson and quorums; and
least once every five financial years. Ernst & Young was appointed as Premier’s external auditor in
• the voting procedures, proxies, representations and polls.
May 2002. The external auditor attends Premier’s annual general meetings and is available to respond
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
to questions from Premier’s members about its independence as auditor, the preparation and content
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
of the Auditor’s Report and Premier’s accounting policies adopted in relation to the financial
including:
statements.
• annual and half‑yearly reports;
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
107 Premier Investments Limited
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
4.2
Composition (continued)
5
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
The Audit and Risk Committee Charter requires the committee to be structured so that:
all members are financially literate, that is, are able to read and understand financial
statements;
at least one member has financial expertise, that is, is an accountant or financial professional
with experience of financial and accounting matters; and
some members have an understanding of the industry in which the Group operates.
The committee consists of three members:
Name
David Crean
Frank Jones
Gary Weiss
Appointed
August 2010
Position in Committee
Chairperson
September 1995 (retired October 2014)
Non-Executive Director
August 2010 (retired October 2014)
Non-Executive Director
Timothy Antonie
October 2014
Sally Herman
October 2014
Non-Executive Director
Non-Executive Director
The Audit and Risk Committee met on four occasions during the year. Each of the meetings was
attended by all three members of the Committee.
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the
Directors’ Report at page 2.
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. The
CEO (when appointed) will have a standing invitation to attend each scheduled meeting of the Audit
and Risk Committee and a standing invitation has also been extended to Premier’s external auditors.
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may
attend if they wish. Other senior managers and external advisers may also be invited to attend
meetings of the Audit and Risk Committee. The Audit and Risk Committee may request management
and/or others to provide such input and advice as required.
4.3
External Audit
Under the Audit and Risk Committee Charter, the committee is responsible for establishing procedures
and making Board recommendations regarding external auditors, monitoring the effectiveness and
independence of the external auditor, reviewing the scope of the external audit, discussing with the
external auditor any significant disagreements with management, and meeting with the external
auditor without management present at least twice a year.
In accordance with the Corporations Act, the external audit engagement partner is required to rotate at
least once every five financial years. Ernst & Young was appointed as Premier’s external auditor in
May 2002. The external auditor attends Premier’s annual general meetings and is available to respond
to questions from Premier’s members about its independence as auditor, the preparation and content
of the Auditor’s Report and Premier’s accounting policies adopted in relation to the financial
statements.
The committee consists of three members, who as at the date of this report are:
During the 2013/14 financial year, Premier maintained a policy to ensure that it complied with its
continuous disclosure obligations under the ASX Listing Rules, the ASX Recommendations and the
Corporations Act, and to ensure that all investors have equal and timely access to material and price
sensitive information. A copy of Premier’s Continuous Disclosure Policy has been disclosed on
Premier’s website.
Name
David Crean
Date Appointed
1 August 2010
Frank Jones
Under this policy, the Board will, as soon as it becomes aware of information concerning Premier that
would be likely to have a material effect on the price or value of Premier’s securities, ensure that
information is notified to the ASX.
7 September 1995
1 August 2010
Gary Weiss
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
Premier has appointed a Compliance Officer to accept reports from personnel relating to price
sensitive information. The Compliance Officer is primarily responsible for ensuring that Premier
complies with its disclosure obligations under the Corporations Act and the ASX Listing Rules, and for
deciding what information will be disclosed. Additionally, all managers are required to keep up to date
with all matters within their responsibility which may be or become material to Premier in this respect.
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
4.2. Composition
6
PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
Premier endeavours to encourage and promote effective communication with its shareholders, as
prescribed by ASX Recommendation 6.1. Premier’s Constitution sets out the procedures to be
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
followed regarding:
to the external auditors.
the convening of meetings;
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
the form and requirements of the notice;
the chairperson and quorums; and
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
and in accordance with relevant accounting standards.
the voting procedures, proxies, representations and polls.
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are
informed of all major developments affecting Premier in a timely and effective manner. Information is
communicated in a number of ways including:
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
market disclosures in accordance with the continuous disclosure protocol;
annual and half yearly reports;
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
updates on operations and developments;
announcements on Premier’s website; and
market briefings and presentations at general meetings.
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
• the form and requirements of the notice;
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
Shareholders are encouraged to attend and participate at general meetings. To facilitate this,
meetings are held during normal business hours and at a place convenient for the greatest possible
number of shareholders to attend. The full text of notices and accompanying materials are included on
Premier’s website. Information is presented in a clear and concise manner designed to provide
shareholders and the market with full and accurate information.
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
7
• annual and half‑yearly reports;
The Board has overall responsibility to ensure that there is a sound system of risk management and
internal controls across the business. One of the primary responsibilities of the Board is to identify,
• market disclosures in accordance with the continuous disclosure protocol;
assess, monitor and manage risk. Additionally, the Board is responsible for identifying material
• updates on operations and developments;
changes in Premier’s risk profile to ensure that Premier can take advantage of potential opportunities
• announcements on Premier’s website; and
while managing potential adverse effects.
• market briefings and presentations at general meetings.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
Annual Report 2014 108
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
7.1
Audit and Risk Committee
The committee consists of three members, who as at the date of this report are:
The Board has delegated responsibility for the identification, assessment and management of risks
relating to both Premier’s internal and external controls to Premier’s Audit and Risk Committee. The
risk management functions of the Audit and Risk Committee include:
Name
David Crean
Frank Jones
Gary Weiss
examining and evaluating the effectiveness of the internal control system with management
and external auditors;
Date Appointed
1 August 2010
assessing existing controls that management has in place for unusual transactions or
transactions that may carry more than an accepted level of risk;
7 September 1995
Position in Committee
Chairperson
Non‑Executive Director
Non‑Executive Director
1 August 2010
meeting periodically with key management, external auditors and compliance staff to
understand Premier’s control environment;
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
receiving reports concerning all suspected and actual frauds, thefts, breaches of the law and
key risk areas; and
4.2. Composition
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
assessing and ensuring that there are internal processes for determining and managing key
of independent directors and the chair of the committee is also independent.
areas, such as important judgments and accounting estimates.
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
The Audit and Risk Committee has the authority to:
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
request management or others to attend meetings and to provide any information or advice
to the external auditors.
that the Committee requires;
access the Company’s documents and records;
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
obtain the advice of special or independent counsel, accountants or other experts, without
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
seeking approval of the Board or management; and
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
and in accordance with relevant accounting standards.
approach management and external auditors for information.
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
During the 2013/2014 year, the Audit and Risk Committee met with an external consultant to
independently evaluate the risk management and internal control processes throughout the Group.
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
As outlined above in section 4.1, a summary of Premier’s Audit and Risk Committee charter can be
found on Premier’s website. This summary addresses Premier’s policies for the oversight and
management of material business risks.
7.2 Management
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
7.3
CEO and CFO certification
The responsibility for managing risk on a day-to-day basis lies with the management of each business
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
operation. Additionally, independent risk management audits of site operations are carried out
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
regularly and a quarterly report is prepared for the Board which reviews the risk management and
• the convening of meetings;
insurances of the Group. The Board received four of these reports during the 2013/14 financial year.
• the form and requirements of the notice;
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
In accordance with section 295A of the Corporations Act, the Company Secretary, who performs the
CFO functions, has provided a written statement to the Board that:
Premier’s financial reports present a true and fair view in all material respects of Premier’s
financial condition and operational results and in accordance with relevant accounting
standards;
• annual and half‑yearly reports;
• market disclosures in accordance with the continuous disclosure protocol;
• updates on operations and developments;
• announcements on Premier’s website; and
• market briefings and presentations at general meetings.
the view provided on the Group’s financial report is founded on a sound system of risk
management and internal compliance and control which implements the financial policies
adopted by the Board; and
the Group’s risk management and internal compliance and control system is operating
effectively in all material aspects.
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
109 Premier Investments Limited
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
7.1
Audit and Risk Committee
The Board has delegated responsibility for the identification, assessment and management of risks
relating to both Premier’s internal and external controls to Premier’s Audit and Risk Committee. The
risk management functions of the Audit and Risk Committee include:
examining and evaluating the effectiveness of the internal control system with management
and external auditors;
assessing existing controls that management has in place for unusual transactions or
transactions that may carry more than an accepted level of risk;
understand Premier’s control environment;
receiving reports concerning all suspected and actual frauds, thefts, breaches of the law and
key risk areas; and
assessing and ensuring that there are internal processes for determining and managing key
areas, such as important judgments and accounting estimates.
The Audit and Risk Committee has the authority to:
request management or others to attend meetings and to provide any information or advice
that the Committee requires;
access the Company’s documents and records;
obtain the advice of special or independent counsel, accountants or other experts, without
seeking approval of the Board or management; and
approach management and external auditors for information.
During the 2013/2014 year, the Audit and Risk Committee met with an external consultant to
independently evaluate the risk management and internal control processes throughout the Group.
As outlined above in section 4.1, a summary of Premier’s Audit and Risk Committee charter can be
found on Premier’s website. This summary addresses Premier’s policies for the oversight and
management of material business risks.
7.2 Management
The responsibility for managing risk on a day-to-day basis lies with the management of each business
operation. Additionally, independent risk management audits of site operations are carried out
regularly and a quarterly report is prepared for the Board which reviews the risk management and
insurances of the Group. The Board received four of these reports during the 2013/14 financial year.
7.3
CEO and CFO certification
In accordance with section 295A of the Corporations Act, the Company Secretary, who performs the
CFO functions, has provided a written statement to the Board that:
Premier’s financial reports present a true and fair view in all material respects of Premier’s
financial condition and operational results and in accordance with relevant accounting
standards;
the view provided on the Group’s financial report is founded on a sound system of risk
management and internal compliance and control which implements the financial policies
adopted by the Board; and
the Group’s risk management and internal compliance and control system is operating
effectively in all material aspects.
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
7.3
CEO and CFO certification (continued)
The committee consists of three members, who as at the date of this report are:
The Board agrees with the views of the ASX on this matter and notes that due to its nature, internal
control assurance from the Company Secretary can only be reasonable rather than absolute. This is
due to such factors as the need for judgement, the use of testing on a sample basis, the inherent
limitations in internal control and because much of the evidence available is persuasive rather than
conclusive and therefore is not and cannot be designed to detect all weaknesses in control
Position in Committee
procedures.
Chairperson
Non‑Executive Director
Non‑Executive Director
In response to this, internal control questions are required to be completed by key management
7 September 1995
personnel of all significant business units in support of these written statements.
Date Appointed
1 August 2010
Name
David Crean
Frank Jones
1 August 2010
Gary Weiss
meeting periodically with key management, external auditors and compliance staff to
8
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
8.1
Remuneration Committee
Details of the respective directors’ qualifications, skills, directorships and experience are set out in the Directors’ Report at
page 2.
4.2. Composition
During the 2013/14 financial year, Premier maintained a formal remuneration committee in accordance
with ASX Recommendation 8.1. The Remuneration and Nomination Committee supports and advises
the Board on the remuneration policies and practices of Premier. The remuneration purposes of the
committee include:
The composition of the Audit and Risk Committee satisfies ASX Recommendation 4.2. The committee comprises a majority
of independent directors and the chair of the committee is also independent.
The Audit and Risk Committee will meet as frequently as required to undertake its role effectively. During the 2010/11
financial year, the Audit and Risk Committee met three times.
review and make recommendations to the Board on remuneration packages and policies
applicable to senior executives and directors;
The CEO is invited to attend each scheduled meeting of the Audit and Risk Committee and a standing invitation is issued
to the external auditors.
define levels at which the Chief Executive Officer must make recommendations to the
committee on proposed changes to remuneration and employee benefit policies;
Directors who are not members of the Audit and Risk Committee are notified of all meetings and may attend if they wish.
Other senior managers and external advisers may also be invited to attend meetings of the Audit and Risk Committee. The
Audit and Risk Committee may request management and/or others to provide such input and advice as required.
ensure that remuneration packages and policies attract, retain and motivate high calibre
executives; and
The Board has received a written statement from the CEO of Premier Retail and Company Secretary that Premier’s
ensure that remuneration policies demonstrate a clear relationship between key executive
financial reports present a true and fair view in all material respects of Premier’s financial condition and operational results
performance and remuneration.
and in accordance with relevant accounting standards.
The roles and responsibilities of the Remuneration and Nomination Committee are set out in Premier’s
5 PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
Board Charter, a summary of which is provided on Premier’s website.
8.2
6 PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS
Composition
During the 2010/11 financial year, Premier maintained a policy to ensure that it complied with its continuous disclosure
obligations under the ASX Listing Rules, the ASX Recommendations and the Corporations Act, and to ensure that all
investors have equal and timely access to material and price sensitive information. This policy is contained in Premier’s
Board Charter which is summarised on the Company’s website.
The Remuneration and Nomination Committee consists of three members, all of whom are non-
executive directors. The members of the Remuneration and Nomination Committee are outlined in
section 2.4 of this corporate governance statement. Although ASX Recommendation 8.2 suggests that
the committee should consist of a majority of independent directors and be chaired by an independent
director, Premier believes that the current members of the committee are most appropriate to achieve
its objectives given their skill set and experience.
Premier endeavours to encourage and promote effective communication with its shareholders, as prescribed by ASX
Recommendation 6.1. Premier’s Constitution sets out the procedures to be followed regarding:
• the convening of meetings;
The Remuneration and Nomination Committee met twice during the year, and both meetings were
• the form and requirements of the notice;
attended by all three committee members.
• the chairperson and quorums; and
• the voting procedures, proxies, representations and polls.
Premier’s strategy is to ensure that shareholders, regulators and the wider investment community are informed of all major
developments affecting Premier in a timely and effective manner. Information is communicated in a number of ways
including:
Premier’s remuneration policies are both reasonable and responsible, and they establish a link
between remuneration and performance. Further details regarding Premier’s remuneration practices
are set out in the remuneration report on pages 12 to 25.
Remuneration policy
8.3
• annual and half‑yearly reports;
Premier clearly distinguishes the structure of non-executive directors’ remuneration from that of
• market disclosures in accordance with the continuous disclosure protocol;
executive directors and senior executives. Non-executive directors’ remuneration is capped at a
• updates on operations and developments;
maximum of $1,000,000 per annum. During the 2013/14 financial year a total of $760,000 was paid by
• announcements on Premier’s website; and
way of remuneration to Premier’s non-executive directors.
• market briefings and presentations at general meetings.
Premier has not established any schemes for retirement benefits for non-executive directors (other
than superannuation).
Shareholders are encouraged to attend and participate at general meetings. To facilitate this, meetings are held during
normal business hours and at a place convenient for the greatest possible number of shareholders to attend. The full text of
notices and accompanying materials are included on Premier’s website. Information is presented in a clear and concise
manner designed to provide shareholders and the market with full and accurate information.
Annual Report 2014 110
TOTAL
% IC
RANK
% IC
RANK
ASX ADDITIONAL INFORMATION AS AT 3 OCTOBER 2014
ASX ADDITIONAL INFORMATION AS AT 3 OCTOBER 2014
TWENTY LARGEST SHAREHOLDERS
NAME
TWENTY LARGEST SHAREHOLDERS
CENTURY PLAZA INVESTMENTS PTY LTD
NAME
J P MORGAN NOMINEES AUSTRALIA LIMITED
CENTURY PLAZA INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
METREPARK PTY LTD
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
METREPARK PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
)
NATIONAL NOMINEES LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
UBS NOMINEES PTY LTD
)
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
DANCETOWN PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
LINFOX SHARE INVESTMENT PTY LTD
DANCETOWN PTY LTD
SPRINGSAND INVESTMENTS PTY LTD
LINFOX SHARE INVESTMENT PTY LTD
ARGO INVESTMENTS LIMITED
SPRINGSAND INVESTMENTS PTY LTD
BNP PARIBAS NOMS PTY LTD
ARGO INVESTMENTS LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
QIC LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD
UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD
QIC LIMITED
MILTON CORPORATION LIMITED
MR CON ZEMPILAS
MILTON CORPORATION LIMITED
TOTAL FOR TOP 20:
MR CON ZEMPILAS
TOTAL FOR TOP 20:
SUBSTANTIAL SHAREHOLDERS
NAME
SUBSTANTIAL SHAREHOLDERS
CENTURY PLAZA INVESTMENTS PTY LTD AND ASSOCIATES
NAME
PERPETUAL LIMITED AND ITS SUBSIDARIES
CENTURY PLAZA INVESTMENTS PTY LTD AND ASSOCIATES
AUSTRALIANSUPER PTY LTD
PERPETUAL LIMITED AND ITS SUBSIDARIES
AIRLIE FUNDS MANAGEMENT PTY LTD
AUSTRALIANSUPER PTY LTD
51,569,400
TOTAL
22,831,014
51,569,400
11,937,685
22,831,014
8,428,649
11,937,685
8,235,331
8,428,649
6,939,577
8,235,331
33.12%
14.66%
33.12%
7.67%
14.66%
5.41%
7.67%
5.29%
5.41%
4.46%
5.29%
6,939,577
5,300,536
3,462,934
5,300,536
3,462,934
3,348,428
4.46%
3.40%
2.22%
3.40%
2.22%
2.15%
3,000,000
3,348,428
2,577,014
3,000,000
1,437,699
2,577,014
1,250,000
1,437,699
1,228,465
1,250,000
1,028,886
1,228,465
684,767
1,028,886
633,270
684,767
605,589
633,270
590,250
605,589
500,000
590,250
135,589,494
500,000
1.93%
2.15%
1.65%
1.93%
0.92%
1.65%
0.80%
0.92%
0.79%
0.80%
0.66%
0.79%
0.44%
0.66%
0.41%
0.44%
0.39%
0.38%
0.41%
0.39%
0.32%
0.38%
87.07%
0.32%
135,589,494
87.07%
TOTAL UNITS
% IC
58,552,420
TOTAL UNITS
22,076,038
58,552,420
8,871,777
22,076,038
8,322,930
8,871,777
42.43%
14.18%
% IC
42.43%
5.70%
14.18%
5.36%
5.70%
AIRLIE FUNDS MANAGEMENT PTY LTD
DISTRIBUTION OF EQUITY SHAREHOLDERS
8,322,930
5.36%
DISTRIBUTION OF EQUITY SHAREHOLDERS
1
TO
1,000
4,575
1
TO
1,000
4,575
1,001
TO
5,000
2,328
1,001
TO
5,000
2,328
5,001
TO
10,000
5,001
TO
361
10,000
361
10,001
TO
100,000
10,001
TO
180
100,000
100,001
TO
(MAX)
100,001
TO
42
(MAX)
7,486
TOTAL
1,783,793
5,454,711
2,664,166
4,354,864
141,457,340
155,714,874
180
42
7,486
Holders
Shares
Holders
Shares
141,457,340
The number of investors holding less than a marketable parcel of 50 securities ($10.00 on 3 October 2014) is
228 and they hold 2,899 securities.
1,783,793
5,454,711
2,664,166
4,354,864
155,714,874
The number of investors holding less than a marketable parcel of 50 securities ($10.00 on 3 October 2014) is
228 and they hold 2,899 securities.
VOTING RIGHTS
All ordinary shares carry one vote per share without restriction.
VOTING RIGHTS
All ordinary shares carry one vote per share without restriction.
111 Premier Investments Limited
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
TOTAL
TOTAL
% IC
RANK
ASX ADDITIONAL INFORMATION AS AT 3 OCTOBER 2014
TWENTY LARGEST SHAREHOLDERS
NAME
CENTURY PLAZA INVESTMENTS PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
METREPARK PTY LTD
NATIONAL NOMINEES LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
)
UBS NOMINEES PTY LTD
CORP A/C>
DANCETOWN PTY LTD
LINFOX SHARE INVESTMENT PTY LTD
SPRINGSAND INVESTMENTS PTY LTD
ARGO INVESTMENTS LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
QIC LIMITED
UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD
MILTON CORPORATION LIMITED
MR CON ZEMPILAS
TOTAL FOR TOP 20:
SUBSTANTIAL SHAREHOLDERS
NAME
CENTURY PLAZA INVESTMENTS PTY LTD AND ASSOCIATES
PERPETUAL LIMITED AND ITS SUBSIDARIES
AUSTRALIANSUPER PTY LTD
AIRLIE FUNDS MANAGEMENT PTY LTD
DISTRIBUTION OF EQUITY SHAREHOLDERS
51,569,400
22,831,014
11,937,685
8,428,649
8,235,331
6,939,577
5,300,536
3,462,934
3,348,428
3,000,000
2,577,014
1,437,699
1,250,000
1,228,465
1,028,886
684,767
633,270
605,589
590,250
500,000
TOTAL UNITS
58,552,420
22,076,038
8,871,777
8,322,930
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
33.12%
14.66%
7.67%
5.41%
5.29%
4.46%
3.40%
2.22%
2.15%
1.93%
1.65%
0.92%
0.80%
0.79%
0.66%
0.44%
0.41%
0.39%
0.38%
0.32%
% IC
42.43%
14.18%
5.70%
5.36%
135,589,494
87.07%
Holders
Shares
1
TO
1,000
4,575
1,001
TO
5,000
2,328
5,001
TO
10,000
361
10,001
TO
100,000
180
100,001
TO
(MAX)
42
TOTAL
7,486
1,783,793
5,454,711
2,664,166
4,354,864
141,457,340
155,714,874
The number of investors holding less than a marketable parcel of 50 securities ($10.00 on 3 October 2014) is
228 and they hold 2,899 securities.
VOTING RIGHTS
All ordinary shares carry one vote per share without restriction.
CORPORATE DIRECTORY
CORPORATE DIRECTORY
A.C.N. 006 727 966
A.C.N. 006 727 966
DIRECTORS
Solomon Lew (Chairman)
DIRECTORS
Frank W. Jones (Deputy Chairman)
Solomon Lew (Chairman)
Timothy Antonie
Frank W. Jones (Deputy Chairman)
Dr David M. Crean
Timothy Antonie
Lindsay E. Fox
Dr David M. Crean
Sally Herman
Lindsay E. Fox
Henry D. Lanzer
Sally Herman
Mark McInnes
Henry D. Lanzer
Michael R.I. McLeod
Mark McInnes
Dr Gary H. Weiss
Michael R.I. McLeod
Dr Gary H. Weiss
COMPANY SECRETARY
Kim Davis
COMPANY SECRETARY
Kim Davis
REGISTERED OFFICE
Level 53
REGISTERED OFFICE
101 Collins Street
Level 53
Melbourne Victoria 3000
101 Collins Street
Telephone (03) 9650 6500
Melbourne Victoria 3000
Facsimile (03) 9654 6665
Telephone (03) 9650 6500
Facsimile (03) 9654 6665
WEBSITE
www.premierinvestments.com.au
WEBSITE
www.premierinvestments.com.au
EMAIL
info@premierinvestments.com.au
EMAIL
info@premierinvestments.com.au
AUDITOR
Ernst & Young
AUDITOR
8 Exhibition Street
Ernst & Young
Melbourne Victoria 3000
8 Exhibition Street
Melbourne Victoria 3000
SHARE REGISTER
Computershare Investor Services Pty
SHARE REGISTER
Limited
Computershare Investor Services Pty
Yarra Falls
Limited
452 Johnston Street
Yarra Falls
Abbotsford Victoria 3067
452 Johnston Street
Telephone (03) 9415 5000
Abbotsford Victoria 3067
Telephone (03) 9415 5000
LAWYERS
Arnold Bloch Leibler
LAWYERS
Level 21
Arnold Bloch Leibler
333 Collins Street
Level 21
Melbourne Victoria 3000
333 Collins Street
Telephone (03) 9229 9999
Melbourne Victoria 3000
Telephone (03) 9229 9999
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Annual Report 2014 112
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113 Premier Investments Limited
Smiggle International Growth
» Premier Retail launched its first
UK store at Westfield Stratford in
February 2014.
» The company plans to have
25-30 stores operating by the
end of FY15.
» The management team continues
to believe that the potential exists
for 200 stores and $200 million in
sales over the next five years.
» John Cheston, Managing Director
of Smiggle has a proven track
record of success in all four
countries we operate in.
Smiggle Westfield Stratford
Brighton, Churchill Square
Reading, Oracle
Kingston, Bentall Centre
Peter Alexander remains a market leader in innovative
product, marketing and multi-channel initiatives.