Annual Report 2016
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Solomon Lew
Chairman
Mark McInnes
CEO Premier Retail
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Chairman’s Report
The Directors of Premier Investments Limited (“Premier”) are pleased to
submit to shareholders the Annual Report for the financial year ended
30 July 2016 (“FY16”) which has been another year of outstanding
operational and financial success by your company.
STRONG FINANCIAL PERFORMANCE
A prime objective of Premier is to deliver long term
sustainable wealth creation to our shareholders. The
strong FY16 results have, once again, delivered superior
returns to our shareholders.
Premier reported net profit after tax of $103.9 million in
FY16, up 17.9% on FY15. These results reflect: the
contribution from Premier Retail (or The Just Group)
which includes its seven retail brands that traded at year
end through 1,111 stores and online; earnings from
Premier’s 27.5% stake in electrical consumer products
manufacturer Breville Group Limited (“Breville”); and
interest earned on Premier’s significant cash balance.
Total sales for Premier Retail were up 10.9% to
$1,049.2 million, breaking the $1 billion mark for the
first time, a milestone which we were very pleased
to surpass1.
Premier Retail’s underlying record earnings before
interest and tax (“EBIT”) of $133.3 million was up 26.1%
on FY15, with underlying net profit before tax increasing
by 28.1% to $129.2 million. The strong trading result
demonstrates the continued successful implementation
of the Premier Retail Strategy to drive growth through
Smiggle, Peter Alexander and our online offer while
rejuvenating our core brands and controlling efficiencies2.
GROWTH INITIATIVES CONTINUE TO FIRE
Smiggle sales for FY16 were $188 million, up 41.8% for
the year and 79% over two years. Smiggle now has
stores in Australia, New Zealand, Singapore, England,
Scotland, Wales, Malaysia and Hong Kong and is a truly
unique international brand. In all of these countries,
Smiggle is achieving growth in both total sales and
like-for-like sales. During the year we opened 52 new
Smiggle stores taking our total at financial year end to
239 stores.
Our strong trading results confirm the long term store
rollout targets management has set for these countries
and we continue to actively review opportunities in new
markets. More than 50% of Smiggle’s revenue for the
financial year was delivered by international stores,
underscoring our decision to create a global business.
Peter Alexander achieved sales growth for the year of
20.4% to $169.1 million driven by innovative products,
new product categories and campaigns that resonate
with our customers. Peter Alexander opened 11 new
stores during the year, including a flagship store in
Queen Street Auckland and the brand’s first airport store
in Brisbane.
In addition, Premier continued to invest in online
capabilities, delivering 39.6% online sales growth for the
year. We continue to significantly outperform the market
and make significant investments in further enhancing
our online capabilities, customer offering and customer
engagement in order to reach our target of $100 million
in annual online sales by 2020.
INVESTMENT IN CORE BUSINESSES
The Premier Retail team made targeted investments in
refurbishments and new store formats during FY16 –
opening 18 new stores; undertaking 33 store relocations
and refurbishments; and a further 28 refurbishments in
existing locations.
The team has continued to improve our products whilst
maintaining a sound foreign exchange hedging position
and enhancing our sourcing capabilities. Our team’s
relentless focus on cost controls and improvements from
our investment in our supply chain are also key factors in
this regard.
1 Excluding sales to Jay Jays South African joint venture in
FY15.
2 Group result in FY16 represents a 53 week period. Refer
to page 29 of the Remuneration Report for a definition
and reconciliation of Premier Retail underlying EBIT.
Annual Report 2016 1
Chairman’s Report continued
SECURE FINANCIAL POSITION
CREDIT TO OUR CUSTOMERS AND TEAM
At the end of the year, Premier’s balance sheet reflects
free cash on hand of $283.2 million plus its equity
accounted investment in Breville at $213.4 million.
The market value of Premier’s holding in Breville was
$282.6 million at 30 July 2016.
On behalf of the Board, I also want to acknowledge our
7,000 dedicated employees who now span Australia,
New Zealand, Singapore, England, Scotland, Wales,
Malaysia and Hong Kong. This team delivers excellence
every day.
Of course, our growth would not be possible without
the strong support of our customers who continue to
embrace our unique brands and designs. The Premier
team will never take your support and your custom for
granted. As we have expanded Smiggle into offshore
markets one of the things we have most enjoyed is
watching new customers embrace our products with the
same enthusiasm we see here at home.
I would also like to thank my fellow directors for their
contribution, service and counsel over the last year.
Finally, thank you to all our shareholders for your
continued support and investment. We never forget that
this is your company and we serve at your behest.
I encourage all shareholders to attend the annual
general meeting on 2 December 2016 and look forward
to your participation.
Solomon Lew
Chairman and Non-Executive Director
Due to the continued strength of Premier’s balance
sheet and the performance of Premier Retail, the Board
has declared an increased final ordinary dividend of
25 cents per share fully franked (FY15: 21cps), bringing
the total ordinary dividends for the year to 48 cents per
share fully franked (FY15 ordinary: 42 cps).
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. We will, as always, be very careful
with your money and only pursue investment that
delivers strong value for you.
LEADERSHIP AND GOVERNANCE
These achievements show, yet again, that the Premier
Retail team, led by Premier Retail CEO Mark McInnes,
has the ability to deliver strong results in a difficult retail
environment. The team remains focused on Premier
Retail’s strategy to rejuvenate core brands, focus on
efficiency, and drive the growth of Smiggle, Peter
Alexander, and online.
During the year, our shareholders approved a new
employment agreement for Mark McInnes, with
performance incentives to be tested out to 2020. The
Board is delighted that Mark has re-committed himself
to a long term future with Premier and we look forward
to his continued contribution. Over the past five years
under Mark’s leadership, the Premier team has delivered
significant returns for Premier shareholders.
In April 2016, your Board announced the appointment
of Mr. Terry McCartney as an Independent
Non-Executive Director. Terry is a former Managing
Director of both Myer Grace Brothers and Kmart; and a
seasoned advisor to investors in the retail sector, both in
Australia and internationally. We are very pleased that
Terry has accepted the invitation to join the
Premier Board.
2 Premier Investments Limited
The Directors
Solomon Lew
Chairman and
Non-Executive Director
Henry D. Lanzer AM
B. COM., LLB (Melb)
Non-Executive Director
David M. Crean
Deputy Chairman
and Non-Executive Director
Terrence McCartney
(Appointed 15 April 2016)
Non-Executive Director
Timothy Antonie
Non-Executive Director
Mark McInnes
Executive Director
Lindsay E. Fox AC
Non-Executive Director
Michael R.I. McLeod
Non-Executive Director
Sally Herman
Non-Executive Director
Gary H. Weiss LLM, J.S.D.
Non-Executive Director
Annual Report 2016 3
Chairman’s Report continued
Solomon Lew
Mr. Lew was appointed as Non-Executive Director and Chairman
of Premier on 31 March 2008. Mr. Lew is 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 50 years’ experience in the manufacture,
wholesale and retailing of textiles, apparel and general
merchandise, as well as property development. His success in the
retail industry has been largely due to his ability to read fashion
trends and interpret them for the Australasian market, in addition
to his demonstrated ability in the timing of strategic investments.
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.
Mr. Lew is a member of the World Retail Hall of Fame and is the
first Australian to be formally inducted.
He is also a former Board Member of the Reserve Bank of
Australia and former Member of the Prime Minister’s Business
Advisory Council.
Mr. Lew was the inaugural Chairman of the Mount Scopus
Foundation (1987–2013) which supports the Mount Scopus
College, one of Australia’s leading private colleges with 2000
students. He has also been the Chairman or a Director of a range
of philanthropic organisations.
Dr. David M. Crean
Dr. Crean has been an Independent Non-Executive Director of
Premier since December 2009, Deputy Chairman since July 2015
and is currently the Chairman of Premier’s Audit and Risk
Committee (appointed August 2010).
Dr. Crean was Chairman of the Hydro Electric Corporation (Hydro
Tasmania) from September 2004 until October 2014 and was also
Chairman of the Business Risk Committee at Hydro Tasmania,
member of the Audit Committee and Chairman of the Corporate
Governance Committee.
Dr. Crean was State Treasurer of Tasmania 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 to 1998 he held Shadow Portfolios of State
Development, Public Sector Management, Finance and Treasury.
Dr. Crean is also a Board member of the Linfox Foundation.
Dr. Crean graduated from Monash University in 1976 with a
Bachelor of Medicine and Bachelor of Surgery.
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,
4 Premier Investments Limited
media and entertainment sectors. Mr Antonie is also a
Non-Executive Director of Village Roadshow Limited and Breville
Group Limited and is a Principal of Stratford Advisory Group.
Lindsay E. Fox AC
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 operates
one of the largest supply chain services businesses 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, airports, 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 the 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
Sally Herman is an experienced Non-Executive Director in the
fields of financial services, retail, manufacturing and property.
She had a successful executive career spanning 25 years in
financial services in both Australia and the US, transitioning in late
2010 to a full time career as a Non-Executive Director.
Prior to that, she had spent 16 years with the Westpac Group,
running major business units in most operating divisions of the
Group as well as heading up Corporate Affairs and Sustainability
through the merger with St. George and the global
financial crisis.
Ms. Herman sits on both listed and unlisted Boards, including
Suncorp Group Limited (effective 6 October 2015), Breville Group
Limited, ME Bank Limited (retired 5 October 2015) and Investec
Property Limited. She was also a board member of FSA Group
Limited (retired 28 November 2014). Ms. Herman is Chair of an
independent girls’ school in Sydney and is on the Board of the
Sydney Harbour Federation Trust. Ms. Herman holds a BA from
the University of NSW and is a Graduate of the Australian
Institute of Company Directors.
Henry D. Lanzer AM B.COM. LLB (Melb)
Henry Lanzer AM is Managing Partner of Arnold Bloch Leibler, a
leading Australian commercial law firm. Henry has over 30 years’
experience in providing legal, corporate finance and strategic
advice to some of Australia’s leading companies.
Mr. Lanzer is a Director of Just Group Limited, Thorney
Opportunities Limited and the TarraWarra Museum of Art and
also a Life Governor of the Mount Scopus College Council.
He is also Chairman of the Remuneration and Nomination
Committee for Premier Investments Limited.
In June 2015, Henry was appointed as a Member of the Order
of Australia.
Terrence L. McCartney
Mr. McCartney has had a long and successful career in retail.
Mr. McCartney started at Boans Department Stores in Perth then
moved to Grace Bros in Sydney. After the acquisition of Grace
Bros by Myer, he relocated to the merged Department Stores
Group in Melbourne within the merchandise & marketing
department. His successful career within Coles Myer meant that
Terry then moved to the Kmart discount department stores as
Head of Merchandise & Marketing and then Managing Director.
Following several years as Managing Director of Kmart Australia
and New Zealand, Terry became Managing Director of Myer
Grace Bros. For 5 years Terry lead year on year growth in
profitability of Australia’s largest department store.
Terry’s experience spans the full spectrum of retailing, ranging
from luxury goods in department stores to large mass
merchandise discount operations. Terry has also been retained by
large international accounting and legal firms as an expert
witness in relation to Australian retail.
In addition to his extensive list of retail experience, he has also
been an advisor to large Australian and international mining
companies, prior to joining the Just Group Board in 2008. Terry
lends his extensive retail and commercial expertise to the Just
Group by serving on a number of committees, including the
Property Committee and Internet Steering Committee of the
Group, and through various store and site visits, both locally and
overseas. He is also actively involved in seasonal and trading
performance reviews for the Group.
Terry was appointed as a Director of Premier Investments Limited
in April 2016.
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.
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 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 and public
affairs. He has been a Non-Executive Director of Premier
Investments Limited since 2002 and was a Non-Executive Director
of Just Group Limited from 2007 to 2013. Past experience
includes the Australian Board of an international funds manager,
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.
Dr. Gary H. Weiss LL.M, J.S.D.
Dr. Weiss holds the degrees of LL.B (Hons) and LL.M (with
distinction) 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 Ridley Corporation Limited, Executive
Director of Ariadne Australia Limited, and a Director of Premier
Investments Limited, Pro-Pac Packaging Limited, Tag Pacific
Limited, Thorney Opportunities Limited, The Straits Trading
Company Limited and Estia Health Limited. He was Chairman of
Clearview Wealth Limited from July 2013 until May 2016 and 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 Mercantile
Investment Company Limited (retired 25 February 2015) Westfield
Group, Tower Australia Limited, Australian Wealth Management
Limited, Tyndall Australia Limited (Deputy Chairman), Joe White
Maltings Limited (Chairman), CIC Limited, Whitlam Turnbull & Co
Limited and Industrial Equity Limited.
He has authored numerous articles on a variety of legal and
commercial topics.
Annual Report 2016 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.
Two phase gross
margin expansion
program.
3
4
Continued solid results were achieved in all five core brands in financial
year 2016 (FY16). After trading during the second half of the financial
year 2016 (2H16) was impacted by an unseasonably warm Autumn,
the core apparel brands delivered a significant improvement in LFL and
Total Sales across June and July as colder weather struck, leaving the
business with a clean inventory position to commence FY17. The group
continues to invest in upgrading its existing store network through
targeted investment that delivers strong returns to shareholders.
Costs of doing business continue to be well controlled whilst strategic
investment in growth initiatives continue, including online, Peter
Alexander and Smiggle international expansion. There was no store
rent growth for established brands in FY16 despite inflationary
pressures built into leases. Total store rent increased due to the
ongoing growth of Peter Alexander in Australia and New Zealand and
Smiggle globally. Salaries continued to be tightly controlled with
improved labour productivity for the established brands. During the
year, 12 loss making stores were closed, as part of an ongoing
program to improve the portfolio profitability.
Premier Retail’s gross margin expanded during the year despite the
weaker AUD and highly competitive market. Strategies to offset the
impact of the weaker AUD have been effectively implemented across
all brands and markets. Direct sourcing initiatives continuing to deliver
benefits from new suppliers and countries, which combined with our
ongoing focus on markdown management is expected to support
margin going forward.
Expand and grow the
internet business.
Total online sales for FY16 were up 39.6% – well ahead of market
growth. The online channel remains extremely profitable. Investment is
continuing in technology, people and marketing to deliver annual
online sales of $100 million by 2020.
5 Grow Peter Alexander
significantly.
6 Grow Smiggle
significantly.
6 Premier Investments Limited
Peter Alexander has over delivered on the three year strategic growth
plan developed in 2013. Sales for FY16 were up 20.4% – bringing
total sales growth over the last 3 years to 68%. 11 new stores were
opened in FY16, including the brand’s first Airport Store and a new
flagship store in Queen Street, Auckland, New Zealand. The brand
sees further new store growth including 3 confirmed new stores in
1H17 and plans for 5–7 new stores per calendar year 2017, 2018 and
2019. Peter Alexander is an established destination during key gift
giving times which remains a focus alongside delivering unique
customer experiences every day in store and online.
A record year for Smiggle, with global sales up 41.8% (up 79% over
two years) and strong LFL growth in all countries (Australia, New
Zealand, Singapore and United Kingdom). The Smiggle Asian
expansion was successfully executed with 5 stores opened across
Hong Kong and Malaysia and an established pipeline to continue the
growth. There are robust plans in place to manage the continued UK
store roll-out, delivering significant returns to shareholders. The
company reaffirms the UK expansion plans to have 200 stores with
annual sales of $200 million by 2019. The company also reaffirms the
Hong Kong and Malaysian expansion plans to have 50 stores within
5 years.
Brand Performance Premier Retail
Smiggle achieved exceptional sales growth of 41.8% in FY16, with more than 50% of global revenue generated
outside Australia. John Cheston, Managing Director Smiggle, continues to lead a strong and focused management
team growing a truly unique global brand. Smiggle’s Asian expansion was successfully executed with 5 stores opened
across Hong Kong and Malaysia in 2H16, targeting to have a total of 10 stores trading before Christmas 2016.
Smiggle UK continues to expand rapidly, with 40 new stores opened during FY16 for a total of 64 stores trading at
the end of FY16, targeting to have 85-90 stores trading before Christmas 2016.
Peter Alexander delivered outstanding growth of 20.4% in FY16. Judy Coomber, Managing Director Peter
Alexander and Peter Alexander, Creative Director have over delivered on the three year strategic growth plan
developed in 2013. 11 new stores were opened during FY16, with a further 5-7 new stores planned to open
in calendar year 2017, 2018 and 2019.
Dotti, led by David Bull, delivered another strong result in a highly competitive market, opening 6 new stores in
FY16. The brand has a world class digital platform. During the year a 60% increase in total fans on social media
channels were driven through the Dotti influencer program. The first full year of a New Zealand dedicated
website has traded ahead of plan since operations commenced.
Portmans, led by Paula Gorman, delivered an impressive full year result through a strong performance in summer
apparel categories. The group continues to invest in ensuring our multi-channel capability is world class. The
investment in Jess Hart as brand ambassador continues to deliver a strong brand campaign.
Jacqui E delivered profit growth in FY16 under Karen Russell’s leadership. The focus on product excellence delivered
a strong performance as a new fashion direction was introduced in 2H16 offering an on trend, modern look which
was well received by customers. Supported by a strong brand campaign, led by our ambassador
Tara Moss, the brand continues to build a destination for work wear.
Just Jeans, under Matthew McCormack’s leadership, continues to implement its “Anchored in Denim”
strategy that has delivered strong denim growth over the year. A new store format was launched during
the year with the opening of Mid City Sydney CBD, delivering improved customer experience and results
ahead of expectations. Ash Hart was launched as the new brand ambassador in August 2015, and
together with the Stenmark twins, is delivering a strong brand campaign.
Jay Jays, under Linda Whitehead’s leadership, consolidated its market position in FY16 following
significant growth in FY16. The brand’s new store format continues to be be well received. Ongoing
focus on driving an increase in full price sales together with sourcing initiatives has delivered further
brand profit growth in FY16.
Annual Report 2016 7
Internet Performance Premier Retail
Consistent online sales growth ahead of the market
ONLINE SALES GROWTH FY16
40
35
30
25
20
15
10
5
0
+39.6%
+30.5%
+30.8%
+8.6%
+8.6%
+8.0%
Fashion Online Sales Growth
Premier Retail Online Sales Growth
FY14
FY15
FY16
Note: NAB Online Retail Sales Index – July 2016, published 31 August 2016.
Reported Australian online retail sales in the fashion category grew by 8.0% in the 12 months to July 2016
» Online sales up 39.6% in FY16 – well ahead of market growth of 8.0% for the
12 months ended July 2016
» Online channel delivers significantly higher profit margin than the Group average
» Strong performance from first full year trading from new international sites:
Smiggle.co.uk for UK/Europe customers, fulfilled from UK
Dotti.co.nz for New Zealand customers, fulfilled from NZ
» Australian sites continuing to deliver strong growth with all brands outperforming the market
» Investment continuing in technology, people and marketing to deliver annual online sales
of $100 million by 2020
8 Premier Investments Limited
Smiggle International Growth
Record Year for Smiggle with strong LFL sales recorded in all countries
Sheffield, UK
» More than 50% of total global revenue was generated outside Australia in FY16
» 52 new stores opened in FY16
» The company reaffirms the UK expansion plans to have 200 stores with annual sales of $200 million by 2019
» Through investment in technology, people and marketing we have experienced an impressive year of online sales
well above expectations
» The company reaffirms the Hong Kong and Malaysian expansion plans to have 50 stores within 5 years
» Exploratory investigations are continuing in potential new high value countries
» John Cheston (Managing Director: Smiggle) continues to lead a strong and focused management team and a truly
unique global brand
Telford Plaza, Hong Kong
Annual Report 2016 9
Peter Alexander Growth
Sales for FY16 were up 20.4% -
bringing total sales growth over the last 3 years to 68%
» 11 new stores opened
» 99 stores trading at year-end
» 3 new stores confirmed in 1H17: Greenwood Plaza, Macarthur Square and Noosa
» 4 stores confirmed to be refurbished and upsized in 1H17: Pacific Fair, Spencer Street, Chadstone and
Warringah
» 5–7 new stores targeted per year in calendar years 2017, 2018 and 2019
» 3-5 store upgrades, upsizing or refurbishments targeted per year in calendar years 2017, 2018 and 2019
» Online sales continue to outperform the market
» New product initiatives continue including Plus Size and bed socks to be expanded in FY17
» Childrenswear expansion continues delivering significant growth
» Myer concessions well established and further department store growth being explored
Werribee, Australia
10 Premier Investments Limited
Our Commitment to Business Sustainability
Premier acknowledges the importance of respecting our stakeholders,
including employees, shareholders, customers and suppliers
PEOPLE
COMMUNITY
ENVIRONMENT
ETHICAL SOURCING
» Attraction and retention
» Peter Alexander and RSPCA/
» Packaging Stewardship
» Development
» Reward and recognition
» Workplace Safety
PAW JUSTICE
» Smiggle Community
Partnerships
» Waste and Recycling
» Energy efficiency
» Our sourcing models,
principles & policies
» Our Assurances
» Membership of the Alliance
for Bangladesh Worker
Safety
» Our activities in Bangladesh
» Ethical Raw Material
Procurement
We are committed to a long term goal of delivering
sustainable value through the effective use of our resources
and relationships. This goal influences how we behave and
impacts everything we do.
OUR COMMITMENT TO OUR PEOPLE
Our goal is for Premier to attract, retain and motivate high
calibre employees. Our outstanding leadership team have
developed and nurtured a culture that supports our
success. We value speed, integrity, energy, and results. We
have a ‘can do’ culture in which employees see the
difference they make.
TOTAL
EMPLOYEES
% FEMALE
7,000+
90%
ATTRACTION AND RETENTION
At the end of the financial year, Premier employed over 7,000
staff across six countries. By Christmas 2016, Premier will
employ over 8,000 staff.
Premier believes that it is important to ensure that all team
members enjoy a workplace which is free from discrimination;
we believe our staff perform the best when they can be
themselves at work and so we strongly support gender, age,
sexual orientation, disability and cultural diversity at work. In
FY16, 90% of our total team members are women, who held
77% of the positions at management level. We rely on the
passion and commitment of our employees to achieve the
results we do.
DEVELOPMENT
Premier provides ongoing and regular training opportunities
throughout the year to develop and support our future
aspiring leaders. This year we held 323 training and
development workshops led by our People & Culture
Managers and Senior Leaders.
REWARD AND RECOGNITION
We recognise and reward outstanding contributions to our
group results, both individually and for team performance.
Our annual awards in FY16 celebrated a total of 93 employees
for their excellent performance and contribution to achieving
our goals. In addition, we reward our top stores and staff
across all seven brands globally via our annual ‘Just Group
Excellence Awards’. The top performing Regional Managers,
Store Managers and Visual Merchandiser Managers for each
of our brands are rewarded publicly amongst their peers for
their great leadership and delivery of the FY16 results.
WORKPLACE SAFETY
Premier is committed to the prevention of workplace injury
and lost time. We want to create a culture where all
employees feel responsible for all aspects of health and safety.
‘Play it Safe’ has become part of our culture. Workplace safety
is considered in all our business decisions, including workplace
design and development, supply chain, visual merchandising
and store planning. We have clear and measurable
performance targets. However, in the event that a work
related injury or illness occurs, we are also committed to
supporting affected employees in returning to work and
continuing their career.
We will continue to develop Premier as a great place
to work, and a great company in which our team build
their careers.
Annual Report 2016 11
Our Commitment to the Community
Premier has a long history of philanthropic support, particularly with our
Peter Alexander and Smiggle brands
PETER ALEXANDER AND THE RSPCA
PETER ALEXANDER AND PAW JUSTICE
As much as Peter Alexander has become famous for his
pyjamas, he has also become known for his dogs, and is a
huge supporter of animal welfare organisations. Peter
Alexander has worked closely for the last 11 years with the
RSPCA in Australia, and for the last three years with Paw
Justice in New Zealand. Our work has included a variety of
fundraising activities which raise awareness for
animal charities.
Working with the RSPCA, Peter has raised over $548,000
contributing to RSPCA shelters, which care for more than
140,000 animals every year supporting rescue, rehabilitation
and rehoming unwanted, stray and injured animals. Peter has
been awarded the status of RSPCA Ambassador in recognition
of his efforts.
In 2014, aligned with the growing presence of Peter Alexander
in New Zealand, we partnered with the NZ animal charity
Paw Justice, and over the last three years have raised close to
$41,000.
Paw Justice works to stop violent animal abuse; and they have
been instrumental in focusing the New Zealand public’s
attention on the need for reform of animal welfare laws
through youth education and advocacy for pets.
During the year Peter Alexander continued its commitment to
the prevention of cruelty to animals. The involvement with the
RSPCA in Australia and Paw Justice in New Zealand continues
to be the key charity supported by the brand. Across the year
there were a variety of items produced including playing cards,
gift wrap and chocolates. 100% of all sales were donated to
these charities. During the year we donated $88,000 to the
RSPCA and $16,000 to Paw Justice.
Peter Alexander with Butch on his right and Betty on his lap.
PETER HAS RAISED OVER
$589,000
CONTRIBUTING TO RSPCA SHELTERS IN AUSTRALIA
AND PAW JUSTICE IN NEW ZEALAND.
SMIGGLE COMMUNITY PARTNERSHIPS
Premier and our Smiggle brand also support a number of
children’s charities, organisations and educational programs.
Plus, countless community fundraising initiatives both locally
and abroad, for schools, sporting, and educational events.
During the year we have donated over $100,000 in products.
Peter Alexander with Butch on his left and Betty on his lap.
12 Premier Investments Limited
Our Commitment to the Environment
PACKAGING STEWARDSHIP
Premier is committed to managing and reducing the
impact our business operations have on the environment.
Premier is a signatory to the Australian Packaging
Covenant, a voluntary agreement between government
and industry which provides companies with the tools to
be more involved in reducing their impact on the
environment through sustainable packaging design,
recycling and product stewardship. Premier has submitted
a 5 year Action Plan outlining its objectives in relation to:
1 Optimising packaging to reduce environmental impacts;
2 Increasing the collection and recycling of packaging;
3 Commitment to product stewardship; and
4 Implementation of Sustainable Packaging Guidelines.
All plastic shopping bags used by the group are made
using EPI technology designed to control and manage the
lifetime of products made from the most common plastics
to assist in the breakdown, degrade and subsequent
biodegrade process.
WASTE AND RECYCLING
Premier has extensive recycling and sustainable practices
across our network of Stores, Distribution Centres and
Support Centre. Our Distribution Centres execute on-site
recovery systems for recycling used packaging and follow
Sustainable Packaging Guidelines. All carton packaging
uses recycled content. Cartons are reused to facilitate the
replenishment of stock, or where necessary waste
packaging is compacted and collected for recycling. We
have partnered with Orora, a signatory to the Australian
Packaging Covenant, to collect and process in line with
their recycling procedures. Orora’s recycling business
specialises in paper and cardboard, among others, which
is then used as the major input at their recycled paper mill,
to produce 100% recycled paper.
Our Support Centre recycles all paper and has continued
our co-mingled recycling program for glass and plastics on
every floor in our entire building. All paper purchased for
our Support Centre is accredited from The Forest
Stewardship Council sources, an international network
which promotes responsible management of the world’s
forests. All necessary printing at our support centre is
activated by personalised swipe access only to release
print. This initiative has seen a significant reduction in
waste paper printing, as it removes entirely non-collection
of printouts. All weekly retail reporting, forms, reference
and administrative material is stored and accessible via
mobile technology.
Across our network of stores, reuse is always our first
option. Specific initiatives relate to plastic hangers and
carton packaging. In store, plastic hangers are first reused,
and if there is an oversupply our supplier collects and
repackages those hangers for reuse or to be fully recycled.
Additionally, all cartons are reused to facilitate movement
of stock between our stores. In the balance of instances
we will utilise our shopping centre recycling facilities.
ENERGY EFFICIENCY
Premier recognises the importance of energy efficient, low
environmental impact lighting systems and since 2012
have adhered to new improved lighting standards to
efficiently manage our energy consumption in all of our
stores. This has resulted in an investment to our store
network and upgrade of 232 stores to LED lighting. This
initiative has subsequently meant less heat, thereby
reducing the overall heat load on our stores and reduced
investment in cooling requirements. In addition this has
led to a dramatic reduction in ongoing maintenance and
light bulb replacement. This standard has been
implemented for all new store fit-outs. Across our existing
store network all expired bulbs are recycled and we are
looking to complete a ‘like for like’ conventional to LED
lamp replacement programme.
With the active participation of our employees, we believe
that our focus on environmental issues will make our
business more efficient, drive customer and employee
connection, and have a positive impact in the communities
in which we operate.
Annual Report 2016 13
Our Commitment to Ethical Sourcing
Premier commits to the highest standards of ethical
conduct and responsible product sourcing practices.
We support this commitment by our models for sourcing
products, the principles that back-up those models,
together with our policies and assurance program.
OUR SOURCING MODELS, PRINCIPLES & POLICIES
We share our customers’ full engagement in
understanding where products come from, how products
are made and the way that people who manufacture those
products are treated.
With this in mind, we use the following sourcing models:
» direct sourcing from factories with whom we work in
close partnership
In each case our model is supported by the
following strict sourcing principles:
1. We comply with all laws in the countries we source
from and operate.
2. We insist on workers’ legal rights – including worker
empowerment and free association.
3. We have zero tolerance for child labour.
4. We have zero tolerance for bribery and corruption.
5. We have zero tolerance for animal cruelty.
» through Li & Fung, the world’s largest sourcing company
» prohibits forced labour (including child labour)
for major retailers and brands around the world
In addition, we work with known established and trusted
Australian importers.
We currently source products in the following countries:
China, Australia, Bangladesh, Cambodia, Hong Kong,
India, Indonesia, Sri Lanka, Taiwan, Thailand, Turkey
and Vietnam.
SOURCE COUNTRIES (THE JUST GROUP, UNITS)
Rest of the world 17%
China 83%
Our Ethical Sourcing and Supply Code (Code) supports our
commitment to sourcing merchandise that is produced
according to these principles, regardless of origin.
All suppliers must sign our supply terms and conditions, of
which the Code is part, prior to any orders being placed.
We will not do business with a supplier who does not
comply with the Code.
Among other things, we note that our supply terms and
the Code:
» requires compliance with all laws (and/or requires our
suppliers to meet higher standards)
» insists on the free association of workers, including the
right to collectively bargain and be represented
» requires labour to be voluntary, without workers being
required to lodge deposits (eg. for recruitment fees etc.)
14 Premier Investments Limited
» insists on worker rights such as the right to work in safe,
hygienic premises where working hours are not excessive
» requires the payment of the minimum national legal
standards or local benchmark standards (whichever is
higher), and, in relation to full time workers, sufficient to
meet basic needs and to provide discretionary income
» prohibits unauthorised sub-contracting – meaning that
we have a fully transparent relationship with
our suppliers
» prohibits discrimination on the basis of personal
attributes as well as union membership or
political affiliations
ASSURANCES WHICH SUPPORT OUR
SOURCING PRINCIPLES
Background checks. We conduct thorough and ongoing
compliance activities of all suppliers directly and through
Li & Fung and qualified audit firms.
Factory inspections. Senior management personally
inspect all factories that manufacture for us. We continue
factory visits throughout our relationship with our suppliers
to ensure our principles are strictly adhered to.
BANGLADESH SOURCING
Background
Bangladesh’s economic and social development relies on
the expansion and strength of the garment sector,
including through investment by international retailers. The
garment industry comprises around 80% of all Bangladesh
export earnings, is a significant contributor to GDP, and
employs over 4 million workers, most of whom are
women. Premier currently sources a portion of its Just
Jeans and Jay Jays branded products in Bangladesh and we
highlight our program in this country in the interest of full
transparency.
MEMBERSHIP OF THE ALLIANCE FOR BANGLADESH
WORKER SAFETY
Since 2013 we have been a proud signatory to the
Alliance for Bangladesh Worker Safety. This is a legally
binding five year commitment to work with some of the
world’s largest apparel retailers including the following
companies: Nordstrom, Gap, Target, Sears, J.C. Penney,
Hudson’s Bay and Macy’s.
Together we have invested in worker safety, improved
conditions and transparent reporting in a results
oriented, measurable and verifiable way.
The Alliance’s achievements to date include:
» inspection of 100% of member factories (including all
of our factories)
» publication on the Alliance website of all factory
inspection results, along with corrective action plans
for any factories requiring remediation (including all of
our factories)
» in partnership with the International Finance
Corporation, a $50 million low-cost long–term facility
to assist factories to undertake remediation
» an anonymous worker helpline program in over 800
member factories, available to over 1.1 million workers
(including all of our factories)
» Fire and safety training for 1.29 million workers in all
member factories (including all of our factories). Plus
following the Nepal Earthquake, the Alliance is now
integrating earthquake preparedness into their
training programs
Further, the Alliance for Bangladesh Worker Safety
collaborates with all parties in the country – including
the Bangladesh government, NGOs, factory workers and
the Accord on Fire & Building Safety in Bangladesh. Both
the Alliance and the Accord share common priorities,
including a relentless focus on workers generally, as well
as building integrity and safety – all supported by
financial commitments and good governance.
All initiatives of the Alliance are publicly available at
www.bangladeshworkersafety.org
OUR ACTIVITIES IN BANGLADESH
Our operational processes have included the
establishment of our own office in Bangladesh, which
we opened in March 2014. Our investment in on the
ground infrastructure in Bangladesh, including
employing staff at our sourcing office directly, supports
our audit and compliance activities in that market with
particular focus on social compliance and safety which
includes:
1 Senior management personally inspect ALL factories
that manufacture for us prior to commencing
business. We continue factory visits throughout our
relationship with our suppliers to ensure our principles
are strictly adhered to. Our Code includes the ability
for us to make unannounced visits in Bangladesh for
the purposes of our audit and compliance activities.
2 Prior to placing orders with any factory, we also
engage independent internationally recognised
qualified assessment and audit firms to verify
compliance with all local laws and safety conditions,
in relation to labour and safety issues including fire
and building integrity.
3 During manufacturing, our globally independent audit
firm Intertek inspect all orders. To-date we have
achieved a 100% inspection rate of all our orders in
all of our factories.
4 In addition, if the factories are not member factories
of either the Alliance or the Accord, then we will not
conduct business with them. Factories must be
inspected for compliance with Alliance safety
standards before they can be approved by the
Alliance for production.
As noted; the Alliance has conducted fire safety training
at all factories we source from and all employed staff
have received this training. We are fully engaged in this
process with a committed and responsible work
program in Bangladesh.
ETHICAL RAW MATERIAL PROCUREMENT
Our sourcing commitment is supported by the following
initiatives relating to fibre procurement:
» Rabbit angora
We confirm that we will not source products
containing rabbit angora until we can be completely
confident that the ethical standards of rabbit angora
farming are assured and independently audited
» Cotton
We will not source cotton harvested in Uzbekistan. We
will maintain this position until the government of
Uzbekistan ends the practice of forced child and adult
labour in its cotton sector. To this end, we signed the
Pledge against Child and Adult Forced Labour in
Uzbek Cotton
» Azo Dyes
We have voluntarily adopted the EU standard whereby
we prohibit the manufacture and sale of goods which
contain prohibited levels of the specific aromatic
amines originating from a small number of azo dyes
» Sandblasted denim
The harmful practice of ‘sandblasting’ denim with
silica based powders has been discontinued in our
business since 2011
Annual Report 2016 15
Our Business
CODE OF CONDUCT
Premier acknowledges the importance of respecting our
stakeholders, including team members, shareholders,
customers and suppliers. We also know that by respecting and
working with the communities in which we operate we can
make an impact.
Our Code of Conduct outlines our legal, moral and ethical
obligations which are underpinned by the behaviours we
expect of all of our stakeholders.
The principles ensure that we:
» Foster a culture in which all stakeholders including
customers, shareholders and fellow team members are
treated with respect
» Comply with the law and Premier policies
» Protect company assets, information and reputation
» Provide a safe workplace for our team members and visitors
» Develop a culture where professional integrity and ethical
behaviour is valued
As part of this focus, team members are regularly required to
complete the Code of Conduct training.
In addition, we have an advisory email and a confidential
telephone service for all issues and complaints under
this Code.
SHRINKAGE
Shrinkage is the loss of merchandise that can be attributed
to product theft or through the administrative handling
process. Premier has a shrinkage reduction strategy in place
with processes and education aimed at reducing these losses.
Premier delivered the sixth consecutive year of improved
shrinkage results and we will continue to maintain this focus
into the future.
16 Premier Investments Limited
Premier Investments Limited
A.C.N. 006 727 966
Financial Report
For the Period Commencing
26 July 2015 to 30 July 2016
Annual Report 2016 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 Auditor’s Report to the
Members of Premier Investments Limited
ASX Additional Information
Corporate Directory
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DIRECTORS’ REPORT
The Board of Directors of Premier Investments Limited (A.B.N. 64 006 727 966) has pleasure in submitting its
report in respect of the financial year ended 30 July 2016.
The Directors present their report together with the consolidated financial report of Premier Investments
Limited (the “Company” or “Premier") and its controlled entities (the “Group”) for the 53 week period
26 July 2015 to 30 July 2016, 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 year 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. Mr. Lew is 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 50 years’ experience in the manufacture, wholesale and retailing of textiles, apparel and
general merchandise, as well as property development. His success in the retail industry has been largely
due to his ability to read fashion trends and interpret them for the Australasian market, in addition to his
demonstrated ability in the timing of strategic investments.
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.
Mr. Lew is a member of the World Retail Hall of Fame and is the first Australian to be formally inducted.
He is also a former Board Member of the Reserve Bank of Australia and former Member of the Prime
Minister’s Business Advisory Council.
Mr. Lew was the inaugural Chairman of the Mount Scopus Foundation (1987 – 2013) which supports the
Mount Scopus College, one of Australia’s leading private colleges with 2000 students. He has also been the
Chairman or a Director of a range of philanthropic organisations.
Dr. David M. Crean Deputy Chairman (appointed 25 July 2015) and Non-Executive Director
Dr. Crean has been an Independent Non-Executive Director of Premier since December 2009, Deputy
Chairman since July 2015 and is currently the Chairman of Premier’s Audit and Risk Committee (appointed
August 2010).
Dr. Crean was Chairman of the Hydro Electric Corporation (Hydro Tasmania) from September 2004 until
October 2014 and was also Chairman of the Business Risk Committee at Hydro Tasmania, member of the
Audit Committee and Chairman of the Corporate Governance Committee.
Dr. Crean was State Treasurer of Tasmania 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 to 1998 he held Shadow
Portfolios of State Development, Public Sector Management, Finance and Treasury.
Dr. Crean is also a Board member of the Linfox Foundation. Dr. Crean graduated from Monash University in
1976 with a Bachelor of Medicine and Bachelor of Surgery.
1 Premier Investments Limited
2
DIRECTORS’ REPORT
The Board of Directors of Premier Investments Limited (A.B.N. 64 006 727 966) has pleasure in submitting its
report in respect of the financial year ended 30 July 2016.
The Directors present their report together with the consolidated financial report of Premier Investments
Limited (the “Company” or “Premier") and its controlled entities (the “Group”) for the 53 week period
26 July 2015 to 30 July 2016, 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 year 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. Mr. Lew is 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 50 years’ experience in the manufacture, wholesale and retailing of textiles, apparel and
general merchandise, as well as property development. His success in the retail industry has been largely
due to his ability to read fashion trends and interpret them for the Australasian market, in addition to his
demonstrated ability in the timing of strategic investments.
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.
Mr. Lew is a member of the World Retail Hall of Fame and is the first Australian to be formally inducted.
He is also a former Board Member of the Reserve Bank of Australia and former Member of the Prime
Minister’s Business Advisory Council.
Mr. Lew was the inaugural Chairman of the Mount Scopus Foundation (1987 – 2013) which supports the
Mount Scopus College, one of Australia’s leading private colleges with 2000 students. He has also been the
Chairman or a Director of a range of philanthropic organisations.
Dr. David M. Crean Deputy Chairman (appointed 25 July 2015) and Non-Executive Director
Dr. Crean has been an Independent Non-Executive Director of Premier since December 2009, Deputy
Chairman since July 2015 and is currently the Chairman of Premier’s Audit and Risk Committee (appointed
August 2010).
Dr. Crean was Chairman of the Hydro Electric Corporation (Hydro Tasmania) from September 2004 until
October 2014 and was also Chairman of the Business Risk Committee at Hydro Tasmania, member of the
Audit Committee and Chairman of the Corporate Governance Committee.
Dr. Crean was State Treasurer of Tasmania 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 to 1998 he held Shadow
Portfolios of State Development, Public Sector Management, Finance and Treasury.
Dr. Crean is also a Board member of the Linfox Foundation. Dr. Crean graduated from Monash University in
1976 with a Bachelor of Medicine and Bachelor of Surgery.
Annual Report 2016 2
2
DIRECTORS’ REPORT
DIRECTORS’ REPORT
(CONTINUED)
(CONTINUED)
PREMIER INVESTMENTS LIMITED
Michael R.I. McLeod Non-Executive Director
Mark McInnes Executive Director
A.C.N. 006 727 966
Mr. McLeod is a former Executive Director of the Century Plaza Group and has been involved with the Group
Mr. McInnes is a career retailer with a long track record of success in every role he has occupied. Like many
since 1996 as an advisor in the areas of corporate strategy, investment and public affairs. He has been a
great retailers, Mark started his career from the shop floor as a company cadet for Grace Brothers. Mark has
Non-Executive Director of Premier Investments Limited since 2002 and was a Non-Executive Director of Just
been directly responsible for some of Australia’s greatest retail success stories – including as a co-founder of
Group Limited from 2007 to 2013. Past experience includes the Australian Board of an international funds
the Officeworks concept which is today Australia’s largest office supply superstore.
manager, chief of staff to a Federal Cabinet Minister and statutory appointments including as a Commission
Member of the National Occupational Health and Safety Commission.
Prior to joining Premier, Mark led David Jones to its most successful time as a public listed company. Mark
FINANCIAL REPORT
spent 13 years at David Jones – 6 years as Merchandise & Marketing Director and 7 years as CEO. From
He holds a Bachelor of Arts (First Class Honours and University Medal) from the University of New South
FOR THE PERIOD COMMENCING 26 JULY 2015 TO 30 JULY 2016
2003 to 2010, Mark as CEO and Executive Director of David Jones turned the company into a fashion and
Wales.
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
Dr. Gary H. Weiss LL.M, J.S.D. Non-Executive Director
compete in an industry under great structural pressure. Premier Retail today has a clear path and a clear
Dr. Weiss holds the degrees of LL.B (Hons) and LL.M (with distinction) from Victoria University of Wellington,
CONTENTS
focus.
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.
In December 2012, Mark was appointed as an Executive Director of Premier Investments Limited. Mark holds
an MBA from the University of Melbourne.
DIRECTORS’ REPORT
Dr. Weiss is Chairman of Ridley Corporation Limited, Executive Director of Ariadne Australia Limited, and a
Director of Premier Investments Limited, Pro-Pac Packaging Limited, Tag Pacific Limited, Thorney
AUDITOR’S INDEPENDENCE DECLARATION
Timothy Antonie Non-Executive Director and Lead Independent Director
Opportunities Limited, The Straits Trading Company Limited and Estia Health Limited. He was Chairman of
STATEMENT OF COMPREHENSIVE INCOME
Clearview Wealth Limited from July 2013 until May 2016 and of Coats Plc from 2003 until April 2012, and
Mr. Antonie was appointed to the Board of Directors on 1 December 2009. He holds a Bachelor of Economics
Executive Director of Guinness Peat Group Plc from 1990 to April 2011 and has held directorships of
STATEMENT OF FINANCIAL POSITION
degree from Monash University and qualified as a Chartered Accountant with Price Waterhouse. He has 20
numerous companies, including Mercantile Investment Company Limited (retired 25 February 2015) Westfield
years’ experience in investment banking and formerly held positions of Managing Director from 2004 to 2008
STATEMENT OF CASH FLOWS
Group, Tower Australia Limited, Australian Wealth Management Limited, Tyndall Australia Limited (Deputy
and Senior Adviser in 2009 at UBS Investment Banking, with particular focus on large scale mergers and
STATEMENT OF CHANGES IN EQUITY
Chairman), Joe White Maltings Limited (Chairman), CIC Limited, Whitlam Turnbull & Co Limited and
acquisitions and capital raisings in the Australian retail, consumer, media and entertainment sectors. Mr
Industrial Equity Limited.
NOTES TO THE FINANCIAL STATEMENTS
Antonie is also a Non-Executive Director of Village Roadshow Limited and Breville Group Limited and is a
Principal of Stratford Advisory Group.
He has authored numerous articles on a variety of legal and commercial topics.
DIRECTORS’ DECLARATION
INDEPENDENT AUDIT REPORT TO THE MEMBERS OF PREMIER INVESTMENTS LIMITED
COMPANY SECRETARY
Lindsay E. Fox AC Non-Executive Director
ASX ADDITIONAL INFORMATION
Mr. Fox has extensive experience in all aspects of the transport, distribution and warehousing industries. He
Kim F. Davis
CORPORATE DIRECTORY
is the founder of the Linfox Group of Companies. Today, the Linfox Group operates one of the largest supply
Mr. Davis has been the Company Secretary of Premier Investments Limited for 22 years. Prior to holding this
chain services businesses with operations in 10 countries. The Linfox Group employs over 23,000 people,
position, Mr Davis had 15 years’ experience within the accounting industry as a tax and financial advisor.
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, airports, 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
the 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.
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DIRECTORS’ REPORT
(CONTINUED)
Sally Herman Non-Executive Director
Sally Herman is an experienced Non-Executive Director in the fields of financial services, retail,
manufacturing and property. She had a successful executive career spanning 25 years in financial services
in both Australia and the US, transitioning in late 2010 to a full time career as a Non-Executive Director.
Prior to that, she had spent 16 years with the Westpac Group, running major business units in most operating
divisions of the Group as well as heading up Corporate Affairs and Sustainability through the merger with St.
George and the global financial crisis.
Ms. Herman sits on both listed and unlisted Boards, including Suncorp Group Limited (effective 6 October
2015), Breville Group Limited, ME Bank Limited (retired 5 October 2015) and Investec Property Limited. She
was also a board member of FSA Group Limited (retired 28 November 2014). Ms. Herman is Chair of an
independent girls’ school in Sydney and is on the Board of the Sydney Harbour Federation Trust. Ms.
Herman holds a BA from the University of NSW and is a Graduate of the Australian Institute of Company
Directors.
Henry D. Lanzer AM B.COM. LLB (Melb) Non-Executive Director
Henry Lanzer AM is Managing Partner of Arnold Bloch Leibler, a leading Australian commercial law firm.
Henry has over 30 years’ experience in providing legal, corporate finance and strategic advice to some of
Australia’s leading companies.
Mr. Lanzer is a Director of Just Group Limited, Thorney Opportunities Limited and the TarraWarra Museum of
Art and also a Life Governor of the Mount Scopus College Council.
He is also Chairman of the Remuneration and Nomination Committee for Premier Investments Limited.
In June 2015, Henry was appointed as a Member of the Order of Australia.
Terrence L. McCartney Non-Executive Director (Appointed 15 April 2016)
Mr. McCartney has had a long and successful career in retail. Mr. McCartney, started at Boans Department
Stores in Perth then moved to Grace Bros in Sydney. After the acquisition of Grace Bros by Myer, he
relocated to the merged Department Stores Group in Melbourne within the merchandise & marketing
department. His successful career within Coles Myer meant that Terry then moved to the Kmart discount
department stores as Head of Merchandise & Marketing and then Managing Director. Following several years
as Managing Director of Kmart Australia and New Zealand, Terry became Managing Director of Myer Grace
Bros. For 5 years Terry lead year on year growth in profitability of Australia’s largest department store.
Terry’s experience spans the full spectrum of retailing, ranging from luxury goods in department stores to
large mass merchandise discount operations. Terry has also been retained by large international accounting
and legal firms as an expert witness in relation to Australian retail.
In addition to his extensive list of retail experience, he has also been an advisor to large Australian and
international mining companies, prior to joining the Just Group Board in 2008. Terry lends his extensive retail
and commercial expertise to the Just Group by serving on a number of committees, including the Property
Committee and Internet Steering Committee of the Group, and through various store and site visits, both
locally and overseas. He is also actively involved in seasonal and trading performance reviews for the Group.
Terry was appointed as a Director of Premier Investments Limited in April 2016.
3 Premier Investments Limited
5
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DIRECTORS’ REPORT
(CONTINUED)
Sally Herman Non-Executive Director
Sally Herman is an experienced Non-Executive Director in the fields of financial services, retail,
manufacturing and property. She had a successful executive career spanning 25 years in financial services
in both Australia and the US, transitioning in late 2010 to a full time career as a Non-Executive Director.
Prior to that, she had spent 16 years with the Westpac Group, running major business units in most operating
divisions of the Group as well as heading up Corporate Affairs and Sustainability through the merger with St.
George and the global financial crisis.
Ms. Herman sits on both listed and unlisted Boards, including Suncorp Group Limited (effective 6 October
2015), Breville Group Limited, ME Bank Limited (retired 5 October 2015) and Investec Property Limited. She
was also a board member of FSA Group Limited (retired 28 November 2014). Ms. Herman is Chair of an
independent girls’ school in Sydney and is on the Board of the Sydney Harbour Federation Trust. Ms.
Herman holds a BA from the University of NSW and is a Graduate of the Australian Institute of Company
Directors.
Henry D. Lanzer AM B.COM. LLB (Melb) Non-Executive Director
Henry Lanzer AM is Managing Partner of Arnold Bloch Leibler, a leading Australian commercial law firm.
Henry has over 30 years’ experience in providing legal, corporate finance and strategic advice to some of
Australia’s leading companies.
Mr. Lanzer is a Director of Just Group Limited, Thorney Opportunities Limited and the TarraWarra Museum of
Art and also a Life Governor of the Mount Scopus College Council.
He is also Chairman of the Remuneration and Nomination Committee for Premier Investments Limited.
In June 2015, Henry was appointed as a Member of the Order of Australia.
Terrence L. McCartney Non-Executive Director (Appointed 15 April 2016)
Mr. McCartney has had a long and successful career in retail. Mr. McCartney, started at Boans Department
Stores in Perth then moved to Grace Bros in Sydney. After the acquisition of Grace Bros by Myer, he
relocated to the merged Department Stores Group in Melbourne within the merchandise & marketing
department. His successful career within Coles Myer meant that Terry then moved to the Kmart discount
department stores as Head of Merchandise & Marketing and then Managing Director. Following several years
as Managing Director of Kmart Australia and New Zealand, Terry became Managing Director of Myer Grace
Bros. For 5 years Terry lead year on year growth in profitability of Australia’s largest department store.
Terry’s experience spans the full spectrum of retailing, ranging from luxury goods in department stores to
large mass merchandise discount operations. Terry has also been retained by large international accounting
and legal firms as an expert witness in relation to Australian retail.
In addition to his extensive list of retail experience, he has also been an advisor to large Australian and
international mining companies, prior to joining the Just Group Board in 2008. Terry lends his extensive retail
and commercial expertise to the Just Group by serving on a number of committees, including the Property
Committee and Internet Steering Committee of the Group, and through various store and site visits, both
locally and overseas. He is also actively involved in seasonal and trading performance reviews for the Group.
Terry was appointed as a Director of Premier Investments Limited in April 2016.
Annual Report 2016 4
4
DIRECTORS’ REPORT
(CONTINUED)
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 and public affairs. He has been a
Non-Executive Director of Premier Investments Limited since 2002 and was a Non-Executive Director of Just
Group Limited from 2007 to 2013. Past experience includes the Australian Board of an international funds
manager, 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.
Dr. Gary H. Weiss LL.M, J.S.D. Non-Executive Director
Dr. Weiss holds the degrees of LL.B (Hons) and LL.M (with distinction) 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 Ridley Corporation Limited, Executive Director of Ariadne Australia Limited, and a
Director of Premier Investments Limited, Pro-Pac Packaging Limited, Tag Pacific Limited, Thorney
Opportunities Limited, The Straits Trading Company Limited and Estia Health Limited. He was Chairman of
Clearview Wealth Limited from July 2013 until May 2016 and 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 Mercantile Investment Company Limited (retired 25 February 2015) Westfield
Group, Tower Australia Limited, Australian Wealth Management Limited, Tyndall Australia Limited (Deputy
Chairman), Joe White Maltings Limited (Chairman), CIC Limited, Whitlam Turnbull & Co Limited and
Industrial Equity Limited.
He has authored numerous articles on a variety of legal and commercial topics.
COMPANY SECRETARY
Kim F. Davis
Mr. Davis has been the Company Secretary of Premier Investments Limited for 22 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, as well as Malaysia and Hong Kong. The Group also has
significant investments in listed securities and money market deposits.
DIVIDENDS
Final Dividend recommended for 2016
Dividends paid in the year:
Interim for the half-year ended 30 January 2016
Final for 2015 shown as recommended in the 2015 report
CENTS
25.00
23.00
21.00
$’000
39,291
36,129
32,840
OPERATING AND FINANCIAL REVIEW
Group Overview:
Premier Investments Limited acquired a controlling interest in Just Group Limited (“Just Group”), a listed company
on the Australian Securities Exchange in August 2008. Subsequent to the acquisition, Just Group delisted from the
Australian Securities Exchange. Just Group is a leading speciality fashion retailer in Australia, New Zealand,
Singapore and the United Kingdom. During the second half of the 2016 financial year, the Group opened its first
Smiggle stores in Hong Kong and Malaysia. 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 1,100 stores across six countries as well as online. Smiggle opened its first four
stores in Hong Kong and one store in Malaysia during the year. Smiggle also expanded its store network in the
United Kingdom by adding a further 40 stores to the UK network, bringing the total UK stores to 64 as at the end of
the 2016 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 53 week
period ended 30 July 2016 (2015: 52 week period ended 25 July 2015) are summarised below:
Revenue from sale of goods
Total interest income
Total other income and revenue
Total revenue and other income
2016
$’000
2015
$’000
% CHANGE
1,049,226
947,662
7,888
1,847
9,828
4,379
1,058,961
961,869
+10.72%
-19.74%
-57.82%
+10.09%
Net profit after income tax
103,874
88,102
+17.90%
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, as well as Malaysia and Hong Kong. The Group also has
significant investments in listed securities and money market deposits.
DIVIDENDS
Final Dividend recommended for 2016
Dividends paid in the year:
Interim for the half-year ended 30 January 2016
Final for 2015 shown as recommended in the 2015 report
CENTS
25.00
23.00
21.00
$’000
39,291
36,129
32,840
OPERATING AND FINANCIAL REVIEW
Group Overview:
Premier Investments Limited acquired a controlling interest in Just Group Limited (“Just Group”), a listed company
on the Australian Securities Exchange in August 2008. Subsequent to the acquisition, Just Group delisted from the
Australian Securities Exchange. Just Group is a leading speciality fashion retailer in Australia, New Zealand,
Singapore and the United Kingdom. During the second half of the 2016 financial year, the Group opened its first
Smiggle stores in Hong Kong and Malaysia. 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 1,100 stores across six countries as well as online. Smiggle opened its first four
stores in Hong Kong and one store in Malaysia during the year. Smiggle also expanded its store network in the
United Kingdom by adding a further 40 stores to the UK network, bringing the total UK stores to 64 as at the end of
the 2016 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 53 week
period ended 30 July 2016 (2015: 52 week period ended 25 July 2015) are summarised below:
Revenue from sale of goods
Total interest income
Total other income and revenue
Total revenue and other income
2016
$’000
2015
$’000
% CHANGE
1,049,226
947,662
7,888
1,847
9,828
4,379
1,058,961
961,869
+10.72%
-19.74%
-57.82%
+10.09%
Net profit after income tax
103,874
88,102
+17.90%
Annual Report 2016 6
6
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Group Operating Results (continued):
Retail Segment:
As Premier’s core business, Just Group was the key contributor to the Group’s operating results for the financial
year. Key financial indicators for the retail segment for the 53 week period ended 30 July 2016 (2015: 52 week
period ended 25 July 2015) are highlighted below:
RETAIL SEGMENT
Sale of goods
Total segment income
2016
$’000
2015
$’000
% CHANGE
1,049,226
1,051,241
947,662
+10.72%
952,191
+10.40%
Segment net profit before income tax
126,207
98,958
+27.54%
Capital expenditure
42,677
36,526
The Retail Segment contributed $126 million to the Group’s net profit before income tax, up 27.54% on the prior
financial year. Growth in sales, combined with gross margin expansion and tight controls over the total cost of doing
business contributed to the improvement in segment profit before income tax. 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.
PREMIER RETAIL TRANSFORMATION STRATEGY – OUR FOCUS ON GROWTH AND
INVESTMENT
GROWTH
CORE
Grow Smiggle significantly
Gross margin expansion program
Grow Peter Alexander significantly
Rejuvenation of core apparel brands
Expansion and growth of online businesses
Organisation-wide cost efficiency program
The increase in sales is as a result of strong sales growth across all brands in the portfolio, with successful growth in
both overseas and domestic markets. Premier Retail achieved annual sales of over $1 billion for the 53 weeks
ended 30 July 2016, a new milestone for the Group. Online sales are up 39.6% on the prior year.
The Group continues to invest in new stores globally, and actively seeks to deliver sustainable sales growth through
store upgrades and refurbishments. During the 2016 financial year, the Group opened a further 81 stores across all
geographic segments, bringing the total global store network to over 1,100 stores.
During the 2016 financial year, the Group also expanded Smiggle’s Asian footprint by opening its first stores in
Malaysia and Hong Kong.
Group Operating Results (continued):
Retail Segment (continued):
Retail segment sales per geographic segment is presented in the graph below:
Investment Segment:
The Group’s balance sheet remains strong, primarily due to the significant asset holding of the investment segment.
As at 30 July 2016, the Group reflected its 27.5% shareholding in Breville Group Limited as an investment in
associate, with an equity accounted value of $213.4 million. The fair value of the Group’s interest in Breville Group
Limited as determined based on the quoted market price for the shares as at 30 July 2016 was $282.6 million.
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.
2016
2015
2014
2013
2012
Closing share price at end of financial year
$16.22
$13.43
$9.34
$7.68
$4.88
Basic earnings per share (cents)
66.3
56.5
47.0
112.4
44.0
Dividend paid per share (cents)
44.0
50.0
39.0
37.0
36.0
Return on equity (%)
7.8%
6.6%
5.6%
13.4%
5.5%
Net debt/equity ratio (%)
(13.3%)
(13.2%)
(14.9%)
(16.2%)
(13.7%)
7 Premier Investments Limited
7
8
DIRECTORS’ REPORT
(CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Group Operating Results (continued):
Retail Segment (continued):
Retail segment sales per geographic segment is presented in the graph below:
Investment Segment:
The Group’s balance sheet remains strong, primarily due to the significant asset holding of the investment segment.
As at 30 July 2016, the Group reflected its 27.5% shareholding in Breville Group Limited as an investment in
associate, with an equity accounted value of $213.4 million. The fair value of the Group’s interest in Breville Group
Limited as determined based on the quoted market price for the shares as at 30 July 2016 was $282.6 million.
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.
2016
2015
2014
2013
2012
Closing share price at end of financial year
$16.22
$13.43
$9.34
$7.68
$4.88
Basic earnings per share (cents)
66.3
56.5
47.0
112.4
44.0
Dividend paid per share (cents)
44.0
50.0
39.0
37.0
36.0
Return on equity (%)
7.8%
6.6%
5.6%
13.4%
5.5%
Net debt/equity ratio (%)
(13.3%)
(13.2%)
(14.9%)
(16.2%)
(13.7%)
Annual Report 2016 8
8
DIRECTORS’ REPORT
DIRECTORS’ REPORT
(CONTINUED)
(CONTINUED)
DIRECTORS’ REPORT
DIRECTORS’ REPORT
(CONTINUED)
(CONTINUED)
Michael R.I. McLeod Non-Executive Director
SHARES ISSUED DURING THE FINANCIAL YEAR
Mr. McLeod is a former Executive Director of the Century Plaza Group and has been involved with the Group
A total of 784,386 shares (2015: 665,201) were issued during the year pursuant to the Group’s Performance Rights
since 1996 as an advisor in the areas of corporate strategy, investment and public affairs. He has been a
Plan.
Non-Executive Director of Premier Investments Limited since 2002 and was a Non-Executive Director of Just
Group Limited from 2007 to 2013. Past experience includes the Australian Board of an international funds
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
manager, chief of staff to a Federal Cabinet Minister and statutory appointments including as a Commission
Member of the National Occupational Health and Safety Commission.
There have been no significant changes in the state of affairs of the Group during the financial year ended
30 July 2016.
He holds a Bachelor of Arts (First Class Honours and University Medal) from the University of New South
Wales.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 21 September 2016, the Directors of Premier Investments Limited declared a final dividend in respect of the
Dr. Gary H. Weiss LL.M, J.S.D. Non-Executive Director
2016 financial year. The total amount of the dividend is $39,291,000 (2015: $32,840,000) which represents a fully
Dr. Weiss holds the degrees of LL.B (Hons) and LL.M (with distinction) from Victoria University of Wellington,
franked dividend of 25 cents per share (2015: 21 cents per share). The dividend has not been provided for in the
as well as a Doctor of Juridical Science (JSD) from Cornell University, New York. Dr. Weiss has extensive
30 July 2016 financial statements.
international business experience and has been involved in numerous cross-border mergers and acquisitions.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Dr. Weiss is Chairman of Ridley Corporation Limited, Executive Director of Ariadne Australia Limited, and a
Certain likely developments in the operations of the Group and the expected results of those operations in financial
Director of Premier Investments Limited, Pro-Pac Packaging Limited, Tag Pacific Limited, Thorney
years subsequent to the period ended 30 July 2016 are referred to in the preceding operating and financial review.
Opportunities Limited, The Straits Trading Company Limited and Estia Health Limited. He was Chairman of
No additional information is included on the likely developments in the operations of the Group and the expected
Clearview Wealth Limited from July 2013 until May 2016 and of Coats Plc from 2003 until April 2012, and
results of those operations as the Directors reasonably believe that the disclosure of such information would be likely
Executive Director of Guinness Peat Group Plc from 1990 to April 2011 and has held directorships of
to result in unreasonable prejudice to the Group if included in this report, and it has therefore been excluded in
numerous companies, including Mercantile Investment Company Limited (retired 25 February 2015) Westfield
accordance with section 299(3) of the Corporations Act 2001.
Group, Tower Australia Limited, Australian Wealth Management Limited, Tyndall Australia Limited (Deputy
Chairman), Joe White Maltings Limited (Chairman), CIC Limited, Whitlam Turnbull & Co Limited and
ENVIRONMENTAL REGULATION AND PERFORMANCE
Industrial Equity Limited.
The Group’s operations are not subject to any significant environmental obligations or regulations.
He has authored numerous articles on a variety of legal and commercial topics.
SHARE OPTIONS
COMPANY SECRETARY
Unissued Shares:
Kim F. Davis
As at the date of this report, there were 1,627,218 unissued performance rights (1,627,218 at the reporting date).
Mr. Davis has been the Company Secretary of Premier Investments Limited for 22 years. Prior to holding this
Refer to the remuneration report for further details of the options outstanding.
position, Mr Davis had 15 years’ experience within the accounting industry as a tax and financial advisor.
Shares Issued as a Result of the Exercise of Options:
A total of 784,386 shares (2015: 665,201) were issued as a result of the exercise of options during the financial year
and to the date of this report.
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.
Michael R.I. McLeod Non-Executive Director
INDEMNIFICATION OF AUDITORS
Mr. McLeod is a former Executive Director of the Century Plaza Group and has been involved with the Group
To the extent permitted by law, the company has agreed to indemnify its auditors, Ernst & Young, as part of the
since 1996 as an advisor in the areas of corporate strategy, investment and public affairs. He has been a
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
Non-Executive Director of Premier Investments Limited since 2002 and was a Non-Executive Director of Just
amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
Group Limited from 2007 to 2013. Past experience includes the Australian Board of an international funds
manager, chief of staff to a Federal Cabinet Minister and statutory appointments including as a Commission
INTERESTS IN SHARES AND RIGHTS OF THE COMPANY
Member of the National Occupational Health and Safety Commission.
At the date of this report, the interests of the Directors in the shares and performance rights of the company were:
He holds a Bachelor of Arts (First Class Honours and University Medal) from the University of New South
Wales.
Mr. S. Lew
Mr. L.E. Fox
4,437,699 ordinary shares**
2,577,014 ordinary shares
Dr. Gary H. Weiss LL.M, J.S.D. Non-Executive Director
Ms. S. Herman
8,000 ordinary shares
Dr. Weiss holds the degrees of LL.B (Hons) and LL.M (with distinction) from Victoria University of Wellington,
Mr. H.D. Lanzer
as well as a Doctor of Juridical Science (JSD) from Cornell University, New York. Dr. Weiss has extensive
27,665 ordinary shares
international business experience and has been involved in numerous cross-border mergers and acquisitions.
Mr. M.R.I. McLeod
28,186 ordinary shares
Dr. Weiss is Chairman of Ridley Corporation Limited, Executive Director of Ariadne Australia Limited, and a
Dr. G. H. Weiss
6,000 ordinary shares
Director of Premier Investments Limited, Pro-Pac Packaging Limited, Tag Pacific Limited, Thorney
Mr. M. McInnes
Opportunities Limited, The Straits Trading Company Limited and Estia Health Limited. He was Chairman of
1,000,000 performance rights
Clearview Wealth Limited from July 2013 until May 2016 and of Coats Plc from 2003 until April 2012, and
**Mr. Lew is an associate of Century Plaza Investments Pty. Ltd. and Metrepark Pty. Ltd (Associated Entities). The
Executive Director of Guinness Peat Group Plc from 1990 to April 2011 and has held directorships of
Associated Entities, collectively, have a relevant interest in 59,804,731 shares in the company. However, Mr. Lew
numerous companies, including Mercantile Investment Company Limited (retired 25 February 2015) Westfield
does not have a relevant interest in the shares of the company held by the Associated Entities.
Group, Tower Australia Limited, Australian Wealth Management Limited, Tyndall Australia Limited (Deputy
Chairman), Joe White Maltings Limited (Chairman), CIC Limited, Whitlam Turnbull & Co Limited and
DIRECTORS’ MEETINGS
Industrial Equity Limited.
The number of meetings of the Board of Directors during the financial year, and the number of meetings attended by
He has authored numerous articles on a variety of legal and commercial topics.
each director were as follows:
BOARD MEETINGS
AUDIT AND RISK COMMITTEE
REMUNERATION AND
COMPANY SECRETARY
DIRECTOR
Kim F. Davis
MEETINGS
HELD WHILE A
DIRECTOR
NUMBER
ATTENDED
NOMINATION COMMITTEE
MEETINGS
ATTENDED AS
COMMITTEE
MEMBER
NUMBER
ATTENDED
MEETINGS
ATTENDED AS
COMMITTEE
MEMBER
NUMBER
ATTENDED
Mr. Davis has been the Company Secretary of Premier Investments Limited for 22 years. Prior to holding this
Mr. S. Lew
position, Mr Davis had 15 years’ experience within the accounting industry as a tax and financial advisor.
8
6
8
7
7
8
8
3
7
8
-
-
4
4
-
4
-
-
-
-
-
-
4
4
-
4
3
1
-
-
3
-
-
-
-
-
3
-
-
3
3
-
-
-
-
-
3
-
-
3
The company is a company of the kind specified in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, dated 24 March 2016. In accordance with that ASIC instrument amounts in the financial
statements and the Directors’ Report have been rounded to the nearest thousand dollars unless specifically stated to
8
8
8
8
8
8
8
3
8
8
Mr. M. McInnes
Mr. T. Antonie
Dr. D. Crean
Mr. L. E. Fox
Ms. S. Herman
Mr. H. D. Lanzer
Mr. T. L. McCartney
Mr. M. R. I. McLeod
Dr. G. H. Weiss
ROUNDING
be otherwise.
AUDITOR INDEPENDENCE
The Directors received the declaration on page 38 from the auditor of Premier Investments Limited.
9 Premier Investments Limited
9
5
10
5
DIRECTORS’ REPORT
DIRECTORS’ REPORT
(CONTINUED)
(CONTINUED)
Michael R.I. McLeod Non-Executive Director
INDEMNIFICATION OF AUDITORS
Mr. McLeod is a former Executive Director of the Century Plaza Group and has been involved with the Group
To the extent permitted by law, the company has agreed to indemnify its auditors, Ernst & Young, as part of the
since 1996 as an advisor in the areas of corporate strategy, investment and public affairs. He has been a
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
Non-Executive Director of Premier Investments Limited since 2002 and was a Non-Executive Director of Just
amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
Group Limited from 2007 to 2013. Past experience includes the Australian Board of an international funds
manager, chief of staff to a Federal Cabinet Minister and statutory appointments including as a Commission
INTERESTS IN SHARES AND RIGHTS OF THE COMPANY
Member of the National Occupational Health and Safety Commission.
At the date of this report, the interests of the Directors in the shares and performance rights of the company were:
He holds a Bachelor of Arts (First Class Honours and University Medal) from the University of New South
Wales.
Mr. S. Lew
4,437,699 ordinary shares**
2,577,014 ordinary shares
Mr. L.E. Fox
Dr. Gary H. Weiss LL.M, J.S.D. Non-Executive Director
Ms. S. Herman
Dr. Weiss holds the degrees of LL.B (Hons) and LL.M (with distinction) from Victoria University of Wellington,
Mr. H.D. Lanzer
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.
Mr. M.R.I. McLeod
28,186 ordinary shares
27,665 ordinary shares
8,000 ordinary shares
6,000 ordinary shares
1,000,000 performance rights
Dr. Weiss is Chairman of Ridley Corporation Limited, Executive Director of Ariadne Australia Limited, and a
Dr. G. H. Weiss
Director of Premier Investments Limited, Pro-Pac Packaging Limited, Tag Pacific Limited, Thorney
Mr. M. McInnes
Opportunities Limited, The Straits Trading Company Limited and Estia Health Limited. He was Chairman of
Clearview Wealth Limited from July 2013 until May 2016 and of Coats Plc from 2003 until April 2012, and
**Mr. Lew is an associate of Century Plaza Investments Pty. Ltd. and Metrepark Pty. Ltd (Associated Entities). The
Executive Director of Guinness Peat Group Plc from 1990 to April 2011 and has held directorships of
Associated Entities, collectively, have a relevant interest in 59,804,731 shares in the company. However, Mr. Lew
numerous companies, including Mercantile Investment Company Limited (retired 25 February 2015) Westfield
does not have a relevant interest in the shares of the company held by the Associated Entities.
Group, Tower Australia Limited, Australian Wealth Management Limited, Tyndall Australia Limited (Deputy
Chairman), Joe White Maltings Limited (Chairman), CIC Limited, Whitlam Turnbull & Co Limited and
DIRECTORS’ MEETINGS
Industrial Equity Limited.
The number of meetings of the Board of Directors during the financial year, and the number of meetings attended by
He has authored numerous articles on a variety of legal and commercial topics.
each director were as follows:
BOARD MEETINGS
AUDIT AND RISK COMMITTEE
REMUNERATION AND
COMPANY SECRETARY
DIRECTOR
Kim F. Davis
MEETINGS
HELD WHILE A
DIRECTOR
NUMBER
ATTENDED
NOMINATION COMMITTEE
MEETINGS
ATTENDED AS
COMMITTEE
MEMBER
NUMBER
ATTENDED
MEETINGS
ATTENDED AS
COMMITTEE
MEMBER
NUMBER
ATTENDED
Mr. Davis has been the Company Secretary of Premier Investments Limited for 22 years. Prior to holding this
Mr. S. Lew
position, Mr Davis had 15 years’ experience within the accounting industry as a tax and financial advisor.
Mr. M. McInnes
6
8
8
8
3
3
-
-
-
-
-
-
Mr. T. Antonie
Dr. D. Crean
Mr. L. E. Fox
Ms. S. Herman
Mr. H. D. Lanzer
Mr. T. L. McCartney
Mr. M. R. I. McLeod
Dr. G. H. Weiss
ROUNDING
8
8
8
8
8
3
8
8
8
7
7
8
8
3
7
8
4
4
-
4
-
-
-
-
4
4
-
4
3
1
-
-
-
-
-
-
3
-
-
3
-
-
-
-
3
-
-
3
The company is a company of the kind specified in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, dated 24 March 2016. In accordance with that ASIC instrument 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 38 from the auditor of Premier Investments Limited.
Annual Report 2016 10
5
10
DIRECTORS’ REPORT
DIRECTORS’ REPORT
(CONTINUED)
(CONTINUED)
Michael R.I. McLeod Non-Executive Director
NON-AUDIT SERVICES
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 and public affairs. He has been a
The Directors are satisfied that the provision of non-audit services is compatible with the general standard of
Non-Executive Director of Premier Investments Limited since 2002 and was a Non-Executive Director of Just
independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit
Group Limited from 2007 to 2013. Past experience includes the Australian Board of an international funds
service provided means that independence was not compromised.
manager, chief of staff to a Federal Cabinet Minister and statutory appointments including as a Commission
Details of non-audit services provided by the entity’s auditor, Ernst & Young, can be found in Note 25 of the Financial
Member of the National Occupational Health and Safety Commission.
Report.
He holds a Bachelor of Arts (First Class Honours and University Medal) from the University of New South
Wales.
CORPORATE GOVERNANCE STATEMENT
To view Premier’s Corporate Governance Statement, please visit www.premierinvestments.com.au/about-us/board-
Dr. Gary H. Weiss LL.M, J.S.D. Non-Executive Director
policies.
Dr. Weiss holds the degrees of LL.B (Hons) and LL.M (with distinction) 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 Ridley Corporation Limited, Executive Director of Ariadne Australia Limited, and a
Director of Premier Investments Limited, Pro-Pac Packaging Limited, Tag Pacific Limited, Thorney
Opportunities Limited, The Straits Trading Company Limited and Estia Health Limited. He was Chairman of
Clearview Wealth Limited from July 2013 until May 2016 and 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 Mercantile Investment Company Limited (retired 25 February 2015) Westfield
Group, Tower Australia Limited, Australian Wealth Management Limited, Tyndall Australia Limited (Deputy
Chairman), Joe White Maltings Limited (Chairman), CIC Limited, Whitlam Turnbull & Co Limited and
Industrial Equity Limited.
He has authored numerous articles on a variety of legal and commercial topics.
COMPANY SECRETARY
Kim F. Davis
Mr. Davis has been the Company Secretary of Premier Investments Limited for 22 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)
REMUNERATION REPORT
Dear Shareholders,
I am delighted to present our remuneration report for the year ended 30 July 2016. This year’s report has expanded
disclosure to illustrate more explicitly the link between Premier’s performance and remuneration outcomes.
Premier has once again achieved very strong results from its main operating division and we are proud to deliver
exceptional results to shareholders.
For FY16, Premier Retail achieved sales of over $1 billion for the first time and a record underlying Earnings before
Interest and Taxation (“EBIT”)1 of $133.3 million, up 26.1% on FY15. The underlying EBIT for FY16 is up 104% on
the $65.3 million achieved in FY11, the year Premier Retail’s CEO, Mr. Mark McInnes, was appointed to our Group.
In the five years following Mr. McInnes’ appointment, the market capitalisation of Premier has increased by $1.6
billion, from $0.9 billion to $2.5 billion, and Premier shareholders have received a total of approximately $313 million
in fully franked dividends.
Premier Investments Limited Total Shareholder Return (“TSR”) against the
ASX200 Index from 4 April 2011 to 30 July 2016
Over the past five years, Premier shareholders have enjoyed some of the best returns of any listed company in the
ASX200. These results are all the more impressive when compared to other listed discretionary retailers (many of
whom have generated negative returns) and the marked changes in the retail landscape. The Board believes that
the strong financial returns enjoyed by shareholders stem, in large part, from the strategic appointment of high calibre
key management personnel.
Our Board is diverse and offers a depth of experience in the retail, financial, distribution and logistics, accounting,
legal, international transaction and public policy sectors. Premier also has the distinct advantage of Chairman Mr.
Solomon Lew’s 50 years of experience in the retail industry, and his ongoing shareholding which aligns his interests
to the betterment of shareholders. Mr. Lew has always declined to accept remuneration in respect of his hands on
involvement in the successful steering of the business.
11 Premier Investments Limited
5
11
12
1 Refer to page 29 of the Remuneration Report for a definition and reconciliation of underlying EBIT.
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT
Dear Shareholders,
I am delighted to present our remuneration report for the year ended 30 July 2016. This year’s report has expanded
disclosure to illustrate more explicitly the link between Premier’s performance and remuneration outcomes.
Premier has once again achieved very strong results from its main operating division and we are proud to deliver
exceptional results to shareholders.
For FY16, Premier Retail achieved sales of over $1 billion for the first time and a record underlying Earnings before
Interest and Taxation (“EBIT”)1 of $133.3 million, up 26.1% on FY15. The underlying EBIT for FY16 is up 104% on
the $65.3 million achieved in FY11, the year Premier Retail’s CEO, Mr. Mark McInnes, was appointed to our Group.
In the five years following Mr. McInnes’ appointment, the market capitalisation of Premier has increased by $1.6
billion, from $0.9 billion to $2.5 billion, and Premier shareholders have received a total of approximately $313 million
in fully franked dividends.
Premier Investments Limited Total Shareholder Return (“TSR”) against the
ASX200 Index from 4 April 2011 to 30 July 2016
Over the past five years, Premier shareholders have enjoyed some of the best returns of any listed company in the
ASX200. These results are all the more impressive when compared to other listed discretionary retailers (many of
whom have generated negative returns) and the marked changes in the retail landscape. The Board believes that
the strong financial returns enjoyed by shareholders stem, in large part, from the strategic appointment of high calibre
key management personnel.
Our Board is diverse and offers a depth of experience in the retail, financial, distribution and logistics, accounting,
legal, international transaction and public policy sectors. Premier also has the distinct advantage of Chairman Mr.
Solomon Lew’s 50 years of experience in the retail industry, and his ongoing shareholding which aligns his interests
to the betterment of shareholders. Mr. Lew has always declined to accept remuneration in respect of his hands on
involvement in the successful steering of the business.
1 Refer to page 29 of the Remuneration Report for a definition and reconciliation of underlying EBIT.
Annual Report 2016 12
12
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED)
Details of our Board’s background and expertise is set out in our annual report. We are committed to maintaining an
engaged and high performing Board and will look to increase the diversity of our members with future appointments,
including an increased presence of female Board members to align with our high numbers of female executives.
In terms of our broader business, Premier has a number of very strong executives who work closely with Mr. McInnes
to deliver exceptional results. This includes female leaders in four of our seven brands, in internet and marketing and
in human resources. Overall, we employ a total of 7,000 employees and actively support our large numbers of female
employees (comprising over 90% of our total workforce) to progress through the business. Further detail regarding
staff composition is set out in our annual report.
Premier operates in the highly competitive retail segment. We are continuing to invest in growing and consolidating
our key domestic business, whilst simultaneously expanding our foot print of retail stores overseas. By the end of this
year, Premier Retail is on target to successfully and profitably operate approximately 120 stores across Singapore,
England, Scotland, Wales, Hong Kong and Malaysia, representing 12% of Premier’s total portfolio. We expect this
international presence to continue to grow.
As a result of this global reach, Premier’s success is dependent on competing for an international pool of talent who
can bring with them innovative and forward thinking business strategies.
Following consultation with external remuneration experts, Premier has developed its remuneration strategy to
entice, incentivise and develop executives who can deliver long term sustainable growth for shareholders.
On 26 April 2016, Mr. McInnes re-committed himself to the business by entering into a new employment agreement.
As Mr. McInnes has indicated that he is committed to remaining in Melbourne for the foreseeable future, Premier
authorised Mr. McInnes to sell 800,000 of his shares in order to fund the purchase and construction of a home in
Melbourne. The new agreement also contained the first increase to Mr. McInnes’ fixed remuneration since his
appointment in 2011, which reflected the outstanding increase in Premier’s market capitalisation referred to above.
Notwithstanding Premier’s exceptional results, the Board is conscious of the debate around Mr. McInnes’ re-
engagement. Premier listened to these concerns and sought expert advice from Egan Associates to review Mr.
McInnes’ remuneration arrangements. The report, which compared 19 similar sized international retail businesses,
concluded that Mr. McInnes’ remuneration was both reasonable and reflective of the strong performance of Premier
under his direction. In reaching this conclusion, the report noted that Premier’s performance over the past five years
was well in excess of the 75th percentile, and yet Mr. McInnes’ remuneration remained between the median and 75th
percentile of the comparison group.
Consistent with this year’s expanded disclosure, our remuneration report provides significant detail around Mr.
McInnes’ employment arrangements.
In September 2016, the Remuneration and Nomination Committee (“Committee”) was re-constituted by the
appointment to the Committee of Mr. Timothy Antonie and Mr. Terrence McCartney. The appointments were made in
order to ensure that the Committee consisted of a majority Independent Directors.
Premier is looking forward to the challenges and opportunities presented by the new financial year and is confident
that its remuneration strategy ensures that we have the people in place to deliver significant outperformance.
I hope that you will find this report informative.
Henry Lanzer AM
Chairman, Remuneration and Nomination Committee
This remuneration report for the 53 weeks ended 30 July 2016 outlines the remuneration arrangement of the Group
in accordance with the requirements of the Corporations Act 2001 (Cth), as amended (the “Act”) and its regulations.
This information has been audited as required by section 308 (3C) of the Act.
The remuneration report is presented under the following headings:
1.
Introduction
2. Remuneration Governance
3. Executive remuneration arrangements:-
A. Remuneration principles and strategy
B. Approach to setting remuneration
C. Fixed remuneration objectives
D. Detail of incentive plans
4. Executive remuneration outcomes (including link to performance)
5. Remuneration of CEO Premier Retail, Mr. McInnes
6. Executive service agreements
7. Non-Executive Director remuneration arrangements
8. Remuneration of Key Management Personnel
9. Additional disclosures relating to Rights and Shares
10. Additional disclosure relating to transactions and balances with Key Management Personnel
1. INTRODUCTION
The remuneration report details the remuneration arrangement for Key Management Personnel (“KMP”) who 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 Group.
The table below outlines the Group’s KMP during the 53 weeks ended 30 July 2016. Unless otherwise indicated, the
individuals were KMP for the entire financial year.
KEY MANAGEMENT PERSONNEL
(i) Non-Executive Directors
Mr. S. Lew
Chairman and Non-Executive Director
Dr. D. Crean
Deputy Chairman and Non-Executive Director
Mr. T. Antonie
Non-Executive Director and Lead Independent Director
Mr. L.E. Fox
Non-Executive Director
Ms. S. Herman
Non-Executive Director
Mr. H.D. Lanzer
Non-Executive Director
Mr. M.R.I. McLeod
Non-Executive Director
Dr. G.H. Weiss
Non-Executive Director
Mr. T.L. McCartney
Non-Executive Director (appointed: 15 April 2016)
13 Premier Investments Limited
13
14
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED)
This remuneration report for the 53 weeks ended 30 July 2016 outlines the remuneration arrangement of the Group
in accordance with the requirements of the Corporations Act 2001 (Cth), as amended (the “Act”) and its regulations.
This information has been audited as required by section 308 (3C) of the Act.
The remuneration report is presented under the following headings:
1.
Introduction
2. Remuneration Governance
3. Executive remuneration arrangements:-
A. Remuneration principles and strategy
B. Approach to setting remuneration
C. Fixed remuneration objectives
D. Detail of incentive plans
4. Executive remuneration outcomes (including link to performance)
5. Remuneration of CEO Premier Retail, Mr. McInnes
6. Executive service agreements
7. Non-Executive Director remuneration arrangements
8. Remuneration of Key Management Personnel
9. Additional disclosures relating to Rights and Shares
10. Additional disclosure relating to transactions and balances with Key Management Personnel
1. INTRODUCTION
The remuneration report details the remuneration arrangement for Key Management Personnel (“KMP”) who 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 Group.
The table below outlines the Group’s KMP during the 53 weeks ended 30 July 2016. Unless otherwise indicated, the
individuals were KMP for the entire financial year.
KEY MANAGEMENT PERSONNEL
(i) Non-Executive Directors
Mr. S. Lew
Chairman and Non-Executive Director
Dr. D. Crean
Deputy Chairman and Non-Executive Director
Mr. T. Antonie
Non-Executive Director and Lead Independent Director
Mr. L.E. Fox
Non-Executive Director
Ms. S. Herman
Non-Executive Director
Mr. H.D. Lanzer
Non-Executive Director
Mr. T.L. McCartney
Non-Executive Director (appointed: 15 April 2016)
Mr. M.R.I. McLeod
Non-Executive Director
Dr. G.H. Weiss
Non-Executive Director
Annual Report 2016 14
14
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
1. INTRODUCTION (CONTINUED)
KEY MANAGEMENT PERSONNEL (CONTINUED)
(ii) Executive Director
Mr. M. McInnes
Executive Director and Chief Executive Officer Premier Retail
(iii) Executives
Mr. K.F. Davis
Company Secretary
Mr. A. Gardner
Chief Financial Officer, Just Group Limited (ceased: 23 February 2016)
Ms. C. Garnsey
Core Brand Director, Just Group Limited
Ms. N. Peck
Chief Financial Officer, Just Group Limited
Ms. Peck was a KMP from 6 January 2016 to 23 June 2016. In accordance with an order of the Supreme Court of
Victoria dated 3 June 2016, Just Group Limited is required to provide Ms. Peck with her usual remuneration until the
current litigation involving Ms. Peck is resolved.
Other than as noted above, there were no changes to the KMP after the reporting date and before the date the
financial report was authorised for issue.
2. REMUNERATION GOVERNANCE
Remuneration and Nomination Committee
The Remuneration and Nomination Committee (“Committee”) of the Board of Directors of the Group (“Board”) comprises
three Non-Executive Directors. The Committee has delegated decision-making authority for some matters related to the
remuneration arrangements for KMP and is required to make recommendations to the Board on other matters.
Specifically, the Board approves the remuneration arrangements of the Chief Executive Officer Premier Retail (“CEO
Premier Retail”) and other executives, including awards made under the short term incentive (“STI”) and long term
incentive (“LTI”) plans, following recommendations from the Committee. The Board also sets the aggregate
remuneration for Non-Executive Directors (which is subject to shareholder approval) and Non-Executive Director fee
levels. The Committee approves, having regard to recommendations made by the CEO Premier Retail, the level of the
Group STI pool.
The Committee meets regularly. The CEO Premier Retail attends certain Committee meetings by invitation, where
management input is required. The CEO Premier Retail is not present during discussions relating to his own
remuneration arrangements.
Further information relating to the Committee’s role, responsibilities and membership can be seen at
www.premierinvestments.com.au.
Use of remuneration advisors
The Committee seeks, from time to time, external remuneration advice to ensure it is fully informed when making
remuneration decisions. Remuneration advisors are engaged by, and report directly to, the Committee.
During the 2016 financial year, the Committee approved the engagement of Ernst & Young to provide advice on the
Group remuneration strategy, and Egan Associates to review Mr. McInnes’ remuneration arrangements. Both the
external experts and the Committee are satisfied that the advice received from each of the external experts is free from
undue influence from the KMP to whom the remuneration report applies.
The Ernst & Young report was provided to the Committee as an input into decision making only. The Committee
considered the report findings, along with other factors, in making its remuneration strategy decisions.
15 Premier Investments Limited
15
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
2. REMUNERATION GOVERNANCE (CONTINUED)
Use of remuneration advisors (continued)
The fee paid to Ernst & Young for the remuneration report findings was $47,895 excluding GST. The fee paid to Egan
Associates for the remuneration review was $21,000, excluding GST.
3. EXECUTIVE REMUNERATION ARRANGEMENTS
3A. Remuneration principles and strategy
The Group’s executive remuneration strategy is designed to attract, motivate and retain high performing individuals,
and align the interests of executives with shareholders.
The Group operates mainly in the retail industry, with significant revenues earned in its traditional markets of Australia
and New Zealand. The retail industry in these markets has seen marked structural change over recent years, including
a prevalence in the use of new and existing technology, an increase in international competitors and significant
changes in general consumer sentiment.
Complementing its strong market position in Australia and New Zealand, the Group is steadily increasing its revenues
from international markets including Singapore, England, Scotland, Wales, Hong Kong and Malaysia. The Group is
committed to growing its existing international presence whilst also exploring expansion into new geographies.
The market for skilled and experienced executives in the retail industry has become increasingly competitive and
international in nature. The Group’s strong domestic position, as well as global reach, provides exposure to an
international pool of talent and access to a diverse range of strategies to respond to industry changes.
Given these structural changes and the growth of the Group’s international business, the Board believes it is both
critical to the future success of the business, and in the best interest of shareholders, to attract, retain and develop the
best possible executive team through the provision of competitive remuneration packages.
The Group’s strategic objective is to be recognised as a leader in the retail industry and build long term value for
shareholders. It seeks to do this by:
Growing Smiggle significantly;
Growing Peter Alexander significantly;
Expansion and growth of online businesses;
Gross margin expansion;
Rejuvenation of core apparel brands; and
Organisation-wide cost efficiency program.
The Group is committed to ensuring that executive remuneration outcomes are explicitly linked to the overall
performance and success of the Group. This section, and in particular the diagram on the following page, illustrates
this link between the Group’s strategic objective and its executive remuneration strategies.
16
Annual Report 2016 16
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3A. Remuneration principles and strategy (continued)
Group Objective
To be recognised as a leader in our industry and build long-term value for our shareholders
Remuneration strategy linkages to Group objective
Align the interests of executives with shareholders
The remuneration framework incorporates “at-
risk” components, through STI and LTI plans.
Performance is assessed against a suite of
financial and non-financial measures relevant
to the success of the Group and generate
returns for shareholders.
Attract, motivate and retain high performing
individuals
Remuneration is competitive as compared to
companies of a similar size and complexity.
Longer-term remuneration frameworks and
“at-risk” components encourage retention,
development and a multi-year performance
focus.
Component
Vehicle
Purpose
Link to performance
Executives have a STI opportunity of between 0% and 100% of their fixed
To provide competitive
fixed remuneration with
reference to the applicable
role, market and relevant
executive’s experience.
Both the executive’s performance,
and the performance of the Group,
are considered during regular
remuneration reviews.
Comprises
base salary,
superannuation
contributions
and other
benefits
Awarded in
cash
Fixed
remuneration
STI
LTI
Rewards executives for
their contribution to
achievement of Group and
business unit annual
outputs and performance
outcomes.
Awarded in
performance
rights
Rewards executives for
their contribution to the
creation of shareholder
value over the long term.
Discretionary
Bonus
Awarded in
cash or
performance
rights
Rewards executives in
exceptional circumstances
linked to long term
shareholder outcomes.
Key financial metrics based
primarily on Premier Retail’s
underlying earnings before interest
and taxation (“EBIT”) of each
business unit, as well as a suite of
other internal financial and non-
financial measures.
Vesting of performance rights is
dependent on both a positive total
shareholder return (“TSR”) for the
Group and testing against the
Comparison Peer Group (defined
on page 20).
Granted at the discretion of the
Board upon recommendation of the
Committee in exceptional
circumstances, and when in the
best interests of the Group.
No discretionary bonuses were
made during the 2016 or 2015
financial years.
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3B. Approach to setting remuneration
For the financial year ended 30 July 2016, the executive remuneration framework comprised of fixed remuneration,
STI and LTI, as outlined below. Details of Mr. McInnes’ remuneration are provided in section 5 of this report.
The Group aims to reward executives with a competitive level and mix of remuneration appropriate to their position and
responsibilities, and linked to shareholder value creation.
3C. Fixed remuneration objectives
Fixed remuneration is reviewed by the Committee. The process consists of a review of the Group, applicable business
unit and executive’s individual performance, relevant comparative remuneration (both externally and internally) and,
where appropriate, external advice. The Committee has access to external advice independent of management.
The Group operates an annual STI program which is awarded subject to the attainment of clearly defined financial and
non-financial Group and business unit measures.
Executives who have served a minimum of nine months.
3D. Detail of incentive plans
Short term incentive (STI)
Who participates?
How is STI delivered?
Cash.
What is the STI
opportunity?
What are the applicable
financial performance
measures?
remuneration.
STI payments awarded to each executive are explicitly aligned to the key
value drivers of Premier Retail, such that rewards will only be payable when
the following criteria has been met:
budgeted EBIT of Premier Retail has been achieved and an incentive pool
has been created;
(hurdle); and
(qualifiers).
the executive receives a performance appraisal on target or above;
the executive’s minimum performance outcomes have been achieved
the executive’s key performance indicators (“KPIs”) have been met
The financial performance measures are chosen with reference to the
strategic objective to promote both short term success and provide a
framework for delivering long term value.
The hurdle criteria are designed to ensure STI outcomes are aligned to the
creation of shareholder value. If the hurdles are not met, the STI is not
payable.
The qualifier criteria aligns the individual activities and focus of the executive
to shareholder value. Each executive is set multiple KPIs covering financial,
non-financial, Group and business unit measures of performance. The KPIs
are quantifiable and weighted according to their value.
The budgeted EBIT for each year is expected to incorporate growth on the
previous year. As such, in a year in which STI payments are made,
executives must exceed the actual result in the prior year to achieve an STI
in the following year. This mechanism ensures the STI scheme continues to
build shareholder returns over time.
17 Premier Investments Limited
17
18
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3B. Approach to setting remuneration
For the financial year ended 30 July 2016, the executive remuneration framework comprised of fixed remuneration,
STI and LTI, as outlined below. Details of Mr. McInnes’ remuneration are provided in section 5 of this report.
The Group aims to reward executives with a competitive level and mix of remuneration appropriate to their position and
responsibilities, and linked to shareholder value creation.
3C. Fixed remuneration objectives
Fixed remuneration is reviewed by the Committee. The process consists of a review of the Group, applicable business
unit and executive’s individual performance, relevant comparative remuneration (both externally and internally) and,
where appropriate, external advice. The Committee has access to external advice independent of management.
3D. Detail of incentive plans
Short term incentive (STI)
The Group operates an annual STI program which is awarded subject to the attainment of clearly defined financial and
non-financial Group and business unit measures.
Who participates?
Executives who have served a minimum of nine months.
How is STI delivered?
Cash.
What is the STI
opportunity?
What are the applicable
financial performance
measures?
Executives have a STI opportunity of between 0% and 100% of their fixed
remuneration.
STI payments awarded to each executive are explicitly aligned to the key
value drivers of Premier Retail, such that rewards will only be payable when
the following criteria has been met:
budgeted EBIT of Premier Retail has been achieved and an incentive pool
has been created;
the executive receives a performance appraisal on target or above;
the executive’s minimum performance outcomes have been achieved
(hurdle); and
the executive’s key performance indicators (“KPIs”) have been met
(qualifiers).
The financial performance measures are chosen with reference to the
strategic objective to promote both short term success and provide a
framework for delivering long term value.
The hurdle criteria are designed to ensure STI outcomes are aligned to the
creation of shareholder value. If the hurdles are not met, the STI is not
payable.
The qualifier criteria aligns the individual activities and focus of the executive
to shareholder value. Each executive is set multiple KPIs covering financial,
non-financial, Group and business unit measures of performance. The KPIs
are quantifiable and weighted according to their value.
The budgeted EBIT for each year is expected to incorporate growth on the
previous year. As such, in a year in which STI payments are made,
executives must exceed the actual result in the prior year to achieve an STI
in the following year. This mechanism ensures the STI scheme continues to
build shareholder returns over time.
18
Annual Report 2016 18
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3D. Detail of incentive plans (continued)
Short-term incentive (STI) (continued)
What are the applicable
non-financial
performance
measures?
How is performance
assessed?
The award of an STI is also dependent on the executive achieving individual
aligned non-financial performance measures, such as:
retention of existing customers through outstanding customer service;
implementation of key growth initiatives;
demonstrated focus on a continuous improvement in safety performance;
and
demonstrated focus on the growth and development of leadership
and team talent to encourage leadership succession.
After the end of the financial year, following consideration of the financial and
non-financial performance measures, the Committee obtains input from the
CEO Premier Retail in relation to the amount of STI to be paid to eligible
executives.
The Committee then provides its recommendations to the Just Group Board
for approval. The provision of any STI payments is subject to the sole
discretion of the Chairman.
Long-term incentive (LTI)
The Group’s LTI plan seeks to create shareholder value over the long term by aligning executive remuneration with the
Group’s strategic objective.
Generally, LTI performance rights are granted annually and are eligible to vest three years from the date of the grant,
with the exception of rights awarded to Mr. Mark McInnes and Ms. Colette Garnsey.
The performance rights issued to Ms. Colette Garnsey on 18 April 2013 were issued to replace vesting 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.
During the 2015 financial year, the Group engaged the services of Ernst & Young to report on the LTI plan as
compared to the market. Ernst & Young’s review considered the number of participants, allocation methodology,
award vehicle, performance and vesting period, performance measures (including the possibility of an absolute test
based on earnings), Comparison Peer Group (see definition on page 20) for TSR testing and re-testing.
Following consideration of shareholder outcomes, the structure of Premier Investments Limited and market segment,
the Committee concluded that the TSR testing mechanism is still considered most appropriate, however made the
following changes to the LTI plan for 2015 onwards:
allocation to be done on face value; and
the removal of re-testing.
3D. Detail of incentive plans (continued)
Long-term incentive (LTI) (continued)
Who participates?
Executives.
How is LTI delivered?
Performance rights.
What were the
performance measures
for the 2015 and 2016
financial year?
LTI rights awarded to each executive are subject to a two stage performance
test - an absolute and relative test - based on the Group’s TSR. Broadly,
TSR is the percentage growth achieved from an investment in ordinary
shares over the relevant testing period (assuming all dividends are
reinvested).
executives.
The two stage performance measure approach ensures that the LTI plan
operates as a key driver for performance whilst also providing an incentive to
The absolute test requires the Group to achieve a positive TSR over the
testing period. If the TSR is negative over the testing period, then the
performance rights lapse.
If the TSR is positive over the testing period, the relative test is undertaken,
which compares the Group’s TSR with the S&P/ASX200 Industrials,
excluding overseas and resource companies (“Comparison Peer Group”).
The Comparison Peer Group was chosen to reflect the Group’s competitors
for both capital and talent.
The Group’s performance against the Comparison Peer Group measure is
determined according to its ranking against the Comparison Peer Group
over the performance period. The vesting schedule is as follows:
Target
Conversion ratio of rights to shares
available to vest under the TSR
performance condition
Below 50th percentile
50th percentile
Between 50th and 62.5th percentile
62.5th percentile
Between 62.5th and 75th percentile
75th percentile and above
0%
25%
Pro Rata
50%
Pro Rata
100%
The absolute test was introduced to ensure that shareholders and
executives are aligned in the goal of absolute wealth creation. The relative
test was introduced to provide alignment between comparative shareholder
return and reward for executives.
The Group considers the suitability of the above performance conditions on
an annual basis.
How is performance
assessed?
TSR performance is calculated by an independent external adviser at the
end of each performance period.
Section 9 of this report, titled “Additional disclosures relating to rights and
shares”, provides details of performance rights granted, vested, exercised
and lapsed during the year.
19 Premier Investments Limited
19
20
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3D. Detail of incentive plans (continued)
Long-term incentive (LTI) (continued)
Who participates?
Executives.
How is LTI delivered?
Performance rights.
What were the
performance measures
for the 2015 and 2016
financial year?
LTI rights awarded to each executive are subject to a two stage performance
test - an absolute and relative test - based on the Group’s TSR. Broadly,
TSR is the percentage growth achieved from an investment in ordinary
shares over the relevant testing period (assuming all dividends are
reinvested).
The two stage performance measure approach ensures that the LTI plan
operates as a key driver for performance whilst also providing an incentive to
executives.
The absolute test requires the Group to achieve a positive TSR over the
testing period. If the TSR is negative over the testing period, then the
performance rights lapse.
If the TSR is positive over the testing period, the relative test is undertaken,
which compares the Group’s TSR with the S&P/ASX200 Industrials,
excluding overseas and resource companies (“Comparison Peer Group”).
The Comparison Peer Group was chosen to reflect the Group’s competitors
for both capital and talent.
The Group’s performance against the Comparison Peer Group measure is
determined according to its ranking against the Comparison Peer Group
over the performance period. The vesting schedule is as follows:
Target
Conversion ratio of rights to shares
available to vest under the TSR
performance condition
Below 50th percentile
50th percentile
Between 50th and 62.5th percentile
62.5th percentile
Between 62.5th and 75th percentile
75th percentile and above
0%
25%
Pro Rata
50%
Pro Rata
100%
The absolute test was introduced to ensure that shareholders and
executives are aligned in the goal of absolute wealth creation. The relative
test was introduced to provide alignment between comparative shareholder
return and reward for executives.
The Group considers the suitability of the above performance conditions on
an annual basis.
How is performance
assessed?
TSR performance is calculated by an independent external adviser at the
end of each performance period.
Section 9 of this report, titled “Additional disclosures relating to rights and
shares”, provides details of performance rights granted, vested, exercised
and lapsed during the year.
20
Annual Report 2016 20
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE)
3D. Detail of incentive plans (continued)
Long-term incentive (LTI) (continued)
When does the LTI
vest?
How are grants treated
on termination?
May participants enter
into hedging
arrangements?
Are there restrictions
on disposals?
Do participants receive
distributions or
dividends on unvested
LTI grants?
Generally, the performance rights will vest over a period of three years
subject to meeting performance measures. The testing period for Ms.
Garnsey is detailed on page 19 of this report.
The performance rights issued in the 2015 and 2016 financial years have no
opportunity to re-test. The rights issued prior to the 2015 financial year are
re-tested a year later if the TSR when first tested was between the 40th and
50th percentile.
Generally, all outstanding unvested rights are forfeited upon an executive
resigning from the Group.
Executives are prohibited from entering into transactions to hedge or limit
the economic risk of the securities allocated to them under the LTI scheme,
either before vesting or after vesting while the securities are held subject to
restriction. Executives are only able to hedge securities that have vested but
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.
Once rights have been allocated, disposal of performance shares is subject
to restrictions whereby Board approval is required to sell shares granted
within seven years under the LTI plan.
Participants do not receive distributions or dividends on unvested LTI
grants.
Group performance and its link to STI
STI payment outcomes are primarily driven by Premier Retail’s underlying EBIT growth. The following chart shows
Premier Retail’s underlying EBIT for the six years since the appointment of Mr. McInnes as CEO Premier Retail.
Premier Retail Underlying EBIT
Note: The term underlying EBIT is not an IFRS defined term. Please refer to page 29 for a reconciliation between underlying EBIT
and statutory reported operating profit before tax for the Retail Segment.
Performance compared to STI payments made during the financial years ended 30 July 2016 and 25 July 2015
STI payments to Ms. Garnsey
During the 2016 financial year, an STI payment of $300,000 was paid to Ms. Garnsey in line with the hurdles and
qualifiers relating to her STI plan. This included the achievement of Premier Retail underlying EBIT and the
achievement of hurdles and qualifiers for specific brands for the 2015 financial year.
During the 2015 financial year, an STI payment of $300,000 was paid to Ms. Garnsey in line with the hurdles and
qualifiers relating to her STI plan. This included the achievement of Premier Retail underlying EBIT and the
achievement of hurdles and qualifiers for specific brands for the 2014 financial year.
21 Premier Investments Limited
21
22
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE)
Group performance and its link to STI
STI payment outcomes are primarily driven by Premier Retail’s underlying EBIT growth. The following chart shows
Premier Retail’s underlying EBIT for the six years since the appointment of Mr. McInnes as CEO Premier Retail.
Premier Retail Underlying EBIT
Note: The term underlying EBIT is not an IFRS defined term. Please refer to page 29 for a reconciliation between underlying EBIT
and statutory reported operating profit before tax for the Retail Segment.
Performance compared to STI payments made during the financial years ended 30 July 2016 and 25 July 2015
STI payments to Ms. Garnsey
During the 2016 financial year, an STI payment of $300,000 was paid to Ms. Garnsey in line with the hurdles and
qualifiers relating to her STI plan. This included the achievement of Premier Retail underlying EBIT and the
achievement of hurdles and qualifiers for specific brands for the 2015 financial year.
During the 2015 financial year, an STI payment of $300,000 was paid to Ms. Garnsey in line with the hurdles and
qualifiers relating to her STI plan. This included the achievement of Premier Retail underlying EBIT and the
achievement of hurdles and qualifiers for specific brands for the 2014 financial year.
22
Annual Report 2016 22
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE) (CONTINUED)
Group performance and its link to LTI
The performance measure which drives LTI vesting is dependent on an absolute test, being a positive Group TSR
performance and a relative test, being a comparison against the Comparison Peer Group (see definition on page 20).
The table below illustrates the outcomes of the TSR testing performed during the 2015 and 2016 financial years in
relation to KMP:
Testing Period
Share price
at start of
testing
period
Share price
at end of
testing
period
Dividends
paid
TSR
percentage
TSR
percentile
Number of
Performance
Rights
tested for
KMP
24 Mar 2011 to 3 Apr 2014
$5.91
$9.84
1 Oct 2011 to 30 Sept 2014
$5.20
$10.20
24 Mar 2011 to 3 Apr 2015
$5.91
$12.92
19 Jun 2012 to 19 Jun 2015
$4.49
$13.29
1 Oct 2012 to 30 Sept 2015
$5.76
$12.85
24 Mar 2011 to 3 Apr 2016
$5.91
$16.61
19 Jun 2012 to 19 Jun 2016
$4.49
$14.69
$1.10 fully
franked
$1.12 fully
franked
$1.50 fully
franked
$1.26 fully
franked
$1.26 fully
franked
$2.01 fully
franked
$1.70 fully
franked
95.3%
85th
600,000*
133.4%
85th
85,878
166.0%
89th
300,000*
241.8%
96th
80,000
155.3%
93rd
95,321
271.7%
95th
300,000*
287.2%
97th
80,000
* Relates to Mr. McInnes, refer to section 5 of this report.
The below chart shows the Premier share performance against the S&P/ASX200 Index, from 4 April 2011 to
30 July 2016:
Premier Investments Limited Total Shareholder Return (TSR) against the
ASX200 Index from 4 April 2011 to 30 July 2016
23 Premier Investments Limited
23
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE) (CONTINUED)
5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES
Group performance and its link to LTI
On 26 April 2016, Mr. McInnes re-committed himself to the Group by signing a new employment agreement.
The performance measure which drives LTI vesting is dependent on an absolute test, being a positive Group TSR
Mr. McInnes’ fixed remuneration
performance and a relative test, being a comparison against the Comparison Peer Group (see definition on page 20).
The table below illustrates the outcomes of the TSR testing performed during the 2015 and 2016 financial years in
relation to KMP:
Testing Period
Share price
Share price
at start of
at end of
testing
period
testing
period
Dividends
TSR
TSR
Rights
paid
percentage
percentile
tested for
24 Mar 2011 to 3 Apr 2014
$5.91
$9.84
$1.10 fully
95.3%
1 Oct 2011 to 30 Sept 2014
$5.20
$10.20
$1.12 fully
133.4%
85,878
24 Mar 2011 to 3 Apr 2015
$5.91
$12.92
$1.50 fully
166.0%
300,000*
19 Jun 2012 to 19 Jun 2015
$4.49
$13.29
$1.26 fully
241.8%
1 Oct 2012 to 30 Sept 2015
$5.76
$12.85
$1.26 fully
155.3%
24 Mar 2011 to 3 Apr 2016
$5.91
$16.61
$2.01 fully
271.7%
300,000*
19 Jun 2012 to 19 Jun 2016
$4.49
$14.69
$1.70 fully
287.2%
80,000
* Relates to Mr. McInnes, refer to section 5 of this report.
The below chart shows the Premier share performance against the S&P/ASX200 Index, from 4 April 2011 to
30 July 2016:
Premier Investments Limited Total Shareholder Return (TSR) against the
ASX200 Index from 4 April 2011 to 30 July 2016
Number of
Performance
KMP
600,000*
80,000
95,321
85th
85th
89th
96th
93rd
95th
97th
franked
franked
franked
franked
franked
franked
franked
Under Mr. McInnes’ new employment agreement, his annual fixed remuneration increased from $2,000,000 to
$2,500,000, effective from the beginning of the 2016 financial year. This is Mr. McInnes’ first increase in fixed
remuneration since joining the Group in 2011.
Mr McInnes’ notice period
Upon cessation of his employment, Mr. McInnes is entitled to 12 months’ notice (“Notice Period”) if he resigns, or is
terminated by Premier for any reason other than for serious misconduct, or for conduct otherwise giving rise to an
entitlement at law to summarily dismiss (“Terminated Without Cause”).
During the Notice Period, Premier may direct Mr. McInnes to continue in his role, perform no duties, reduced duties or
alternative duties during the Notice Period, or elect to provide Mr. McInnes with payment in lieu of the Notice Period.
The maximum amount of any payment in lieu of the Notice Period based on Mr. McInnes’ current fixed remuneration is
$2,500,000 gross, less applicable tax.
If Mr. McInnes is terminated for serious misconduct or Premier is otherwise entitled at law to summarily dismiss Mr.
McInnes (“Terminated for Cause”), Premier may terminate Mr. McInnes’ employment without providing a Notice Period.
Mr McInnes’ STI payments during the 2016 financial year
During the 2016 financial year, an STI payment of $2,000,000 was made to Mr. McInnes which primarily reflected the
significant growth achieved in Premier Retail’s EBIT for the 2015 financial year.
The historical growth in Premier Retail’s underlying EBIT is detailed in the graph on page 22.
Mr McInnes’ STI arrangements under his new employment contract
Under his new employment agreement, Mr. McInnes is entitled to receive a STI if the applicable performance targets
and conditions set out below are met.
Calculation of Mr. McInnes’ STI is based on growth of Premier Retail EBIT, as compared to the previous financial year
(“Base Year”). The relevant performance targets and corresponding STI payment amounts are as follows:
EBIT growth less than 5% of Base Year
No payment.
EBIT growth of 5% of Base Year
$1,250,000.
EBIT growth between 5% and 10% of Base Year
EBIT growth of above 10% of Base Year
$1,250,000 plus a pro rata payment based on the %
of the EBIT growth above 5%, up to a maximum of
$2,500,000 for 10% EBIT growth.
If Mr. McInnes considers that any additional
payment is warranted based on EBIT growth of
above 10%, he may make a request for an
additional payment to the Chairman of Premier. The
Chairman may determine whether or not to make
any such payment in his sole and absolute
discretion within 30 days of receiving any such
request.
The maximum payment that Mr. McInnes may receive under the current STI scheme is $2,500,000, unless the
Chairman decides to make an additional payment in his absolute discretion to reward EBIT growth of above 10%.
23
24
Annual Report 2016 24
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
Mr McInnes’ STI arrangements under his new employment contract (continued)
The Chairman has absolute discretion to make an additional STI payment if Mr. McInnes would not otherwise be
entitled to such a payment under the above table.
The amount that Mr. McInnes may receive under the STI scheme in connection with him ceasing employment (for
reasons other than being Terminated for Cause) will depend on the financial year in which the Notice Period ends and
will be calculated in accordance with the above table (on a pro rata basis for part of a financial year if the Notice Period
ends part way through a financial year).
If Mr. McInnes resigns from his employment, or is Terminated Without Cause, he remains entitled to continue
participating in the STI scheme until the end of the Notice Period.
This entitlement will not be impacted by any election by Premier to direct Mr. McInnes to continue in his role, to perform
no duties, reduced duties or alternative duties during the Notice Period, or to provide Mr. McInnes with a payment in
lieu of the Notice Period.
If Mr. McInnes’ employment is Terminated for Cause, he is not entitled to participate in the STI scheme for the financial
year in which his employment ceases, or any following financial year.
Payment of an STI upon Mr. McInnes’ cessation of employment may be considered a termination benefit within the
meaning of Part 2D.2 of the Act.
Mr McInnes’ LTI arrangements
Under Mr. McInnes’ new employment agreement, he became entitled to 1,000,000 performance rights split into four
equal tranches. The performance rights were granted at no cost to Mr. McInnes and, conditional on the performance
hurdles being met, the performance rights will be exercisable at no cost.
Shareholders approved the right of the Group to issue the 1,000,000 performance rights to Mr. McInnes at the 2015
Annual General Meeting of shareholders held on 27 November 2015. The rules pertaining to this grant were approved
by shareholders at the Extraordinary General Meeting of shareholders held on 15 June 2016.
The performance rights granted will vest in four equal tranches subject to the achievement of both an absolute and
relative TSR test. No value will be received by Mr. McInnes if the performance rights lapse prior to the vesting date.
Each tranche of performance rights will be tested against the TSR performance measure over different testing periods,
as follows:
Tranche A – 4 April 2014 to 4 April 2017
Tranche B – 4 April 2014 to 4 April 2018
Tranche C – 4 April 2014 to 4 April 2019
Tranche D - 4 April 2014 to 4 April 2020
(each date being a “Vesting Date”).
The share price baseline for each tranche is $9.88, which was the volume weighted average share price (“VWAP”) of
the ordinary shares on ASX for the five trading days prior to 4 April 2014. Premier’s TSR will be calculated based on
the percentage growth achieved from the share price baseline of $9.88 to the share price on the relevant Vesting Date
(calculated by the VWAP of the ordinary shares on ASX for the five trading days prior to the relevant Vesting Date).
The first stage absolute test requires that the TSR over the testing period is positive.
If the TSR is positive, the second stage relative test requires the TSR to be assessed against the relative performance
of the Comparison Peer Group.
25 Premier Investments Limited
25
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
Mr McInnes’ STI arrangements under his new employment contract (continued)
Mr McInnes’ LTI arrangements (continued)
The Chairman has absolute discretion to make an additional STI payment if Mr. McInnes would not otherwise be
The relative TSR performance targets and the corresponding vesting percentages are as follows:
entitled to such a payment under the above table.
The amount that Mr. McInnes may receive under the STI scheme in connection with him ceasing employment (for
reasons other than being Terminated for Cause) will depend on the financial year in which the Notice Period ends and
will be calculated in accordance with the above table (on a pro rata basis for part of a financial year if the Notice Period
ends part way through a financial year).
If Mr. McInnes resigns from his employment, or is Terminated Without Cause, he remains entitled to continue
participating in the STI scheme until the end of the Notice Period.
Target
Below the 50th percentile
50th percentile
Between 50th and 62.5th percentile
This entitlement will not be impacted by any election by Premier to direct Mr. McInnes to continue in his role, to perform
62.5th percentile
no duties, reduced duties or alternative duties during the Notice Period, or to provide Mr. McInnes with a payment in
Between 62.5th and 75th percentile
75th percentile and above
Conversion ratio of performance rights to
shares available to vest under the TSR
performance condition:
0%
25%
Pro rata
50%
Pro rata
100%
Premier’s TSR and ranking within the Comparison Peer Group for each testing period will be assessed by an external
independent advisor.
The performance rights under each tranche lapse if the applicable performance hurdles are not met (unless otherwise
determined by the Board in its absolute discretion).
If in any year Mr. McInnes has satisfied all performance conditions, other than the TSR being positive, and would
otherwise have been entitled to vesting of any performance rights, the Chairman may, in his sole and absolute
discretion, elect to enable some or all of the applicable performance rights to vest if circumstances justify such an
award.
If Mr. McInnes resigns, or is Terminated Without Cause (as defined on page 24), he will be entitled to continue to
participate in the LTI plan until the end of his Notice Period, regardless of any election by Premier to direct Mr. McInnes
to continue in his role, to perform no duties, reduced duties or alternative duties during the Notice Period, or to provide
Mr. McInnes with a payment in lieu of the Notice Period.
If Mr. McInnes’ employment is Terminated for Cause (as defined on page 24), he is not entitled to participate in the LTI
plan for the financial year in which his employment ceases, or any following financial year.
If Mr. McInnes resigns, or is Terminated Without Cause, and the final day of the Notice Period is within 14 days prior to
a Vesting Date, Mr. McInnes remains entitled to have the performance rights tested against the TSR performance
measure on the Vesting Date (“Special Vesting”).
The Special Vesting terms will be effective regardless of any election by Premier to direct Mr. McInnes to continue in
his role, to perform no duties, reduced duties or alternative duties during the Notice Period, or to provide Mr. McInnes
with a payment in lieu of the Notice Period.
Similar Special Vesting terms were contained in Mr. McInnes’ prior employment agreement in relation to the 2014 and
2015 Vesting Dates. Mr McInnes’ new employment agreement replicates this treatment in relation to each of the
Vesting Dates.
Provision of an LTI upon Mr. McInnes’ cessation of employment may be considered a termination benefit within the
meaning of Part 2D.2 of the Act.
25
26
Annual Report 2016 26
If Mr. McInnes’ employment is Terminated for Cause, he is not entitled to participate in the STI scheme for the financial
year in which his employment ceases, or any following financial year.
Payment of an STI upon Mr. McInnes’ cessation of employment may be considered a termination benefit within the
lieu of the Notice Period.
meaning of Part 2D.2 of the Act.
Mr McInnes’ LTI arrangements
Under Mr. McInnes’ new employment agreement, he became entitled to 1,000,000 performance rights split into four
equal tranches. The performance rights were granted at no cost to Mr. McInnes and, conditional on the performance
hurdles being met, the performance rights will be exercisable at no cost.
Shareholders approved the right of the Group to issue the 1,000,000 performance rights to Mr. McInnes at the 2015
Annual General Meeting of shareholders held on 27 November 2015. The rules pertaining to this grant were approved
by shareholders at the Extraordinary General Meeting of shareholders held on 15 June 2016.
The performance rights granted will vest in four equal tranches subject to the achievement of both an absolute and
relative TSR test. No value will be received by Mr. McInnes if the performance rights lapse prior to the vesting date.
Each tranche of performance rights will be tested against the TSR performance measure over different testing periods,
as follows:
Tranche A – 4 April 2014 to 4 April 2017
Tranche B – 4 April 2014 to 4 April 2018
Tranche C – 4 April 2014 to 4 April 2019
Tranche D - 4 April 2014 to 4 April 2020
(each date being a “Vesting Date”).
The share price baseline for each tranche is $9.88, which was the volume weighted average share price (“VWAP”) of
the ordinary shares on ASX for the five trading days prior to 4 April 2014. Premier’s TSR will be calculated based on
the percentage growth achieved from the share price baseline of $9.88 to the share price on the relevant Vesting Date
(calculated by the VWAP of the ordinary shares on ASX for the five trading days prior to the relevant Vesting Date).
The first stage absolute test requires that the TSR over the testing period is positive.
If the TSR is positive, the second stage relative test requires the TSR to be assessed against the relative performance
of the Comparison Peer Group.
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
Mr McInnes’ post-employment restrictions
If Mr. McInnes resigns, or is Terminated Without Cause, Premier may elect to restrict Mr. McInnes from certain conduct
in competition with Premier for a period of either 12 months or 24 months from the end of the Notice Period (“Post-
employment Restrictions”).
If Premier elects to enforce the Post-employment Restrictions, it is required to provide Mr. McInnes with his total fixed
remuneration during the relevant period (up to a maximum period of 24 months). If Premier elects to enforce the Post-
employment Restrictions for 24 months, Mr. McInnes would receive a total of $5,000,000 gross, less applicable tax. If
Premier elects to enforce the Post-employment Restrictions for 12 months, Mr. McInnes would receive a total of
$2,500,000 gross, less applicable tax.
Premier’s ability to enforce the Post-employment Restrictions will not be impacted by any election by Premier to direct
Mr. McInnes to continue in his role, perform no duties, reduced duties or alternative duties during the Notice Period, or
to provide Mr. McInnes with a payment in lieu of the Notice Period.
If Mr. McInnes’ employment is Terminated for Cause, Premier may elect to enforce the Post-employment Restrictions
from the date on which his employment is terminated (as no Notice Period will be provided).
The payments outlined above may be considered a termination benefit within the meaning of Part 2D.2 of the Act.
Termination benefits
The STI, LTI and Post-employment Restriction payments and benefits outlined above may be considered termination
benefits within the meaning of Part 2D.2 of the Act.
At an Extraordinary General Meeting held on 15 June 2016, shareholders approved these potential termination
benefits for the purposes of Part 2D.2 of the Act.
The performance rights issued to Mr McInnes on his appointment in April 2011
Mr. McInnes was issued 1,200,000 performance rights on his original appointment in April 2011. These performance
rights were divided into 3 tranches and tested as follows:
April 2016 – A tranche of 300,000 performance rights were tested for the period 24 March 2011 to 3 April 2016.
The TSR over this period was 271.7% placing Premier in the 95th percentile of the Comparison Peer Group.
Details of this test are presented on page 23 of this report. The testing resulted in 100% of performance rights
qualifying for vesting into 300,000 newly issued shares in April 2016.
April 2015 – A tranche of 300,000 performance rights were tested for the period 24 March 2011 to 3 April 2015.
The TSR over this period was 166.0% placing Premier in the 89th percentile of the Comparison Peer Group.
Details of this test are presented on page 23 of this report. The testing resulted in 100% of performance rights
qualifying for vesting, however under Mr. McInnes’ employment agreement one third of this tranche was subject
to an additional 12 month retention clause that was fulfilled in March 2016. Therefore, 200,000 of this tranche
vested into 200,000 newly issued shares in April 2015 and 100,000 of this tranche vested into 100,000 newly
issued shares in March 2016.
April 2014 - A tranche of 600,000 performance rights were tested for the period 24 March 2011 to 3 April 2014.
The TSR over this period was 95.3% placing Premier in the 85th percentile of the Comparison Peer Group. The
testing resulted in 100% of performance rights qualifying for vesting, however under Mr McInnes’ employment
agreement one third of this tranche was subject to an additional 12 month retention clause that was fulfilled in
March 2015. Therefore, 400,000 of this tranche vested into 400,000 newly issued shares in April 2014 and
200,000 of this tranche vested into 200,000 newly issued shares in March 2015.
27 Premier Investments Limited
27
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
Mr McInnes’ post-employment restrictions
Mr McInnes’ STI payments during the 2015 financial year
If Mr. McInnes resigns, or is Terminated Without Cause, Premier may elect to restrict Mr. McInnes from certain conduct
in competition with Premier for a period of either 12 months or 24 months from the end of the Notice Period (“Post-
employment Restrictions”).
During the 2015 financial year, two STI payments were made to Mr. McInnes. An STI payment of $1,100,000 was paid
in relation to the growth achieved in Premier Retail EBIT for the 2013 financial year. Another STI payment of
$2,000,000 was paid in relation to the growth achieved in Premier Retail EBIT for the 2014 financial year.
6. EXECUTIVE SERVICE AGREEMENTS
Remuneration and other terms of employment for KMP and other executives are formalised in written service
agreements (with the exception of Mr. Davis, whose relevant terms of employment are set out below). Material
provisions of the service agreements are set out below:
Notice
period
required
from
Premier
Term of
agreement
Review
period
Open
Annual
12 months
Open
Annual
3 months
Nil
Open
Annual
12 months
Start
date
4 April
2011
17 Nov
1993
2 Jan
2007
Mr. McInnes
Mr. Davis
Mr. Gardner
(ceased: 23
February 2016)
Ms. Peck
6 Jan
2016
Open
Oct
2017
12 months
Ms. Garnsey
20 Sep
2012
Open
Annual
12 months
Termination benefits
Premier
initiated
Upon
diminution
of role
Notice period
required from
employee
Nil
Nil
Nil
12 months
fixed rem.
including
notice
3 months
12 months
Nil
12 months
Nil
12 months
12 months
fixed rem.
including
notice
12 months
fixed rem.
including
notice
12 months
fixed rem.
Including
notice
12 months
fixed rem.
including
notice
7. NON-EXECUTIVE DIRECTOR FEE ARRANGEMENTS
Determination of fees and maximum aggregate non-executive director remuneration
The Board seeks to set Non-Executive Director fees at a level which provides the Group with the ability to attract and
retain Non-Executive Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
The Group’s constitution and the ASX listing rules specify that the Non-Executive Director maximum aggregate
remuneration shall be determined from time to time by a general meeting. The most recent determination of this kind
was at the 2008 Annual General Meeting held on 25 November 2008 when shareholders approved an aggregate
remuneration of an amount not exceeding $1,000,000 per year.
27
28
Annual Report 2016 28
If Premier elects to enforce the Post-employment Restrictions, it is required to provide Mr. McInnes with his total fixed
remuneration during the relevant period (up to a maximum period of 24 months). If Premier elects to enforce the Post-
employment Restrictions for 24 months, Mr. McInnes would receive a total of $5,000,000 gross, less applicable tax. If
Premier elects to enforce the Post-employment Restrictions for 12 months, Mr. McInnes would receive a total of
$2,500,000 gross, less applicable tax.
Premier’s ability to enforce the Post-employment Restrictions will not be impacted by any election by Premier to direct
Mr. McInnes to continue in his role, perform no duties, reduced duties or alternative duties during the Notice Period, or
to provide Mr. McInnes with a payment in lieu of the Notice Period.
If Mr. McInnes’ employment is Terminated for Cause, Premier may elect to enforce the Post-employment Restrictions
from the date on which his employment is terminated (as no Notice Period will be provided).
The payments outlined above may be considered a termination benefit within the meaning of Part 2D.2 of the Act.
Termination benefits
The STI, LTI and Post-employment Restriction payments and benefits outlined above may be considered termination
benefits within the meaning of Part 2D.2 of the Act.
At an Extraordinary General Meeting held on 15 June 2016, shareholders approved these potential termination
benefits for the purposes of Part 2D.2 of the Act.
The performance rights issued to Mr McInnes on his appointment in April 2011
Mr. McInnes was issued 1,200,000 performance rights on his original appointment in April 2011. These performance
rights were divided into 3 tranches and tested as follows:
April 2016 – A tranche of 300,000 performance rights were tested for the period 24 March 2011 to 3 April 2016.
The TSR over this period was 271.7% placing Premier in the 95th percentile of the Comparison Peer Group.
Details of this test are presented on page 23 of this report. The testing resulted in 100% of performance rights
qualifying for vesting into 300,000 newly issued shares in April 2016.
April 2015 – A tranche of 300,000 performance rights were tested for the period 24 March 2011 to 3 April 2015.
The TSR over this period was 166.0% placing Premier in the 89th percentile of the Comparison Peer Group.
Details of this test are presented on page 23 of this report. The testing resulted in 100% of performance rights
qualifying for vesting, however under Mr. McInnes’ employment agreement one third of this tranche was subject
to an additional 12 month retention clause that was fulfilled in March 2016. Therefore, 200,000 of this tranche
vested into 200,000 newly issued shares in April 2015 and 100,000 of this tranche vested into 100,000 newly
issued shares in March 2016.
April 2014 - A tranche of 600,000 performance rights were tested for the period 24 March 2011 to 3 April 2014.
The TSR over this period was 95.3% placing Premier in the 85th percentile of the Comparison Peer Group. The
testing resulted in 100% of performance rights qualifying for vesting, however under Mr McInnes’ employment
agreement one third of this tranche was subject to an additional 12 month retention clause that was fulfilled in
March 2015. Therefore, 400,000 of this tranche vested into 400,000 newly issued shares in April 2014 and
200,000 of this tranche vested into 200,000 newly issued shares in March 2015.
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. NON-EXECUTIVE DIRECTOR FEE ARRANGEMENTS (CONTINUED)
Determination of fees and maximum aggregate non-executive director remuneration (continued)
The Chairman of the Group, consistent with his past practice, has declined to accept any remuneration for his role as a
director or for his role on any committees.
Fee policy
Non-Executive Director’s fees consist of base fees and committee fees. The payment of committee fees recognises
the additional time commitment required by Non-Executive Directors who serve on Board committees.
Non-Executive Directors may be reimbursed for expenses reasonably incurred in attending to the Group’s affairs. Non-
Executive Directors do not participate in any incentive programs. Premier has not established any schemes for
retirement benefits for Non-Executive Directors (other than superannuation).
RECONCILIATION BETWEEN UNDERLYING PREMIER RETAIL EBIT AND REPORTED RETAIL
SEGMENT RESULT
IFRS financial information is financial information that is presented in accordance with all relevant accounting
standards. Non-IFRS information is financial information that is presented other than in accordance with all relevant
accounting standards.
STI payments are paid based on Non-IFRS financial information. The table below reconciles the Non-IFRS
financial term Premier Retail underlying EBIT to the Reported Retail Segment Result for each of the financial years:
2011
$’000
2012
$’000
2013
$’000
2014
$’000
2015
$’000
2016
$’000
Reported Retail Segment Operating
Profit before Taxation
39,796
69,988
76,686
79,299
98,958
126,207
Add back: Interest expense
9,614
10,194
6,988
6,311
5,738
4,912
EBIT
Adjusted for:
49,410
80,182
83,674
85,610
104,696
131,119
Inter-segment adjustments
74
192
30
(482)
(673)
(167)
One-off costs related to strategic review
One-off Smiggle UK market entry
expense
One-off supply chain transformation
expense
One-off exit of South African Joint
Venture
One-off litigation expense
15,771
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,193
4,482
-
-
-
-
-
1,724
-
-
-
-
-
2,345
Underlying Premier Retail EBIT
65,255
80,374
83,704
92,803
105,747
133,297
Underlying Premier Retail EBIT,
expressed in $’ millions
65.3
80.4
83.7
92.8
105.7
133.3
29 Premier Investments Limited
29
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Annual Report 2016 30
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Annual Report 2016 32
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DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
9. ADDITIONAL DISCLOSURES RELATING TO RIGHTS AND SHARES (CONTINUED)
b) Value of rights awarded, exercised and lapsed during the year
2016
Key management
personnel
Mr. M. McInnes
Mr. A. Gardner
Ms. C. Garnsey
Value of rights
granted during the
year
$
Value of rights
exercised during the
year
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Value of rights
lapsed during the
year
$
Remuneration
consisting of rights
for the year
%
9,960,000
-
-
6,182,000
1,256,331
1,120,000
-
-
-
25.28
-
4.46
There were no alterations to the terms and conditions of rights awarded as remuneration since their award
date.
c) Shares issued on exercise of rights
2016
Key management
personnel
Mr. M. McInnes
Mr. A. Gardner
Ms. C. Garnsey
Shares issued
No
Paid per share
$
Unpaid per share
$
400,000
95,321
80,000
-
-
-
-
-
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There were no alterations to the terms and conditions of rights awarded as remuneration since their award
date.
33 Premier Investments Limited
33
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DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
9. ADDITIONAL DISCLOSURES RELATING TO RIGHTS AND SHARES (CONTINUED)
e) Number of Shares held in Premier Investments Limited
BALANCE
26 JULY 2015
ORDINARY
SHARE
PURCHASE
ORDINARY
SHARES
ACQUIRED
UNDER
PERFORMANCE
RIGHTS PLAN
ORDINARY
NET CHANGE -
OTHER
ORDINARY
BALANCE
30 JULY 2016
ORDINARY
4,437,699
-
-
2,577,014
8,000
27,665
-
28,186
6,000
400,000
-
113,266
80,000
7,677,830
-
-
-
-
-
-
-
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
400,000
(800,000)
-
95,321
80,000
-
(208,587)
(40,000)
4,437,699
-
-
2,577,014
8,000
27,665
-
28,186
6,000
-
-
-
120,000
575,321
(1,048,587)
7,204,564
2016
NON-EXECUTIVE
DIRECTORS
Mr. S. Lew *
Mr. T. Antonie
Dr. D.M. Crean
Mr. L.E. Fox
Ms. S. Herman
Mr. H.D. Lanzer
Mr. T.L. McCartney
Mr. M.R.I. McLeod
Dr. G.H. Weiss
EXECUTIVES
Mr. M. McInnes
Mr. K.F. Davis
Mr. A. Gardner **
Ms. C. Garnsey
TOTAL
* 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 (2015: 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.
** Mr. Gardner ceased being a KMP effective 23 February 2016.
10. ADDITIONAL DISCLOSURES RELATING TO TRANSACTIONS AND BALANCES WITH KEY
MANAGEMENT PERSONNEL
a) Details and terms and conditions of other transactions and balances 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 $1,905,871 (2015: $1,250,763), including
Mr. Lanzer's Directors fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the
consolidated group, with $769,000 (2015: $101,748) remaining outstanding at year-end. The fees paid for
these services were all at arm's length and on normal commercial terms.
35 Premier Investments Limited
35
DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
9. ADDITIONAL DISCLOSURES RELATING TO RIGHTS AND SHARES (CONTINUED)
10. ADDITIONAL DISCLOSURES RELATING TO TRANSACTIONS AND BALANCES WITH KEY
e) Number of Shares held in Premier Investments Limited
BALANCE
26 JULY 2015
ORDINARY
SHARE
PURCHASE
ORDINARY
PERFORMANCE
RIGHTS PLAN
ORDINARY
NET CHANGE -
OTHER
ORDINARY
BALANCE
30 JULY 2016
ORDINARY
SHARES
ACQUIRED
UNDER
2016
NON-EXECUTIVE
DIRECTORS
Mr. S. Lew *
Mr. T. Antonie
Dr. D.M. Crean
Mr. L.E. Fox
Ms. S. Herman
Mr. H.D. Lanzer
Mr. T.L. McCartney
Mr. M.R.I. McLeod
Dr. G.H. Weiss
EXECUTIVES
Mr. M. McInnes
Mr. K.F. Davis
Mr. A. Gardner **
Ms. C. Garnsey
TOTAL
4,437,699
2,577,014
8,000
27,665
28,186
6,000
-
-
-
-
400,000
113,266
80,000
7,677,830
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,437,699
2,577,014
8,000
27,665
28,186
6,000
-
-
-
-
-
-
400,000
(800,000)
95,321
80,000
(208,587)
(40,000)
120,000
575,321
(1,048,587)
7,204,564
* 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 (2015: 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.
** Mr. Gardner ceased being a KMP effective 23 February 2016.
10. ADDITIONAL DISCLOSURES RELATING TO TRANSACTIONS AND BALANCES WITH KEY
MANAGEMENT PERSONNEL
their related parties
a) Details and terms and conditions of other transactions and balances with key management personnel and
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 $1,905,871 (2015: $1,250,763), including
Mr. Lanzer's Directors fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the
consolidated group, with $769,000 (2015: $101,748) remaining outstanding at year-end. The fees paid for
these services were all at arm's length and on normal commercial terms.
MANAGEMENT PERSONNEL (CONTINUED)
a) Details and terms and conditions of other transactions and balances with key management
personnel and their related parties (continued)
Mr. Lanzer is a director of Loch Awe Pty Ltd. During the year operating lease payments totalling $351,998
(2015: $393,774) 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 $18,648,378 (2015: $18,831,141) including GST have been made by Group
companies from Voyager Distributing Co. Pty Ltd, Playcorp Pty Ltd and Sky Chain Trading Limited, with
$969,084 (2015: $1,232,020) remaining outstanding at year-end. The purchases were all 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 $382,123 (2015: $391,480) 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
2016
$’000
1,738
1,738
2016
$’000
17,128
320
1,749
382
19,579
35
Annual Report 2016 36
36
DIRECTORS’ REPORT
(CONTINUED)
AUDITOR INDEPENDENCE
A copy of the Auditor’s Independence Declaration in relation to the audit for the financial year is provided on page
38 of this report.
Signed in accordance with a resolution of the Board of Directors.
Solomon Lew
Chairman
5 October 2016
8 Exhibition Street
Melbourne VIC 3000 Australia
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
GPO Box 67
Melbourne VIC 3001
ey.com/au
Auditor’s Independence Declaration to the Directors of Premier
Investments Limited
As lead auditor for the audit of Premier Investments Limited for the financial year ended 30 July 2016,
I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the review; and
b) no contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Premier Investments Limited and the entities it controlled during the
financial period.
Ernst & Young
Rob Perry
Partner
5 October 2016
37 Premier Investments Limited
37
A copy of the Auditor’s Independence Declaration in relation to the audit for the financial year is provided on page
Signed in accordance with a resolution of the Board of Directors.
DIRECTORS’ REPORT
(CONTINUED)
AUDITOR INDEPENDENCE
38 of this report.
Solomon Lew
Chairman
5 October 2016
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
8 Exhibition Street
Melbourne VIC 3000 Australia
Melbourne VIC 3000 Australia
GPO Box 67
GPO Box 67
Melbourne VIC 3001
Melbourne VIC 3001
Tel: +61 3 9288 8000
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
Fax: +61 3 8650 7777
ey.com/au
ey.com/au
Independent auditor's report to the members of Premier Investments
Limited
Auditor’s Independence Declaration to the Directors of Premier
Investments Limited
Report on the financial report
Auditor’s Independence Declaration to the Directors of Premier
We have audited the accompanying financial report of Premier Investments Limited, which comprises the
Investments Limited
consolidated statement of financial position as at 30 July 2016, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the financial year then ended, notes comprising a summary of significant accounting
policies and other explanatory information, and the directors' declaration of the consolidated entity
As lead auditor for the audit of Premier Investments Limited for the financial year ended 30 July 2016,
As lead auditor for the audit of Premier Investments Limited for the financial year ended 30 July 2016,
comprising the company and the entities it controlled for the financial year ended or from time to time
I declare to the best of my knowledge and belief, there have been:
I declare to the best of my knowledge and belief, there have been:
during the financial year.
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
Directors' responsibility for the financial report
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the review; and
relation to the review; and
b) no contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Premier Investments Limited and the entities it controlled during the
financial period.
b) no contraventions of any applicable code of professional conduct in relation to the review.
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
This declaration is in respect of Premier Investments Limited and the entities it controlled during the
such internal controls as the directors determine are necessary to enable the preparation of the financial
financial period.
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 financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
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
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
Ernst & Young
reasonable assurance about whether the financial report is free from material misstatement.
Ernst & Young
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
Rob Perry
Rob Perry
preparation and fair presentation of the financial report in order to design audit procedures that are
Partner
Partner
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
5 October 2016
5 October 2016
of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting
policies used and 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
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.
37
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report 2016 38
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015
STATEMENT OF FINANCIAL POSITION
AS AT 30 JULY 2016 AND 25 JULY 2015
CONSOLIDATED
CONSOLIDATED
NOTES
NOTES
2016
$’000
2016
$’000
2015
$’000
2015
$’000
NOTES
CONSOLIDATED
2016
$’000
Continuing operations
Continuing operations
Revenue from sale of goods
Revenue from sale of goods
Other revenue
Other revenue
Total revenue
Total revenue
Other income
Other income
Total revenue and other income
Total revenue and other income
Changes in inventories of finished goods
Changes in inventories of finished goods
Employee expenses
Employee expenses
Operating lease rental expense
Operating lease rental expense
Depreciation, impairment and amortisation
Depreciation, impairment and amortisation
Advertising and direct marketing
Advertising and direct marketing
Finance costs
Finance costs
Expense associated with disposal of asset held for sale
Expense associated with disposal of asset held for sale
Other expenses
Other expenses
Total expenses
Total expenses
Share of profit of associates
Share of profit of associates
Profit from continuing operations before income tax
Profit from continuing operations before income tax
Income tax expense
Income tax expense
Net profit for the period attributable to owners
Net profit for the period attributable to owners
Other comprehensive income (loss)
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit or loss
Net (loss) gain on cash flow hedges
Items that may be reclassified subsequently to profit or loss
Net (loss) gain on cash flow hedges
Foreign currency translation
Foreign currency translation
Net movement in other comprehensive income of associates
Net movement in other comprehensive income of associates
Income tax on items of other comprehensive income
Income tax on items of other comprehensive income
Other comprehensive income (loss) for the period, net of tax
Other comprehensive income (loss) for the period, net of tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
ATTRIBUTABLE TO THE OWNERS
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
ATTRIBUTABLE TO THE OWNERS
Earnings per share for profit from continuing operations
Earnings per share for profit from continuing operations
attributable to the ordinary equity holders of the parent:
attributable to the ordinary equity holders of the parent:
4
4
4
4
4
4
5
5
5
5
5
5
5
5
14
14
6
6
20
20
20
20
20
20
20
20
1,049,226
1,049,226
8,228
8,228
1,057,454
1,057,454
1,507
1,507
1,058,961
1,058,961
(378,946)
(378,946)
(268,997)
(268,997)
(204,707)
(204,707)
(23,881)
(23,881)
(11,580)
(11,580)
(4,912)
(4,912)
-
-
(36,647)
(36,647)
947,662
947,662
10,230
10,230
957,892
957,892
3,977
3,977
961,869
961,869
(350,894)
(350,894)
(240,469)
(240,469)
(193,812)
(193,812)
(22,677)
(22,677)
(12,879)
(12,879)
(5,738)
(5,738)
(1,724)
(1,724)
(29,875)
(29,875)
(929,670)
(929,670)
(858,068)
(858,068)
13,792
13,792
143,083
143,083
(39,209)
(39,209)
13,144
13,144
116,945
116,945
(28,843)
(28,843)
103,874
103,874
88,102
88,102
(44,983)
(44,983)
(5,363)
(5,363)
(70)
(70)
13,495
13,495
(36,921)
(36,921)
35,374
35,374
1,418
1,418
2,728
2,728
(10,612)
(10,612)
28,908
28,908
66,953
66,953
117,010
117,010
- basic for profit for the year (cents per share)
- basic for profit for the year (cents per share)
- diluted for profit for the year (cents per share)
- diluted for profit for the year (cents per share)
31
31
31
31
66.27
66.27
65.78
65.78
56.49
56.49
55.92
55.92
The accompanying notes form an integral part of this Statement of Comprehensive Income.
The accompanying notes form an integral part of this Statement of Comprehensive Income.
1,338,555
1,338,307
The accompanying notes form an integral part of this Statement of Financial Position.
39 Premier Investments Limited
39
39
40
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial instruments
Other current assets
Asset classified as held for sale
Total current assets
Non-current assets
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 non-current liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
26
8
9
30
10
11
12
13
6
14
30
15
16
30
17
18
16
6
17
30
18
19
20
21
283,233
16,461
123,556
1,636
11,694
-
436,580
139,237
854,816
18,858
213,392
-
72,965
-
11,711
31,953
16,457
6,967
140,053
105,805
57,311
1,871
4,479
14,809
184,275
324,328
608,615
(2,434)
732,374
1,226,303
1,662,883
1,202,972
1,648,803
1,338,555
1,338,307
2015
$’000
281,572
14,341
111,814
30,795
6,309
1,000
445,831
123,537
854,711
13,476
209,477
1,771
73,723
14
117
31,781
16,097
5,635
127,367
104,641
64,285
1,782
10
12,411
183,129
310,496
608,615
32,223
697,469
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015
STATEMENT OF FINANCIAL POSITION
AS AT 30 JULY 2016 AND 25 JULY 2015
NOTES
CONSOLIDATED
2016
$’000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial instruments
Other current assets
Asset classified as held for sale
Total current assets
Non-current assets
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 non-current liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
26
8
9
30
10
11
12
13
6
14
30
15
16
30
17
18
16
6
17
30
18
19
20
21
The accompanying notes form an integral part of this Statement of Financial Position.
2015
$’000
281,572
14,341
111,814
30,795
6,309
1,000
445,831
123,537
854,711
13,476
209,477
1,771
283,233
16,461
123,556
1,636
11,694
-
436,580
139,237
854,816
18,858
213,392
-
1,226,303
1,662,883
1,202,972
1,648,803
72,965
-
11,711
31,953
16,457
6,967
140,053
105,805
57,311
1,871
4,479
14,809
184,275
324,328
73,723
14
117
31,781
16,097
5,635
127,367
104,641
64,285
1,782
10
12,411
183,129
310,496
1,338,555
1,338,307
608,615
(2,434)
732,374
608,615
32,223
697,469
1,338,555
1,338,307
Annual Report 2016 40
40
CONSOLIDATED
NOTES
2016
$’000
2015
$’000
1,049,226
8,228
1,057,454
1,507
1,058,961
(378,946)
(268,997)
(204,707)
(23,881)
(11,580)
(4,912)
-
(36,647)
(929,670)
13,792
143,083
(39,209)
103,874
(44,983)
(5,363)
(70)
13,495
(36,921)
Continuing operations
Revenue from sale of goods
Other revenue
Total revenue
Other income
Total revenue and other income
Changes in inventories of finished goods
Employee expenses
Operating lease rental expense
Depreciation, impairment and amortisation
Advertising and direct marketing
Expense associated with disposal of asset held for sale
Finance costs
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 (loss)
Items that may be reclassified subsequently to profit or loss
Net (loss) gain on cash flow hedges
Foreign currency translation
Net movement in other comprehensive income of associates
Income tax on items of other comprehensive income
Other comprehensive income (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
14
6
20
20
20
20
31
31
The accompanying notes form an integral part of this Statement of Comprehensive Income.
66,953
117,010
66.27
65.78
56.49
55.92
947,662
10,230
957,892
3,977
961,869
(350,894)
(240,469)
(193,812)
(22,677)
(12,879)
(5,738)
(1,724)
(29,875)
(858,068)
13,144
116,945
(28,843)
88,102
35,374
1,418
2,728
(10,612)
28,908
39
STATEMENT OF CASH FLOWS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015
STATEMENT OF CHANGES IN EQUITY
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015
NOTES
CONSOLIDATED
2016
$’000
2015
$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Borrowing costs paid
Income taxes paid
NET CASH FLOWS FROM OPERATING ACTIVITIES
26(b)
CASH FLOWS FROM INVESTING ACTIVITIES
Dividends received from associates
Payment for trademarks
Purchase of investments
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of asset classified as held for sale
Payment for property, plant and equipment and leasehold
premiums
NET CASH FLOWS USED IN 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 (DECREASE) IN CASH HELD
Cash at the beginning of the financial year
Net foreign exchange difference
CASH AT THE END OF THE FINANCIAL YEAR
26(a)
The accompanying notes form an integral part of this Statement of Cash Flows.
1,162,989
(1,024,780)
8,197
(4,943)
(37,800)
103,663
9,836
(128)
(29)
204
1,000
(45,046)
(34,163)
(68,969)
111,069
(109,571)
(14)
(67,485)
2,015
281,572
(354)
283,233
1,051,088
(930,319)
10,294
(5,605)
(22,347)
103,111
9,628
(42)
(16,492)
-
-
(36,122)
(43,028)
(78,033)
66,800
(80,530)
(56)
(91,819)
(31,736)
313,308
-
281,572
CONSOLIDATED
CONTRIBUTED
EQUITY
CAPITAL
PROFITS
$’000
RESERVE
$’000
PERFORMANCE
CASH FLOW
RIGHTS
RESERVE
$’000
HEDGE
FOREIGN
CURRENCY
RESERVE
TRANSLATION
$’000
RESERVE
$’000
RETAINED
PROFITS
$’000
TOTAL
$’000
608,615
464
4,082
21,197
6,480
697,469
1,338,307
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,264
-
-
-
-
-
-
-
801
-
-
-
103,874
103,874
(31,488)
(5,433)
-
(36,921)
(31,488)
(5,433)
103,874
66,953
-
2,264
(68,969)
(68,969)
-
-
-
-
-
-
-
-
-
24,762
4,146
-
-
88,102
88,102
28,908
24,762
4,146
88,102
117,010
-
801
(78,033)
(78,033)
608,615
464
3,281
(3,565)
2,334
687,400
1,298,529
At 26 July 2015
Net profit for the period
Other comprehensive loss
Total comprehensive income
for the period
Transactions with owners
in their capacity as owners:
Performance rights issued
Dividends paid
At 27 July 2014
Net profit for the period
Other comprehensive income
Total comprehensive income
for the period
Transactions with owners
in their capacity as owners:
Performance rights issued
Dividends paid
Balance as at 30 July 2016
608,615
464
6,346
(10,291)
1,047
732,374
1,338,555
Balance as at 25 July 2015
608,615
464
4,082
21,197
6,480
697,469
1,338,307
The accompanying notes form an integral part of this Statement of Changes in Equity
41 Premier Investments Limited
41
42
STATEMENT OF CHANGES IN EQUITY
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015
CONSOLIDATED
CONTRIBUTED
EQUITY
$’000
CAPITAL
PROFITS
RESERVE
$’000
PERFORMANCE
RIGHTS
RESERVE
$’000
CASH FLOW
HEDGE
RESERVE
$’000
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$’000
RETAINED
PROFITS
$’000
TOTAL
$’000
608,615
464
4,082
21,197
6,480
697,469
1,338,307
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
103,874
103,874
(31,488)
(5,433)
-
(36,921)
(31,488)
(5,433)
103,874
66,953
2,264
-
-
-
-
-
-
2,264
(68,969)
(68,969)
At 26 July 2015
Net profit for the period
Other comprehensive loss
Total comprehensive income
for the period
Transactions with owners
in their capacity as owners:
Performance rights issued
Dividends paid
Balance as at 30 July 2016
608,615
464
6,346
(10,291)
1,047
732,374
1,338,555
At 27 July 2014
Net profit for the period
Other comprehensive income
Total comprehensive income
for the period
Transactions with owners
in their capacity as owners:
Performance rights issued
Dividends paid
608,615
464
3,281
(3,565)
2,334
687,400
1,298,529
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
88,102
24,762
4,146
-
88,102
28,908
24,762
4,146
88,102
117,010
801
-
-
-
-
-
-
801
(78,033)
(78,033)
Balance as at 25 July 2015
608,615
464
4,082
21,197
6,480
697,469
1,338,307
The accompanying notes form an integral part of this Statement of Changes in Equity
Annual Report 2016 42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
1
CORPORATE INFORMATION
The financial report of Premier Investments Limited for the 53 weeks ended 30 July 2016 was
authorised for issue in accordance with a resolution of the Directors on 5 October 2016.
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 53 weeks beginning 26 July 2015 to
30 July 2016.
(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 and assets classified as held for sale, 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), unless otherwise stated, as the Company is a kind referred
to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191,
dated 24 March 2016.
(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 2015-3 Amendments to Australian Accounting Standards arising from the
Withdrawal of AASB 1031 Materiality: The Standard completes the withdrawal of
references to AASB 1031 in all Australian Accounting Standards and Interpretations,
allowing the Standard to effectively be withdrawn.
The adoption of the amending Standard did not have any impact on the disclosures or the
amounts recognised in the Group’s consolidated financial report. In the current financial year
the Group did not elect to early adopt any new Standards or amendments issued but not yet
effective.
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
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 ended
30 July 2016, are outlined in the table below:
Title
Summary
AASB 2014-4
Clarification of
Acceptable
Methods of
and
Amortisation
Depreciation
calculated.
The standard amends AASB 116 Property, Plant and
Equipment and AASB 138 Intangible Assets to provide
The Group does
The standard
not expect the
applies to
additional guidance on how the depreciation or amortisation of
adoption of this
annual reporting
property, plant and equipment and intangible assets should be
Standard to
periods
Impact on the
Group financial
report
Effective Dates
have a material
effect on the
beginning on or
after 1 January
financial position
2016.
and
performance of
the Group.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
31 July 2016.
The standard
applies to
annual reporting
periods
beginning on or
after 1 January
2018.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
AASB 15 outlines a single comprehensive model for entities to
use in accounting for revenue arising from contracts with
customers and replaces AASB 111 Construction Contracts,
AASB 118 Revenue, and Interpretation 13 Customer Loyalty
The new
standard
requires
extensive
Programmes. The core principle of AASB 15 is that an entity
disclosures,
recognises revenue to depict the transfer of promised goods or
including
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.
AASB 2016-3 Amendments to Australian Accounting
Standards – Clarifications to AASB 15 has been issued as a
consequence of the issuance of International Financial
disaggregation
of total revenue
and key
judgements and
estimates. The
Group is in the
process of
AASB 15
Revenue from
Contracts with
Customers,
AASB 2014-5
Amendments
to Australian
Accounting
Standards
arising from
AASB 15,
AASB 2015-8
Amendments
to Australian
Accounting
Standards –
Reporting Standards Clarifications to IFRS 15 Revenue from
evaluating the
Contracts with Customers and clarifies some requirements and
potential impact,
29 July 2018.
provides additional transitional relief for companies that are
if any, of the
effective date
implementing the new Standard. The amendments do not
new standard on
of AASB 15
change the underlying principles of the Standard, but rather
the Group.
clarify how those principles should be applied.
AASB 16
Leases
AASB 16 will replace AASB 117 Leases, Interpretation 4
Determining whether an Arrangement contains a Lease,
Interpretation 115 Operating Leases – Incentives and
The new
standard
The standard
applies to
requires lessees
annual reporting
Interpretation 127 Evaluating the Substance of Transactions
Involving the Legal form of a Lease. The Standard will provide
a comprehensive model for the identification of lease
arrangements and their treatment in the financial statements of
to recognise all
leases, except
for short-term
and low value
both lessees and lessors. The new Standard introduces three
leases, on
periods
beginning on or
after 1 January
2019.
main changes:
contains a lease;
Enhanced guidance on identifying whether a contract
A completely new leases accounting model for lessees
that require lessees to recognise all leases on balance
sheet, except short-term leases and leases of low value
assets, and
Enhanced disclosures.
balance sheet.
The Group is in
the process of
evaluating the
The standard is
expected to be
initially applied
by the group for
potential impact
the financial
of the new
standard on the
year beginning
28 July 2019.
Group.
43 Premier Investments Limited
43
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
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 ended
30 July 2016, are outlined in the table below:
Title
Summary
The standard amends AASB 116 Property, Plant and
Equipment and AASB 138 Intangible Assets to provide
additional guidance on how the depreciation or amortisation of
property, plant and equipment and intangible assets should be
calculated.
Impact on the
Group financial
report
The Group does
not expect the
adoption of this
Standard to
have a material
effect on the
financial position
and
performance of
the Group.
AASB 2014-4
Clarification of
Acceptable
Methods of
Depreciation
and
Amortisation
AASB 15
Revenue from
Contracts with
Customers,
AASB 2014-5
Amendments
to Australian
Accounting
Standards
arising from
AASB 15,
AASB 2015-8
Amendments
to Australian
Accounting
Standards –
effective date
of AASB 15
AASB 16
Leases
AASB 15 outlines a single comprehensive model for entities to
use in accounting for revenue arising from contracts with
customers and replaces AASB 111 Construction Contracts,
AASB 118 Revenue, and Interpretation 13 Customer Loyalty
Programmes. The core principle of AASB 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.
AASB 2016-3 Amendments to Australian Accounting
Standards – Clarifications to AASB 15 has been issued as a
consequence of the issuance of International Financial
Reporting Standards Clarifications to IFRS 15 Revenue from
Contracts with Customers and clarifies some requirements and
provides additional transitional relief for companies that are
implementing the new Standard. The amendments do not
change the underlying principles of the Standard, but rather
clarify how those principles should be applied.
AASB 16 will replace AASB 117 Leases, Interpretation 4
Determining whether an Arrangement contains a Lease,
Interpretation 115 Operating Leases – Incentives and
Interpretation 127 Evaluating the Substance of Transactions
Involving the Legal form of a Lease. The Standard will provide
a comprehensive model for the identification of lease
arrangements and their treatment in the financial statements of
both lessees and lessors. The new Standard introduces three
main changes:
Enhanced guidance on identifying whether a contract
contains a lease;
A completely new leases accounting model for lessees
that require lessees to recognise all leases on balance
sheet, except short-term leases and leases of low value
assets, and
Enhanced disclosures.
The new
standard
requires
extensive
disclosures,
including
disaggregation
of total revenue
and key
judgements and
estimates. The
Group is in the
process of
evaluating the
potential impact,
if any, of the
new standard on
the Group.
The new
standard
requires lessees
to recognise all
leases, except
for short-term
and low value
leases, on
balance sheet.
The Group is in
the process of
evaluating the
potential impact
of the new
standard on the
Group.
Effective Dates
The standard
applies to
annual reporting
periods
beginning on or
after 1 January
2016.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
31 July 2016.
The standard
applies to
annual reporting
periods
beginning on or
after 1 January
2018.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
29 July 2018.
The standard
applies to
annual reporting
periods
beginning on or
after 1 January
2019.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
28 July 2019.
Annual Report 2016 44
44
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (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)
Title
Summary
AASB 2015-1
Amendments
to Australian
Accounting
Standards –
Annual
Improvements
to Australian
Accounting
Standards
2012 - 2014
Cycle
AASB 2015-2
Amendments
to Australian
Accounting
Standards –
Disclosure
Initiative:
Amendments
to AASB 101
AASB 1057
Application of
Australian
Accounting
Standards,
AASB 2015-9
Amendments
to Australian
Accounting
Standards –
Scope and
Application
Paragraphs
AASB 2016-5
Amendments
to Australian
Accounting
Standards –
Classification
and
Measurement
of Share-
based
Payment
Transactions
AASB 2015-1 amends a number of pronouncements as a
result of the IASB’s 2012 – 2014 annual improvements cycle.
Key amendments include:
AASB 7: Servicing contracts and applicability of the
amendments to AASB 7 to condensed interim financial
statements.
AASB 119: Discount rate; regional market issue.
AASB 134: Disclosure of information ‘elsewhere in the
interim financial report’.
AASB 2015-2 amends AASB 101 Presentation of Financial
Statements to provide clarification regarding the disclosure
requirements in AASB 101.
The amendments include narrow-focus amendments to
address concerns about existing presentation and disclosure
requirements and to ensure entities are able to use
judgements when applying a Standard in determining what
information to disclose in their financial statements.
This Standard effectively moved Australian specific application
paragraphs from each Standard into a combined Standard.
The Standard has no impact on the application of individual
standards.
This standard amends AASB 2 Share-based Payment, to
clarify how to account for certain types of share-based
payment transactions. The amendments provide requirements
on:
The accounting for the effects of vesting and non-vesting
conditions on the measurement of cash-settled share-
based payments.
The classification of share-based payment transactions
with a net settlement feature for withholding tax
obligations.
The accounting for a modification to the terms and
conditions of a share-based payment that changes the
classification of the transaction from cash-settled to
equity-settled.
45 Premier Investments Limited
Impact on the
Group financial
report
The Group does
not expect the
adoption of this
Standard to
have a material
effect on the
financial position
and
performance of
the Group, but
may affect future
disclosures.
The Group does
not expect the
adoption of this
Standard to
have a material
effect on the
financial position
and
performance of
the Group, but
may affect future
disclosures.
The Group does
not expect the
adoption of this
Standard to
have a material
effect on the
financial position
and
performance of
the Group.
The Group is in
the process of
evaluating the
potential impact
of the new
standard on the
Group.
Effective Dates
The standard
applies to
annual reporting
periods
beginning on or
after 1 January
2016.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
31 July 2016.
The standard
applies to
annual reporting
periods
beginning on or
after 1 January
2016.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
31 July 2016.
The standard
applies to
annual reporting
periods
beginning on or
after 1 January
2016.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
31 July 2016.
The standard
applies to
annual reporting
periods
beginning on or
after 1 January
2018.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
29 July 2018.
45
Title
Summary
AASB 9
Financial
AASB 9 (Dec 2014) is a new principal standard which replaces
The Group has
The standard
AASB 139. This new version supersedes AASB 9 issued in
not yet
Instruments
December 2009 (as amended) and AASB 9 (issued in Dec
Impact on the
Group financial
report
determined the
potential effects
of the standard.
Retrospective
application is
generally
required.
Effective Dates
applies to
annual reporting
periods
beginning on or
after 1 January
2018.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
29 July 2018.
2010) and includes a model for classification and
measurement, a single forward-looking ‘expected loss’
impairment model and a substantially-reformed approach to
hedge accounting.
The final version of AASB 9 introduces a new expected-loss
impairment model that will require more timely recognition of
expected credit losses. Specifically, the new Standard requires
entities to account for expected credit losses from when
financial instruments are first recognised and to recognise full
lifetime expected losses on a timelier basis.
Amendments to AASB 9 (Dec 2009 and 2010 editions, as well
as AASB 2013-9) issued in December 2013 included the new
hedge accounting requirements, including changes to hedge
effectiveness testing, treatment of hedge costs, risk
components that can be hedged and disclosures.
AASB 9 includes requirements for a simpler approach to
classification and measurement of financial assets compared
with the requirements of AASB 139.
The main changes are described below:
Financial assets that are debt instruments will be classified
based on 1) the objective of the entity’s business model for
managing the financial assets; 2) the characteristics of the
contractual cash flows.
Allows an irrevocable election on initial recognition to
present gains and losses on investments in equity
instruments that are not held for trading in other
comprehensive income. Dividends in respect of these
investments that are a return on investment can be
recognised in profit or loss and there is no impairment or
recycling on disposal of investment.
Financial assets can be designated and measured at fair
value through profit and loss at initial recognition if doing so
eliminates or significantly reduces the measurement or
recognition inconsistency that would arise from measuring
assets or liabilities, or recognising gains and losses on
them, on different bases.
Where the fair value option is used for financial liabilities the
change in fair value is to be accounted for as follows:
The change attributable to changes in credit risk are
presented in other comprehensive income.
The remaining change is presented in profit or loss.
AASB 9 also removes the volatility in profit or loss that was
caused by changes in the credit risk of liabilities elected to be
measured at fair value. The change in accounting means that
gains caused by deterioration of an entity’s own credit risk on
such liabilities are no longer recognised in profit or loss.
Consequential amendments were also made to other
standards as a result of AASB 9, introduced by AASB 2009-11
and superseded by AASB 2010-7, AASB 2010-10 and AASB
2014-1 – Part E.
AASB 2014-7 incorporates the consequential amendments
arising from the issuance of AASB 9 in December 2014.
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
Impact on the
Group financial
report
The Group has
not yet
determined the
potential effects
of the standard.
Retrospective
application is
generally
required.
Effective Dates
The standard
applies to
annual reporting
periods
beginning on or
after 1 January
2018.
The standard is
expected to be
initially applied
by the group for
the financial
year beginning
29 July 2018.
Title
Summary
AASB 9
Financial
Instruments
AASB 9 (Dec 2014) is a new principal standard which replaces
AASB 139. This new version supersedes AASB 9 issued in
December 2009 (as amended) and AASB 9 (issued in Dec
2010) and includes a model for classification and
measurement, a single forward-looking ‘expected loss’
impairment model and a substantially-reformed approach to
hedge accounting.
The final version of AASB 9 introduces a new expected-loss
impairment model that will require more timely recognition of
expected credit losses. Specifically, the new Standard requires
entities to account for expected credit losses from when
financial instruments are first recognised and to recognise full
lifetime expected losses on a timelier basis.
Amendments to AASB 9 (Dec 2009 and 2010 editions, as well
as AASB 2013-9) issued in December 2013 included the new
hedge accounting requirements, including changes to hedge
effectiveness testing, treatment of hedge costs, risk
components that can be hedged and disclosures.
AASB 9 includes requirements for a simpler approach to
classification and measurement of financial assets compared
with the requirements of AASB 139.
The main changes are described below:
Financial assets that are debt instruments will be classified
based on 1) the objective of the entity’s business model for
managing the financial assets; 2) the characteristics of the
contractual cash flows.
Allows an irrevocable election on initial recognition to
present gains and losses on investments in equity
instruments that are not held for trading in other
comprehensive income. Dividends in respect of these
investments that are a return on investment can be
recognised in profit or loss and there is no impairment or
recycling on disposal of investment.
Financial assets can be designated and measured at fair
value through profit and loss at initial recognition if doing so
eliminates or significantly reduces the measurement or
recognition inconsistency that would arise from measuring
assets or liabilities, or recognising gains and losses on
them, on different bases.
Where the fair value option is used for financial liabilities the
change in fair value is to be accounted for as follows:
The change attributable to changes in credit risk are
presented in other comprehensive income.
The remaining change is presented in profit or loss.
AASB 9 also removes the volatility in profit or loss that was
caused by changes in the credit risk of liabilities elected to be
measured at fair value. The change in accounting means that
gains caused by deterioration of an entity’s own credit risk on
such liabilities are no longer recognised in profit or loss.
Consequential amendments were also made to other
standards as a result of AASB 9, introduced by AASB 2009-11
and superseded by AASB 2010-7, AASB 2010-10 and AASB
2014-1 – Part E.
AASB 2014-7 incorporates the consequential amendments
arising from the issuance of AASB 9 in December 2014.
Annual Report 2016 46
46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(d)
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 judgements 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.
Further details of the nature of these judgements, estimates and assumptions and conditions
may be found in the relevant notes to the financial statements.
(i) Significant accounting judgements
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 sale must be highly probable. For the sale to be highly probable,
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.
Impairment of non-financial assets other than goodwill and indefinite life intangibles
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 year.
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.
(CONTINUED)
Taxation
(i) Significant accounting judgements (continued)
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 profit or loss in 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 13 for details of these assumptions and the potential impact
of changes to the assumptions.
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 an appropriate valuation model and taking into
account the terms and conditions upon which the instruments were granted. The related
valuation models and assumptions are detailed in note 28.
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.
47 Premier Investments Limited
47
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(CONTINUED)
(i) Significant accounting judgements (continued)
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 profit or loss in 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 13 for details of these assumptions and the potential impact
of changes to the assumptions.
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 an appropriate valuation model and taking into
account the terms and conditions upon which the instruments were granted. The related
valuation models and assumptions are detailed in note 28.
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.
Annual Report 2016 48
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d)
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
(CONTINUED)
(ii) Significant accounting estimates and assumptions
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.
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
(f)
INVESTMENT IN ASSOCIATES
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.
49 Premier Investments Limited
49
50
(e)
BASIS OF CONSOLIDATION (CONTINUED)
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 consolidated financial statements 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.
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
BASIS OF CONSOLIDATION (CONTINUED)
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 consolidated financial statements 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.
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.
Annual Report 2016 50
50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f)
INVESTMENT IN ASSOCIATES (CONTINUED)
(g)
BUSINESS COMBINATIONS (CONTINUED)
Under the equity method, investments in the associates are initially recognised at 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.
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.
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.
51 Premier Investments Limited
51
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g)
BUSINESS COMBINATIONS (CONTINUED)
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.
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.
Annual Report 2016 52
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j)
FOREIGN CURRENCY TRANSLATION
(m)
PROPERTY, PLANT AND EQUIPMENT
Items included in the financial statements of each of the Group’s entities are measured using
the currency of the primary economic environment in which the entity operates (‘the functional
currency’). Both the functional and presentation currency of Premier Investments Limited and
its Australian subsidiaries is 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 profit
or loss in the statement of comprehensive income.
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.
(k)
CASH AND CASH EQUIVALENTS
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;
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.
Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated direct costs necessary to make the sale.
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 10 years
Leased plant and equipment 2 to 5 years
Other plant and equipment 2 to 20 years
Freehold land is not depreciated.
(n)
GOODWILL
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 of disposal 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.
Impairment losses recognised for goodwill are not subsequently reversed.
53 Premier Investments Limited
53
54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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 10 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 of disposal 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.
(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.
Annual Report 2016 54
54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o)
INTANGIBLE ASSETS (excluding goodwill)
(p)
OTHER FINANCIAL ASSETS
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. The recoverable
amount is the asset’s 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 of disposal 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.
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
Indefinite
Method used
Internally
generated/acquired
Impairment
test/recoverable
amount testing
Not amortised or
revalued
Amortised over the
term of the lease
Not amortised or
revalued
Acquired
Acquired
Acquired
Annually; for
indicators of
impairment
Annually; for
indicators of
impairment
Amortisation method
reviewed at each
financial year end;
reviewed annually
for indicators of
impairment
A financial instrument is any contract that gives 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.
(q)
OTHER FINANCIAL LIABILITIES
55 Premier Investments Limited
55
56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p)
OTHER FINANCIAL ASSETS
A financial instrument is any contract that gives 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.
(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.
Annual Report 2016 56
56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q)
OTHER FINANCIAL LIABILITIES (CONTINUED)
(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,
or to realise the assets and settle the liabilities simultaneously.
(r)
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
(t)
LEASES
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 remeasured 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 and are considered to
be effective, 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 other
comprehensive income and accumulated in the cash flow hedge reserve in equity, while the
ineffective portion is recognised in profit or loss. Amounts taken to equity are reclassified out
of equity and included in the measurement of the hedge transaction (finance costs or
inventory purchases) when the forecast transaction occurs.
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
reclassified to profit or loss in 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)
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.
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.
(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.
(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 unavoidable costs of
continuing with the contract. Before a provision is established, the Group recognises any
impairment loss on the assets associated with the contract.
57 Premier Investments Limited
57
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(s)
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.
(t)
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.
(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.
(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 unavoidable costs of
continuing with the contract. Before a provision is established, the Group recognises any
impairment loss on the assets associated with the contract.
Annual Report 2016 58
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(w)
SUPPLY CHAIN TRANSFORMATION PROVISIONS
(aa)
REVENUE RECOGNITION
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 current annual leave
The provisions for employee entitlements to wages, salaries and annual leave (which
is expected to be settled wholly within 12 months of the reporting date) 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 and non-current annual leave
The liability for long service leave and non-current annual leave (which is not expected
to be settled wholly within 12 months of the reporting date) 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
high quality corporate 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 LEASE INCENTIVES
Lease incentives are capitalised in the financial statements when received and credited to
rent expense over the term of the store lease to which they relate.
(z)
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.
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
(iv)
Lay-by sales
Revenue is recognised when the Group’s right to receive the payment is established.
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
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 profit or loss. 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.
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.
non-redemption rates.
(bb)
INCOME TAX
59 Premier Investments Limited
59
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(aa)
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.
(bb)
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 profit or loss. 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.
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.
Annual Report 2016 60
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(bb)
INCOME TAX (CONTINUED)
(bb)
INCOME TAX (CONTINUED)
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.
Tax consolidation
Premier Investments Limited and its wholly owned Australian controlled entities have
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.
(cc)
OTHER TAXES
(GST) except:
Revenues, expenses and assets are recognised net of the amount of goods and services tax
-
-
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.
(dd)
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.
(ee)
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.
(ff)
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 plan in place to provide these benefits is a long-term incentive plan known
as the performance rights plan (“PRP”).
61 Premier Investments Limited
61
62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(bb)
INCOME TAX (CONTINUED)
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.
(cc)
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.
(dd)
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.
(ee)
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.
(ff)
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 plan in place to provide these benefits is a long-term incentive plan known
as the performance rights plan (“PRP”).
Annual Report 2016 62
62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
(ff)
SHARE-BASED REMUNERATION SCHEMES (CONTINUED)
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 in profit or loss, 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 profit or loss in 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.
(gg)
COMPARATIVES
The current reporting period, 26 July 2015 to 30 July 2016, represents 53 weeks and the
comparative reporting period is from 27 July 2014 to 25 July 2015 which represents 52 weeks.
From time to time, management may change prior year comparatives to reflect classifications
applied in the current year.
The Group’s principal financial instruments comprise cash and short-term deposits, derivative financial
instruments, receivables, payables, bank overdraft and interest-bearing liabilities.
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
Bank loans AUD
Bank loans (NZD 20.0 million)
Net Financial Assets
NOTES
26
16
16
CONSOLIDATED
2016
$’000
283,233
1,373
284,606
105,805
-
105,805
178,801
2015
$’000
281,572
2,464
284,036
86,623
18,018
104,641
179,395
63 Premier Investments Limited
63
64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
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 and interest-bearing liabilities.
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
Bank loans AUD
Bank loans (NZD 20.0 million)
Net Financial Assets
NOTES
26
16
16
CONSOLIDATED
2016
$’000
283,233
1,373
284,606
105,805
-
105,805
178,801
2015
$’000
281,572
2,464
284,036
86,623
18,018
104,641
179,395
Annual Report 2016 64
64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Interest rate risk (Continued)
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group’s objective of managing interest rate risk is to
minimise the Group’s exposure to fluctuations in interest rates that might impact its interest revenue,
interest expense and cash flow. To manage this risk, the Group locks a portion of its cash and cash
equivalents into term deposits. The maturity of term deposits is determined based on the Group’s cash
flow forecast. The Group manages its interest rate risk relating to long-term debt obligations by having
access to both fixed and variable rate debt which can be drawn down.
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 (2015:100) 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, whilst a negative number indicates a reduction in profit after tax.
Judgements of reasonably possible movements:
CONSOLIDATED
+1.0% (100 basis points)
-1.0% (100 basis points)
POST-TAX PROFIT
HIGHER/(LOWER)
2016
$000
1,242
(1,242)
2015
$000
1,236
(1,236)
The movement in profits are due to lower interest expense and interest income 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 years’ 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.
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.
65 Premier Investments Limited
65
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Credit risk (Continued)
With respect to credit risk arising from the other financial assets of the Group, which comprise mainly
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 30 July 2016, the maximum exposure to credit risk of the Group is the amount
guaranteed as disclosed in note 34.
Foreign operations
The Group has operations in New Zealand, Singapore and the United Kingdom. As a result,
movements in the Australian Dollar and New Zealand Dollar (“AUD/NZD”) exchange rate, Australian
Dollar and Singapore Dollar (“AUD/SGD”) exchange rate, and the Australian Dollar and Pound Sterling
(“AUD/GBP”) exchange rate affect the Group’s statement of financial position and results from
operations. From time to time the Group obtains 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, on occasion,
hedges its cash flow exposure in movements in the AUD/SGD and AUD/GBP.
During the 2016 financial year, the Group commenced operations in Malaysia and Hong Kong. As a
result, movement in the Australian Dollar and Malaysian Ringgit (“AUD/MYR”) exchange rate, as well
as the Australian Dollar and Hong Kong Dollar (“AUD/HKD”) exchange rate may affect the Group’s
statement of financial position and results from operations.
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 70% of the Group’s purchases are
denominated in USD, which is not the functional currency of the Australian, New Zealand, Singapore,
United Kingdom, Malaysia or Hong Kong operating entities.
The Group considers its exposure to USD arising from the purchases of inventory to be a long-
term and ongoing exposure. In order to protect against exchange rate movements, the Group
enters into forward exchange contracts to purchase US Dollars.
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, New Zealand Dollar, Singapore Dollar, Pound Sterling,
Hong Kong Dollar and Malaysian Ringgit against the currency risk being hedged, relative to
long-term indicators;
the Group’s strategic decision-making horizon; and
other factors considered relevant by the Board
Annual Report 2016 66
66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Foreign currency transactions (Continued)
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
(USD), New Zealand Dollar (NZD), Singapore Dollar (SGD), Pound Sterling (GBP), Hong Kong Dollar
(HKD) and Malaysian Ringgit (MYR):
2016
CONSOLIDATED
USD
$’000
NZD
$’000
SGD
$’000
GBP
$’000
HKD
$’000
MYR
$’000
FINANCIAL ASSETS
Cash and cash equivalents
205
3,024
1,486
2,517
772
1,101
Derivative financial assets
FINANCIAL LIABILITIES
1,636
1,841
-
-
-
-
-
3,024
1,486
2,517
772
1,101
Trade and other payables
18,597
2,512
Derivative financial liabilities
16,190
-
34,787
2,512
289
-
289
176
-
176
51
-
51
-
-
-
NET EXPOSURE
(32,946)
512
1,197
2,341
721
1,101
2015
CONSOLIDATED
USD
$’000
NZD
$’000
SGD
$’000
GBP
$’000
HKD
$’000
MYR
$’000
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
156
195
Derivative financial assets
32,566
3,822
2,670
2,933
-
-
-
-
-
-
32,917
3,822
2,670
2,933
FINANCIAL LIABILITIES
Trade and other payables
22,781
4,803
372
539
Derivative financial liabilities
127
-
Bank loans
-
18,018
-
-
-
-
22,908
22,821
372
539
NET EXPOSURE
10,009
(18,999)
2,298
2,394
-
-
-
-
-
-
-
-
-
67 Premier Investments Limited
-
-
-
-
-
-
-
-
-
67
RISK EXPOSURES AND RESPONSES (CONTINUED)
Foreign currency transactions (Continued)
The Group has forward currency contracts 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 30).
Foreign currency risk
The following sensitivity is based on the foreign exchange risk exposures in existence at the reporting date:
POST-TAX PROFIT
HIGHER/(LOWER)
OTHER COMPREHENSIVE INCOME
HIGHER/(LOWER)
Judgements of
reasonably possible
movements:
CONSOLIDATED
AUD/USD + 2.5%
AUD/USD – 10.0%
AUD/NZD + 2.5%
AUD/NZD – 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%
AUD/HKD + 2.5%
AUD/HKD –10.0%
AUD/MYR + 2.5
AUD/MYR –10.0%
2016
$000
(5,248)
29,991
2015
$000
(4,023)
16,997
2016
$000
(58)
326
(12)
57
-
-
(29)
133
(57)
260
(18)
80
(27)
122
2015
$000
(311)
1,318
463
(2,111)
(34)
153
(56)
255
(58)
266
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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 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 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.
-
-
-
-
-
-
-
-
-
-
-
-
68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Foreign currency transactions (Continued)
The Group has forward currency contracts 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 30).
Foreign currency risk
The following sensitivity is based on the foreign exchange risk exposures in existence at the reporting date:
POST-TAX PROFIT
HIGHER/(LOWER)
OTHER COMPREHENSIVE INCOME
HIGHER/(LOWER)
Judgements of
reasonably possible
movements:
CONSOLIDATED
AUD/USD + 2.5%
AUD/USD – 10.0%
AUD/NZD + 2.5%
AUD/NZD – 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%
AUD/HKD + 2.5%
AUD/HKD –10.0%
AUD/MYR + 2.5
AUD/MYR –10.0%
2016
$000
(58)
326
(12)
57
-
-
(29)
133
(57)
260
(18)
80
(27)
122
2015
$000
(311)
1,318
463
(2,111)
(34)
153
(56)
255
(58)
266
-
-
-
-
2016
$000
(5,248)
29,991
2015
$000
(4,023)
16,997
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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 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 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.
Annual Report 2016 68
68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (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)
Liquidity risk
Fair value of financial assets and liabilities
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.
The Group has, at reporting date, $30 million (2015: $35 million) cash held in deposit with 11am at call
and the remaining $254 million (2015: $246 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 30
July 2016 and 25 July 2015.
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.
At reporting date, the remaining contractual maturities of the Group’s financial liabilities are:
value measurement as a whole:
2016
MATURITY
< 6 MONTHS
MATURITY
MATURITY
MATURITY
6 – 12 MONTHS
12 – 24 MONTHS
> 24 MONTHS
CONSOLIDATED
$’000
$’000
$’000
$’000
FINANCIAL LIABILITIES
Trade and other payables
Bank loans
Forward currency contracts
72,965
-
143,932
216,897
-
-
125,465
125,465
-
86,805
140,425
227,230
-
19,000
-
19,000
2015
MATURITY
< 6 MONTHS
MATURITY
MATURITY
MATURITY
6 – 12 MONTHS
12 – 24 MONTHS
> 24 MONTHS
CONSOLIDATED
$’000
$’000
$’000
$’000
FINANCIAL LIABILITIES
Trade and other payables
73,723
Bank loans
Finance leases
Forward currency contracts
-
14
123,035
196,772
-
-
-
-
-
-
103,123
103,123
19,605
19,605
-
105,018
-
-
105,018
The Group measures financial instruments, such as derivatives and assets held for sale, 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, based on the lowest level input that is significant to the fair
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.
liabilities:
The following table provides the fair value measurement hierarchy of the Group’s financial assets and
69 Premier Investments Limited
69
70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Fair value of financial assets and liabilities
The Group measures financial instruments, such as derivatives and assets held for sale, 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, 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.
The following table provides the fair value measurement hierarchy of the Group’s financial assets and
liabilities:
Annual Report 2016 70
70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
3
FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
RISK EXPOSURES AND RESPONSES (CONTINUED)
Fair value of financial assets and liabilities (continued)
CONSOLIDATED
FINANCIAL YEAR ENDED 30 JULY 2016
FINANCIAL YEAR ENDED 25 JULY 2015
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
FINANCIAL ASSETS
Asset classified as
held for sale
Foreign Exchange
Contracts
FINANCIAL LIABILITIES
Foreign Exchange
Contracts
-
-
-
-
-
-
1,636
1,636
-
-
-
-
1,636
1,636
16,190
16,190
- 16,190
- 16,190
-
-
-
-
-
-
1,000
1,000
32,566
-
32,566
32,566
1,000 33,566
127
127
-
-
127
127
There have been no transfers between Level 1 and Level 2 during the financial year.
At 30 July 2016 and 25 July 2015 the fair values of cash and cash equivalents, short-term receivables
and payables approximate their carrying values. The carrying value of interest bearing liabilities is
considered 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 fair value on
the date which the contract is entered into, 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 AND OTHER INCOME
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
TOTAL OTHER REVENUE
TOTAL REVENUE
OTHER INCOME
Gain on ineffective cash flow hedges
Royalty and licence fees
Other persons
Insurance proceeds
Other
TOTAL OTHER INCOME
CONSOLIDATED
2016
$’000
2015
$’000
1,049,226
-
1,049,226
1,057,454
318
22
7,702
186
7,888
8,228
-
63
-
1,444
1,507
945,706
1,956
947,662
385
17
9,680
148
9,828
10,230
957,892
2,224
99
159
1,495
3,977
TOTAL REVENUE AND OTHER INCOME
1,058,961
961,869
71 Premier Investments Limited
71
72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
4
REVENUE AND OTHER INCOME
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
TOTAL OTHER REVENUE
TOTAL REVENUE
OTHER INCOME
Gain on ineffective cash flow hedges
Royalty and licence fees
Other persons
Insurance proceeds
Other
TOTAL OTHER INCOME
CONSOLIDATED
2016
$’000
2015
$’000
1,049,226
-
1,049,226
318
22
7,702
186
7,888
8,228
1,057,454
-
63
-
1,444
1,507
945,706
1,956
947,662
385
17
9,680
148
9,828
10,230
957,892
2,224
99
159
1,495
3,977
TOTAL REVENUE AND OTHER INCOME
1,058,961
961,869
Annual Report 2016 72
72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
5
EXPENSES AND LOSSES
CONSOLIDATED
NOTES
2016
$’000
2015
$’000
12
12
12
13
EXPENSES
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 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 INCLUDE:
Foreign exchange losses
Loss on ineffective cash flow hedges
Net loss on disposal of property, plant and
equipment
23,842
21,797
12
-
47
771
23,854
22,615
27
62
23,881
22,677
33
4,870
9
4,912
169,511
35,196
204,707
191
2,010
413
28
5,697
13
5,738
163,543
30,269
193,812
73
-
758
EXPENSE ASSOCIATED WITH DISPOSAL OF ASSET HELD FOR SALE
In the 2015 financial year, the Group resolved to dispose of its 50% interest in a joint venture entity, Just
Kor Fashion Group (Pty) Ltd, which was involved in retailing of the Jay Jays concept in South Africa.
The commercial terms of the sale had been agreed as at year-end, with transfer of the consideration
completed in August 2015.
As a result of the disposal, the Group reclassified its investment in associate to an asset classified as
held for sale in the 2015 financial year. The Group incurred an impairment loss of $765,000 in the 2015
financial year on revaluing its investment classified as held for sale at fair value. Other costs associated
with the sale of the investment amounted to $959,000, and were expensed in 2015.
Refer to note 11 for further information on the asset held for sale at the end of the previous year.
73 Premier Investments Limited
73
6
INCOME TAX
The major components of income tax expense are:
(a)
INCOME TAX RECOGNISED IN PROFIT OR 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
Adjustments in respect of current income tax of
previous years
Difference in exchange rates
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
EQUITY
INCOME TAX EXPENSE (BENEFIT) REPORTED IN
(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% (2015: 30%)
Adjustment in respect of current income tax of
previous years
Effect of exchange rates
Expenditure not allowable for income tax purposes
Effect of different rates of tax on overseas income
Income not assessable for tax purposes
Other
AGGREGATE INCOME TAX EXPENSE
CONSOLIDATED
2016
$’000
2015
$’000
38,044
(90)
1,841
(450)
(136)
30,776
(1,031)
(1,057)
155
-
39,209
28,843
(13,495)
(13,495)
10,612
10,612
143,083
116,945
42,925
(609)
(38)
751
(1,641)
(3,749)
1,570
39,209
35,084
(1,031)
(337)
43
(533)
(3,849)
(534)
28,843
74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
6
(a)
(b)
(c)
INCOME TAX
The major components of income tax expense are:
INCOME TAX RECOGNISED IN PROFIT OR 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
Adjustments in respect of current income tax of
previous years
Difference in exchange rates
INCOME TAX EXPENSE REPORTED IN THE
STATEMENT OF COMPREHENSIVE INCOME
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
INCOME TAX EXPENSE (BENEFIT) REPORTED IN
EQUITY
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% (2015: 30%)
Adjustment in respect of current income tax of
previous years
Effect of exchange rates
Expenditure not allowable for income tax purposes
Effect of different rates of tax on overseas income
Income not assessable for tax purposes
Other
AGGREGATE INCOME TAX EXPENSE
CONSOLIDATED
2016
$’000
2015
$’000
38,044
(90)
1,841
(450)
(136)
30,776
(1,031)
(1,057)
155
-
39,209
28,843
(13,495)
(13,495)
10,612
10,612
143,083
116,945
42,925
(609)
(38)
751
(1,641)
(3,749)
1,570
39,209
35,084
(1,031)
(337)
43
(533)
(3,849)
(534)
28,843
Annual Report 2016 74
74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
6
(d)
INCOME TAX (CONTINUED)
RECOGNISED DEFERRED TAX ASSETS AND
LIABILITIES
DEFERRED TAX RELATES TO THE FOLLOWING:
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
Leased plant and equipment
Other
Lease liability
CONSOLIDATED
2016
$’000
2015
$’000
(703)
(47,892)
4,367
70
6,431
5,438
(1,019)
(6,032)
-
887
-
(5)
(46,322)
(9,731)
13
5,100
5,109
(262)
(4,817)
(4)
106
4
NET DEFERRED TAX LIABILITIES
(38,453)
(50,809)
REFLECTED IN THE STATEMENT OF FINANCIAL
POSITION AS FOLLOWS:
Deferred tax assets
Deferred tax liabilities
NET DEFERRED TAX LIABILITIES
7
DIVIDENDS PAID AND PROPOSED
RECOGNISED DIVIDEND AMOUNTS
Declared and paid during the year:
Interim franked dividends for 2016:
23 cents per share (2015: 21 cents)
Special franked dividends for 2016:
nil cents per share (2015: 9 cents)
Final franked dividends for 2015:
21 cents per share (2014: 20 cents)
TOTAL DECLARED AND PAID DURING THE YEAR
UNRECOGNISED DIVIDEND AMOUNTS
Final franked dividend for 2016:
25 cents per share (2015: 21 cents)
18,858
(57,311)
(38,453)
13,476
(64,285)
(50,809)
36,129
-
32,840
68,969
32,823
14,067
31,143
78,033
39,291
32,840
CONSOLIDATED
2016
$’000
2015
$’000
198,813
193,190
27,434
29,042
(16,839)
209,408
(14,074)
208,158
CONSOLIDATED
2016
$’000
2015
$’000
16,461
-
12,963
1,378
16,461
14,341
7
DIVIDENDS PAID AND PROPOSED (CONTINUED)
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% (2015: 30%)
franking credits that will arise from the payment
of income tax payable 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
The tax rate at which paid dividends have been franked is 30% (2015: 30%). Dividends proposed will be
franked at the rate of 30% (2015: 30%).
8
TRADE AND OTHER RECEIVABLES
CURRENT
Sundry debtors
Associate
RECEIVABLES
(a)
Impairment losses
CARRYING AMOUNT OF TRADE AND OTHER
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
year ended 30 July 2016 (2015: $nil). During the year, no bad debt expense (2015: $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
(c)
Fair value and credit risk
For terms and conditions of related party receivables refer to Note 27.
Due to the short-term nature of these receivables, their carrying value is considered 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.
75 Premier Investments Limited
75
76
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
7
DIVIDENDS PAID AND PROPOSED (CONTINUED)
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% (2015: 30%)
franking credits that will arise from the payment
of income tax payable 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
2016
$’000
2015
$’000
198,813
193,190
27,434
29,042
(16,839)
209,408
(14,074)
208,158
The tax rate at which paid dividends have been franked is 30% (2015: 30%). Dividends proposed will be
franked at the rate of 30% (2015: 30%).
8
TRADE AND OTHER RECEIVABLES
CURRENT
Sundry debtors
Associate
CARRYING AMOUNT OF TRADE AND OTHER
RECEIVABLES
(a)
Impairment losses
CONSOLIDATED
2016
$’000
2015
$’000
16,461
-
12,963
1,378
16,461
14,341
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
year ended 30 July 2016 (2015: $nil). During the year, no bad debt expense (2015: $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 27.
(c)
Fair value and credit risk
Due to the short-term nature of these receivables, their carrying value is considered 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.
Annual Report 2016 76
76
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
9
INVENTORIES
The valuation policy adopted in respect of
the following is set out in Note 2(l)
Finished goods
TOTAL INVENTORIES AT THE LOWER OF
COST AND NET REALISABLE VALUE
10
OTHER ASSETS
CURRENT
Deposits and prepayments
TOTAL OTHER CURRENT ASSETS
11
ASSET CLASSIFIED AS HELD FOR SALE
Investment in Just Kor Fashion Group (Pty) Ltd
TOTAL ASSETS HELD FOR SALE
CONSOLIDATED
2016
$’000
2015
$’000
123,556
111,814
123,556
111,814
11,694
11,694
-
-
6,309
6,309
1,000
1,000
INVESTMENT IN JUST KOR FASHION GROUP (PTY) LTD
Just Jeans Group Pty Ltd, a subsidiary of Premier Investments Limited, had a 50% interest in a joint venture
entity, Just Kor Fashion Group (Pty) Ltd, which was involved in retailing of the Jay Jays concept in South
Africa. During the second half of the 2015 financial year, the Group resolved to dispose of its 50% interest
in the joint venture entity. As a result of the disposal, the group ceased equity accounting for its investment
in the joint venture and classified the fair value of the investment as an asset held for sale.
The commercial terms of the sale was agreed at the end of the 2015 financial year, with settlement of the
fair value completed in August 2015.
As a result of the reclassification from investment in associate to asset held for sale, and the subsequent
revaluing to fair value of the asset held for sale, an impairment loss of $765,000 was recognised in the 2015
financial year.
Refer to note 14 for further details of the amounts previously recognised as an investment in associate.
The investment in the joint venture formed part of the Retail Operating Segment in the financial statements.
Refer to note 22, Operating Segments.
CONSOLIDATED
NOTES
2016
$’000
2015
$’000
12
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 property, plant and equipment are set
out below:
Land
At beginning of the financial year
Net carrying amount at end of financial year
At beginning of the financial year
Buildings
Depreciation
Net carrying amount at end of financial year
Plant and equipment
At beginning of the financial year
Additions
Disposals
Transfers from capital works in progress
Exchange differences
Impairment – plant and equipment
Depreciation
Net carrying amount at end of financial year
Leased plant and equipment
At beginning of the financial year
Amortisation
Net carrying amount at end of financial year
Capital works in progress
At beginning of the financial year
Additions
Transfers to plant and equipment
Net carrying amount at end of financial year
TOTAL PROPERTY, PLANT AND EQUIPMENT
5
5
5
5
3,203
14,985
(807)
14,178
242,121
(122,084)
120,037
343
(343)
-
1,819
139,237
3,203
3,203
14,553
(375)
14,178
103,841
40,858
1,928
(1,186)
(1,937)
-
(23,467)
120,037
12
(12)
-
1,928
1,819
(1,928)
1,819
139,237
3,203
14,985
(432)
14,553
213,916
(110,075)
103,841
343
(331)
12
1,928
123,537
3,203
3,203
14,928
(375)
14,553
90,838
34,598
-
(857)
1,455
(771)
(21,422)
103,841
59
(47)
12
1,928
-
-
1,928
123,537
77 Premier Investments Limited
77
78
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
12
PROPERTY, PLANT AND EQUIPMENT
CONSOLIDATED
NOTES
2016
$’000
2015
$’000
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 property, plant and equipment are set
out below:
Land
At beginning of the financial year
Net carrying amount at end of financial year
Buildings
At beginning of the financial year
Depreciation
Net carrying amount at end of financial year
Plant and equipment
At beginning of the financial year
Additions
Transfers from capital works in progress
Disposals
Exchange differences
Impairment – plant and equipment
Depreciation
Net carrying amount at end of financial year
Leased plant and equipment
At beginning of the financial year
Amortisation
Net carrying amount at end of financial year
Capital works in progress
At beginning of the financial year
Additions
Transfers to plant and equipment
Net carrying amount at end of financial year
TOTAL PROPERTY, PLANT AND EQUIPMENT
5
5
5
5
3,203
14,985
(807)
14,178
242,121
(122,084)
120,037
343
(343)
-
1,819
139,237
3,203
3,203
14,553
(375)
14,178
103,841
40,858
1,928
(1,186)
(1,937)
-
(23,467)
120,037
12
(12)
-
1,928
1,819
(1,928)
1,819
139,237
3,203
14,985
(432)
14,553
213,916
(110,075)
103,841
343
(331)
12
1,928
123,537
3,203
3,203
14,928
(375)
14,553
90,838
34,598
-
(857)
1,455
(771)
(21,422)
103,841
59
(47)
12
-
1,928
-
1,928
123,537
Annual Report 2016 78
78
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
12
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
LAND AND BUILDINGS
The land and buildings with a combined carrying amount of $17,381,000 have been pledged to secure
certain interest-bearing borrowings of the Group (refer to note 16).
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 five year period. Cash flows beyond the five 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% (2015: 10.5%) and the cash flows
beyond the five year period are extrapolated using a growth rate of 3% (2015: 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. No impairment loss was recognised during the current financial year
(2015: impairment loss recognised of $771,000).
13
INTANGIBLES
THE PERIOD
RECONCILIATION OF CARRYING AMOUNTS AT THE BEGINNING AND END OF
YEAR ENDED 30 JULY 2016
As at 26 July 2015 net of
accumulated amortisation and
impairment
Trademark registrations
Amortisation
Exchange differences
As at 30 July 2016 net of
accumulated amortisation and
impairment
AS AT 30 JULY 2016
Cost (gross carrying amount)
Accumulated amortisation and
impairment
Net carrying amount
YEAR ENDED 25 JULY 2015
As at 27 July 2014 net of
accumulated amortisation and
impairment
Additions
Trademark registrations
Amortisation
Exchange differences
As at 25 July 2015 net of
accumulated amortisation and
impairment
AS AT 25 JULY 2015
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
123
-
(27)
4
854,711
128
(27)
4
477,085
376,179
1,452
100
854,816
477,085
376,179
989
855,705
477,085
376,179
(889)
(889)
100
854,816
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
477,085
376,179
1,282
854,572
26
158
(62)
-
1
158
42
(62)
1
477,085
376,179
1,324
123
854,711
477,085
376,179
965
855,553
-
-
477,085
376,179
(842)
123
(842)
854,711
1,324
128
-
-
1,452
-
1,452
42
-
-
-
1,324
-
1,324
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.
79 Premier Investments Limited
79
80
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
13
INTANGIBLES
RECONCILIATION OF CARRYING AMOUNTS AT THE BEGINNING AND END OF
THE PERIOD
YEAR ENDED 30 JULY 2016
As at 26 July 2015 net of
accumulated amortisation and
impairment
Trademark registrations
Amortisation
Exchange differences
As at 30 July 2016 net of
accumulated amortisation and
impairment
AS AT 30 JULY 2016
Cost (gross carrying amount)
Accumulated amortisation and
impairment
Net carrying amount
YEAR ENDED 25 JULY 2015
As at 27 July 2014 net of
accumulated amortisation and
impairment
Additions
Trademark registrations
Amortisation
Exchange differences
As at 25 July 2015 net of
accumulated amortisation and
impairment
AS AT 25 JULY 2015
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
-
-
-
-
-
1,324
128
-
-
123
-
(27)
4
854,711
128
(27)
4
477,085
376,179
1,452
100
854,816
477,085
376,179
-
-
477,085
376,179
477,085
-
376,179
-
-
-
-
-
-
-
1,452
-
1,452
1,282
-
42
-
-
989
855,705
(889)
(889)
100
854,816
26
158
-
(62)
1
854,572
158
42
(62)
1
477,085
376,179
1,324
123
854,711
477,085
376,179
-
-
477,085
376,179
1,324
-
1,324
965
855,553
(842)
123
(842)
854,711
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 2016 80
80
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
13
INTANGIBLES (CONTINUED)
IMPAIRMENT TESTING OF GOODWILL
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 2016 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 2017 financial year and
are projected for a further four years based on estimated growth rates of 3.4% to 3.5% (2015: 3.4%). 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% (2015: 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 10.1% (2015: 10.7%). 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
(2015: 3.5% and 8.5%).
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 2016 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 2017 financial year and are projected for a further four years based
on estimated growth rates.
The extrapolated growth rates at which cash flows have been discounted for the individual brands within each
of the CGU groups have been summarised in the table on the following page. Cash flows beyond the five
year period are extrapolated using a growth rate of 3% (2015: 3%), which reflects the long-term growth
expectation beyond the five year projection.
13
INTANGIBLES (CONTINUED)
IMPAIRMENT TESTING OF BRAND NAMES (CONTINUED)
The extrapolated growth rates at which cash flows have been projected 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
3.5% to 4%
3.5% to 5%
3%
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.
The post-tax discount rate applied to the cash flow projections for each of the three CGU groups is 9.0%
(2015: 9.7%). 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 the possible change in expected sales growth, net royalty rates and discount
rates applied to brands within the relevant CGU groups, each of which have been subjected 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 groups to exceed its recoverable amount.
81 Premier Investments Limited
81
82
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
13
INTANGIBLES (CONTINUED)
IMPAIRMENT TESTING OF BRAND NAMES (CONTINUED)
The extrapolated growth rates at which cash flows have been projected 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
3.5% to 4%
3.5% to 5%
3%
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.
The post-tax discount rate applied to the cash flow projections for each of the three CGU groups is 9.0%
(2015: 9.7%). 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%
(2015: 3.5% and 8.5%).
Management has considered the possible change in expected sales growth, net royalty rates and discount
rates applied to brands within the relevant CGU groups, each of which have been subjected 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 groups to exceed its recoverable amount.
Annual Report 2016 82
82
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
CONSOLIDATED
14
INVESTMENTS IN ASSOCIATES (CONTINUED)
NOTES
2016
$’000
2015
$’000
Breville Group Limited
14
INVESTMENTS IN ASSOCIATES
Movements in carrying amounts
Carrying amount at the beginning of the
financial year
Increase in investment in associate
Share of profit after income tax
Share of other comprehensive income
Foreign currency translation of investment
Dividends received
Impairment loss on investment in associate
Transferred to asset classified as held for sale
5
11
209,477
29
13,792
(70)
-
(9,836)
-
-
188,418
16,492
13,144
2,728
88
(9,628)
(765)
(1,000)
Investments in associates
213,392
209,477
The following table illustrates summarised financial information relating to the Group’s investment in Breville
Just Kor Fashion Group (Pty) Ltd
Just Jeans Group Pty Ltd, a subsidiary of Premier Investments Limited, had a 50% interest in a joint venture
entity, namely Just Kor Fashion Group (Pty) Ltd. Just Kor Fashion Group (Pty) Ltd a small proprietary
company incorporated in South Africa, was involved in retailing of the Jay Jays concept in South Africa. Its
functional currency was South African Rand.
During the second half of the 2015 financial year, the Group resolved to dispose of its 50% interest in the
joint venture entity. As a result of the disposal, the Group ceased equity accounting for its investment in the
joint venture and classified the fair value of the investment as an asset held for sale. The commercial terms
of the sale was agreed at the end of the 2015 financial year, with transfer of the fair value completed in
August 2015.
As a result of the reclassification from investment in associate to asset classified as held for sale and the
subsequent revaluing to fair value, an impairment loss of $765,000 was recognised in the 2015 financial
year. Prior to classifying the investment as held for sale, the Group’s share of the profit in its investment in
the associate for the first half of the 2015 financial year was $311,850.
The following table illustrates summarised financial information relating to the Group’s investment in Just
Kor Fashion Group (Pty) Ltd for the 2015 financial year:
EXTRACT OF THE ASSOCIATE’S STATEMENT OF
COMPREHENSIVE INCOME
Revenue
Profit after income tax
Group’s share of profit after income tax
2016
$’000
26 WEEKS ENDED 26
JANUARY 2015
$’000
-
-
-
18,212
624
312
As at 30 July 2016, Premier Investments Limited holds 27.5% (2015: 27.5%) of Breville Group Limited, a
company incorporated in Australia whose shares are quoted on the Australian Securities Exchange. The
principal activities of Breville Group Limited involves the innovation, development, marketing and distribution
of small electrical appliances.
As at 30 July 2016, the fair value of the Group’s interest in Breville Group Limited as determined based on
the quoted market price was $282,555,326 (2015: $228,873,056).
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 after tax in its investment in
associate for the year was $13,792,283 (2015: $12,832,332).
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 2016 have been used.
Group Limited:
POSITION
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
NET ASSETS
EXTRACT OF THE ASSOCIATE’S STATEMENT OF FINANCIAL
30 JUNE 2016
$’000
30 JUNE 2015
$’000
258,512
111,455
369,967
(108,204)
(15,758)
(123,962)
246,005
254,808
106,464
361,272
(102,626)
(27,241)
(129,867)
231,405
Group’s share of associate’s net assets
67,627
63,613
EXTRACT OF THE ASSOCIATE’S STATEMENT OF
COMPREHENSIVE INCOME
30 JUNE 2016
$’000
30 JUNE 2015
$’000
Revenue
Profit after income tax
Other comprehensive (loss) income
576,573
50,172
(255)
527,036
46,680
9,889
Group’s share of profit after income tax
13,792
12,832
83 Premier Investments Limited
83
84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
14
INVESTMENTS IN ASSOCIATES (CONTINUED)
Breville Group Limited
As at 30 July 2016, Premier Investments Limited holds 27.5% (2015: 27.5%) of Breville Group Limited, a
company incorporated in Australia whose shares are quoted on the Australian Securities Exchange. The
principal activities of Breville Group Limited involves the innovation, development, marketing and distribution
of small electrical appliances.
As at 30 July 2016, the fair value of the Group’s interest in Breville Group Limited as determined based on
the quoted market price was $282,555,326 (2015: $228,873,056).
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 after tax in its investment in
associate for the year was $13,792,283 (2015: $12,832,332).
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 2016 have been used.
The following table illustrates summarised financial information relating to the Group’s investment in Breville
Group Limited:
EXTRACT OF THE ASSOCIATE’S STATEMENT OF FINANCIAL
POSITION
30 JUNE 2016
$’000
30 JUNE 2015
$’000
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
NET ASSETS
258,512
111,455
369,967
(108,204)
(15,758)
(123,962)
246,005
254,808
106,464
361,272
(102,626)
(27,241)
(129,867)
231,405
Group’s share of associate’s net assets
67,627
63,613
EXTRACT OF THE ASSOCIATE’S STATEMENT OF
COMPREHENSIVE INCOME
30 JUNE 2016
$’000
30 JUNE 2015
$’000
Revenue
Profit after income tax
Other comprehensive (loss) income
576,573
50,172
(255)
527,036
46,680
9,889
Group’s share of profit after income tax
13,792
12,832
Annual Report 2016 84
84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
15
TRADE AND OTHER PAYABLES
CURRENT
Trade creditors
Other creditors and accruals
TOTAL CURRENT
(a)
Fair values
CONSOLIDATED
2016
$’000
2015
$’000
31,632
41,333
72,965
38,162
35,561
73,723
Due to the short-term nature of these payables, their carrying values approximate their fair values.
(b)
Interest rate, foreign exchange rate and liquidity risk
Detail regarding interest rate, foreign exchange and liquidity risk is disclosed in Note 3.
CONSOLIDATED
NOTES
2016
$’000
2015
$’000
16
INTEREST-BEARING LIABILITIES
CURRENT
Lease liability
TOTAL CURRENT
23
NON-CURRENT
Bank loans* unsecured
Bank loans* unsecured (NZ$20.0 million)
Bank loans ** secured
TOTAL NON-CURRENT
-
-
86,805
-
19,000
105,805
105,805
14
14
67,623
18,018
19,000
104,641
104,641
* 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 Land and Buildings, representing the National Distribution Centre in Truganina, Victoria. The borrowing
is repayable in full at the end of 5 years, being January 2019.
(a)
Fair values
The carrying values of the Group’s current and non-current borrowings approximate their fair values.
(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.
85 Premier Investments Limited
85
17
PROVISIONS
CURRENT
Employee entitlements – Annual Leave
Employee entitlements – Long Service Leave
MOVEMENTS IN PROVISIONS
Supply chain transformation
Onerous leases
TOTAL CURRENT
NON-CURRENT
Supply chain transformation
Opening balance
Utilised during the period
Closing balance
Onerous leases
Opening balance
Charged to profit or loss
Utilised during the period
Closing balance
18
OTHER LIABILITIES
CURRENT
Deferred income
TOTAL CURRENT
NON-CURRENT
Deferred income
TOTAL NON-CURRENT
Employee entitlements – Long Service Leave
1,871
1,782
NATURE AND TIMING OF PROVISIONS
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.
CONSOLIDATED
2016
$’000
2015
$’000
CONSOLIDATED
2016
$’000
2015
$’000
10,903
5,554
-
-
16,457
497
(497)
-
-
-
202
(202)
6,967
6,967
14,809
14,809
10,209
5,189
497
202
16,097
1,100
(603)
497
541
36
(375)
202
5,635
5,635
12,411
12,411
86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
17
PROVISIONS
CURRENT
Employee entitlements – Annual Leave
Employee entitlements – Long Service Leave
Supply chain transformation
Onerous leases
TOTAL CURRENT
NON-CURRENT
CONSOLIDATED
2016
$’000
2015
$’000
10,903
5,554
-
-
16,457
10,209
5,189
497
202
16,097
Employee entitlements – Long Service Leave
1,871
1,782
MOVEMENTS IN PROVISIONS
Supply chain transformation
Opening balance
Utilised during the period
Closing balance
Onerous leases
Opening balance
Charged to profit or loss
Utilised during the period
Closing balance
497
(497)
-
202
-
(202)
-
1,100
(603)
497
541
36
(375)
202
NATURE AND TIMING OF PROVISIONS
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.
18
OTHER LIABILITIES
CURRENT
Deferred income
TOTAL CURRENT
NON-CURRENT
Deferred income
TOTAL NON-CURRENT
CONSOLIDATED
2016
$’000
2015
$’000
6,967
6,967
14,809
14,809
5,635
5,635
12,411
12,411
Annual Report 2016 86
86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
19
CONTRIBUTED EQUITY
Ordinary shares
608,615
608,615
CONSOLIDATED
2016
$’000
2015
$’000
(a)
MOVEMENTS IN SHARES ON ISSUE
Shares on issue 26 July 2015
Shares issued during the year (i)
Shares on issue at 30 July 2016
Shares on issue 27 July 2014
Shares issued during the year (i)
Shares on issue at 25 July 2015
NO. (‘000)
$‘000
156,380
784
157,164
155,714
666
156,380
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 784,386 shares (2015: 665,201) 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 16,
cash and cash equivalents as disclosed in Note 26 and equity attributable to the equity holders of the
parent comprising of issued capital, reserves and retained profits as disclosed in Notes 19, 20 and 21
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.
87 Premier Investments Limited
87
20
RESERVES
RESERVES COMPRISE:
Capital profits reserve (a)
Foreign currency translation reserve (b)
Cash flow hedge reserve (c)
Performance rights reserve (d)
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)
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
(c)
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 (loss) gain on cash flow hedges
Transferred to (from) statement of financial position/
profit or loss
Net deferred income tax movement on cash flow hedges
CLOSING BALANCE
CONSOLIDATED
2016
$’000
2015
$’000
464
1,047
(10,291)
6,346
(2,434)
464
6,480
21,197
4,082
32,223
6,480
(5,363)
(70)
1,047
21,197
(24,076)
(20,907)
13,495
(10,291)
2,334
1,418
2,728
6,480
(3,565)
19,251
16,123
(10,612)
21,197
88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
20
RESERVES
RESERVES COMPRISE:
Capital profits reserve (a)
Foreign currency translation reserve (b)
Cash flow hedge reserve (c)
Performance rights reserve (d)
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)
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
(c)
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 (loss) gain on cash flow hedges
Transferred to (from) statement of financial position/
profit or loss
Net deferred income tax movement on cash flow hedges
CLOSING BALANCE
CONSOLIDATED
2016
$’000
2015
$’000
464
1,047
(10,291)
6,346
(2,434)
464
6,480
21,197
4,082
32,223
6,480
(5,363)
(70)
1,047
21,197
(24,076)
(20,907)
13,495
(10,291)
2,334
1,418
2,728
6,480
(3,565)
19,251
16,123
(10,612)
21,197
Annual Report 2016 88
88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
CONSOLIDATED
2016
$’000
2015
$’000
22
OPERATING SEGMENTS
Identification of operating segments
20
RESERVES (CONTINUED)
(d)
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
21
RETAINED EARNINGS
Opening balance
Net profit for the period attributable to owners
Dividends paid
CLOSING BALANCE
4,082
2,264
6,346
697,469
103,874
(68,969)
732,374
3,281
801
4,082
687,400
88,102
(78,033)
697,469
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.
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 operating segments for the periods
ended 30 July 2016 and 25 July 2015.
89 Premier Investments Limited
89
90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
22
OPERATING SEGMENTS
Identification of operating 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.
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 operating segments for the periods
ended 30 July 2016 and 25 July 2015.
Annual Report 2016 90
90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
22
(a)
OPERATING SEGMENTS (CONTINUED)
OPERATING SEGMENTS
RETAIL
INVESTMENT
ELIMINATION
TOTAL
2016
$’000
2015
$’000
2016
$’000
2015
$’000
2016
$’000
2015
$’000
2016
$’000
2015
$’000
REVENUE
Sale of goods
1,049,226
947,662
-
-
Interest revenue
Other revenue
Other income
186
322
390
388
7,702
9,438
62,018
48,014
(62,000)
(48,000)
340
402
-
-
- 1,049,226
947,662
-
7,888
9,828
1,507
3,751
-
226
-
-
1,507
3,977
Total Segment Income
1,051,241
952,191
69,720
57,678
(62,000)
(48,000) 1,058,961
961,869
-
-
-
-
-
-
-
-
1,724
-
-
312
13,792
12,832
Total income per the statement of
comprehensive income
RESULTS
Depreciation and
amortisation
Impairment of property
plant and equipment
23,881
21,906
-
771
Interest expense
4,912
5,738
Disposal of asset held
for sale
Share of profit of
associates
Segment profit before
income tax expense
Income tax expense
Net profit after tax per the statement of
comprehensive income
ASSETS AND LIABILITIES
1,058,961
961,869
-
-
-
-
-
-
-
-
-
-
23,881
21,906
-
771
4,912
5,738
-
1,724
13,792
13,144
(39,209)
(28,843)
103,874
88,102
126,207
98,958
78,876
65,987
(62,000)
(48,000)
143,083
116,945
Segment assets
446,874
442,900
1,283,894 1,278,659
(67,885)
(72,756) 1,662,883 1,648,803
Segment liabilities
270,091
260,971
76,106
76,268
(21,869)
(26,742)
324,328
310,496
Capital expenditure
42,677
36,526
-
-
-
-
42,677
36,526
91 Premier Investments Limited
91
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Annual Report 2016 92
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
CONSOLIDATED
NOTES
2016
$’000
2015
$’000
23
EXPENDITURE COMMITMENTS
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
16
16
106,663
195,649
49,813
352,125
108,283
179,102
44,396
331,781
-
-
-
-
-
-
-
-
14
-
14
14
-
14
-
14
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.
24
KEY MANAGEMENT PERSONNEL
COMPENSATION FOR KEY MANAGEMENT PERSONNEL
Short-term employee benefits
Post-employment benefits
Other post-employment 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.
25
AUDITOR’S REMUNERATION
The auditor of Premier Investments Limited is Ernst
& Young. Amounts received, or due and receivable,
by Ernst & 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:
- Other non-audit services
Total – Other services
TOTAL AUDITOR’S REMUNERATION
CONSOLIDATED
2016
$
2015
$
8,065,012
180,390
100,000
1,650,120
9,995,522
8,088,880
189,095
-
530,220
8,808,195
CONSOLIDATED
2016
$
2015
$
501,138
526,757
76,125
76,125
577,263
76,600
76,600
603,357
93 Premier Investments Limited
93
94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
24
KEY MANAGEMENT PERSONNEL
COMPENSATION FOR KEY MANAGEMENT PERSONNEL
Short-term employee benefits
Post-employment benefits
Other post-employment benefits
Share-based payments
TOTAL
CONSOLIDATED
2016
$
2015
$
8,065,012
180,390
100,000
1,650,120
9,995,522
8,088,880
189,095
-
530,220
8,808,195
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.
25
AUDITOR’S REMUNERATION
The auditor of Premier Investments Limited is Ernst
& Young. Amounts received, or due and receivable,
by Ernst & 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:
- Other non-audit services
Total – Other services
TOTAL AUDITOR’S REMUNERATION
CONSOLIDATED
2016
$
2015
$
501,138
526,757
76,125
76,125
577,263
76,600
76,600
603,357
Annual Report 2016 94
94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
26
(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:
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:
Increase (decrease) in provisions
(Decrease) increase 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 in deferred tax assets
Increase in income tax payable
NET CASH FLOWS FROM OPERATING ACTIVITIES
95 Premier Investments Limited
CONSOLIDATED
2016
$’000
2015
$’000
29,551
253,682
283,233
35,099
246,473
281,572
103,874
88,102
39
23,842
-
191
109
21,797
1,536
73
(13,792)
(13,144)
33
191
413
2,264
(31,488)
(230)
449
(6,974)
7,291
16,063
(6,464)
(632)
(5,385)
(11,742)
30,930
(5,382)
172
103,663
28
153
758
801
24,762
(716)
(141)
11,699
18,858
(6,674)
(4,420)
(898)
(1,094)
(13,318)
(30,970)
(1,329)
7,139
103,111
95
CONSOLIDATED
2016
$’000
2015
$’000
26
NOTES TO THE STATEMENT OF CASH FLOWS
(CONTINUED)
(c)
FINANCE FACILITIES
Working capital and bank overdraft facility
Bank guarantee facility
Interchangeable facility
Used
Unused
Finance facility
Used
Unused
Used
Unused
Used
Unused
Leasing facility
Used
Unused
Total facilities
Used
Unused
TOTAL
-
11,800
11,800
106,000
53,000
159,000
51
149
200
5,156
2,844
8,000
-
-
-
111,207
67,793
179,000
-
11,800
11,800
105,018
53,982
159,000
188
12
200
3,899
4,101
8,000
14
-
14
109,119
69,895
179,014
96
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
26
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
2016
$’000
2015
$’000
-
11,800
11,800
106,000
53,000
159,000
51
149
200
5,156
2,844
8,000
-
-
-
-
11,800
11,800
105,018
53,982
159,000
188
12
200
3,899
4,101
8,000
14
-
14
111,207
67,793
179,000
109,119
69,895
179,014
Annual Report 2016 96
96
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
27
RELATED PARTY DISCLOSURES
27
RELATED PARTY DISCLOSURES (CONTINUED)
The consolidated financial statements include the financial statements of Premier Investments Limited
and the subsidiaries listed in the following table:
(b)
GROUP TRANSACTIONS WITH ASSOCIATES
(a)
SUBSIDIARIES
COUNTRY OF
INCORPORATION
2016
INTEREST HELD
2015
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%
97 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%
97
During the 2015 financial year, the Group had a 50% interest in Just Kor Fashion Group (Pty) Ltd.
The Group disposed of its interest in Just Kor Fashion Group (Pty) Ltd in August 2015.
(i)
(ii)
Sale of inventory in the amount of $ nil (2015: $1,956,022).
Management fee charged for services provided in the amount of $ nil (2015: $83,501).
(iii)
Information regarding outstanding balances with the associate at the end of the 2015
financial year is disclosed in Note 8. The loan was denominated in South African Rand.
Interest was charged at a commercial rate and was payable monthly. Interest earned on the
loan in 2015 is disclosed in Note 4.
(iv)
Refer to Note 11 for information regarding the disposal of the 50% interest in Just Kor
Fashion Group (Pty) Ltd subsequent to the 2015 financial year-end.
(c)
KEY MANAGEMENT PERSONNEL
(d)
TERMS AND CONDITIONS
Details relating to remuneration paid to key management personnel are included in Note 24.
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.
(e)
ULTIMATE PARENT
Premier Investments Limited is the ultimate parent entity.
98
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
27
RELATED PARTY DISCLOSURES (CONTINUED)
(b)
GROUP TRANSACTIONS WITH ASSOCIATES
During the 2015 financial year, the Group had a 50% interest in Just Kor Fashion Group (Pty) Ltd.
The Group disposed of its interest in Just Kor Fashion Group (Pty) Ltd in August 2015.
(i)
(ii)
(iii)
Sale of inventory in the amount of $ nil (2015: $1,956,022).
Management fee charged for services provided in the amount of $ nil (2015: $83,501).
Information regarding outstanding balances with the associate at the end of the 2015
financial year is disclosed in Note 8. The loan was denominated in South African Rand.
Interest was charged at a commercial rate and was payable monthly. Interest earned on the
loan in 2015 is disclosed in Note 4.
(iv)
Refer to Note 11 for information regarding the disposal of the 50% interest in Just Kor
Fashion Group (Pty) Ltd subsequent to the 2015 financial year-end.
(c)
KEY MANAGEMENT PERSONNEL
Details relating to remuneration paid to key management personnel are included in Note 24.
(d)
TERMS AND CONDITIONS
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.
(e)
ULTIMATE PARENT
Premier Investments Limited is the ultimate parent entity.
Annual Report 2016 98
98
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
28
(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
2016
$’000
2,264
2015
$’000
801
The Company grants performance rights to executives, thus ensuring that the executives who are
most directly able to influence the Group’s 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
three or four 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
15 to 36.
The fair value of the performance rights has been calculated as at the respective grant dates using
an appropriate valuation technique. The valuation model applied, being either the Black Sholes
European option pricing model for performance rights granted prior to the end of the 2015 financial
year, or the Monte-Carlo simulation pricing model for performance rights granted as of the 2016
financial year, is dependent on the assumptions underlying the performance rights granted to ensure
these are appropriately factored into the determination of fair value.
In determining the share-based payments expense 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 Total
Shareholder Return (“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
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
Granted on 22 June 2015
Granted on 22 June 2015
Granted on 24 February 2016
Granted on 26 April 2016
1,200,000
185,201
304,386
240,000
319,493
169,365
12,266
123,647
1,000,000
10/05/2011
25/05/2012
12/04/2013
18/04/2013
11/12/2013
22/06/2015
22/06/2015
24/02/2016
26/04/2016
99 Premier Investments Limited
$3.00
$2.62
$2.88
$4.20
$4.28
$10.34
$8.56
$12.89
$9.96
99
28
(b)
SHARE-BASED PAYMENT PLANS (CONTINUED)
TYPE OF SHARE-BASED PAYMENT PLAN (CONTINUED)
The following table shows the factors which were considered in determining the fair value of the
performance rights in existence during the current and prior reporting period:
GRANT DATE
10/05/2011
25/05/2012
12/04/2013
18/04/2013
11/12/2013
22/06/2015
22/06/2015
24/02/2016
26/04/2016
SHARE ISSUE
PRICE
OPTION LIFE
VOLATILITY
FAIR VALUE
DIVIDEND
YIELD
RISK-FREE
RATE
$6.00
$5.24
$5.77
$8.40
$8.56
$10.34
$8.56
$12.89
$9.88
4-5 years
3.4 years
3.5 years
4.2 years
3.8 years
2.3 years
2.3 years
2.6 years
3-6 years
5%
5%
5%
5%
5%
5%
5%
5%
5.5%
40%
40%
40%
40%
40%
40%
40%
40%
30%
5.10%
2.39%
2.81%
2.71%
2.98%
1.95%
1.95%
1.75%
2.06%
$3.00
$2.62
$2.88
$4.20
$4.28
$10.34
$8.56
$12.89
$9.96
(c)
SUMMARY OF RIGHTS GRANTED UNDER PERFORMANCE RIGHTS PLANS
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of,
and movements in, performance rights issued during the year:
Balance at beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year (i)
Expired during the year
2016
No.
1,365,510
1,123,647
(77,553)
(784,386)
-
2016
WAEP
-
-
-
-
-
-
2015
No.
1,849,080
181,631
(665,201)
-
-
2015
WAEP
-
-
-
-
-
-
Balance at the end of the year
1,627,218
1,365,510
(i) The weighted average share price at the date of exercise of rights exercised during the year
was $15.01 (2015: $12.36).
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
no performance rights have expired.
(d)
WEIGHTED AVERAGE FAIR VALUE
The weighted average fair value of performance rights granted during the year was $10.28
(2015: $10.22).
29
DEED OF CROSS GUARANTEE
Pursuant to Class Order 98/1418, relief has been granted to certain wholly-owned subsidiaries in the
Australian Group from the Corporations law requirements for preparation, audit and lodgement of
financial reports.
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
at 25 June 2009. Premier Investments Limited is not a party to the Deed of Cross Guarantee.
100
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
28
(b)
SHARE-BASED PAYMENT PLANS (CONTINUED)
TYPE OF SHARE-BASED PAYMENT PLAN (CONTINUED)
The following table shows the factors which were considered in determining the fair value of the
performance rights in existence during the current and prior reporting period:
GRANT DATE
10/05/2011
25/05/2012
12/04/2013
18/04/2013
11/12/2013
22/06/2015
22/06/2015
24/02/2016
26/04/2016
SHARE ISSUE
PRICE
OPTION LIFE
$6.00
$5.24
$5.77
$8.40
$8.56
$10.34
$8.56
$12.89
$9.88
4-5 years
3.4 years
3.5 years
4.2 years
3.8 years
2.3 years
2.3 years
2.6 years
3-6 years
DIVIDEND
YIELD
5%
5%
5%
5%
5%
5%
5%
5%
5.5%
VOLATILITY
RISK-FREE
RATE
FAIR VALUE
40%
40%
40%
40%
40%
40%
40%
40%
30%
5.10%
2.39%
2.81%
2.71%
2.98%
1.95%
1.95%
1.75%
2.06%
$3.00
$2.62
$2.88
$4.20
$4.28
$10.34
$8.56
$12.89
$9.96
(c)
SUMMARY OF RIGHTS GRANTED UNDER PERFORMANCE RIGHTS PLANS
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of,
and movements in, performance rights issued during the year:
Balance at beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year (i)
Expired during the year
2016
No.
1,365,510
1,123,647
(77,553)
(784,386)
-
Balance at the end of the year
1,627,218
2016
WAEP
-
-
-
-
-
-
2015
No.
1,849,080
181,631
-
(665,201)
-
1,365,510
2015
WAEP
-
-
-
-
-
-
(i) The weighted average share price at the date of exercise of rights exercised during the year
was $15.01 (2015: $12.36).
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
no performance rights have expired.
(d)
WEIGHTED AVERAGE FAIR VALUE
The weighted average fair value of performance rights granted during the year was $10.28
(2015: $10.22).
29
DEED OF CROSS GUARANTEE
Pursuant to Class Order 98/1418, relief has been granted to certain wholly-owned subsidiaries in the
Australian Group from the Corporations law requirements for preparation, audit and lodgement of
financial reports.
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
at 25 June 2009. Premier Investments Limited is not a party to the Deed of Cross Guarantee.
Annual Report 2016 100
100
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
30
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
CONSOLIDATED
2016
$’000
2015
$’000
1,636
1,636
30,795
30,795
-
-
1,771
1,771
11,711
11,711
4,479
4,479
117
117
10
10
(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 30 July 2016
and the profit and loss within cost of sales will be affected over the next couple of years as
the inventory is sold.
30
30
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
(a)
(a)
INSTRUMENTS USED BY THE GROUP (CONTINUED)
INSTRUMENTS USED BY THE GROUP (CONTINUED)
(i)
(i)
Forward currency contracts – cash flow hedges (continued)
Forward currency contracts – cash flow hedges (continued)
At reporting date, the details of the outstanding contracts are:
At reporting date, the details of the outstanding contracts are:
CONSOLIDATED
CONSOLIDATED
2016
2016
$’000
$’000
2015
2015
$’000
$’000
2016
2016
2015
2015
Buy USD / Sell AUD
Buy USD / Sell AUD
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
NOTIONAL AMOUNTS $AUD
NOTIONAL AMOUNTS $AUD
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
111,917
111,917
98,282
98,282
115,482
115,482
77,145
77,145
93,879
93,879
10,146
10,146
0.7268
0.7268
0.7170
0.7170
0.7231
0.7231
0.8774
0.8774
0.8089
0.8089
0.7885
0.7885
Buy USD / Sell NZD
Buy USD / Sell NZD
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
Buy USD / Sell GBP
Buy USD / Sell GBP
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
Buy AUD / Sell NZD
Buy AUD / Sell NZD
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
Buy USD / Sell SGD
Buy USD / Sell SGD
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
NOTIONAL AMOUNTS $NZD
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
21,399
21,399
21,060
21,060
22,623
22,623
15,652
15,652
-
-
-
-
0.6502
0.6502
0.6502
0.6502
0.6586
0.6586
0.8206
0.8206
-
-
-
-
NOTIONAL AMOUNTS £GBP
NOTIONAL AMOUNTS £GBP
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
1,737
1,737
1,134
1,134
167
167
1.4493
1.4493
1.3554
1.3554
1.3299
1.3299
1.5313
1.5313
1.5059
1.5059
1.5067
1.5067
NOTIONAL AMOUNTS $NZD
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
4,114
4,114
3,178
3,178
-
-
1.0897
1.0897
1.0937
1.0937
-
-
1.0494
1.0494
1.0561
1.0561
-
-
NOTIONAL AMOUNTS $SGD
NOTIONAL AMOUNTS $SGD
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
3,239
3,239
1,626
1,626
-
-
0.7199
0.7199
0.7167
0.7167
-
-
0.7407
0.7407
0.7385
0.7385
-
-
5,011
5,011
4,791
4,791
5,339
5,339
4,400
4,400
2,635
2,635
-
-
3,591
3,591
2,512
2,512
-
-
The forward currency contracts are considered to be highly effective hedges as they are
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
matched against forecast inventory purchases and any gain or loss on the contracts
attributable to the hedge risk is taken directly to equity.
attributable to the hedge risk is taken directly to equity.
When the cash flows occur, the Group adjusts the initial measurement of the component
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.
recognised in the statement of financial position by the related amount deferred in equity.
101 Premier Investments Limited
101
102
102
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
30
30
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
(a)
(a)
INSTRUMENTS USED BY THE GROUP (CONTINUED)
INSTRUMENTS USED BY THE GROUP (CONTINUED)
(i)
(i)
Forward currency contracts – cash flow hedges (continued)
Forward currency contracts – cash flow hedges (continued)
At reporting date, the details of the outstanding contracts are:
At reporting date, the details of the outstanding contracts are:
CONSOLIDATED
CONSOLIDATED
2016
$’000
2016
$’000
2015
$’000
2015
$’000
2016
2016
2015
2015
Buy USD / Sell AUD
Buy USD / Sell AUD
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
NOTIONAL AMOUNTS $AUD
NOTIONAL AMOUNTS $AUD
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
111,917
111,917
98,282
98,282
115,482
115,482
77,145
77,145
93,879
93,879
10,146
10,146
0.7268
0.7268
0.7170
0.7170
0.7231
0.7231
0.8774
0.8774
0.8089
0.8089
0.7885
0.7885
Buy USD / Sell NZD
Buy USD / Sell NZD
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
Buy USD / Sell GBP
Buy USD / Sell GBP
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
Buy AUD / Sell NZD
Buy AUD / Sell NZD
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
Buy USD / Sell SGD
Buy USD / Sell SGD
Maturity < 6 months
Maturity < 6 months
Maturity 6 – 12 months
Maturity 6 – 12 months
Maturity 12 – 24 months
Maturity 12 – 24 months
NOTIONAL AMOUNTS $NZD
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
21,399
21,399
21,060
21,060
22,623
22,623
15,652
15,652
-
-
-
-
0.6502
0.6502
0.6502
0.6502
0.6586
0.6586
0.8206
0.8206
-
-
-
-
NOTIONAL AMOUNTS £GBP
NOTIONAL AMOUNTS £GBP
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
5,011
5,011
4,791
4,791
5,339
5,339
1,737
1,737
1,134
1,134
167
167
1.4493
1.4493
1.3554
1.3554
1.3299
1.3299
1.5313
1.5313
1.5059
1.5059
1.5067
1.5067
NOTIONAL AMOUNTS $NZD
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
4,400
4,400
2,635
2,635
-
-
4,114
4,114
3,178
3,178
-
-
1.0897
1.0897
1.0937
1.0937
-
-
1.0494
1.0494
1.0561
1.0561
-
-
NOTIONAL AMOUNTS $SGD
NOTIONAL AMOUNTS $SGD
AVERAGE EXCHANGE RATE
AVERAGE EXCHANGE RATE
3,591
3,591
2,512
2,512
-
-
3,239
3,239
1,626
1,626
-
-
0.7199
0.7199
0.7167
0.7167
-
-
0.7407
0.7407
0.7385
0.7385
-
-
The forward currency contracts are considered to be highly effective hedges as they are
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
matched against forecast inventory purchases and any gain or loss on the contracts
attributable to the hedge risk is taken directly to equity.
attributable to the hedge risk is taken directly to equity.
When the cash flows occur, the Group adjusts the initial measurement of the component
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.
recognised in the statement of financial position by the related amount deferred in equity.
Annual Report 2016 102
102
102
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
30
(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.
31
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
Weighted average number of ordinary shares used in
calculating:
- basic earnings per share
- diluted earnings per share
CONSOLIDATED
2016
$’000
2015
$’000
103,874
88,102
NUMBER OF
SHARES
‘000
NUMBER OF
SHARES
‘000
156,733
157,918
155,967
157,564
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.
$’000
2016
2015
$’000
Refer to note 2 for a summary of the significant accounting policies of the Group.
(a)
The individual financial statements for the parent entity show the following aggregate amounts:
Summary financial information (continued)
Shareholders’ equity
Issued capital
Reserves
NOTES TO THE FINANCIAL STATEMENTS
- Foreign currency translation reserve
(a)
Summary financial information
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
- Performance rights reserve
6,346
4,082
32
PARENT ENTITY INFORMATION (CONTINUED)
Total assets
Total comprehensive income (loss) for the period, net
Statement of financial position
Retained earnings
Current assets
Net profit for the period
of tax
Current liabilities
608,615
2016
$’000
2,982
655,982
294,124
75,636
1,369,030
2016
(70)
28,201
$’000
95,106
608,615
2015
$’000
3,052
649,315
289,109
64,629
1,360,484
2015
2,719
29,920
$’000
95,420
(b)
Guarantees entered into by the parent entity
Total liabilities
(a)
Summary financial information (continued)
Shareholders’ equity
subsidiaries amounting to $nil (2015: $nil).
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:
608,615
608,615
Issued capital
Reserves
(i)
Finance leases of subsidiaries amounting to $nil (2015: $nil).
- Foreign currency translation reserve
(ii)
The bank overdraft of a subsidiary amounting to $nil (2015: $nil).
- Performance rights reserve
2,982
6,346
655,982
103
3,052
4,082
649,315
(c)
Contingent liabilities of the parent entity
Retained earnings
The parent entity did not have any contingent liabilities as at 30 July 2016 or 25 July 2015.
Net profit for the period
75,636
64,629
(d)
Total comprehensive income (loss) for the period, net
Contractual commitments for the acquisition of property, plant or equipment
of tax
The parent entity did not have any contractual commitments to purchase property, plant and
(70)
2,719
(b)
equipment as at 30 July 2016 or 25 July 2015.
Guarantees entered into by the parent entity
The parent entity has provided financial guarantees in respect of bank overdrafts and loans of
33
subsidiaries amounting to $nil (2015: $nil).
EVENTS AFTER THE REPORTING DATE
The parent entity has also given unsecured guarantees in respect of:
On 21 September 2016, the Directors of Premier Investments Limited declared a final dividend in
(i)
respect of the 2016 financial year. The total amount of the dividend is $39,291,000 (2015:
Finance leases of subsidiaries amounting to $nil (2015: $nil).
$32,840,000) which represents a fully franked dividend of 25 cents per share (2015: 21 cents per
(ii)
share).
The bank overdraft of a subsidiary amounting to $nil (2015: $nil).
(c)
Contingent liabilities of the parent entity
34
CONTINGENT LIABILITIES
The parent entity did not have any contingent liabilities as at 30 July 2016 or 25 July 2015.
(d)
The Group has bank guarantees totalling $5,206,702 (2015: $4,087,246).
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 30 July 2016 or 25 July 2015.
33
EVENTS AFTER THE REPORTING DATE
On 21 September 2016, the Directors of Premier Investments Limited declared a final dividend in
respect of the 2016 financial year. The total amount of the dividend is $39,291,000 (2015:
$32,840,000) which represents a fully franked dividend of 25 cents per share (2015: 21 cents per
share).
34
CONTINGENT LIABILITIES
The Group has bank guarantees totalling $5,206,702 (2015: $4,087,246).
104
104
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
NOTES TO THE FINANCIAL STATEMENTS
There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
potential ordinary shares since the reporting date and before the completion of this financial report.
30
30
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
32
32
PARENT ENTITY INFORMATION
PARENT ENTITY INFORMATION (CONTINUED)
(b)
(b)
INTEREST RATE RISK
INTEREST RATE RISK
Information regarding interest rate exposure is set out in Note 3.
Information regarding interest rate exposure is set out in Note 3.
(c)
(c)
CREDIT RISK
CREDIT RISK
Information regarding credit risk exposure is set out in Note 3.
Information regarding credit risk exposure is set out in Note 3.
CONSOLIDATED
CONSOLIDATED
2016
$’000
2016
$’000
2015
$’000
2015
$’000
31
31
EARNINGS PER SHARE
EARNINGS PER SHARE
The following reflects the income and share data used
in the calculation of basic and diluted 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
Net profit for the period
103,874
103,874
88,102
88,102
Weighted average number of ordinary shares used in
calculating:
Weighted average number of ordinary shares used in
calculating:
- basic earnings per share
- basic earnings per share
- diluted earnings per share
- diluted earnings per share
NUMBER OF
NUMBER OF
SHARES
SHARES
‘000
‘000
NUMBER OF
NUMBER OF
SHARES
SHARES
‘000
‘000
156,733
156,733
157,918
157,918
155,967
155,967
157,564
157,564
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.
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.
32
32
PARENT ENTITY INFORMATION
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 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:
The individual financial statements for the parent entity show the following aggregate amounts:
(a)
(a)
Summary financial information
Summary financial information
Statement of financial position
Statement of financial position
Current assets
Current assets
Total assets
Total assets
Current liabilities
Current liabilities
Total liabilities
Total liabilities
2016
$’000
2016
$’000
2015
$’000
2015
$’000
294,124
294,124
1,369,030
1,369,030
289,109
289,109
1,360,484
1,360,484
28,201
28,201
95,106
95,106
29,920
29,920
95,420
95,420
103 Premier Investments Limited
103
103
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
OTHER FINANCIAL INSTRUMENTS (CONTINUED)
30
(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.
31
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
Weighted average number of ordinary shares used in
calculating:
- basic earnings per share
- diluted earnings per share
CONSOLIDATED
2016
$’000
2015
$’000
103,874
88,102
NUMBER OF
SHARES
‘000
NUMBER OF
SHARES
‘000
156,733
157,918
155,967
157,564
NOTES TO THE FINANCIAL STATEMENTS
There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
potential ordinary shares since the reporting date and before the completion of this financial report.
32
32
PARENT ENTITY INFORMATION
PARENT ENTITY INFORMATION (CONTINUED)
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.
2016
$’000
2015
$’000
(a)
The individual financial statements for the parent entity show the following aggregate amounts:
Summary financial information (continued)
Shareholders’ equity
Issued capital
Reserves
608,615
2016
$’000
608,615
2015
$’000
3,052
4,082
NOTES TO THE FINANCIAL STATEMENTS
- Foreign currency translation reserve
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
2,982
6,346
(a)
Summary financial information
- Performance rights reserve
Statement of financial position
Retained earnings
Current assets
Net profit for the period
PARENT ENTITY INFORMATION (CONTINUED)
Total assets
Total comprehensive income (loss) for the period, net
of tax
Current liabilities
Guarantees entered into by the parent entity
Total liabilities
Summary financial information (continued)
32
(b)
(a)
655,982
294,124
75,636
1,369,030
(70)
2016
$’000
28,201
95,106
649,315
289,109
64,629
1,360,484
2015
2,719
$’000
29,920
95,420
The parent entity has provided financial guarantees in respect of bank overdrafts and loans of
subsidiaries amounting to $nil (2015: $nil).
Shareholders’ equity
Issued capital
The parent entity has also given unsecured guarantees in respect of:
608,615
608,615
Reserves
(i)
Finance leases of subsidiaries amounting to $nil (2015: $nil).
- Foreign currency translation reserve
(ii)
The bank overdraft of a subsidiary amounting to $nil (2015: $nil).
- Performance rights reserve
2,982
6,346
(c)
Contingent liabilities of the parent entity
Retained earnings
655,982
The parent entity did not have any contingent liabilities as at 30 July 2016 or 25 July 2015.
Net profit for the period
75,636
(d)
(b)
Contractual commitments for the acquisition of property, plant or equipment
Total comprehensive income (loss) for the period, net
of tax
(70)
The parent entity did not have any contractual commitments to purchase property, plant and
equipment as at 30 July 2016 or 25 July 2015.
Guarantees entered into by the parent entity
103
3,052
4,082
649,315
64,629
2,719
The parent entity has provided financial guarantees in respect of bank overdrafts and loans of
subsidiaries amounting to $nil (2015: $nil).
EVENTS AFTER THE REPORTING DATE
33
(i)
The parent entity has also given unsecured guarantees in respect of:
On 21 September 2016, the Directors of Premier Investments Limited declared a final dividend in
respect of the 2016 financial year. The total amount of the dividend is $39,291,000 (2015:
$32,840,000) which represents a fully franked dividend of 25 cents per share (2015: 21 cents per
share).
Finance leases of subsidiaries amounting to $nil (2015: $nil).
The bank overdraft of a subsidiary amounting to $nil (2015: $nil).
(ii)
(c)
Contingent liabilities of the parent entity
34
CONTINGENT LIABILITIES
The parent entity did not have any contingent liabilities as at 30 July 2016 or 25 July 2015.
(d)
The Group has bank guarantees totalling $5,206,702 (2015: $4,087,246).
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 30 July 2016 or 25 July 2015.
33
EVENTS AFTER THE REPORTING DATE
On 21 September 2016, the Directors of Premier Investments Limited declared a final dividend in
respect of the 2016 financial year. The total amount of the dividend is $39,291,000 (2015:
$32,840,000) which represents a fully franked dividend of 25 cents per share (2015: 21 cents per
share).
Annual Report 2016 104
104
34
CONTINGENT LIABILITIES
The Group has bank guarantees totalling $5,206,702 (2015: $4,087,246).
104
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
32
PARENT ENTITY INFORMATION (CONTINUED)
(a)
Summary financial information (continued)
Shareholders’ equity
Issued capital
Reserves
- Foreign currency translation reserve
- Performance rights reserve
Retained earnings
Net profit for the period
Total comprehensive income (loss) for the period, net
of tax
(b)
Guarantees entered into by the parent entity
2016
$’000
2015
$’000
608,615
608,615
2,982
6,346
655,982
75,636
3,052
4,082
649,315
64,629
(70)
2,719
The parent entity has provided financial guarantees in respect of bank overdrafts and loans of
subsidiaries amounting to $nil (2015: $nil).
The parent entity has also given unsecured guarantees in respect of:
(i)
Finance leases of subsidiaries amounting to $nil (2015: $nil).
(ii)
The bank overdraft of a subsidiary amounting to $nil (2015: $nil).
(c)
Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 July 2016 or 25 July 2015.
Contractual commitments for the acquisition of property, plant or equipment
(d)
NOTES TO THE FINANCIAL STATEMENTS
The parent entity did not have any contractual commitments to purchase property, plant and
FOR THE 53 WEEKS ENDED 30 JULY 2016 AND THE 52 WEEKS ENDED 25 JULY 2015 (CONTINUED)
equipment as at 30 July 2016 or 25 July 2015.
33
32
EVENTS AFTER THE REPORTING DATE
PARENT ENTITY INFORMATION (CONTINUED)
On 21 September 2016, the Directors of Premier Investments Limited declared a final dividend in
respect of the 2016 financial year. The total amount of the dividend is $39,291,000 (2015:
$32,840,000) which represents a fully franked dividend of 25 cents per share (2015: 21 cents per
share).
2016
$’000
Summary financial information (continued)
(a)
2015
$’000
Shareholders’ equity
34
CONTINGENT LIABILITIES
Issued capital
608,615
608,615
Reserves
The Group has bank guarantees totalling $5,206,702 (2015: $4,087,246).
- Foreign currency translation reserve
- Performance rights reserve
Retained earnings
Net profit for the period
Total comprehensive income (loss) for the period, net
of tax
(b)
Guarantees entered into by the parent entity
2,982
6,346
655,982
75,636
3,052
4,082
649,315
64,629
(70)
2,719
as issued by the International Accounting Standards Board.
Note 2(b) confirms that the financial statements also comply with International Financial Reporting Standards
The Directors have been given the declaration by the Chief Financial Officer required by section 295A of the
Corporations Act 2001 for the financial year ended 30 July 2016.
The parent entity has provided financial guarantees in respect of bank overdrafts and loans of
subsidiaries amounting to $nil (2015: $nil).
104
The parent entity has also given unsecured guarantees in respect of:
(i)
Finance leases of subsidiaries amounting to $nil (2015: $nil).
(ii)
The bank overdraft of a subsidiary amounting to $nil (2015: $nil).
(c)
Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 July 2016 or 25 July 2015.
(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 30 July 2016 or 25 July 2015.
33
EVENTS AFTER THE REPORTING DATE
On 21 September 2016, the Directors of Premier Investments Limited declared a final dividend in
respect of the 2016 financial year. The total amount of the dividend is $39,291,000 (2015:
$32,840,000) which represents a fully franked dividend of 25 cents per share (2015: 21 cents per
share).
34
CONTINGENT LIABILITIES
The Group has bank guarantees totalling $5,206,702 (2015: $4,087,246).
On behalf of the Board
Solomon Lew
Chairman
5 October 2016
105 Premier Investments Limited
104
105
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Premier Investments Limited, I state that:
In the opinion of the Directors:
(a)
the financial statements and notes of Premier Investments Limited for the financial year ended
30 July 2016 are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30 July 2016
and of its performance for the financial year ended on that date, and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
(c)
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.
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Premier Investments Limited, I state that:
In the opinion of the Directors:
(a)
the financial statements and notes of Premier Investments Limited for the financial year ended
30 July 2016 are in accordance with the Corporations Act 2001, including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
giving a true and fair view of the consolidated entity’s financial position as at 30 July 2016
and of its performance for the financial year ended on that date, and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
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.
(b)
(c)
Note 2(b) confirms that the financial statements also comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board.
The Directors have been given the declaration by the Chief Financial Officer required by section 295A of the
Corporations Act 2001 for the financial year ended 30 July 2016.
On behalf of the Board
Solomon Lew
Chairman
5 October 2016
105
Annual Report 2016 106
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67
8 Exhibition Street
Melbourne VIC 3001
Melbourne VIC 3000 Australia
GPO Box 67
Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent auditor's report to the members of Premier Investments
Limited
Independent auditor's report to the members of Premier Investments
Limited
Report on the financial report
Report on the financial report
We have audited the accompanying financial report of Premier Investments Limited, which comprises the
consolidated statement of financial position as at 30 July 2016, the consolidated statement of
We have audited the accompanying financial report of Premier Investments Limited, which comprises the
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
consolidated statement of financial position as at 30 July 2016, the consolidated statement of
of cash flows for the financial year then ended, notes comprising a summary of significant accounting
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
policies and other explanatory information, and the directors' declaration of the consolidated entity
of cash flows for the financial year then ended, notes comprising a summary of significant accounting
comprising the company and the entities it controlled for the financial year ended or from time to time
policies and other explanatory information, and the directors' declaration of the consolidated entity
during the financial year.
comprising the company and the entities it controlled for the financial year ended or from time to time
during the financial year.
Directors' responsibility for the financial report
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
The directors of the company are responsible for the preparation of the financial report that gives a true
such internal controls as the directors determine are necessary to enable the preparation of the financial
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
report that is free from material misstatement, whether due to fraud or error. In Note 2 (b), the directors
such internal controls as the directors determine are necessary to enable the preparation of the financial
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
report that is free from material misstatement, whether due to fraud or error. In Note 2 (b), the directors
the financial statements comply with International Financial Reporting Standards.
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
the financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Auditor's responsibility
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
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
reasonable assurance about whether the financial report is free from material misstatement.
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.
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
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
the financial report. The procedures selected depend on the auditor's judgment, including the
In making those risk assessments, the auditor considers internal controls relevant to the entity's
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
preparation and fair presentation of the financial report in order to design audit procedures that are
In making those risk assessments, the auditor considers internal controls relevant to the entity's
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
preparation and fair presentation of the financial report in order to design audit procedures that are
of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
policies used and the reasonableness of accounting estimates made by the directors, as well as
of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting
evaluating the overall presentation of the financial report.
policies used and 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
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
In conducting our audit we have complied with the independence requirements of the Corporations Act
copy of which is included in the directors’ report.
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
107 Premier Investments Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
i
ii
a.
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
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 30 July 2016, 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 30 July 2016
of cash flows for the financial year then ended, notes comprising a summary of significant accounting
and of its performance for the financial year ended on that date; and
policies and other explanatory information, and the directors' declaration of the consolidated entity
comprising the company and the entities it controlled for the financial year ended or from time to time
during the financial year.
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67
8 Exhibition Street
Melbourne VIC 3001
Melbourne VIC 3000 Australia
GPO Box 67
Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
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
Opinion
Report on the financial report
In our opinion:
Independent auditor's report to the members of Premier Investments
Limited
Independent auditor's report to the members of Premier Investments
Limited
Report on the financial report
Report on the financial report
We have audited the accompanying financial report of Premier Investments Limited, which comprises the
consolidated statement of financial position as at 30 July 2016, the consolidated statement of
We have audited the accompanying financial report of Premier Investments Limited, which comprises the
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
consolidated statement of financial position as at 30 July 2016, the consolidated statement of
of cash flows for the financial year then ended, notes comprising a summary of significant accounting
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
policies and other explanatory information, and the directors' declaration of the consolidated entity
of cash flows for the financial year then ended, notes comprising a summary of significant accounting
comprising the company and the entities it controlled for the financial year ended or from time to time
policies and other explanatory information, and the directors' declaration of the consolidated entity
during the financial year.
comprising the company and the entities it controlled for the financial year ended or from time to time
during the financial year.
Directors' responsibility for the financial report
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
The directors of the company are responsible for the preparation of the financial report that gives a true
such internal controls as the directors determine are necessary to enable the preparation of the financial
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
report that is free from material misstatement, whether due to fraud or error. In Note 2 (b), the directors
such internal controls as the directors determine are necessary to enable the preparation of the financial
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
report that is free from material misstatement, whether due to fraud or error. In Note 2 (b), the directors
the financial statements comply with International Financial Reporting Standards.
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
the financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Auditor's responsibility
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
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
reasonable assurance about whether the financial report is free from material misstatement.
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.
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
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
the financial report. The procedures selected depend on the auditor's judgment, including the
In making those risk assessments, the auditor considers internal controls relevant to the entity's
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
preparation and fair presentation of the financial report in order to design audit procedures that are
In making those risk assessments, the auditor considers internal controls relevant to the entity's
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
preparation and fair presentation of the financial report in order to design audit procedures that are
of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
policies used and the reasonableness of accounting estimates made by the directors, as well as
of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting
evaluating the overall presentation of the financial report.
policies used and 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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
our audit opinion.
Independence
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
In conducting our audit we have complied with the independence requirements of the Corporations Act
copy of which is included in the directors’ report.
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.
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
Report on the remuneration report
such internal controls as the directors determine are necessary to enable the preparation of the financial
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 financial year ended
the financial statements comply with International Financial Reporting Standards.
30 July 2016. 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
Auditor's responsibility
is 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 financial year ended 30
July 2016, 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
Ernst & Young
policies used and 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
Rob Perry
In conducting our audit we have complied with the independence requirements of the Corporations Act
Partner
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
Melbourne
copy of which is included in the directors’ report.
5 October 2016
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
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 2016 108
ASX ADDITIONAL INFORMATION AS AT 27 SEPTEMBER 2016
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
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
)
NATIONAL NOMINEES LIMITED
SL SUPERANNUATION NO 1 PTY LTD
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMS PTY LTD
LINFOX SHARE INVESTMENT PTY LTD
BNP PARIBAS NOMINEES PTY LTD
ARGO INVESTMENTS LIMITED
RBC INVESTOR SERVICES AUSTRALIA PTY LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
MILTON CORPORATION LIMITED
MR CON ZEMPILAS
SANDHURST TRUSTEES LTD
TOTAL
% IC
RANK
51,569,400
20,173,227
14,590,055
9,346,381
8,235,331
6,451,395
5,060,588
4,437,699
3,725,910
2,898,517
2,897,725
2,577,014
1,766,004
1,250,000
1,144,221
873,590
597,935
590,250
470,000
412,650
32.81%
12.84%
9.28%
5.95%
5.24%
4.10%
3.22%
2.82%
2.37%
1.84%
1.84%
1.64%
1.12%
0.80%
0.73%
0.56%
0.38%
0.38%
0.30%
0.26%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
TOTAL FOR TOP 20:
139,067,892
88.48%
109 Premier Investments Limited
ASX ADDITIONAL INFORMATION AS AT 27 SEPTEMBER 2016
ASX ADDITIONAL INFORMATION AS AT 27 SEPTEMBER 2016
SUBSTANTIAL SHAREHOLDERS
TWENTY LARGEST SHAREHOLDERS
NAME
NAME
CENTURY PLAZA INVESTMENTS PTY LTD AND ASSOCIATES
CENTURY PLAZA INVESTMENTS PTY LTD
PERPETUAL LIMITED AND ITS SUBSIDARIES
J P MORGAN NOMINEES AUSTRALIA LIMITED
AUSTRALIANSUPER PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
AIRLIE FUNDS MANAGEMENT PTY LTD
CITICORP NOMINEES PTY LIMITED
METREPARK PTY LTD
DISTRIBUTION OF EQUITY SHAREHOLDERS
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
)
NATIONAL NOMINEES LIMITED
TOTAL UNITS
TOTAL
58,552,420
51,569,400
22,027,776
20,173,227
8,871,777
14,590,055
7,866,245
9,346,381
8,235,331
% IC
% IC
42.43%
32.81%
14.02%
12.84%
5.70%
9.28%
5.01%
5.95%
5.24%
1
TO
1,000
1,001
TO
5,000
5,001
TO
10,000
4.10%
100,001
TO
3.22%
(MAX)
6,451,395
10,001
TO
5,060,588
100,000
4,437,699
188
3,725,910
7
TOTAL
8
8,003
9
157,164,461
2,335
5,114
1,965,466
SL SUPERANNUATION NO 1 PTY LTD
Holders
UBS NOMINEES PTY LTD
2,382,866
Ordinary Fully Paid Shares
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
The number of investors holding less than a marketable parcel of 32 securities ($15.63 on 27 September 2016)
BNP PARIBAS NOMS PTY LTD
is 204 and they hold 1,471 securities.
LINFOX SHARE INVESTMENT PTY LTD
VOTING RIGHTS
BNP PARIBAS NOMINEES PTY LTD
All ordinary shares carry one vote per share without restriction.
ARGO INVESTMENTS LIMITED
2.82%
41
2.37%
143,058,548
2,897,725
2,577,014
1,766,004
1,250,000
2,898,517
4,324,395
5,433,186
1.12%
1.84%
1.64%
1.84%
0.80%
325
RBC INVESTOR SERVICES AUSTRALIA PTY LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
MILTON CORPORATION LIMITED
MR CON ZEMPILAS
SANDHURST TRUSTEES LTD
1,144,221
873,590
597,935
590,250
470,000
412,650
0.73%
0.56%
0.38%
0.38%
0.30%
0.26%
TOTAL FOR TOP 20:
139,067,892
88.48%
RANK
1
2
3
4
5
6
10
11
12
13
14
15
16
17
18
19
20
Annual Report 2016 110
AUDITOR
Ernst & Young
8 Exhibition Street
Melbourne Victoria 3000
SHARE REGISTER AND SHAREHOLDER
ENQUIRIES
Computershare Investor Services Pty
Limited
Yarra Falls
452 Johnston Street
Abbotsford Victoria 3067
Telephone (03) 9415 5000
LAWYERS
Arnold Bloch Leibler
Level 21
333 Collins Street
Melbourne Victoria 3000
Telephone (03) 9229 9999
CORPORATE DIRECTORY
A.C.N. 006 727 966
DIRECTORS
Solomon Lew (Chairman)
Dr. David M. Crean (Deputy Chairman)
Timothy Antonie (Lead Independent Director)
Lindsay E. Fox
Sally Herman
Henry D. Lanzer
Terrence L. McCartney
Mark McInnes
Michael R.I. McLeod
Dr. Gary H. Weiss
COMPANY SECRETARY
Kim Davis
REGISTERED OFFICE
Level 53
101 Collins Street
Melbourne Victoria 3000
Telephone (03) 9650 6500
Facsimile (03) 9654 6665
WEBSITE
www.premierinvestments.com.au
EMAIL
info@premierinvestments.com.au
111 Premier Investments Limited
Solomon Lew
Chairman
Mark McInnes
CEO Premier Retail
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Annual Report 2016
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