Premier Investments Limited Annual Report 2019

FY2019 Annual Report · Premier Investments Limited

Loading PDF…

Annual Report 2019

Solomon Lew
Chairman

Mark McInnes
CEO Premier Retail

Chairman’s Report

On behalf of the Premier Investments Limited (“Premier”)
Board of Directors, it is my pleasure to present the
Annual Report for the year ended 27 July 2019 (“2019”).

Recognising your company’s strong result, and reflecting our
confidence in Premier Retail’s growth strategies, the Directors
have declared full year ordinary dividends totalling 70 cents
per share, fully franked – a record for Premier and an increase
of 12.9% on the prior year.

Premier delivered Net Profit After Tax of $106.8 million in
2019, up 27.7%. On an underlying basis, Net Profit Before Tax
was $177.6 million with strong contributions from Premier
Retail and our investment in Breville Group Limited.
Premier also maintains an investment in Myer Holdings Limited
and had $190.3 million of free cash on hand as at year end.

With an outstanding management team, consistently strong
operational performance and a strong balance sheet,
your company is well placed to invest in growth opportunities
to deliver long term shareholder value.

PREMIER RETAIL PERFORMING STRONGLY

Premier Retail includes our core brands (Just Jeans, Jay Jays,
Dotti, Jacqui E and Portmans) and our unique growth brands
(Smiggle and Peter Alexander). During the year the
Premier Retail management team, led by Mark McInnes,
continued to relentlessly pursue the successful rejuvenation of
our apparel brands whilst growing Smiggle, Peter Alexander
and our Online businesses.

As a result, Premier Retail delivered total global sales of
$1.27 billion, up 7.5% on the prior year. Premier Retail
reported a record underlying earnings before interest and tax
(“EBIT”) of $167.3 million1 for the year, up 11.5% on 2018.
These are outstanding results in a tough and competitive retail
environment and while consumer sentiment in our core
markets remains low.

Notwithstanding the environment, by creating a clear market
position for each of Premier Retail’s brands and successfully
balancing efficiency measures with investment opportunities,
we continued to deliver operational outperformance and
record financial results for Premier shareholders.

Premier Retail’s apparel brands achieved like-for-like sales
growth of 7.8% across Australia and New Zealand – well
above the market.

ONLINE DELIVERS RECORD SALES

During 2019, Premier Retail’s online business delivered record
sales of $148.2 million, up 31.7% with growth ahead of the
market. In the second half of the year, the team launched
transactional websites for Just Jeans, Smiggle, Portmans

and Jacqui E in New Zealand. These were in addition to the
already established and rapidly growing New Zealand
Peter Alexander and Dotti transactional websites.

The performance of Premier Retail’s online businesses has
surpassed expectations. We continue to make major
investments in technology, people and new marketing
initiatives to deliver a world class platform and
customer experience.

PETER ALEXANDER AHEAD OF EXPECTATIONS

Peter Alexander delivered record sales for the year of
$247.8 million, up 13.3% on prior year with positive
like-for-like sales growth in both Australia and New Zealand.
The brand opened nine new stores and continued its online
expansion of P.A. Plus and children’s sleepwear during
the year.

At the time of writing this report, Peter Alexander had already
achieved its aspirational target of $250 million in annual sales
– a year ahead of schedule.

Pleasingly, Peter Alexander’s growth categories continue to
perform, with children’s sleepwear sales up 500% since 2013
and P.A. Plus sales growing by 150% over the past two years.

Peter Alexander has further growth plans in place via the
expansion of ranges online, expanded stores and new stores.

SMIGGLE ACCELERATED GLOBAL GROWTH STRATEGY

Smiggle achieved record global sales of $306.5 million in
2019 as the brand commenced the execution of its
“Accelerated Global Growth Strategy”.

This strategy was announced in September 2018,
in recognition of the major structural changes in global
consumerism and technology. We anticipated that the true
scale opportunity ahead for Smiggle as a globally recognised
and sought-after brand is not confined to traditional channels.

Our objective is to accelerate Smiggle’s global growth from
four major pathways: global wholesale arrangements;
online growth (both proprietary and third party); concession
partnerships with iconic global retailers; and new store
growth where the economics and shareholder returns are
attractive. Significantly, these four pathways aim to deliver
much higher EBIT margin with materially less capital and far
higher cash flows than the originally planned multi-country
own-store roll out.

1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of Premier Retail Underlying EBIT.

Annual Report 2019Chairman’s Report continued

The strategy is currently progressing ahead of expectations
with Smiggle recently successfully launched into South Korea,
Thailand, Indonesia, Philippines, United Arab Emirates, Canada
and Qatar via wholesale partnerships with iconic retailers.
Smiggle is now available to consumers in 180 new doors
through six best in market retailers.

Management believes that there is the potential to grow
Smiggle to over 350 doors with existing wholesale partners
within the next 12 to 24 months. Advanced discussions are
ongoing with new wholesale partners in markets which have
been identified as high potential with long runways for future
global growth.

As I have said previously, your Board believes that we have the
most outstanding senior management team of any retail
business in Australia, and one which could be successfully
benchmarked internationally. On behalf of the Board and all
shareholders, I thank Premier Retail CEO Mark McInnes,
his senior leadership group and our entire 9,000 plus strong
team of employees for their outstanding contribution.

I would also like to thank my remarkable fellow Directors for
their valuable contribution, insights and counsel throughout
the year.

Finally, our sincere thanks to the owners of the company,
our shareholders, for your continued support and confidence.

Smiggle concession performance in Selfridges and Harrods
continues to perform ahead of expectations and Smiggle
opened its first Asian concession stores during the year,
with three concessions trading in Singapore as at July 2019.
The brand is in final negotiations for a further three to five
concessions which we aim to have trading across Asia by
Christmas 2019.

Also, in addition to its own successful transactional websites
in key markets, Smiggle continued to expand its global
footprint through third party websites in France, Italy
and Spain.

LEADERSHIP AND GOVERNANCE

In February 2019, we announced the appointment of
Ms Marinda Meyer to the role of Company Secretary
following the retirement of Mr Kim Davis. On behalf of the
Board, I sincerely thank Mr Davis for his impressive
performance over 24 years of service.

As we look forward, your Board continues to see strong
growth prospects for Premier. We are proud to have built a
successful global retail business from a strong local
brand portfolio.

We have a track record of sustained performance through
all economic cycles and are very focused on maintaining
flexibility, responding to change and growing a sustainable,
long-term business that delivers strong shareholder returns.

I encourage all of our shareholders to attend the company’s
Annual General Meeting for a further overview on the
performance of the Group and strategies for the future.
I look forward to seeing many of you there.

I would also like to acknowledge that Premier’s robust
financial performance would not have been possible without
the continuing hard work and commitment of our employees.

Solomon Lew
Chairman and Non-Executive Director

Premier Investments LimitedThe Directors

Solomon Lew
Chairman and
Non-Executive Director

David M. Crean
Deputy Chairman
and Non-Executive Director

Timothy Antonie
Non-Executive Director

Sylvia Falzon
Non-Executive Director

Sally Herman
Non-Executive Director

Henry D. Lanzer AM
B. COM., LLB (Melb)
Non-Executive Director

Terrence McCartney
Non-Executive Director

Mark McInnes
Executive Director

Michael R.I. McLeod
Non-Executive Director

Annual Report 2019Strategic 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
apparel brands.

2 Organisation-wide cost
efficiency program.

3 Two phase gross

margin expansion
program.

4 Expand and grow the
internet business.

5 Grow Peter Alexander

significantly.

6 Grow Smiggle
significantly.

The apparel brands delivered exceptional results for the year with
total apparel brand sales up 6.9% and even stronger like-for-like
(LFL) sales growth of 7.8%. Just Jeans delivered stand out growth
performance with sales up 13.7% for the year, and all five apparel
brands delivered positive LFL sales growth for the year. The apparel
brands have delivered this growth through the ongoing investment
in product, strong management and merchandising teams.

Costs of doing business decreased 109 bps as a percentage of sales
to 48.8% in FY19, whilst strategic investment continues in growth
initiatives, including Online, Peter Alexander and Smiggle
international expansion. During FY19, Premier Retail has closed
35 stores, taking the total closed over the past 7 years to 138 stores
as part of the ongoing program to close unprofitable stores.
As consumers continue to increase their online shopping,
Premier Retail will continue to focus on store costs and profitability
to drive appropriate investment and shareholder returns.

Premier Retail’s gross margin of 61.9% for the year in a highly
competitive market was delivered through the effective
implementation of key gross margin strategies. Direct sourcing
initiatives continue to deliver benefits from new suppliers and
countries. Ongoing focus on markdown management is expected
to support margin going forward and has left the group with a
clean inventory position at year end.

Online sales of $148.2 million were up 31.7% on FY18. The group
surpassed its aspirational target of $100million in global annual
online sales in FY18 – two years ahead of schedule. This exceptional
outcome has reinforced Premier Retail’s strategies to continue to
make major investments in technology, people and new marketing
initiatives to deliver a world class platform and customer experience.
The online channel continues to deliver significantly higher EBIT
margin than the Group average.

Peter Alexander delivered record sales for the year of
$247.8 million, up 13.3% on FY18, with positive LFL sales growth
in both Australia and New Zealand. The brand opened nine new
stores and continued its online expansion of P.A. Plus and
children’s sleepwear. Peter Alexander’s aspirational target of $250
million in annual sales has now been delivered one year ahead of
schedule – with growth set to continue. There is the potential for
a further 20 to 30 stores to be opened over the next 18 to 24
months, including five confirmed to open in 1H20. Online
continues to be a significant growth channel as Peter Alexander
materially increases its online-only options of children’s sleepwear
and P.A. Plus.

The brand delivered record global sales of $306.5 million in FY19,
with a particularly strong performance in Asia. Smiggle’s
“Accelerated Global Growth Strategy” announced in September
2018 to accelerate global growth through four major pathways is
being successfully delivered with performance to date far
exceeding expectations. Smiggle successfully launched its new
wholesale channel and is now represented in over 180 new doors
through 6 iconic retailers in seven new countries.

Premier Investments Limited

Brand Performance Premier Retail

Smiggle, delivered record global sales of $306.5 million in FY19, with particularly strong performance in Asia.
Smiggle’s “Accelerated Global Growth Strategy” announced in September 2018 to accelerate global growth
through four major pathways is being successfully delivered with performance to date far exceeding expectations.
Smiggle successfully launched its new wholesale channel and is now represented in over 180 new doors through
6 iconic retailers in seven new countries. John Cheston, Managing Director Smiggle, continues to lead a strong and
focused management team growing a truly unique global brand.

Peter Alexander delivered record sales for the year of $247.8 million, up 13.3% on FY18 with positive LFL sales
growth in both Australia and New Zealand. The brand opened nine new stores and continued its online expansion of
P.A. Plus and children’s sleepwear. Peter Alexander’s aspirational target of $250 million in annual sales has now been
delivered one year ahead of schedule. Under the leadership of Judy Coomber, Managing Director Peter Alexander and
Dotti, and Peter Alexander, Creative Director, the growth is set to continue. There is the potential for a further 20 to 30
stores to be opened over the next 18 to 24 months, including five confirmed to open in 1H20. Online continues to be
a significant growth channel as Peter Alexander materially increases its online-only options of children’s sleepwear and
P.A. Plus.

Dotti, following the appointment of Judy Coomber (Managing Director Peter Alexander and Dotti), together with the
return of Deanna Moylan (Dotti Group General Manager) in March 2018 reporting to Judy, is delivering a turnaround
in performance. FY19 LFL sales were up 2.2% with improvements in profit margins being delivered through changes
to sourcing strategy. Capital investment in new store concepts continued in FY19, largely funded by landlords.
Online Sales continued to grow ahead of the market with this channel delivering significantly higher EBIT margin than
the Brand average.

Portmans, under the leadership of Linda Levy, delivered FY19 Sales of $128.4 million in a highly competitive apparel
market. FY19 LFL Sales were up 6.1% - stronger than overall sales growth as 4 stores were closed in the last 12 months
as part of the ongoing program to close unprofitable stores. FY19 Online Sales continue to drive overall growth at
a significantly higher EBIT margin than the store portfolio. Portmans has an extremely strong and distinctive market
position, and continued investment in digital marketing and better merchants is expected to drive further growth
in FY20.

Jacqui E under the leadership of Nicole Naccarella, delivered FY19 Sales up 3.3% to $71.5 million in a highly competitive
apparel market. Jacqui E has an extremely strong and distinctive market position, and continued investment in better
merchants is expected to drive further growth in FY20.

Just Jeans, under Matthew McCormack’s leadership, delivered exceptional results in FY19 with sales
growth up 13.7% to $241.9 million in a particularly pleasing result for the group’s original brand.
Just Jeans has a strong, distinctive and competitive market position. Differentiation through the
international branded denim business where investment in width of range, instock of sizes and personal
service continues to deliver a great competitive advantage.

Jay Jays, under Linda Whitehead’s leadership, delivered strong results in FY19 with sales of $168.7 million.
FY19 LFL Sales were up 6.9% - stronger than overall sales growth as 7 stores were closed in FY19 as part
of the ongoing program to close unprofitable stores across the group. Jay Jays has a strong, distinctive
and competitive market position, and continued investment in better merchants is expected to drive further
growth in FY20.

Annual Report 2019Internet Performance Premier Retail

180

160

140

120

100

13.4%

148.2

11.0%

112.5

7.1%

68.1

14%

12%

10%

5.2%

47.2

4.3%

34.4

3.3%

24.6

2.6%

18.9

FY13

FY14

FY15

FY16

FY17

FY18

FY19

Online Sales ($'M)

Online sales as % of the sales in countries & brands with a transactional website

• Record Online sales of $148.2 million, up 31.7% on a previous record FY18

• Online sales growing to 13.4% of the respective markets’ sales in FY19

• The Group surpassed its aspirational target of $100 million in global annual online sales in FY18, 2 years ahead

of expectations

• New Zealand Websites successfully launched and far exceeding expectations in 2H19 for Smiggle, Just Jeans,

Portmans and Jacqui E, in addition to the rapidly growing Peter Alexander and Dotti Online businesses already
in New Zealand

• 2013 investment in centralised and specifically customised Australian Distribution Centre servicing 100% order

fulfilment of 100% of Premier Retail products in Australia

• Online channel continues to deliver significantly higher EBIT margin than the Group average

• All global sites continuing to deliver strong growth with all brands outperforming the market

• Major investment continues in technology, people and new marketing initiatives to deliver a world class platform

and customer experience

Note: FY16 excludes non-comparable 53rd week of sales

Premier Investments LimitedSmiggle International Growth

Record result with the four global growth platforms far exceeding expectations

Another record year for Smiggle, delivering global sales of $306.5 million in FY19, with a particularly strong performance in Asia.

Smiggle reaffirms its target of $450 million in annual global retail sales in calendar 2021 or calendar 2022, with the accelerated
global growth strategy delivering ahead of expectations.

SMIGGLE’S ACCELERATED GLOBAL GROWTH STRATEGY

In September 2018, Premier announced Smiggle’s “Accelerated Global Growth Strategy” which aims to accelerate
Smiggle’s global growth from four major pathways:

• Global wholesale arrangements in markets where Smiggle has a significant opportunity but elects not to or will unlikely

operate company-owned standalone stores

• Online growth, both proprietary and third party

• Concession partnerships with iconic global retailers

• New store growth through the continued rollout of standalone stores where the economics and shareholder returns

are attractive

• Significantly, these four pathways aimed to deliver much higher EBIT margin with materially less capital and far higher

cash flows than the originally planned multi-country own store roll out.

Wholesale channel is far exceeding expectations, with Smiggle
now represented in over 180 doors through 6 iconic retailers
across 7 countries with a combined population of over half a
billion and with the potential to grow to 350+ doors with the
existing 6 partners within 12-24 months.

South Korea

Thailand

Indonesia

Philippines

U.A.E

Qatar

Canada

Smiggle represented through iconic retailer in Indonesia

Smiggle represented through iconic retailer in South Korea

Annual Report 2019Peter Alexander Growth

Delivers record result with growth set to continue

• Record Sales up 13.3% to $247.8 million with strong total and LFL sales growth in both Australia and New Zealand

• 2020 Strategic Growth plan announced in September 2017 to increase annual sales to $250 million by FY20 has now

been delivered one year ahead of schedule - with growth set to continue

• Potential to open a further 20-30 stores over the next 2 years, with 5 new stores already confirmed to open in 1H20

• Additional opportunities exist for landlord funded refurbishments and expansions of existing stores

• Significant growth opportunity exists by expanding Children’s sleepwear options online only

• Significant growth opportunity exists by expanding P.A. Plus options online only

• Strong and focused management team led by Judy Coomber (Managing Director: Peter Alexander and Dotti)

and Peter Alexander (Creative Director: Peter Alexander)

Peter Alexander Marylands - Opened 14 March 2019

Peter Alexander Rhodes - Opened 21 June 2019

Premier Investments LimitedOur 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/PAW JUSTICE

• Development

• Smiggle Community

• Reward

and recognition

• Workplace Safety

Partnerships

• Packaging Stewardship

• Waste and Recycling

• Energy efficiency

• Our sourcing models,
principles & policies

• Our Assurances

• Membership of the

Accord 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.

9,000+

Total employees

91%

% female

ATTRACTION AND RETENTION

At the end of the financial year, Premier employed
approximately 9,000 staff across eight countries. By Christmas
2019, Premier will employ over 10,400 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
FY19, 91% of our total team members are women, who held
78% of the positions at management level internationally.
We have continued our focus on the development and career
trajectory of our very strong team of female executives.
Female leaders spearheaded internet and marketing, human
resources, and five out of our seven brands, to deliver
exceptional results. We rely on the passion and commitment
of our employees to achieve the results we do.

DEVELOPMENT

Premier provides ongoing and regular training throughout the
year to support and develop all team members.
Upon commencement all new team members complete our
comprehensive Just Getting Started Induction Program.
Leadership and Management Development training is
provided for our leaders and this year 192 workshops were
led by our People & Culture and Senior Leadership Teams.

REWARD AND RECOGNITION

We recognise and reward outstanding contributions to our
Group results, both individually and for team performance.
Our annual Just Excellence Awards recognised our best
performing Retail Leaders and salespeople for their excellent
performance and contribution to achieving our FY19 goals.
The top performing Regional Managers, Store Managers and
Visual Merchandisers for each of our brands were rewarded
publicly amongst their peers for their great leadership and
delivery of the FY19 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’ is 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 fully
supporting affected employees to return 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 2019Our 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 13 years with
the RSPCA in Australia, and for the last five 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 $984,000
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 five years have
raised over $109,710.

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. Each year,
Peter develops a special product to be made available in store
in the lead up to Christmas.

In 2018, a range of chocolate bars featuring Peter Alexander
prints were sold with 100% of all proceeds donated to these
charities. During the year we donated $149,000 to the RSPCA
and $15,200 to Paw Justice.

Since we’ve been working with RSPCA
shelters in Australia and Paw Justice
in New Zealand, Peter has raised over

$1 million

Premier Investments LimitedSMIGGLE COMMUNITY PARTNERSHIPS

Premier and our Smiggle brand regularly support a number of
children’s charities, organisations and educational programs.
Plus countless community fundraising initiatives both locally
and abroad, for schools and educational events.

In addition, in FY19 Smiggle partnered with the
Alannah & Madeline Foundation in Australia, an organisation
committed to the safety and well-being of children who have
experienced or witnessed violence, including cyber bullying
and bullying in schools. Smiggle donated $60,000 (RRP)
worth of products for inclusion in the charity’s “Buddy Bag”
programme; which provides 10,000 vulnerable children per
year with backpacks full of essential home and school
supplies. Smiggle campaigned for the charity in the month of
May, encouraging Smiggle team members and Smiggle
customers to write a kind note to children affected by violence
and bullying. Nearly 7,000 notes were written in Smiggle
stores nationally over the 7 week period, and each note will
now be included in the Buddy Bags distributed to children in
2019 by the Alannah & Madeline Foundation.

In the same period, Smiggle also partnered with two
children’s charities across the UK and Ireland: The Rainbow
Trust (UK) who supports families with life threatening or
terminal illnesses, and Temple Street Children’s University
Hospital Foundation (IRELAND) who raises funds to provide
world class paediatric equipment and facilities for the hospital.
Smiggle donated over £65,000 ($113,000 AUD) worth of
Smiggle products to these charities. Smiggle also encouraged
customers to write a kind note to go alongside the goodies
distributed to children in the care of both charities, helping
them to smile and giggle during an extremely difficult time.

Annual Report 2019Our Commitment to the Environment

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
hangers for reuse or 100% recycling. Additionally, 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, Distribution
Centre and Support Centre, upgrading 369 stores to LED
lighting, all of the DC high bay lighting to LED, and converting
over 80% of our head office lighting to LED. 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.

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.

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 tools to be more involved in reducing their
impact on the environment through sustainable packaging
design, recycling and product stewardship. Premier has
submitted its Action Plan outlining its objectives in relation to:

1. Optimising packaging to reduce environmental impact;

2. Increasing the collection and recycling of packaging;

3. Commitment to product stewardship; and

4. Implementation of Sustainable Packaging Guidelines.

WASTE AND RECYCLING

Premier has extensive recycling and sustainability practices
across our network of Stores, Distribution Centres and
Support Centre. Our Distribution Centres execute on-site
recovery systems for recycling used packaging, following
Sustainable Packaging Guidelines. All carton packaging uses
recycled content. Cartons are reused to facilitate the
replenishment of stock, and 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 waste in line with their recycling
procedures. Orora’s recycling waste business specialises in
paper and cardboard, among others, which is the major input
for their recycled paper mill that produces 100%
recycled paper.

Our Support Centre recycles all paper and has a continuing
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
non-collection of printouts. All weekly retail reporting, forms,
reference and administrative material is stored and accessible
via mobile technology, where possible.

Premier Investments LimitedOur 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.

MODERN SLAVERY

Premier has zero tolerance to modern slavery in all its forms,
including forced labour, child labour, slavery, people
trafficking, deceptive labour recruitment practices, forced
marriage and debt bondage. Premier fully supports the
introduction of modern slavery legislation in various
jurisdictions in which we operate, and will fully comply with
the legislative timelines in all relevant markets.

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

• through Li & Fung, the world’s largest sourcing company

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, India, Indonesia, Pakistan,
Sri Lanka, Turkey, and Vietnam.

SOURCE COUNTRIES (THE JUST GROUP, UNITS)

13%
Rest of the world

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 have zero tolerance for modern slavery in

all its forms

3. We insist on workers’ legal rights – including
worker empowerment and free association

4. We have zero tolerance for bribery

and corruption

5. We have zero tolerance for animal cruelty

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. identity documents;
for recruitment fees etc.)

• prohibits forced labour (including child labour)

• 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

87%
China

ASSURANCES WHICH SUPPORT OUR SOURCING
PRINCIPLES

Background checks

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.

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.

Annual Report 2019Our Commitment to Ethical Sourcing continued

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, Dotti and Jay Jays
branded products in Bangladesh and we highlight our
program in this country in the interest of full transparency.

MEMBERSHIP OF THE ACCORD ON FIRE AND BUILDING
SAFETY IN BANGLADESH

2. Prior to placing orders with any factory, we also engage
independent, internationally recognised 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 inspects all orders.

4. In addition, we will not conduct business with factories

that do not comply with the requirements of the Accord.
All factories have been disclosed to the Accord for
assessment under its operational processes.

ETHICAL RAW MATERIAL PROCUREMENT

We are a member of the Accord on Fire and Building Safety in
Bangladesh (the Accord).

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.

Prior to joining the Accord, we were (since 2013) a signatory
to the Alliance for Bangladesh Worker Safety (the Alliance).
The Alliance program was a five-year commitment which
ended in June 2018.

The Accord, and the Alliance before it, 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.

Together with our international peers in Bangladesh, we have
invested in worker safety, improved conditions and
transparent reporting in a results-oriented, measurable
and verifiable way.

All initiatives of the Accord are publicly available at
http://bangladeshaccord.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.

Premier Investments LimitedOur Business

CODE OF CONDUCT

SHRINKAGE

Shrinkage is the loss of merchandise that can be attributed to
product theft or through administrative handling process.
Premier has a shrinkage reduction strategy in place with
processes and education aimed at reducing these losses.
Premier continues to deliver low levels of shrinkage and we
will continue to maintain this focus into the future.

We believe that the ‘what’ and the ‘how’ are both important
when it comes to operating. We want great results, and how
we go about achieving them is also important.

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 a positive 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

All team members globally are issued with the Code of
Conduct upon commencement with the business and are
re-issued a copy and asked to acknowledge receipt as
amendments to the Code are made from time to time. In
addition, we have an advisory email and a confidential
telephone service for all issues and complaints related to
this Code.

Annual Report 2019Premier Investments Limited
A.C.N. 006 727 966

Financial Report

For the 52 week period
29 July 2018 to 27 July 2019

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

Annual Report 2019DIRECTORS’ REPORT

Director’s 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 27 July 2019.

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 52 week period 29 July 2018 to 27 July 2019,
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 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 has been a Non-Executive Director and Deputy Chairman of Moonlake Investments, owner of VDL dairy
farms in Tasmania from August 2016 to April 2018. He 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.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

Mark McInnes Executive Director

Mr. McInnes is a career retailer with a long track record of success in every role he has occupied. Like many great
retailers, Mark started his career from the shop floor as a company cadet for Grace Brothers. Mark has 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.

Timothy Antonie Non-Executive Director and Lead Independent Director

Mr. Antonie was appointed to the Board of Directors on 1 December 2009. He holds a Bachelor of Economics degree
from Monash University and qualified as a Chartered Accountant with Price Waterhouse. He has 20 years’ experience
in investment banking and formerly held positions of Managing Director from 2004 to 2008 and Senior Advisor in 2009
at UBS Investment Banking, with particular focus on large scale mergers and acquisitions and capital raisings in the
Australian retail, consumer, media and entertainment sectors.
Mr. Antonie is also a Non-Executive Director of Village Roadshow Limited, Breville Group Limited and Netwealth Group
Limited and is a Principal of Stratford Advisory Group.

Sylvia Falzon Non-Executive Director

Ms. Falzon was appointed to the Board of Directors on 16 March 2018. She brings to Premier an executive career that
spanned over nearly 30 years in Financial Services where she held senior executive positions responsible for
institutional and retail funds management businesses, both here in Australia and offshore.

As a Non-Executive Director since 2010, Ms. Falzon has experience across a range of sectors and customer driven
businesses in financial services, health and aged care. During this time, she has been involved in several business
transformations, IPOs, merger and acquisitions and divestment activities. Ms. Falzon is currently an Independent Non-
Executive Director of ASX listed companies Regis Healthcare Limited, Perpetual Limited and Suncorp Group Limited.
In the not-for-profit sector, she is the Chairman of Cabrini Australia Limited. Ms. Falzon previously served on the board
of ASX listed company SAI Global until December 2016.

Ms. Falzon holds a Masters Degree in Industrial Relations and Human Resource Management (Hons) from the
University of Sydney and a Bachelor of Business from the University of Western Sydney. She is a Senior Fellow of the
Financial Services Institute of Australasia and a Fellow of the Australian Institute of Company Directors.

Sally Herman Non-Executive Director

Ms. 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.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

Sally Herman Non-Executive Director (continued)

Ms. Herman sits on both listed and not-for-profit Boards, including Suncorp Group Limited, Breville Group Limited,
Evans Dixon Limited and Investec Property Limited. She is also a Trustee of the Art Gallery of NSW. Ms. Herman
holds a BA from the University of New South Wales 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 35 years’ experience in providing legal, corporate finance and strategic advice to some of Australia’s leading
companies.

Mr. Lanzer is a Non-Executive Director of Just Group Limited, Thorney Opportunities Limited and previously the
TarraWarra Museum of Art and is also a Life Governor of the Mount Scopus College Council.

In June 2015, Henry was appointed as a Member of the Order of Australia.

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.

Terrence L. McCartney Non-Executive Director

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 and marketing department. His successful career
within Coles Myer meant that Terry then moved to the Kmart discount department stores as Head of Merchandise and
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 as Non-Executive Director, and by serving on a number of committees, including the
Internet Steering Committee of the Group, and through various store and site visits, both locally and overseas. He is
also involved in seasonal and trading performance reviews for the Group.

Terry is a member of the Remuneration and Nomination Committee of Premier Investments Limited. In August 2017,
he was appointed Chairman of the Remuneration and Nomination Committee.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

COMPANY SECRETARY

Kim F. Davis (resigned 4 February 2019)

Mr. Davis has been the Company Secretary of Premier Investments Limited for over 24 years. Prior to holding this
position, Mr Davis had 15 years’ experience within the accounting industry as a tax and financial advisor. Mr Davis
resigned as Company Secretary effective 4 February 2019.

Marinda Meyer (appointed 4 February 2019)

Ms. Meyer was appointed as Company Secretary effective 4 February 2019. She is a Chartered Accountant with over
15 years financial experience. She has both local and international experience in financial accounting and reporting,
corporate governance and administration of listed companies.

PRINCIPAL ACTIVITIES

The Group operates a number of specialty retail fashion chains within the specialty retail fashion markets in Australia,
New Zealand, Asia and Europe. The Group also has significant investments in listed securities and money market
deposits.

DIVIDENDS

Final Dividend recommended for 2019
Dividends paid in the year:

Interim for the half-year ended 26 January 2019

Final for 2018 shown as recommended in the 2018 report

CENTS

$’000

37.00
33.00

33.00

58,619
52,282

52,201

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 specialty fashion retailer with operations in Australia, New
Zealand, Asia and Europe. 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 1,200 stores across seven countries, as well as through wholesale and online. The Group’s key strategic
growth initiatives continued to deliver results for the Group. The establishment of a clear market position for the
apparel brands delivered exceptional results during the year, with combined total sales growth of the apparel brands
of 6.9%. Smiggle’s accelerated growth strategy continues, with the successful launch of global wholesale
arrangements during the second half of the year. Peter Alexander has delivered records sales for the year, with an
additional 9 stores opened. The Group’s online sales exceeded $148 million, delivering growth of over 30%.

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 broad 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.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

OPERATING AND FINANCIAL REVIEW (CONTINUED)

Group Operating Results:

The Group’s reported revenue from contracts with customers, total income and net profit before income tax for the 52
week period ended 27 July 2019 (2018: 52 week period ended 28 July 2018) are summarised below:

CONSOLIDATED

52 WEEKS
ENDED 27 JULY
2019
$’000

52 WEEKS
ENDED 28 JULY
2018
$’000

Revenue from contracts with customers

1,270,958

1,182,221

Total interest income

Total other income and revenue

Total revenue and other income

3,886

709

3,632

3,187

1,275,553

1,189,040

% CHANGE

+7.5%

+7.0%

-77.8%

+7.3%

Reported profit before income tax

151,742

123,965

+22.4%

United Kingdom – accelerated depreciation and other
associated expenses

Non-cash impairment of intangible assets

25,858

30,000

Profit before income tax - underlying

177,600

153,965

+15.4%

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 52 week period ended 27 July 2019 are highlighted below:

RETAIL SEGMENT

52 WEEKS
ENDED 27 JULY
2019
$’000

52 WEEKS
ENDED 28 JULY
2018
$’000

% CHANGE

Revenue from contracts with customers

Total segment income

1,270,958

1,271,899

1,182,221

1,183,715

+7.5%

+7.4%

Segment net profit before income tax

135,762

142,484

-4.7%

Capital expenditure

25,457

45,854

-44.5%

The Retail Segment contributed $135.8 million to the Group’s net profit before income tax for the 52 week period
ended 27 July 2019 (2018: $142.5 million net profit before income tax for the 52 week period ended 28 July 2018).

The Retail Segment net profit before income tax includes accelerated depreciation and associated expenses of
$25.9 million, which has arisen due to the reassessment of the Group’s depreciation method and useful life of store
assets within the United Kingdom, in line with the earlier of contracted shorter term lease break options or lease end
dates, given the uncertainty of the useful life of these store assets beyond these dates.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

OPERATING AND FINANCIAL REVIEW (CONTINUED)

Group Operating Results (continued):

Retail Segment (continued):

$180.0

$160.0

$140.0

$120.0

$100.0

$80.0

$60.0

$40.0

$20.0

$20.0
$-

Premier Retail Underlying EBIT History
Premier Retail Underlying EBIT History

$167.3

$150.1

$136.0

$126.7

$105.7
$105.7

$92.8
$92.8

$80.4

$83.7

$65.3

FY11

FY12

FY13

FY14

FY15

FY16*

FY17

FY18

FY19

FY11

FY12

FY13

FY14

FY15
$' millions

$' millions

FY16 *

FY17

FY18

FY19

* FY16 Underlying EBIT represents a comparable 52 week period.

Refer to page 9 for a reconciliation between underlying EBIT and statutory reported operating profit before taxation for
the Retail Segment.

Growth in sales, combined with tight controls over the total cost of doing business led to the outstanding retail
segment underlying EBIT result. The solid result reflects the Group’s continued efforts to transform its apparel 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 the portfolio of brands, with successful growth in
both overseas and domestic markets.

Online sales were up 31.7% on the prior comparative 52 week period. During the 2019 financial year, the Group
continued to invest in technology, people and new marketing initiatives to deliver a world-class online platform and
customer experience. The Group launched its New Zealand transactional websites for a further four brands during the
year.

Annual Report 2019DIRECTORS’ REPORT
DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)
(CONTINUED)

OPERATING AND FINANCIAL REVIEW (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Group Operating Results (continued):
Group Operating Results (continued):
Retail Segment (continued):
Retail Segment (continued):
It has been yet another outstanding year for the growth-focussed brands, being Peter Alexander and Smiggle.
It has been yet another outstanding year for the growth-focussed brands, being Peter Alexander and Smiggle.
Smiggle reported global sales growth of 4.6% on the previous comparable 52 week period. Peter Alexander recorded
Smiggle reported global sales growth of 4.6% on the previous comparable 52 week period. Peter Alexander recorded
sales growth of 13.3% on the previous comparable 52 week period.
sales growth of 13.3% on the previous comparable 52 week period.
The apparel brands delivered excellent sales growth of 6.9% during the year. The apparel brands delivered like-for-
The apparel brands delivered excellent sales growth of 6.9% during the year. The apparel brands delivered like-for-
like sales growth of 7.8% as a result of a disciplined focus on product and market positioning, as well as the Group’s
like sales growth of 7.8% as a result of a disciplined focus on product and market positioning, as well as the Group’s
ongoing program to close unprofitable stores.
ongoing program to close unprofitable stores.
The Group continues to invest in its global presence, with the successful launch of wholesale agreements in six
The Group continues to invest in its global presence, with the successful launch of wholesale agreements in six
countries during the second half of the year.
countries during the second half of the year.
Retail segment sales per geographic segment is presented in the graph below:
Retail segment sales per geographic segment is presented in the graph below:

SALE OF GOODS PER GEOGRAPHIC SEGMENT FOR THE YEAR ENDED
SALE OF GOODS PER GEOGRAPHIC SEGMENT FOR THE YEAR ENDED
27 JULY 2019
Sale of Goods per Geographic Segment for the Year Ended
27 JULY 2019
27 July 2019

Europe
Europe
10%
10%

New Zealand
New Zealand
10%
10%

Asia
Asia
6%
6%

10%
Europe

6%
Asia

10%
New Zealand

74%
Australia

Australia
Australia
74%
74%

Investment Segment:
Investment Segment:
The Group’s balance sheet remains strong, primarily due to the significant asset holding of the investment segment. As
The Group’s balance sheet remains strong, primarily due to the significant asset holding of the investment segment. As
at 27 July 2019, the Group continued to reflect its 28.06% (2018: 27.49%) shareholding in Breville Group Limited as an
at 27 July 2019, the Group continued to reflect its 28.06% (2018: 27.49%) shareholding in Breville Group Limited as an
investment in associate, with an equity accounted value of $238.7 million. The fair value of the Group’s interest in
investment in associate, with an equity accounted value of $238.7 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 27 July 2019 was
Breville Group Limited as determined based on the quoted market price for the shares as at 27 July 2019 was
$691.7 million.
$691.7 million.
During the 2017 financial year, the Group acquired a strategic investment of 10.77% in Myer Holdings Limited. At the
During the 2017 financial year, the Group acquired a strategic investment of 10.77% in Myer Holdings Limited. At the
end of the 2019 financial year the fair value of this listed equity investment is reflected as $46.9 million.
end of the 2019 financial year the fair value of this listed equity investment is reflected as $46.9 million.

8
8

Premier Investments Limitede
s
e
h
t

s
e
d
v
o
r
p

p
u
o
r
G
e
h
T

.
s
d
r
a
d
n
a
t
s
g
n
i
t
n
u
o
c
c
a

t
n
a
v
e
e
r

l
l

t
i

w
e
c
n
a
d
r
o
c
c
a

n
a
h

r
e
h

o
d
e

n
e
s
e
r
p

a
h

n
o

i
t

a
m
r
o
n

a
c
n
a
n
i
f

n
o
i
t
a
m
r
o
f
n

S
R
F
I
-
n
o
N

.
)

B
S
A

I
(

d
r
a
o
B
s
d
r
a
d
n
a
t
S

1
1
0
2

0
0
0
’
$

2
1
0
2

0
0
0
’
$

3
1
0
2

0
0
0
’
$

4
1
0
2

0
0
0
’
$

5
1
0
2

0
0
0

’
$

0
0
0
’
$

*
6
1
0
2

7
1
0
2

0
0
0
’
$

8
1
0
2

0
0
0
’
$

9
1
0
2

0
0
0
’
$

6
9
7
,
9
3

8
8
9
,
9
6

6
8
6
,
6
7

9
9
2
,
9
7

8
5
9
,
8
9

7
0
2
,
6
2
1

2
8
1
,
6
2
1

4
8
4
,
2
4
1

2
6
7
,
5
3
1

n
o
i
t
a
x
a
T
e
r
o
f
e
b
t
i
f
o
r
P
g
n
i
t
a
r
e
p
O

t
n
e
m
g
e
S

l
i
a
t
e
R
d
e
t
r
o
p
e
R

4
1
6
,
9

4
9
1
,
0
1

8
8
9
,
6

1
1
3
,
6

8
3
7
,
5

2
1
9
,
4

4
8
8
,
4

7
6
4
,
5

3
0
6
,
5

e
s
n
e
p
x
e
t
s
e
r
e
t
n
I

:
k
c
a
b
d
d
A

0
1
4
,
9
4

2
8
1
,
0
8

4
7
6
,
3
8

0
1
6
,
5
8

6
9
6
,
4
0
1

9
1
1
,
1
3
1

6
6
0
,
1
3
1

1
5
9
,
7
4
1

5
6
3
,
1
4
1

:
r
o
f

d
e
t
s
u
d
A

T
B
E

:
s
r
a
e
y

a
c
n
a
n
i
f

e
h
t

f
o
h
c
a
e

r
o
f

t
l
u
s
e
R

n
e
m
g
e
S

l
i

e
R
d
e

t
r
o
p
e
R
e
h

T
B
E
g
n
y
l
r
e
d
n
u

l
i

a
e
R

r
e
m
e
r
P
m
r
e
t

a
c
n
a
n
i
f

S
R
F
I
-
n
o
N
e
h
t

s
e

l
i

c
n
o
c
e
r

w
o
e
b

e
b
a
t
e
h
T

.
t
n
e
m
g
e
S

l
i

’

a
e
R
s
p
u
o
r
G
e
h

s
r
e
v
i
r
d
d
n
a

e
c
n
a
m
r
o
f
r
e
p

e
h

s
t
c
e
p
s
a

y
e
k

d
n
a
t
s
r
e
d
n
u

r
e
t
t
e
b

o
t

s
e
r
u
s
a
e
m

a
c
n
a
n
i
f

S
R
F
I
-
n
o
N

g
n
i
t
n
u
o
c
c
A

a
n
o
i
t
a
n
r
e
t
n
I

e
h
t

y
b
d
e
u
s
s

s
a

)
”

S
R
F
I
“
(

s
d
r
a
d
n
a
S
g
n

i
t
r
o
p
e
R

a
c
n
a
n
F

a
n
o

i
t

a
n
r
e

d
n
a

s
d
r
a
d
n
a
S
g
n

i
t

n
u
o
c
c
A
n
a

i
l

a
r
t
s
u
A

r
e
d
n
u
d
e
t
r
o
p
e
r

e
r
a

s
t
l
u
s
e
r

’

s
p
u
o
r
G
e
h
T

t
l
u
s
e
R

t
n
e
m
g
e
S

l
i

a
t
e
R
d
e
t
r
o
p
e
R
d
n
a
T
B
E

l
i

a
t
e
R
r
e
i
m
e
r
P
g
n
i
y
l
r
e
d
n
u
n
e
e
w
t
e
b
n
o
i
t
a
i
l
i
c
n
o
c
e
R

:
)
d
e
u
n
i
t
n
o
c
(

s
t
l
u
s
e
R
g
n
i
t
a
r
e
p
O
p
u
o
r

)

D
E
U
N
T
N
O
C

(

W
E
V
E
R
L
A
C
N
A
N
F
D
N
A
G
N
T
A
R
E
P
O

’

)

(

4
7

1
7
7
,
5
1

2
9
1

0
3

)
2
8
4
(

3
9
1
,
3

2
8
4
,
4

)
3
7
6
(

)
7
6
1
(

4
2
7
,
1

)
6
9
5
,
6
(

)
4
8
(

8
1
2

)
2
9
(

7
4
7

6
8
7
,
1

0
6
4
,
1

1
1
1

d
o
o
g
-
e
k
a
m
d
n
a
n
o
i
t
a
c
o
e
r

e
c
i
f
f
o

d
a
e
H
o
t
g
n
i
t
a
e
r

s
e
s
n
e
p
x
e
f
f
o
-
e
n
O

6
1
0
2
n

k
e
e
w
d
r
3
5

e
h
t

r
o
f
n
o
i
t
u
b
i
r
t
n
o
c
T
B
E
e
b
a
r
a
p
m
o
c
-
n
o
N

e
s
n
e
p
x
e
n
o
i
t
a
m
r
o
f
s
n
a
r
t

n
a
h
c

y
p
p
u
s

f
f
o
-
e
n
O

e
r
u
t
n
e
V

t
n
o
J
n
a
c
i
r
f

A
h
t
u
o
S

f
o
t
i
x
e
f
f
o
-
e
n
O

e
s
n
e
p
x
e
y
r
t
n
e
t
e
k
r
a
m
w
e
n
e
g
g
m
S

f
f
o
-
e
n
O

w
e
v
e
r

c
g
e
t
a
r
t
s
o
t
d
e
t
a
e
r

s
t
s
o
c

f
f
o
-
e
n
O

s
t
n
e
m
t
s
u
d
a
t
n
e
m
g
e
s
-
r
e
n

5
5
2
,
5
6

4
7
3
,
0
8

4
0
7
,
3
8

3
0
8
,
2
9

7
4
7

,
5
0
1

1
0
7
,
6
2
1

1
3
0
,
6
3
1

6
6
0
,
0
5
1

4
3
3
,
7
6
1

5
4
3
,
2

5
4
0
,
3

8
5
8
,
5
2

s
t
s
o
c
d
e
t
a
c
o
s
s
a

d
n
a
n
o
i
t
a
c
e
r
p
e
d

d
e
t
a
r
e
e
c
c
a
m
o
d
g
n
K
d
e
t
i
n
U

f
f
o
-
e
n
O

T
B
E

l
i

a
t
e
R
r
e
i
m
e
r
P
g
n
i
y
l
r
e
d
n
U

e
s
n
e
p
x
e
n
o
i
t
a
g
i
t
i
l

f
f
o
-
e
n
O

3
.
5
6

4
.
0
8

7
.
3
8

8
.
2
9

7
.
5
0
1

7
.
6
2
1

0
.
6
3
1

1
.
0
5
1

3
.
7
6
1

s
n
o

i
l
l
i

’
$
n

d
e
s
s
e
r
p
x
e
,

T
B
E

l
i

a
t
e
R
r
e
i
m
e
r
P
g
n
i
y
l
r
e
d
n
U

.
r
a
e
y

a
c
n
a
n

i
f

k
e
e
w
3
5

a
d
e

n
e
s
e
r
p
e
r

6
1
0
2

y
u
J

0
3

d
e
d
n
e

r
a
e
y

e
h
t

r
o
f

x
a
t

e
r
o
f
e
b

t
i
f
o
r

l
i

a
t
e
R

r
e
m
e
r
P
d
e
t
r
o
p
e
R
*

Annual Report 2019

DIRECTORS’ REPORT
(CONTINUED)
Director’s Report continued

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 period 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.

2019

2018

2017

2016

2015

Closing share price at end of financial year

$16.28

$17.35

$13.35

$16.22

$13.43

Basic earnings per share (cents)

Dividend paid per share (cents)

Return on equity (%)

67.51

66.0

9.8%2

52.97

56.0

8.5%1

66.8

51.0

7.9%

66.3

44.0

56.5

50.0

7.8%

6.6%

Net debt/equity ratio (%)

1.7%

(0.2%)

0.2%

(13.3%)

(13.2%)

1 Excludes the impact of a non-cash impairment of intangible asset brand names of $30 million.

2 Excludes the impact of the United Kingdom accelerated depreciation and other related expenses of $25.9 million.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There have been no significant changes in the state of affairs of the Group during the financial year ended
27 July 2019.

SIGNIFICANT EVENTS AFTER THE REPORTING DATE

Directors of Premier Investments Limited declared a final dividend in respect of the 2019 financial year. The total
amount of the dividend is $58,619,000 (2018: $52,201,000) which represents a fully franked dividend of 37 cents
per share (2018: 33 cents per share). The dividend has not been provided for in the 27 July 2019 financial
statements.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

Certain likely developments in the operations of the Group and the expected results of those operations in financial
years subsequent to the period ended 27 July 2019 are referred to in the preceding operating and financial review.
No additional information is included on the likely developments in the operations of the Group and the expected
results of those operations as the Directors reasonably believe that the disclosure of such information would be likely
to result in unreasonable prejudice to the Group if included in this report, and it has therefore been excluded in
accordance with section 299(3) of the Corporations Act 2001.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Group’s operations are not subject to any significant environmental obligations or regulations.

SHARE OPTIONS AND SHARES ISSUED DURING THE FINANCIAL YEAR

Unissued Shares:

As at the date of this report, there were 615,637 unissued performance rights (615,637 at the reporting date). Refer
to the remuneration report for further details of the options outstanding.

Shares Issued as a Result of the Exercise of Options:

A total of 330,112 shares (2018: 350,978) were issued during the year pursuant to the Group’s Performance Rights
Plan. No other shares were issued during the year.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

To the extent permitted by law, the company indemnifies every person who is or has been a director or officer of the
company or of a wholly-owned subsidiary of the company against liability for damages awarded or judgments
entered against them and legal defence costs and expenses, arising out of a wrongful act, incurred by that person
whilst acting in their capacity as a director or officer provided there has been no admission, or judgment, award or
other finding by a court, tribunal or arbitrator which establishes improper use of position, or committing of any
criminal, dishonest, fraudulent or malicious act.

The officers include the Directors, as named earlier in this report, the Company Secretary and other officers, being
the executive senior management team. Details of the nature of the liabilities covered or the amount of the premium
paid in respect of the Directors, and Officers, liability insurance contracts are not disclosed as such disclosure is
prohibited under the terms of the contracts.

INDEMNIFICATION OF AUDITORS

To the extent permitted by law, the company has agreed to indemnify its auditors, Ernst & Young, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the financial year.

AUDITOR INDEPENDENCE

The Directors received a copy of the Auditor’s Independence Declaration in relation to the audit for this financial year
and is presented on page 34.

NON-AUDIT SERVICES

The Directors are satisfied that the provision of non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit
service provided means that independence was not compromised.

Details of non-audit services provided by the Group’s auditor, Ernst & Young, can be found in Note 30 of the
Financial Report.

ROUNDING

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.

CORPORATE GOVERNANCE STATEMENT

To view Premier’s Corporate Governance Statement, please visit www.premierinvestments.com.au/about-us/board-
policies.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

DIRECTOR INTERESTS IN SHARES AND RIGHTS OF THE COMPANY

At the date of this report, the interests of the Directors in the shares and performance rights of the company were:

Solomon Lew
Sally Herman
Henry Lanzer AM
Michael McLeod
Mark McInnes

4,437,699 ordinary shares**
8,000 ordinary shares
27,665 ordinary shares
28,186 ordinary shares
732,100 ordinary shares and 250,000 performance rights

**Mr. Lew is an associate of Century Plaza Investments Pty. Ltd. and Metrepark Pty. Ltd (Associated Entities). The
Associated Entities, collectively, have a relevant interest in 59,804,731 shares in the company. However, Mr. Lew
does not have a relevant interest in the shares of the company held by the Associated Entities.

DIRECTORS’ MEETINGS

The number of meetings of the Board of Directors during the financial year, and the number of meetings attended by
each director were as follows:

DIRECTOR

Solomon Lew

Mark McInnes

Timothy Antonie

David Crean

Sylvia Falzon

Sally Herman

Henry Lanzer AM

Terrence McCartney

Michael McLeod

BOARD MEETINGS

AUDIT AND RISK COMMITTEE

REMUNERATION AND
NOMINATION COMMITTEE

MEETINGS
HELD

NUMBER
ATTENDED

MEETINGS
HELD

NUMBER
ATTENDED

MEETINGS
HELD

NUMBER
ATTENDED

REMUNERATION REPORT

The Remuneration Report, which forms part of this Directors’ Report, is presented from page 13.

The Directors’ Report is signed in accordance with a resolution of the Board of Directors.

Solomon Lew
Chairman
2 October 2019

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT

DIRECTORS’ REPORT
(CONTINUED)
Dear Shareholders,

As Chairman of the Remuneration and Nomination Committee, I am pleased to present Premier Investments’
REMUNERATION REPORT
remuneration report for the 52 weeks ended 27 July 2019. This report outlines, in detail, the remuneration outcomes
and incentive arrangements, related to our performance.

Premier has again successfully managed our retail businesses on behalf of our shareholders for the 2019 financial
year. This is in an environment of substantial change in the retail market, here in Australia as well as our international
Dear Shareholders,
operations, which requires the very best executives to deliver the result. Premier Retail CEO, Mark McInnes has
As Chairman of the Remuneration and Nomination Committee, I am pleased to present Premier Investments’
again led a talented executive team to deliver reported revenue of $1.27 billion, with statutory reported retail segment
remuneration report for the 52 weeks ended 27 July 2019. This report outlines, in detail, the remuneration outcomes
operating profit before taxation of $135.8 million and underlying Earnings before Interest and Taxation (“EBIT”) 1, of
and incentive arrangements, related to our performance.
$167.3 million, up 11.5% on the prior financial year.
Premier has again successfully managed our retail businesses on behalf of our shareholders for the 2019 financial
From a shareholder’s perspective, this has again translated into some of the best returns within the ASX200. For the
year. This is in an environment of substantial change in the retail market, here in Australia as well as our international
8th consecutive year, Premier Retail has delivered growth in underlying EBIT, resulting in increased ordinary fully
operations, which requires the very best executives to deliver the result. Premier Retail CEO, Mark McInnes has
franked dividends being declared to our shareholders.
again led a talented executive team to deliver reported revenue of $1.27 billion, with statutory reported retail segment
operating profit before taxation of $135.8 million and underlying Earnings before Interest and Taxation (“EBIT”) 1, of
Underlying EBIT History1
$167.3 million, up 11.5% on the prior financial year.
Underlying EBIT History1
Underlying EBIT History1
From a shareholder’s perspective, this has again translated into some of the best returns within the ASX200. For the
8th consecutive year, Premier Retail has delivered growth in underlying EBIT, resulting in increased ordinary fully
franked dividends being declared to our shareholders.

$180.0

$167.3

$160.0

$180.0

$150.1

$167.3

$136.0

$126.7

$150.1

Full year ordinary dividends
per share (fully franked)

FY14

FY15

FY16

FY17

FY18

FY19

cents per share

$100.0

$120.0

$80.4 $83.7

$136.0
$105.7
Underlying EBIT History1
$105.7

$126.7

$92.8

$80.4 $83.7

$92.8

$140.0

$160.0

$120.0

$140.0

$100.0

$80.0
$180.0
$60.0
$160.0
$40.0
$140.0

$80.0

$60.0

$120.0

$40.0

$167.3

$150.1

$136.0
FY17

FY18

FY19

FY12

FY13

FY14

$126.7
FY16

FY15
$105.7
$' millions

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

$92.8

$80.4 $83.7

Full year ordinary dividends per share (fully
franked)

$' millions

FY13

FY14

FY17

FY16

70
FY12
FY15
FY19
Full Year Ordinary Dividends per Share
Full year ordinary dividends
62
$' millions
(fully franked)
per share (fully franked)
53
Full year ordinary dividends per share (fully
48
70
franked)

FY18

FY14
40

FY15

FY16

FY17

cents per share

FY18

FY19

FY14

FY15

FY16

FY17

FY18

FY19

$180.0

$160.0

$140.0

$120.0

$100.0

$80.0

$60.0

$40.0

Underlying EBIT History1

$167.3

$150.1

$136.0

$126.7

$105.7

$92.8

$80.4 $83.7

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

$100.0

$80.0

$60.0

$40.0

40
70

30
60

$' millions

1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of underlying EBIT. FY16 Underlying
EBIT represents a comparable 52 week period.

cents per share

FY14

FY15

FY16

FY17

FY18

FY19

cents per share

1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of underlying EBIT. FY16 Underlying
EBIT represents a comparable 52 week period.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

REMUNERATION REPORT (CONTINUED)

DIRECTORS’ REPORT
(CONTINUED)
The senior executive team are highly skilled, experienced and very well respected within the retail industry, many of
whom are female. Female senior leaders are responsible for five of our seven retail brands, and two of our major
support functions, being Internet and Marketing and People and Culture. 53%2 of the CEO’s direct reports are
REMUNERATION REPORT (CONTINUED)
female.

Across our over 1,200 stores in Australia, New Zealand, Asia and Europe, the critical support functions within those
markets, our fast-growing online business and in the Group’s head office, over 90% of the approximately 9,000
The senior executive team are highly skilled, experienced and very well respected within the retail industry, many of
strong workforce are female. Female management represents 78%2 of management.
whom are female. Female senior leaders are responsible for five of our seven retail brands, and two of our major
support functions, being Internet and Marketing and People and Culture. 53%2 of the CEO’s direct reports are
We will continue to encourage and support a business leadership structure that reflects the values of equal
female.
opportunity.

Across our over 1,200 stores in Australia, New Zealand, Asia and Europe, the critical support functions within those
The retail environment in several markets have experienced difficult conditions as political instability and general
markets, our fast-growing online business and in the Group’s head office, over 90% of the approximately 9,000
economic environment has damaged consumer confidence. This at a time when traditional channels of retail are
strong workforce are female. Female management represents 78%2 of management.
rapidly changing. Premier has proactively managed these impacts, with successful expansion into new avenues of
growth, throughout Australia, New Zealand, Asia, the Middle East and Europe, be it own stores, concessions, online
We will continue to encourage and support a business leadership structure that reflects the values of equal
or wholesale. Success in the broader international markets, whilst sustaining profitable growth in the very competitive
opportunity.
domestic market, requires a highly competent and experienced retail team, a priority for Premier’s remuneration
The retail environment in several markets have experienced difficult conditions as political instability and general
strategies, as evident in the consistent quality results, even with the domestic and international retail industries
economic environment has damaged consumer confidence. This at a time when traditional channels of retail are
experiencing accelerated speed of change and the need for an incisive investment response.
rapidly changing. Premier has proactively managed these impacts, with successful expansion into new avenues of
In this global retail world Premier continues to encourage, incentivise and develop executives who understand this
growth, throughout Australia, New Zealand, Asia, the Middle East and Europe, be it own stores, concessions, online
complex retail environment and proactively develop business outcomes that build shareholder wealth. With that in
or wholesale. Success in the broader international markets, whilst sustaining profitable growth in the very competitive
mind, the Premier Board is committed to supporting executives to ensure that strong financial returns are continued
domestic market, requires a highly competent and experienced retail team, a priority for Premier’s remuneration
to be enjoyed by our shareholders.
strategies, as evident in the consistent quality results, even with the domestic and international retail industries
experiencing accelerated speed of change and the need for an incisive investment response.
The report summarises our remuneration strategies, the way in which incentives are calculated and the connection
between those strategies and the achievement of positive returns for shareholders.
In this global retail world Premier continues to encourage, incentivise and develop executives who understand this
complex retail environment and proactively develop business outcomes that build shareholder wealth. With that in
mind, the Premier Board is committed to supporting executives to ensure that strong financial returns are continued
to be enjoyed by our shareholders.

The report summarises our remuneration strategies, the way in which incentives are calculated and the connection
between those strategies and the achievement of positive returns for shareholders.

Terrence McCartney

Chairman, Remuneration and Nomination Committee

Terrence McCartney

Chairman, Remuneration and Nomination Committee

2 As per the Just Group Limited Australian Workplace Gender Equality Agency Report 2018-2019.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED)

This remuneration report for the 52 weeks ended 27 July 2019 outlines the remuneration arrangements 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:

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 disclosures relating to transactions and balances with Key Management Personnel

INTRODUCTION

The remuneration report details the remuneration arrangements 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 52 weeks ended 27 July 2019. Unless otherwise indicated, the
individuals were KMP for the entire financial year.

KEY MANAGEMENT PERSONNEL

(i) Non-Executive Directors

Solomon Lew

David Crean

Chairman and Non-Executive Director

Deputy Chairman and Non-Executive Director

Timothy Antonie

Non-Executive Director and Lead Independent Director

Sylvia Falzon

Sally Herman

Non-Executive Director

Henry Lanzer AM

Non-Executive Director

Terrence McCartney

Non-Executive Director

Michael McLeod

Non-Executive Director

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

INTRODUCTION (CONTINUED)

KEY MANAGEMENT PERSONNEL (CONTINUED)

(ii) Executive Director

Mark McInnes

Executive Director and Chief Executive Officer Premier Retail

(iii) Executives

John Bryce

Chief Financial Officer, Just Group Limited

Marinda Meyer

Company Secretary, Premier Investments Limited (appointed 4 February 2019)

Kim Davis

Company Secretary, Premier Investments Limited (retired 4 February 2019)

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 is led by Terrence McCartney, an independent Non-Executive Director,
and the majority of its members are independent Non-Executive Directors. This demonstrates an ongoing commitment
to the independence of the Committee. 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 may from time to time seek 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 2019 financial year, the Committee approved the engagement of Egan Associates to review aspects of the
Company’s future LTI plans.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS

3A. Remuneration principles and strategy

REMUNERATION REPORT (AUDITED) (CONTINUED)
The Group’s executive remuneration strategy is designed to attract, motivate and retain high performing individuals,
and align the interests of executives with shareholders.
3. EXECUTIVE REMUNERATION ARRANGEMENTS
The Group operates mainly in the retail industry, with significant revenues earned in its traditional markets of Australia
3A. Remuneration principles and strategy
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
The Group’s executive remuneration strategy is designed to attract, motivate and retain high performing individuals,
changes in general consumer sentiment.
and align the interests of executives with shareholders.

Complementing its strong market position in Australia and New Zealand, the Group continues to diversify its revenues
The Group operates mainly in the retail industry, with significant revenues earned in its traditional markets of Australia
by expanding into international markets in Asia and Europe. The Group is committed to growing its existing
and New Zealand. The retail industry in these markets has seen marked structural change over recent years, including
international presence whilst also exploring expansion into new geographies. During the 2019 financial year, the Group
a prevalence in the use of new and existing technology, an increase in international competitors and significant
launched its wholesale business internationally, expanding its overseas footprint.
changes in general consumer sentiment.

REVENUE FROM CUSTOMERS PER GEOGRAPHIC AREA FY19

Revenue from Customers per Geographic Area FY19

Complementing its strong market position in Australia and New Zealand, the Group continues to diversify its revenues
by expanding into international markets in Asia and Europe. The Group is committed to growing its existing
international presence whilst also exploring expansion into new geographies. During the 2019 financial year, the Group
launched its wholesale business internationally, expanding its overseas footprint.

Europe
10%

10%
Europe

Asia
6%

REVENUE FROM CUSTOMERS PER GEOGRAPHIC AREA FY19

6%
New Zealand
Asia
10%

10%
New Zealand

Asia
6%

New Zealand
10%

Europe
10%

Australia
74%

74%
Australia

The market for skilled and experienced executives in the retail industry continues to be 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.

Australia
74%

Given these structural changes and the Group’s growing 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
The market for skilled and experienced executives in the retail industry continues to be increasingly competitive and
possible executive team through the provision of competitive remuneration packages, and incentive arrangements
international in nature. The Group’s strong domestic position, as well as global reach, provides exposure to an
which are aligned to growth and performance.
international pool of talent and access to a diverse range of strategies to respond to industry changes.

The Group’s strategic objective is to be recognised as a leader in the retail industry and build long term value for
Given these structural changes and the Group’s growing international business, the Board believes it is both critical to
shareholders. It seeks to do this in the following ways:
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, and incentive arrangements
which are aligned to growth and performance.

PREMIER RETAIL TRANSFORMATION STRATEGY – OUR FOCUS ON GROWTH AND
INVESTMENT

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 in the following ways:

GROWTH

CORE

 Grow Smiggle significantly

 Gross margin expansion program

 Grow Peter Alexander significantly

PREMIER RETAIL TRANSFORMATION STRATEGY – OUR FOCUS ON GROWTH AND
INVESTMENT

 Rejuvenation of core apparel brands

 Expansion and growth of online businesses
GROWTH

 Organisation-wide cost efficiency program

CORE

 Grow Smiggle significantly

 Gross margin expansion 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.

 Rejuvenation of core apparel brands

 Grow Peter Alexander significantly

 Expansion and growth of online businesses

 Organisation-wide cost efficiency program

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)

3A. Remuneration principles and strategy (continued)

To be recognised as a leader in our industry and build long-term value for our shareholders

Group Objective

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

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 in
Section 3D of this report).

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 2019 or 2018
financial years.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)

3B. Approach to setting remuneration

For the 52 weeks ended 27 July 2019, 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?

Executives have an STI opportunity of between 0% and 100% of their fixed
remuneration.

What are the applicable
financial performance
measures?

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 have 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.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

REMUNERATION REPORT (AUDITED) (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 indicators, 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 indicators, 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 objectives.

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. McInnes. Refer to section 5 for details surrounding Mr McInnes’ LTI
arrangements.

Who participates?

Executives.

How is LTI delivered?

Performance rights.

What were the
performance measures
for the 2019 and 2018
financial years?

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 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.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)

3D. Detail of incentive plans (continued)

Long-term incentive (“LTI”) (continued)

What were the
performance measures
for the 2019 and 2018
financial years
(continued)?

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

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 advisor 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.

When does the LTI
vest?

Generally, the performance rights will vest over a period of three years subject to
meeting performance measures. Performance rights have no opportunity to re-test.

How are grants treated
on termination?

Generally, all outstanding unvested rights are forfeited upon an executive resigning
from the Group.

May participants enter
into hedging
arrangements?

Are there restrictions
on disposals?

Do participants receive
distributions or
dividends on unvested
LTI grants?

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.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE)

Group performance and its link to STI
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE)
STI payment outcomes are primarily driven by Premier Retail’s underlying EBIT growth. The following chart shows
Group performance and its link to STI
Premier Retail’s underlying EBIT for the eight years since the appointment of Mr. McInnes as CEO Premier Retail.
STI payment outcomes are primarily driven by Premier Retail’s underlying EBIT growth. The following chart shows
Premier Retail’s underlying EBIT for the eight years since the appointment of Mr. McInnes as CEO Premier Retail.

Premier Retail Underlying EBIT

$180.0

$160.0
$180.0

$160.0

$140.0
$160.0

$140.0

$120.0
$140.0

$120.0

$100.0

$100.0
$120.0

$80.0
$100.0

Premier Retail Underlying EBIT

$136.0

$136.0
$136.0

$126.7

$105.7

$126.7
$126.7

$105.7

$92.8

$80.4

$83.7

$65.3

$80.4

$83.7

$80.4

$167.3

$150.1

$150.1
$150.1

$80.0

$60.0
$80.0

$60.0

$40.0
$60.0

$40.0

$20.0
$40.0

$20.0

$-
$20.0

$65.3

FY11

FY12

FY13

FY14

FY11

FY12

FY13

FY14
FY14

$'millions
* FY16 Underlying EBIT represents a comparable 52 week period.

FY15
$'millions
FY15
FY15
$'millions

FY16 *

FY17

FY18

FY19

FY16 *

FY16*

FY17

FY18

FY19

Note: The term underlying EBIT is not an IFRS defined term. Please refer to page 9 for a reconciliation between underlying EBIT and
* FY16 Underlying EBIT represents a comparable 52 week period.
statutory reported operating profit before tax for the Retail Segment.
Note: The term underlying EBIT is not an IFRS defined term. Please refer to page 9 for a reconciliation between underlying EBIT and

statutory reported operating profit before tax for the Retail Segment.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE) (CONTINUED)

DIRECTORS’ REPORT
Group performance and its link to LTI
(CONTINUED)
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 (as defined in section 3D of
this report).
REMUNERATION REPORT (AUDITED) (CONTINUED)
The table below illustrates the outcomes of the TSR testing performed during the 2018 and 2019 financial years in
relation to KMP:
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE) (CONTINUED)

Group performance and its link to LTI

Number of
Performance
Rights
The performance measure which drives LTI vesting is dependent on an absolute test, being a positive Group TSR
tested for
performance and a relative test, being a comparison against the Comparison Peer Group (as defined in section 3D of
KMP
this report).

Share price
at end of
testing
period

Share price
at start of
testing
period

TSR
percentage

Dividends
paid

TSR
percentile

Testing Period

4 Apr 2014 to 4 Apr 2018

$9.95

$15.93

87.67%

82.57

250,000*

The table below illustrates the outcomes of the TSR testing performed during the 2018 and 2019 financial years in
relation to KMP:

4 Apr 2014 to 4 Apr 2019

$9.95

$15.65

100.58%

74.53

$1.92 fully
franked

$2.54 fully
franked

* Relates to Mr. McInnes, refer to section 5 of this report.

Share price
at end of
testing
period
The below chart shows the Premier TSR against the S&P/ASX200 Index, from 4 April 2011 to 27 July 2019:

Share price
at start of
testing
period

TSR
percentage

Dividends
paid

TSR
percentile

Testing Period

250,000*
Number of
Performance
Rights
tested for
KMP

250,000*

4 Apr 2014 to 4 Apr 2018

4 Apr 2014 to 4 Apr 2019

30.00

$9.95

$15.93

Premier Investments Limited TSR against the
ASX200 Index from 4 April 2011 to 27 July 2019
Premier Investments Limited TSR Against the
ASX200 Index from 4 April 2011 to 27 July 2019

$1.92 fully
franked

$2.54 fully
franked

100.58%

87.67%

$15.65

$9.95

82.57

74.53

* Relates to Mr. McInnes, refer to section 5 of this report.

25.00

$167.3

30.00
The below chart shows the Premier TSR against the S&P/ASX200 Index, from 4 April 2011 to 27 July 2019:

20.00

25.00

15.00
30.00

20.00

10.00
25.00

15.00

5.00
20.00

10.00

–
15.00
Apr-11

5.00

10.00

Premier Investments Limited TSR against the
ASX200 Index from 4 April 2011 to 27 July 2019

Apr-12

Apr-13

Apr-14

Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

PMV

ASX 200

+263%

+100%

+263%

+100%

5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES

–
5.00

Mr. McInnes’ fixed remuneration

Apr-11

Apr-12

Apr-13

Apr-14

Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

Mr. McInnes’ annual fixed remuneration increased from $2,000,000 to $2,500,000, effective from the beginning of the
PMV
Apr-15
2016 financial year. This was Mr. McInnes’ first increase in fixed remuneration since joining the Group in 2011.

–
Apr-11

ASX 200

Apr-19

Apr-14

Apr-12

Apr-16

Apr-13

Apr-17

Apr-18

PMV

ASX 200

5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES

Mr. McInnes’ fixed remuneration

Mr. McInnes’ annual fixed remuneration increased from $2,000,000 to $2,500,000, effective from the beginning of the
2016 financial year. This was Mr. McInnes’ first increase in fixed remuneration since joining the Group in 2011.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)

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 the Notice
Period (or payment in lieu of the Notice Period).

Mr. McInnes’ STI arrangements

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

$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.

EBIT growth of above 10% of Base
Year

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%. The
Chairman has not used such discretion during the 2018 or 2019 financial years.

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.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)

Mr. McInnes’ STI arrangements (continued)

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’ STI payments during the financial years ended 27 July 2019 and 28 July 2018

During the 2019 financial year, an STI payment of $2,500,000 was made to Mr. McInnes which primarily reflected the
significant growth achieved in Premier Retail’s EBIT for the 2018 financial year.

During the 2018 financial year, an STI payment of $1,840,000 was made to Mr. McInnes which primarily reflected the
significant growth achieved in Premier Retail’s EBIT for the 2017 financial year.

The historical growth in Premier Retail’s underlying EBIT is detailed in the graph in section 4 of this report.

Mr. McInnes’ STI payment for the 2019 financial year will be finalised in December 2019.

Mr. McInnes’ LTI arrangements

Mr. McInnes is 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 (Tested, see further details provided in Section 5)

Tranche C – 4 April 2014 to 4 April 2019 (Tested, see further details provided in Section 5)

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.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)

Mr. McInnes’ LTI arrangements (continued)

The relative TSR performance targets and the corresponding vesting percentages are as follows:

Target

Below the 50th percentile

50th percentile

Between 50th and 62.5th percentile

62.5th percentile

Between 62.5th and 75th percentile

75th percentile and above

Conversion ratio of performance rights to shares
available to vest under the TSR performance condition:

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, 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, 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.

Provision of a LTI upon Mr. McInnes’ cessation of employment may be considered a termination benefit within the
meaning of Part 2D.2 of the Act.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)

Shares issued as a result of vesting of performance rights issued to Mr McInnes for the financial years ended
27 July 2019 and 28 July 2018

During the 2019 financial year, a tranche of 250,000 performance rights (being Tranche C) were tested for the period
4 April 2014 to 4 April 2019. The TSR over this period was 100.58%, placing Premier in the 74.53 percentile of the
Comparison Peer Group. Details of this test have been presented in Section 4 of this report. The testing resulted in
98% of the performance rights qualifying for vesting into 245,300 newly issued shares in May 2019.

During the 2018 financial year, a tranche of 250,000 performance rights (being Tranche B) were tested for the period
4 April 2014 to 4 April 2018. The TSR over this period was 87.67%, placing Premier in the 82.57 percentile of the
Comparison Peer Group. Details of this test have been presented in Section 4 of this report. The testing resulted in
100% of the performance rights qualifying for vesting into 250,000 newly issued shares in April 2018.

Mr. McInnes’ post-employment restrictions

If Mr. McInnes resigns, is Terminated Without Cause or is Terminated for 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
based on his current total fixed remuneration. 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 Restrictions 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.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

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 and Ms. Meyer, whose relevant terms of employment are set out below).
Material provisions of the service agreements are set out below:

Start
date

Term of
agreement

Review
period

Notice
period
required
from
Premier

Mr. McInnes

4 April
2011

Open

Annual

12 months

Mr. Bryce

13 Dec
2016

Open

Annual

12 months

Termination benefits

Upon
diminution
of role

Nil

Notice
period
required
from
employee

12 months
fixed rem.
including
notice

Nil

12 months

Premier
initiated

12 months
fixed rem.
including
notice

Mr. Davis
(retired: 4
February 2019)

17 Nov
1993

Ms. Meyer

4 Feb
2019

Open

Annual

3 months

Nil

3 months

Open

Annual

12 months Nil

Nil

12 months

7. NON-EXECUTIVE DIRECTOR REMUNERATION 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 2016 Annual General Meeting held on 2 December 2016 when shareholders approved an aggregate
remuneration of an amount not exceeding $1,500,000 per year.

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).

Premier Investments Limitede
c
n
a
m
r
o
f
r
e
P

d
e
t
a
l
e
r

l
a
t
o
T

d
e
s
a
b
e
r
a
h
S

m
r
e
t
-
g
n
o
L

s
e
v
i
t
n
e
c
n

-
t
s
o
P
r
e
h
t
O

y
r
a
t
e
n
o
M
-
n
o
N

t
n
e
m
y
o
p
m
e
-
t
s
o
P

m
r
e
t
-
t
r
o
h
S

t
n
e
m
y
o
p
m
e

n
o
i
t
a
u
n
n
a
r
e
p
u
S

s
t
i
f
e
n
e
B

h
s
a
C

e
e
F
/
y
r
a
l
a
S

T
R
O
P
E
R

’

S
R
O
T
C
E
R
D

)

D
E
U
N
T
N
O
C

9
1
0
2

(

:
s
w
o

l
l

o
f

s
a

e
r
a
r
a
e
y

a
c
n
a
n

i
f

e
h

d
a
p

p
u
o
r
G
e
h

o
P
M
K

r
o

s
e
c
v
r
e
s

r
o

n
o

i
t

a
s
n
e
p
m
o
c

f
o

t
n
e
m
e
e
h
c
a
e

f
o

t
n
u
o
m
a

d
n
a
e
r
u
t
a
n

e
h
t

f
o

l
i

a
t
e
D

)

P
M
K

(
L
E
N
N
O
S
R
E
P
T
N
E
M
E
G
A
N
A
M
Y
E
K
F
O
N
O
T
A
R
E
N
U
M
E
R

.
8

)

D
E
U
N
T
N
O
C

(

)

D
E
T
D
U
A

(
T
R
O
P
E
R
N
O
T
A
R
E
N
U
M
E
R

T
R
O
P
E
R

’

S
R
O
T
C
E
R
D

)

D
E
U
N
T
N
O
C

(

:
s
w
o

l
l

o
f

s
a

e
r
a
r
a
e
y

a
c
n
a
n

i
f

e
h

1
8
8
3
1

d
a
p

p
u
o
r
G
e
h

o
P
M
K

r
o

s
e
c
v
r
e
s

)

P
M
K

)

D
E
U
N
T
N
O
C

(

)

D
E
T
D
U
A

(
T
R
O
P
E
R
N
O
T
A
R
E
N
U
M
E
R

s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
-
n
o
N

(
L
E
N
N
O
S
R
E
P
T
N
E
M
E
G
A
N
A
M
Y
E
K
F
O
N
O
T
A
R
E
N
w
U
e
L
M
E
S
R
M
.
8

.
r

0
0
0
,
0
2
1

e
n
o
t
n
A

.
r

r
o

n
o

i
t

a
s
n
e
p
m
o
c

f
o

9
1
t
1
n
,
e
6
m
4
1
e
e
h
c
a
e

f
o

t
n
u
o
m
a

d
n
a
e
r
u
t
a
n

e
h
t

n
a
e
r
C
f
o

l
i

.
r

s
D
a
t
D
e
D

d
e
t
a
l
e
r

%
5
9
.
6

%
7
3
.
9
5

%
5
9
.
6

%
7
3
.
9
5

9
2

0
0
0
,
0
2
1

0
0
0
,
0
6
1

0
0
0
,
0
0
1

-
e
c
n
a
m
r
o
f
r
e
P

0
0
0
,
0
8

0
$
0
0
,
0
2
1

0
0
0
,
l
0
a
4
t
o
3
T

0
0
0
,
0
2
0
,
1

0
4
0
2
0
5
,
,
0
1
6
6
1
4

2
0
3
0
8
0
,
,
8
0
4
0
1
1

8
0
5
0
4
0
,
,
5
0
7
0
2
1

4
0
2
0
6
0
,
,
3
0
5
2
1
1
,
6

0
0
0
,
0
8

8
3
4
,
9
3
0
,
7

0
0
0
,
0
4
3

8
3
4
,
9
5
0
,
8

0
0
0
,
0
2
1

0
0
0
,
0
2
0
,
1

-
$

-
5
9
0
,
2
3

4
-
2
6
,
3
5
1
,
1

9
1
7
,
5
8
1
,
1

4
2
6
,
3
5
1
,
6

4
2
6
,
3
5
1
,
1

4
2
5
,
1
6
4

2
3
8
,
8
4
1

8
5
4
,
5
7
2

8
3
4
,
9
3
0
,
7

8
3
4
,
9
5
0
,
8

5
9
0
,
2
3

9
1
7
,
5
8
1
,
1

d
e
s
a
b
e
r
a
h
S

m
r
e
t
-
g
n
o
L

s
e
v
i
t
n
e
c
n

-
t
n
e
m
y
o
p
m
e

-
n
o
i
t
a
u
n
n
a
r
e
p
u
S

t
n
e
m
y
o
p
5
m
7
6
e
-
8
t
s
o
P

5
7
6
8

-
t
s
o
P
r
e
h
t
O

-
y
r
a
t
e
n
o
M
-
n
o
N

-
$

.
9
1
0
2

0
$
0
0
5
2

1
3
2
6
5

0
-
0
0
5
2

1
0
8
7
8
5
3
0
1
2

8
5
7
0
6
8
8
7
1

6
5
6
7
2
6
0
8
1

4
4
6
3
7

0
0
0
5
2

1
3
2
6
5

0
0
0
5
2

0
7
5
0
2

8
0
8
7
1

5
7
8
9
2
1

6
6
2
0
1

y
r
a
u
r
b
e
F
4
n
o

0
0
5
2

r
e
y
e
M

.
s
M

4
4
6
3
7

5
7
8
9
2
1

0
0
0

5
7
0
,
0
8
2
,
3

4
4
8
,
3
4
2
,
4

s
e
v
i
t
u
c
e
x
e

l
a
t
o
T

9
1
0
2
L
A
T
O
T

y
r
a
t
e
r
c
e
S
y
n
a
p
m
o
C
s
a
d
e
t
n
o
p
p
a

s
a
w

.
9
1
0
2

y
r
a
u
r
b
e
F
4

n
o

y
r
a
t
e
r
c
e
S
y
n
a
p
m
o
C
s
a
d
e
r
i
t
e
r

T
S
e
h
t

2
9
1
,
5
6
2

.
s
e
n
n
I
c
M

.
r

r
o
f

t
n
e
m
y
a
p

o
t
g
n
i
t
a
e
r

n
o
i
t
a
m
r
o
f
n

r
e
h
t
r
u
f

r
o
f
3
5
s
2
v
e
a
g
D
a
p

o
t

F
K

s
v
a
D

.
r

r
e
f
e
M
R

.
r

-
$

s
t
i
f
e
n
e
B

m
r
e
t
-
t
r
o
h
S

5
2
3
,
1
9

0
0
0
,
0
8

h
s
a
C

0
0
e
0
e
,
F
0
4
/
y
3
r
a
l
a
S

-
$

0
$
0
0
,
5
9

9
6
7
,
3
6
9

-
2
0
0
0
0
0
5

0
0
0
0
0
0
,
,
5
0
7
2
4
1
,
2

0
0
0

0
0
5
2

2
0
0
0
0
0
5

9
9
1
5
1
8
,
,
6
8
4
0
4
1

4
5
2
2
0
3
,
,
1
1
3
9
1

2
5
9
2
1
3
,
,
5
1
6
9
2

0
0
0
,
5
9

0
0
0
,
0
8

5
7
0
,
0
8
2
,
3

0
0
0
,
0
4
3

4
4
8
,
3
4
2
,
4

9
6
7
,
3
6
9

9
5
8
,
8
0
4

0
0
0
,
5
7
4
,
2

.
r
e
b
4
e
L
2
0
h
,
c
1
o
3
B
1
d
o
n
r
A
o
t

s
r
o
t
c
e
s
r
r
i
o
D
t
c
e
e
v
r
i
t
i
D
u
c
e
e
v
x
i
E
t
u
-
n
c
e
o
x
N
E
l
-
a
n
t
o
o
N
T

y
e
n
t
r
a
C
c
M

.
L
.
T
9
1
.
r
0
M
2

1
r
e
z
n
a
L

.
r

d
o
e
L
c
M

.
I

.
r

n
o
z
a
F

.
s
M

n
a
m
r
e
H
S

.
s
M

s
w
e
v
e
i
L
t
u
S
c
e
x
M
E

.
r

e
c
n
y
a
r
e
B
r
C
S
.
.
D
J

.
r

M
D

3
n
r
e
o
y
z
e
a
M
F
M
S

3
n
s
a
v
m
a
D
r
e
H
.
F
S
K

.
.
s
s
M
M

.
.
s
r
M
M

1
r
e
z
n
a
L

s
e
v
i
t
u
c
e
x
D
e
H
l
a
t
o
M
T

.
r

s
e
e
n
n
n
o
I
c
t
n
M
A
M
T

.
r

M
M

s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
-
n
o
N

l
a
t
o
T

d
o
e
L
c
M

.
I

.
r

d
a
p

e
r
e
w
s
e
e
f

s
’
r
o
t
c
e
3
r
r
i
e
d
y
s
e
’
r
M
e
z
.
n
M
a
L
.
s
.
r
M
M

s
e
n
n
I
c
M

.
r

e
c
y
r

S
.
J

.
r

s
e
v
i
t
u
c
e
x
E

y
e
n
t
r
a
C
c
M

.
L
.
T

9
1
0
2
L
A
T
O
T

.
r

.
9
1
0
2

y
r
a
u
r
b
e
F
4
n
o

y
r
a
t
e
r
c
e
S
y
n
a
p
m
o
C
s
a
d
e
t
n
o
p
p
a

s
a
w

r
e
y
e
M

.
s
M

.
9
1
0
2

y
r
a
u
r
b
e
F
4

n
o

y
r
a
t
e
r
c
e
S
y
n
a
p
m
o
C
s
a
d
e
r
i
t
e
r

s
v
a
D

.
r

.
s
e
n
n
I
c
M

.
r

r
o
f

t
n
e
m
y
a
p

T
S
e
h
t

o
t
g
n
i
t
a
e
r

n
o
i
t
a
m
r
o
f
n

r
e
h
t
r
u
f

r
o
f
5
2
e
g
a
p

o
t

r
e
f
e
R

.
r
e
b
e
L
h
c
o
B
d
o
n
r
A
o
t

d
a
p

e
r
e
w
s
e
e
f

s
’
r
o
t
c
e
r
i
d

s
’
r
e
z
n
a
L

.
r

Annual Report 2019

d
e
t
a
l
e
r

2
4
.
2

2
1
.
1
6

2
4
.
2

2
1
.
1
6

0
3

-
e
c
n
a
m
r
o
f
r
e
P

e
c
n
a
m
r
o
f
r
e
P

d
e
t
a
l
e
r

l
a
t
o
T

0
0
$
0
,
0
6
1

0
0
0
,
0
l
2
a
1
t
o
T

4
3
6
,
7
3

0
0
-
0
,
0
8

0
0
0
0
0
,
0
0
,
0
0
1
2
1

0
0
0
0
0
,
0
0
,
8
0
6
1

0
0
4
0
3
,
6
0
,
4
7
3
3

0
0
0
0
0
,
0
0
,
2
0
1
8

0
0
0
0
0
,
0
0
,
8
0
0
1

4
3
0
6
0
,
0
7
,
1
0
1
8
,
1

0
0
0
,
0
4
3

7
5
0
,
5
5
4

0
0
0
,
0
8

1
8
4
,
6
2
8
,
6

0
0
0
,
0
2
1

d
e
s
a
b
e
r
a
h
S

m
r
e
t
-
g
n
o
L

s
e
v
i
t
n
e
c
n

-
$

d
e
s
a
b
e
r
a
h
S

m
r
e
t
-
g
n
o
L

s
e
v
i
t
n
e
c
n

2
3
0
,
1
1

1
7
0
,
2
3
3
,
2

0
0
4
6
3
,
6
9
,
2
7
5
1
1
,
1

8
3
1
,
1
1
8
,
7

2
7
7
,
8
2
9
,
8

1
8
4
,
6
2
8
,
6

7
5
0
,
5
5
4

0
0
6
,
9
2
5

8
3
1
,
1
1
8
,
7

2
7
7
,
8
2
9
,
8

3
0
1
,
3
4
3
,
2

1
7
0
,
2
3
3
,
2

2
3
0
,
1
1

3
0
1
,
3
4
3
,
2

-
$

t
n
e
m
y
o
p
m
e

n
o
i
t
a
u
n
n
a
r
e
p
u
S

s
t
i
f
e
n
e
B

h
s
a
C

t
n
e
m
y
o
p
m
e
-
t
s
o
P

-
t
s
o
P
r
e
h
t
O

t
n
e
m
y
o
p
m
e

-
n
o
i
t
a
u
n
n
a
r
e
p
u
S

y
r
a
t
e
n
o
M
-
n
o
N

s
t
i
f
e
n
e
B

m
r
e
t
-
t
r
o
h
S

)

D
e
e
E
F
U
/
y
N
r
a
T
l
a
N
S
O
C

(

h
s
a
C

0
0
0
e
,
0
e
2
F
1
/
y
r
a
l
a
S

t
n
e
m
y
o
p
m
e
-
t
s
o
P

-
t
s
o
P
r
e
h
t
O

y
r
a
t
e
n
o
M
-
n
o
N

m
r
e
t
-
t
r
o
h
S

)

D
E
U
N
T
N
O
C

(

)

D
E
T
D
U
A

(
T
R
O
P
E
R
N
O
T
A
R
E
N
U
M
E
R

d
e
u
n
i
t
n
o
c

t
r
o
T
p
R
e
O
P
R
E
R
s
’
S
r
R
o
O
D
t
E
T
c
U
C
N
e
E
T
r
N
R
O
i
I
D
C
D

’

(

)

D
E
U
N
T
N
O
C

(

)

D
E
T
D
U
A

(
T
R
O
P
E
R
N
O
T
A
R
E
N
U
M
E
R

T
R
O
P
E
R

’

S
R
O
T
C
E
R
D

)

D
E
U
N
T
N
O
C

(

P
M
K
F
O
N
O
T
A
R
E
D
N
E
U
U
M
N
E
T
R
N
O
8
C
(

)

5
6
2

1
4
-
9

6
7
-
6

1
8
$
8

3
1

-
5
6
2

-
1
8
8

3
1

0
0
1
0
4
9
5
2
6

1
4
6
9
7
6
6
8

4
0
-
7

4
6

0
0
0

5
2

9
8
0

1
4
9

0
2

9
4
4
0
0
7
0
2
4
6

-
$

0
1
4

4
5
1

-
$

2
0
0
0
0
4
8

8
3
1

5
6

0
1
4

4
5
1

0
0
0
0
4
8
1

2
4
8

0
0
0

9
2
1

5
2

0
1
4

4
5
1

0
0
0
0
4
8
1

2
0
0
0
0
4
8

9
8
0

0
2

9
4
0

0
2

8
3
1

5
6

2
4
8

9
2
1

0
1
4

4
5
1

0
1
4

4
5
1

0
0
0
0
4
8
1

9
6
3
,
4
3

9
5
-
0
,
3
7

9
1
$
1
,
6
4
1

4
2
0
3
0
,
0
1
,
9
0
2
1

0
0
9
0
1
,
1
0
,
8
6
4
1

0
0
9
0
6
,
3
0
,
4
4
3
3

0
0
9
0
5
,
0
5
,
9
3
7

9
5
4
0
2
,
3
3
,
7
1
9

0
3
0
9
0
,
0
2
,
5
0
0
8
,
1

0
0
0
,
0
4
3

6
3
9
,
3
2
4

9
5
0
,
3
7

0
0
0
,
5
9

0
0
0
,
5
7
4
,
2

1
5
0
5
3
,
9
9
,
0
2
5
5
0
,
1

7
8
4
,
8
0
4
,
3

7
1
4
,
1
6
4
,
4

0
0
0
,
5
7
4
,
2

6
3
9
,
3
2
4

1
5
5
,
9
0
5

7
8
4
,
8
0
4
,
3

7
1
4
,
1
6
4
,
4

P
M
K
F
O
N
O
T
A
R
E
N
U
M
E
8
R
1
0
2

.
8

s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E

-
n
o
N

s
r
o
t
c
e
r
i
D
e
n
v
o
i
z
t
u
l
a
c
F
e
x
.
S
E

-
.
n
s
M
o
N

e
n
o
t
n
A

T
8
.
r
1
M
0
2

w
e
L

.
r

n
a
e
r
C

.
r

3
x
o
F
w
.
E
e
L
.
L
.
S
M
M

.
r

n
a
e
m
n
r
o
e
t
H
n
A
S
T
.
s
.
M
r
M

1
r
e
z
n
a
n
L
a
.
e
D
r
C
H
D
M
D

.
r

y
e
n
t
r
a
C
n
c
o
M
z
a
.
L
F
.
T
S

.
r
.
M
s
M

d
o
e
L
c
M
3
x
.
I
o
.
F
R
E
M
.
L
.
r
M
M

.
r

s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
1
r
e
e
x
z
E
n
-
a
n
L
o
N
D
l
.
a
H
t
o
.
T
r
M

y
e
n
t
r
a
s
C
e
c
v
M
i
t
u
c
e
x
E
M

.
L
T

.
r

s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
s
e
v
x
a
E
D
-
n
F
o
N
K
l
a
.
r
t
M
o
T

s
e
v
i
t
u
c
s
e
e
x
v
e
i
t
l
u
a
c
t
o
e
x
T
E

s
e
v
i
t
u
c
e
x
e

l
a
t
o
T

8
1
0
2
L
A
T
O
T

e
c
y
r
B

S
.
J

.
r

s
v
a
D

.
r

s
8
e
1
n
0
n
2
I
c
M
L
A
T
M
O
T
M

.
r

3
s
e
s
c
y
e
r
W
B
S
H
.
J
G
M
D

.
r

.
I

d
o
e
s
L
e
c
n
M
n
I
c
M
R
M
M
M
M

.
r

3
s
s
n
e
a
W
m
.
r
H
e
H
G
S

.
r
.
s
D
M

.
s
e
n
n
I
c
M

.
r

r
o
f

t
n
e
m
y
a
p

T
S
e
h
t

o
t
g
n
i
t
a
e
r

n
o
i
t
a
m
r
o
f
n

r
e
h
t
r
u
f

r
o
f
5
2
e
g
a
p

o
t

r
e
f
e
R

.
8
1
0
2
y
u
J

8
2

n
o

d
r
a
o
B
e
h
t

m
o
r
f
d
e
r
i
t
e
r

s
s
e
W

.
r

M
d
n
a

x
o
F

.
r

.
r
e
b
e
L
h
c
o
B
d
o
n
r
A
o
t

d
a
p

e
r
e
w
s
e
e
f

s
’
r
o
t
c
e
r
i
d

s
’
r
e
z
n
a
L

.
r

.
s
e
n
n
I
c
M

.
r

r
o
f

t
n
e
m
y
a
p

T
S
e
h
t

o
t
g
n
i
t
a
e
r

n
o
i
t
a
m
r
o
f
n

r
e
h

t
r
u
f

r
o
f
5
2
e
g
a
p

o
t

r
e

f
e
R

8
1
0
2
y
u
J

8
2

n
o

d
r
a
o
B
e
h
t

m
o
r
f
d
e
r
i
t
e
r

s
s
e
W

.
r

M
d
n
a

x
o
F

.
r

.
r
e
b
e
L
h
c
o
B
d
o
n
r
A
o
t

d
a
p

e
r
e
w
s
e
e
f

s
’
r
o
t
c
e
r
i
d

s
’
r
e
z
n
a
L

.
r

Premier Investments Limited

DIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

9. ADDITIONAL DISCLOSURES RELATING TO RIGHTS AND SHARES OF KMP

a) Rights awarded, vested and lapsed during the year:

The table below discloses the number of performance rights granted to KMP as remuneration for the financial year
ended 27 July 2019, as well as the number of rights vested and lapsed during the year:

Terms and conditions

Grant date

Year
granted

Rights
granted
during the
year
No.

Expiry and
Exercise
date

Fair value
per right
at grant
date
$

Rights vested and
lapsed during 2019

Rights
vested

Rights
lapsed

No.

2019

Mr. M. McInnes
Mr. J.S. Bryce

2016
2019

-
6,188

26 Apr 2016
12 Apr 2019

-
6.81

-
1 Oct 2021

245,300
-

4,700
-

b) Value of rights awarded, exercised and lapsed during the year:

Value of rights granted
during the year

2019

Mr. M. McInnes

Mr. J.S. Bryce

42,140

Value of rights
exercised during
the year
$

Value of rights
lapsed during the
year
$

Remuneration
consisting of
rights for the year
%

4,155,382

79,618

18.75%

6.95%

There were no alterations to the terms and conditions of rights awarded as remuneration since their award date.
The value of rights exercised and lapsed during the year represent the intrinsic value of the rights based on the share
price on the relevant day of vesting/ lapse.

c) Shares issued on exercise of rights:

2019

Shares issued
No

Paid per share
$

Unpaid per share
$

Mr. M. McInnes

245,300

There were no alterations to the terms and conditions of rights awarded as remuneration since their award date.

d) Rights holdings of KMP:

2019

Balance at
28 July
2018

Granted as
remuneration

Rights
exercised

Rights
lapsed

Balance at
27 July 2019

Rights not
exercisable

At 27 July 2019

Mr. M. McInnes
Mr. J.S. Bryce

500,000
8,713

-
6,188

(245,300)
-

(4,700)
-

250,000
14,901

Rights granted to key management personnel were made in accordance with the provisions of the Group’s
Performance Rights Plan.

Annual Report 2019DIRECTORS’ REPORT
Director’s Report continued
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

9. ADDITIONAL DISCLOSURES RELATING TO RIGHTS AND SHARES (CONTINUED)

e) Number of Shares held in Premier Investments Limited by KMP:

2019

NON-EXECUTIVE
DIRECTORS

Mr. S. Lew *
Mr. T. Antonie

Dr. D.M. Crean

Ms. S. Falzon

Ms. S. Herman

Mr. H.D. Lanzer

Mr. T.L. McCartney
Mr. M.R.I. McLeod

EXECUTIVES

Mr. M. McInnes

Mr. J.S. Bryce

Ms. M. Meyer **

Mr. K.F. Davis **

TOTAL

BALANCE
28 JULY 2018
ORDINARY

SHARE
PURCHASE
ORDINARY

SHARES
ACQUIRED
UNDER
PERFORMANCE
RIGHTS PLAN
ORDINARY

NET CHANGE -
OTHER
ORDINARY

BALANCE
27 JULY 2019
ORDINARY

4,437,699

8,000

27,665

28,186

486,800

4,988,350

245,300

4,437,699

8,000

27,665

28,186

732,100

5,233,650

* 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 (2018: 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. Davis retired as Company Secretary on 4 February 2019, and Ms. Meyer was appointed on 4 February 2019.

10. ADDITIONAL DISCLOSURES RELATING TO TRANSACTIONS AND BALANCES WITH KMP

Details and terms and conditions of other transactions and balances with KMP and their related parties

Mr. Lanzer is the managing partner of the legal firm Arnold Bloch Leibler. Group companies use the
services of Arnold Bloch Leibler from time to time. Legal services totalling $1,797,386 (2018: $1,996,754),
including Mr. Lanzer's Director fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the
Group, with $30,445 (2018: $58,580) remaining outstanding at year-end. The fees paid for these services
were at arm's length and on normal commercial terms.

Premier Investments LimitedDIRECTORS’ REPORT

(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

10. ADDITIONAL DISCLOSURES RELATING TO TRANSACTIONS AND BALANCES WITH KMP

(CONTINUED)

Details and terms and conditions of other transactions and balances with KMP and their related parties
(continued)

Mr. Lanzer is a director of Loch Awe Pty Ltd. During the year, operating lease payments totalling $330,000
(2018: $330,000) 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 $22,842,474 (2018: $16,404,781) including GST have been made by Group companies
from Voyager Distributing Co. Pty Ltd, Playcorp Pty Ltd and Sky Chain Trading Limited, with $1,882,897
(2018: $1,737,758) 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 $518,650 (2018: $476,379) 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:

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

2019
$’000

1,913

2019
$’000

21,102

300

1,634

519

23,555

Annual Report 2019Auditor’s Independence Declaration

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

Auditor’s Independence Declaration to the Directors of Premier
Investments Limited

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

As lead auditor for the audit of the financial report of Premier Investments Limited for the financial year
ended 27 July 2019, 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

Auditor’s Independence Declaration to the Directors of Premier
Investments Limited

relation to the audit; and

b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Premier Investments Limited and the entities it controlled during the
As lead auditor for the audit of the financial report of Premier Investments Limited for the financial year
financial period.
ended 27 July 2019, I declare to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the audit; and

b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Premier Investments Limited and the entities it controlled during the
Ernst & Young
financial period.

Rob Perry
Ernst & Young
Partner
02 October 2019

Rob Perry
Partner
02 October 2019

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

Premier Investments LimitedSTATEMENT OF COMPREHENSIVE INCOME
Statement of Comprehensive Income
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018

for the 52 weeks ended 27 July 2019 and 28 July 2018

STATEMENT OF COMPREHENSIVE INCOME
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018

CONSOLIDATED

NOTES

2019
$’000

2018
$’000

NOTES

Revenue from contracts with customers

Other revenue

Total revenue

Other income

Total revenue and other income

Revenue from contracts with customers

Other revenue

Changes in inventories of finished goods

Total revenue

Employee expenses

Other income

Operating lease rental expense
Total revenue and other income

Depreciation, impairment and amortisation of non-current assets

Advertising and direct marketing

Changes in inventories of finished goods

Finance costs
Employee expenses
Other expenses

Operating lease rental expense

Depreciation, impairment and amortisation of non-current assets

Total expenses

Advertising and direct marketing
Share of profit of associate

Finance costs

Profit from continuing operations before income tax

Other expenses

Income tax expense

Total expenses

Net profit for the period attributable to owners

Share of profit of associate

Other comprehensive income

Profit from continuing operations before income tax

Income tax expense

Items that may be reclassified subsequently to profit or loss
Net (loss) gain on cash flow hedges

Net profit for the period attributable to owners

Foreign currency translation

Net movement in other comprehensive income of associates

Other comprehensive income

Income tax on items of other comprehensive income

Items that may be reclassified subsequently to profit or loss
Net (loss) gain on cash flow hedges

Other comprehensive (loss) income which may be reclassified
to profit or loss in subsequent periods, net of tax
Items not to be reclassified subsequently to profit or loss
Net fair value gain (loss) on listed equity investment

Net movement in other comprehensive income of associates

Foreign currency translation

Income tax on items of other comprehensive income

Other comprehensive (loss) income which may be reclassified
Other comprehensive income (loss) not to be reclassified to
to profit or loss in subsequent periods, net of tax
profit or loss in subsequent periods, net of tax
Items not to be reclassified subsequently to profit or loss
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Net fair value gain (loss) on listed equity investment
ATTRIBUTABLE TO THE OWNERS

Income tax on items of other comprehensive income

Other comprehensive income (loss) not to be reclassified to
Earnings per share from continuing operations attributable to
profit or loss in subsequent periods, net of tax
the ordinary equity holders of the parent:

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
ATTRIBUTABLE TO THE OWNERS

- basic, profit for the year (cents per share)

- diluted, profit for the year (cents per share)

Earnings per share from continuing operations attributable to
the ordinary equity holders of the parent:

1,270,958

CONSOLIDATED

1,182,221

4,108
2019
1,275,066
$’000

487

1,275,553

1,270,958

4,108
(484,380)

1,275,066

(302,642)
487
(224,393)

1,275,553

(52,315)

(15,896)

(484,380)

(7,687)

(302,642)

(55,404)

(224,393)
(1,142,717)
(52,315)

(15,896)

18,906

(7,687)
151,742

(55,404)

(44,935)

(1,142,717)

106,807
18,906

151,742

(44,935)

(7,937)

106,807

2,936

1,424

2,381

(7,937)

(1,196)
2,936

1,424

6,192

2,381
(1,857)

5,626
2018
$’000

1,187,847

1,193

1,189,040

1,182,221

5,626
(443,907)

1,187,847

(282,813)
1,193
(222,978)

1,189,040

(58,904)

(15,234)

(443,907)

(7,551)

(282,813)

(49,775)

(222,978)
(1,081,162)
(58,904)

(15,234)

16,087

(7,551)
123,965

(49,775)

(40,327)

(1,081,162)

83,638

16,087

123,965

(40,327)

33,343

83,638

5,214

1,424

(10,003)

33,343

29,978
5,214

1,424
(26,978)

(10,003)

7,913

(1,196)

4,335

6,192
109,946

(1,857)

29,978
(19,065)

(26,978)

94,551

7,913

4,335

(19,065)

109,946

67.51

67.19

94,551

52.97

52.64

- basic, profit for the year (cents per share)

The accompanying notes form an integral part of this Statement of Comprehensive Income.

- diluted, profit for the year (cents per share)

The accompanying notes form an integral part of this Statement of Comprehensive Income.

67.51

67.19

52.97

52.64

Annual Report 2019STATEMENT OF FINANCIAL POSITION
Statement of Financial Position
AS AT 27 JULY 2019 AND 28 JULY 2018

as at 27 July 2019 and 28 July 2018

STATEMENT OF FINANCIAL POSITION
AS AT 27 JULY 2019 AND 28 JULY 2018

ASSETS

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories
ASSETS
Other financial instruments
Current assets
Other current assets
Cash and cash equivalents
Total current assets
Trade and other receivables
Non-current assets
Inventories
Property, plant and equipment
Other financial instruments
Intangible assets
Other current assets
Deferred tax assets
Total current assets
Listed equity investment at fair value
Non-current assets
Investment in associate
Property, plant and equipment
Total non-current assets
Intangible assets
TOTAL ASSETS
Deferred tax assets
LIABILITIES
Listed equity investment at fair value
Current liabilities
Investment in associate
Trade and other payables
Total non-current assets
Income tax payable
TOTAL ASSETS
Provisions
LIABILITIES
Other current liabilities
Current liabilities
Total current liabilities
Trade and other payables
Non-current liabilities
Income tax payable
Interest-bearing liabilities
Provisions
Deferred tax liabilities
Other current liabilities
Provisions
Total current liabilities
Other financial instruments
Non-current liabilities
Other non-current liabilities
Interest-bearing liabilities
Total non-current liabilities
Deferred tax liabilities
TOTAL LIABILITIES
Provisions
NET ASSETS
Other financial instruments
EQUITY
Other non-current liabilities
Contributed equity
Total non-current liabilities
Reserves
TOTAL LIABILITIES
Retained earnings
NET ASSETS
TOTAL EQUITY
EQUITY

Contributed equity

Reserves

Retained earnings

TOTAL EQUITY

NOTES

9
NOTES
10

11
19

10
15
24
16
11
6

18
15

18
12

20
13
6
14
13

14
20

14
21

The accompanying notes form an integral part of this Statement of Financial Position.

CONSOLIDATED

2019
$’000

2018
$’000

CONSOLIDATED

190,255

23,011
2019
$’000
171,165

6,119

14,688
190,255
405,238
23,011

171,165
210,855
6,119
826,639
14,688
40,380
405,238
46,879

238,732
210,855
1,363,485
826,639
1,768,723
40,380

46,879

238,732
81,938
1,363,485
12,571
1,768,723
23,881

26,529

144,919
81,938

12,571
167,493
23,881
63,875
26,529
11,465
144,919
2,548

29,137
167,493
274,518
63,875
419,437
11,465
1,349,286
2,548

29,137
608,615
274,518
(10,858)
419,437
751,529
1,349,286
1,349,286

608,615

(10,858)

751,529

178,618

21,563
2018
$’000
159,313

11,973

15,323
178,618
386,790
21,563

159,313
238,167
11,973
825,949
15,323
36,637
386,790
40,687

223,184
238,167
1,364,624
825,949
1,751,414
36,637

40,687

223,184
84,558
1,364,624
9,947
1,751,414
19,234

21,629

135,368
84,558

9,947
175,684
19,234
63,933
21,629
2,040
135,368
425

29,030
175,684
271,112
63,933
406,480
2,040
1,344,934
425

29,030
608,615
271,112
(16,009)
406,480
752,328
1,344,934
1,344,934

608,615

(16,009)

752,328

1,349,286

1,344,934

Premier Investments LimitedSTATEMENT OF CASH FLOWS
Statement of Cash Flows
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018

for the 52 weeks ended 27 July 2019 and 28 July 2018

STATEMENT OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018
Receipts from customers (inclusive of GST)

Payments to suppliers and employees (inclusive of GST)

Interest received

Borrowing costs paid

Income taxes paid

CASH FLOWS FROM OPERATING ACTIVITIES
NET CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of GST)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to suppliers and employees (inclusive of GST)
Dividends received from listed equity investment
Interest received
Dividends received from investment in associate
Borrowing costs paid
Payment for trademarks
Income taxes paid
Purchase of investments

Proceeds from disposal of property, plant and equipment
NET CASH FLOWS FROM OPERATING ACTIVITIES

19(b)

Payment for property, plant and equipment
CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received from listed equity investment
NET CASH FLOWS USED IN INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends received from investment in associate

Equity dividends paid
Payment for trademarks
Proceeds from borrowings
Purchase of investments
Repayment of borrowings
Proceeds from disposal of property, plant and equipment

Payment for property, plant and equipment
NET CASH FLOWS USED IN FINANCING ACTIVITIES

NET CASH FLOWS USED IN INVESTING ACTIVITIES
NET INCREASE IN CASH HELD
CASH FLOWS FROM FINANCING ACTIVITIES

Cash at the beginning of the financial year
Equity dividends paid

Proceeds from borrowings
Net foreign exchange difference

Repayment of borrowings
CASH AT THE END OF THE FINANCIAL YEAR
NET CASH FLOWS USED IN FINANCING ACTIVITIES

19(a)

NET INCREASE IN CASH HELD

Cash at the beginning of the financial year

Net foreign exchange difference

CASH AT THE END OF THE FINANCIAL YEAR

19(a)

The accompanying notes form an integral part of this Statement of Cash Flows.

CONSOLIDATED

NOTES

2019
$’000

2018
$’000

1,397,331

1,303,577

(1,209,685)

(1,120,075)

3,919

CONSOLIDATED

3,702

(7,232)
2018
(46,121)
$’000

NOTES

19(b)

(7,892)
2019
(44,859)
$’000

138,814
1,397,331

(1,209,685)
-
3,919
12,654
(7,892)
(714)
(44,859)
(7,872)

-
138,814
(19,618)

-
(15,550)

12,654

(104,483)
(714)
173,000
(7,872)
(181,000)
-

(19,618)
(112,483)

(15,550)
10,781

178,618
(104,483)

173,000
856

(181,000)
190,255
(112,483)

10,781

178,618

856

190,255

133,851
1,303,577

(1,120,075)
1,769
3,702
11,267
(7,232)
(859)
(46,121)
-

326
133,851
(53,172)

1,769
(40,669)

11,267

(88,468)
(859)
107,000
-
(105,000)
326

(53,172)
(86,468)

(40,669)
6,714

170,631
(88,468)

107,000
1,273

(105,000)
178,618
(86,468)

6,714

170,631

1,273

178,618

Annual Report 2019)
3
2
1
,
3
(

6
4
9
,
9
0
1

9
3
1
,
3

4
3
9
,
4
4
3
,
1

8
2
3
,
2
5
7

)
3
2
1
,
3
(

7
0
8
,
6
0
1

5
3
3
,
4

)
3
4
2
,
3
4
(

0
6
3
,
4

7
7
9
,
2

0
6
3
,
4

9
5
0

)
6
5
5

5
(

4
3
7
5
1

4
6
4

5
1
6
8
0
6

E
V
R
E
S
E
R

N
O
T
A
L
S
N
A
R
T

E
V
R
E
S
E
R

L
A
T
O
T

S
T
F
O
R
P

D
E
N
A
T
E
R

E
V
R
E
S
E
R

E
U
L
A
V
R
A
F

N
G
E
R
O
F

Y
C
N
E
R
R
U
C

E
G
D
E
H

W
O
L
F
H
S
A
C

E
C
N
A
M
R
O
F
R
E
P

S
T
H
G
R

E
V
R
E
S
E
R

L
A
T
P
A
C

S
T
F
O
R
P

E
V
R
E
S
E
R

Y
T
U
Q
E

8
1
D
0
E
2
T
Y
U
L
B
U
R
J
T
8
N
2
O
D
C
N
A
9
1
0
2
Y
L
U
J

7
2
D
E
D
N
E
S
K
E
E
W
2
5
E
H
T
R
O
F

0
0
0
’
$

D
E
T
A
D
L
O
0
S
0
N
0
’
O
$
C

0
0
0
’
$

7
0
8
,
6
0
1

1
1
8
,
1
4
3
,
1

5
0
2
,
9
4
7

0
0
0
’
$

7
0
8
,
6
0
1

0
0
0
’
$

)
3
4
2
,
3
4
(

)
3
2
1
,
3
(

L
A
T
O
T

4
3
9
,
4
4
3
,
1

S
)
3
T
2
F
1
O
,
3
R
(
P

8
2
3
,
2
5
7

D
E
N
A
T
E
R

E
-
V
R
E
S
E
R

)
3
4
2
,
3
4
(

E
U
L
A
V
R
A
F

7
7
9
,
2

N
G
E
R
O
F

-
Y
C
N
E
R
R
U
C

-
E
G
D
E
H

9
5
0

W
O
L
F
H
S
A
C

-
S
T
H
G
R

4
3
7
5
1

E
C
N
A
M
R
O
F
R
E
P

4
6
4

L
A
T
P
A
C

-
S
T
F
O
R
P

Y
-
T
U
Q
E

5
1
6
8
0
6

D
E
T
U
B
R
T
N
O
C

5
1
B
S
A
A

f
o
n
o
i
t
a
c

i
l

p
p
a

a
i
t
i
n

8
1
0
2

y
u
J

9
2

n
o

t
n
e
m
e
t
a
t
s
e
R

0
0
0
’
$

7
7
9
,
2

E
V
R
E
S
E
R

N
O
T
A
L
S
N
A
R
T

9
5
0

E
V
R
E
S
E
R

4
3
7
5
1

E
V
R
E
S
E
R

0
0
0
’
$

4
6
4

E
V
R
E
S
E
R

0
0
0
’
$

5
1
6
8
0
6

8
1
0
2

y
u
J
9
2

s
a
e
c
n
a
a
b

d
e
t
a
t
s
e
R

d
o
i
r
e
p

e
h
t

r
o
f

t
i
f
o
r
p

t
e
N

D
E
T
A
D
L
O
S
N
O
C

Y
T
U
Q
E
N

S
E
G
N
A
H
C
F
O
T
N
E
M
E
T
A
T
S

y
t
i
u
q
E
n

8
1
0
2
I
Y
Y
s
L
T
U
e
J
U
8
g
2
Q
D
n
E
N
A
N
a
9
1
h
0
S
2
E
C
Y
L
G
U
N
J
f
7
A
2
o
H
D
E
C
D
t
N
F
n
E
O
S
e
K
T
E
m
N
E
W
E
M
e
2
5
E
t
E
H
T
a
T
A
t
R
T
O
S
S
F

8
1
0
2

y
l
u
J
8
2
d
n
a
9
1
0
2

y
l
u
J

7
2

d
e
d
n
e

s
k
e
e
w
2
5

e
h
t

r
o
f

1
1
8
,
1
4
3
,
1

2
1
0
,
2

9
3
1
,
3

7
0
8
,
6
0
1

6
4
9
,
9
0
1

)
3
8
4
,
4
0
1
(

6
8
2
,
9
4
3
,
1

3
2
7
1
6
0
,
,
5
2
3
3
,
1

)
8
3
3
8
6
4
,
,
3
4
8
0
1
(

6
3
8
1
2
9
,
,
9
0
4
1
3
,
1

1
5
5
,
4
9

3
7
6
,
5
3
3
,
1

8
3
6
,
3
8

8
7
1
,
3

3
1
9
,
0
1

1
5
5
,
4
9

)
8
6
4
,
8
8
(

4
3
9
,
4
4
3
,
1

8
7
1
,
3

)
8
6
4
,
8
8
(

4
3
9
,
4
4
3
,
1

8
3

5
0
2
,
9
4
7

7
0
8
,
6
0
1

9
2
5
,
1
5
7

7
0
8
,
6
0
1

)
3
8
4
,
4
0
1
(

-
8
5
1
,
7
5
7

)
8
3
3
8
6
4
,
,
3
4
8
0
1
(

9
-
2
5
,
1
5
7

8
3
6
,
3
8

8
5
1
,
7
5
7

8
3
6
,
3
8

)
8
6
4
,
8
8
(

8
2
3
,
2
5
7

)
8
6
4
,
8
8
(

8
2
3
,
2
5
7

)
3
4
2
,
3
4
(

5
3
3
,
4

)
8
0
9
,
8
3
(

7
7
9
,
2

0
6
3
,
4

7
3
3
,
7

9
5
0

)
6
5
5

5
(

)
6
5
5

5
(

3
0
5

4
3
7
5
1

2
1
0
2

6
4
7
7
1

-
)
8
7
1
,
4
2
(

-
)
1
6
6
,
3
(

-
)
1
8
2
5
1
(

2
6
1
5
0
5
2
2
1

,
,

-
-

)
)
8
5
0
6
9
0
,
,
8
9
3
1
(
(

)
5
6
0
,
9
1
(

-
-

7
8
3
3
3
6
,
,
7
6

8
3
6
,
6

-
-

3
0
0
4
5
3
2
3
2

,
,

0
4
3
3
2

)
8
7
1
,
4
2
(

)
1
6
6
,
3
(

)
1
8
2
5
1
(

)
5
6
0
,
9
1
(

)
3
4
2
,
3
4
(

8
3
6
,
6

7
7
9
,
2

0
4
3
3
2

9
5
0
8

0
4
3
3
2

)
3
4
2
,
3
4
(

7
7
9
,
2

9
5
0
8

-
-

6
-
4
7
7
1

8
7
1

6
5
5

2
1

4
3
7

5
1

8
7
1

4
3
7

5
1

4
6
4

5
1
6
8
0
6

4
6
4

-
4
6
4

-
-

4
-
6
4

4
6
4

5
1
6
8
0
6

-
-

-
5
1
6

8
0
6

5
-
1
6
8
0
6

5
1
6

8
0
6

4
6
4

5
1
6

8
0
6

8
1
0
2

y
u
J
9
2

d
o
i
r
e
p
e
h
t

5
1
B
S
A
A

f
o
n
o
i
t
a
c

i
l

p
p
a

r
o
f

e
m
o
c
n

i
e
v
i
s
n
e
h
e
r
p
m
o
c

l
a
t
o
T

a
i
t
i
n

n
o

t
n
e
m
e
t
a
t
s
e
R

r
i
e
h
t
n

i
s
r
e
n
w
o
h
t
i

w
s
n
o
i
t
c
a
s
n
a
r
T

d
o
i
r
e
p

e
h
t

r
o
f

:
s
r
e
n
w
o
s
a

s
a
e
c
n
a
a
b

d
e
t
a
t
s
e
R

y
t
i
c
a
p
a
c

t
i
f
o
r
p

t
e
N

e
m
o
c
n

e
v
s
n
e
h
e
r
p
m
o
c

r
e
h
t
O

8
1
0
2

y
u
J

9
2

d
o
i
r
e
p
e
h
t

r
o
f

e
m
o
c
n

i
e
v
i
s
n
e
h
e
r
p
m
o
c

d
a
p

s
d
n
e
d
v
D

l
a
t
o
T

r
i
e
h
t
n

i
s
r
e
n
w
o
h
t
i

9
1
0
2

y
l
u
J
7
2

t
a

w
s
n
o
i
t
c
a
s
n
a
r
T

s
a
e
c
n
a
l
a
B

d
o
i
r
e
p
e
h
t

r
o
f
e
m
o
c
n

e
v
i
s
n
e
h
e
r
p
m
o
c

l
a
t
o
T

d
e
u
s
s

s
t
h
g
7
i
1
r
0
e
2
c
n
y
a
u
m
J
r
o
0
3
f
r
e
t
A
P

d
o
i
r
e
p

e
h
d
t
i
a
r
o
p
f
s
t
d
i
f
o
n
r
e
p
d
i
t
v
e
N
D

:
s
r
e
n
w
o
s
a

y
t
i
c
a
p
a
c

e
9
m
1
o
0
c
2
n
y
e
l
u
v
J
s
n
7
e
2
h
t
e
a
r
p
s
m
a
o
e
c
c
n
r
e
a
h
l
a
t
O
B

r
i
e
h
t
n

s
r
e
n
w
o
h
t
i

w
s
n
o
i
t
c
a
s
n
a
r
T

d
o
i
r
e
p

e
h
t

r
o
f

t
i
f
o
r
p

t
e
N

:
s
r
e
n
w
o
s
a
y
t
i
c
a
p
a
c

7
1
0
2

y
u
J

0
3

e
m
o
c
n

d
e
u
s
s

s
t
h
g
i
r

e
v
s
n
e
h
e
r
p
m
o
c

r
e
h
t
O

e
c
n
a
m
r
o
f
r
e
P

e
m
o
c
n

d
e
u
s
s

e
v
s
n
e
h
e
r
p
m
o
c

s
t
h
g
i
r
e
c
n
a
m
r
o
f
r
e
P

r
e
h
t
O

d
o
i
r
e
p
e
h
t

r
o
f
e
m
o
c
n

e
v
i
s
n
e
h
e
r
p
m
o
c

r
i
e
h
t
n

8
1
0
2
y
u
J

s
r
e
n
w
o
h
t
i

8
2

t
a
s
a

w
s
n
o
i
t
c
a
s
n
a
r
T

d
a
p

s
d
n
e
d
v
D

l
a
t
o
T

e
c
n
a
l
a
B

4
6
4

5
1
6

8
0
6

d
e
u
s
s

s
t
h
g
i
r

e
c
n
a
m
r
o
f
r
e
P

d
a
p

s
d
n
e
d
v
D

8
1
0
2
y
u
J

8
2

t
a
s
a

e
c
n
a
l
a
B

y
t
i
u
q
E
n

s
e
g
n
a
h
C

f
o

t
n
e
m
e
t
a
t
S
s
h
t

f
o

t
r
a
p

a
r
g
e
t
n

n
a
m
r
o
f

:
s
s
e
r
t
e
o
n
n
w
g
n
o
y
s
n
a
a
p
y
m
t
i
o
c
c
a
c
p
a
a
e
c
h
T

y
t
i
u
q
E
n

s
e
g
n
a
h
C

f
o

t
n
e
m
e
t
a
t
S
s
h
t

f
o

t
r
a
p

a
r
g
e
t
n

n
a
m
r
o
f

s
e
t
o
n
g
n
y
n
a
p
m
o
c
c
a
e
h
T

Premier Investments Limited

Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018
for the 52 weeks ended 27 July 2019 and 28 July 2018

1 GENERAL INFORMATION

The financial report contains the consolidated financial statements of the consolidated entity, comprising
Premier Investments Limited (the ‘parent entity’) and its wholly owned subsidiaries (‘the Group’) for the
52 weeks ended 27 July 2019. The financial report was authorised for issue in accordance with a resolution
of the Directors on 2 October 2019.

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.

The Group has presented the content and structure of its financial report in a manner to improve and
clarify the presentation of financial information. The financial report is presented in such a way as to
provide users with more clear, understandable and structured financial information, which better explains
the financial performance and position of the Group.

The notes to the financial statements have been organised into the following sections:

(i) Other significant group accounting policies: Summarises the basis of financial statement preparation
and other accounting policies adopted in the preparation of these consolidated financial statements.
Specific accounting policies are disclosed in the note to which they relate.

(ii) Group performance: Contains the notes that focus on the results and performance of the Group.

(iii) Operating assets and liabilities: Provides information on the Group’s assets and liabilities used to

generate the Group’s performance.

(iv) Capital invested: Provides information on the capital invested which allows the Group to generate its

performance.

(v) Capital structure and risk management: Provides information on the Group’s capital structure and

summarises the Group’s Risk Management policies.

(vi) Group structure: Contains information in relation to the Group’s structure and related parties.

(vii) Other disclosures: Summarises other disclosures which are required in order to comply with

Australian Accounting Standards and other authoritative pronouncements.

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES

The consolidated financial report is prepared for the 52 weeks from 29 July 2018 to 27 July 2019.

Below is a summary of significant group accounting policies applicable to the Group which have not been
disclosed elsewhere. The notes to the financial statements, which contain detailed accounting policy
notes, should be read in conjunction with the below Group accounting policies.

(a) BASIS OF FINANCIAL REPORT 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 listed equity investments at fair
value, which have been measured at fair value as explained in the relevant accounting policies
throughout the notes.

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.

Annual Report 2019Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(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).

The consolidated financial statements are those of the consolidated entity, comprising Premier
Investments Limited and its wholly owned subsidiaries as at the end of each financial year. A list of the
Group’s subsidiaries is included in note 26.

Subsidiaries are entities that are controlled by the Group. Control is achieved when the Group has:

-
-
-

Power over the investee;
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.

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 revenue in the separate statement of comprehensive
income of the parent entity, and do not impact the recorded cost of the investment.

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.

(d) COMPARATIVE AMOUNTS

The current reporting period, 29 July 2018 to 27 July 2019, represents 52 weeks and the comparative
reporting period is from 30 July 2017 to 28 July 2018 which also represents 52 weeks. From time to time,
management may change prior year comparatives to reflect classifications applied in the current year.

(e) 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 results of which form the basis of the carrying values of assets and liabilities that are not readily
apparent from other sources.

Management has identified certain critical accounting policies for which significant judgements, estimates
and assumptions are required. These key judgements, estimates and assumptions have been disclosed as
part of the relevant note to the financial statements. 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.

(f) 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.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(g) CURRENT VERSUS NON-CURRENT CLASSIFICATION

The Group presents assets and liabilities in the statement of financial position based on current versus
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.

(h) FOREIGN CURRENCY TRANSLATION

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 the parent entity 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 are taken to profit or loss in the statement of comprehensive income. Non-monetary items
that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions.

As at the reporting date the assets and liabilities of the overseas subsidiaries are translated into the
presentation currency of the parent entity at the rate of exchange ruling at the reporting date and the
statements of comprehensive income are translated at the weighted average exchange rates for the
period. Exchange variations resulting from the translations are recognised in the foreign currency
translation reserve in equity.

(i) GOODS AND SERVICES TAX (GST), INCLUDING OTHER VALUE-ADDED 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.

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(j) 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 for new
and amended Australian Accounting Standards and AASB Interpretations relevant to the Group and its
operations that are effective for the current annual reporting period, described below:

AASB 15 Revenue from Contracts with Customers: The Group has adopted AASB 15 Revenue from
Contracts with Customers from 29 July 2018 which has superseded AASB 118 Revenue. Under AASB 15,
revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled
to in exchange for the transfer of goods to the customer.

In accordance with the transition provisions in AASB 15, the Group has adopted AASB 15 using the
modified retrospective approach. The impact of adopting the standard on the Group’s financial statements
has been adjusted in opening retained earnings in the Statement of Changes in Equity as at 29 July 2018.
Therefore, the comparative information was not restated and continues to be reported under AASB 118
and related Interpretations.

For the majority of retail sales (including online sales and concession sales), the adoption of AASB 15
does not have a material impact on the Group’s revenue and Comprehensive Income. Revenue
recognition occurs at the point in time when control of the asset is transferred to the customer, generally at
the point of sale or on delivery of the goods.

The impact of adopting AASB 15 has been noted in the customer’s right of return, customer loyalty
programmes and gift card breakage. The effects of adopting AASB 15 as at 29 July 2018 are described
below.

Right of return

1)
Under AASB 15, the Group estimates the value of expected customer returns that will arise as a result of
the Group’s returns policy, which entitles the customer to a refund of returned unused products within the
specified timeframe for the respective brands. At the same time, the Group recognises a right of return
asset, being the former carrying amount of the inventory, less any expected costs to recover the goods the
Group expects to be returned by customers as a result of the returns policy. Prior to the adoption of
AASB 15, no right of return provision was recognised by the Group.

The impact of transition to AASB 15 on the statement of financial position as at 29 July 2018 was to
recognise a right of return asset in trade and other receivables of $0.7 million, recognise a refund liability of
$2.0 million in provisions, an increase in deferred tax assets of $0.4 million and a decrease in retained
earnings of $0.9 million.

Customer loyalty programmes

2)
The Group operates certain loyalty programmes, which allow customers to accumulate points when
products are purchased, and which can be redeemed for free or discounted product once a minimum
number of points have been accumulated. Prior to the adoption of AASB 15, a portion of the consideration
received from the sale of goods was allocated to the loyalty programme according to the fair value of
points issued and recognised in deferred revenue in trade and other payables until the earlier of
redemption or expiry. Under AASB 15, loyalty points give rise to a separate performance obligation
providing a material right to the customer, therefore a portion of the transaction price is allocated to the
loyalty programme based on the relative stand-alone selling prices, resulting in a larger impact on deferred
revenue than previously recognised.

As a consequence of transition to AASB 15, the contract liability in relation to the customer loyalty
programmes at 29 July 2018 has increased by $2.4 million in other current liabilities, with a corresponding
increase in deferred tax assets of $0.7 million and a decrease in retained earnings of $1.7 million.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(j) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)

AASB 15 Revenue from Contracts with Customers (continued)

3) Gift cards
The Group recognises a contract liability upon the sale of gift cards and subsequently derecognises the
liability when gift card breakage occurs. Prior to the adoption of AASB 15, gift card breakage was
calculated according to the Group’s analysis of historical non-redemption rates. Upon adoption of
AASB 15, gift card breakage is estimated and recognised as revenue in proportion to the pattern of rights
exercised by customers. On expiry of the gift card, any unused funds are recognised in full as breakage.
Whilst the Group’s accounting treatment remains materially consistent, the adoption of
AASB 15 as at 29 July 2018 has resulted in an increase of $0.7 million of other current liabilities, an
increased deferred tax asset of $0.2 million and a decrease in retained earnings of $0.5 million.

The following table summarises the impact of adopting AASB 15 on the Group’s Statement of Financial
Position on adoption at 29 July 2018 for each of the line items affected:

ASSETS

Trade and other receivables

Deferred tax assets

TOTAL ASSETS

LIABILITIES

Provisions (current)

Other current liabilities

TOTAL LIABILITIES

NET ASSETS

EQUITY

Retained earnings

TOTAL EQUITY

AASB 118

(PREVIOUS
STANDARD)
$’000

CONSOLIDATED

ADJUSTMENTS
$’000

21,563

36,637

1,751,414

19,234

21,629

406,480

1,344,934

715

1,338

2,053

2,088

3,088

5,176

(3,123)

AASB 15

(ADOPTED
STANDARD)
$’000

22,278

37,975

1,753,467

21,322

24,717

411,656

1,341,811

752,328

1,344,934

(3,123)

749,205

1,341,811

There was no material impact on the Group’s Statement of Comprehensive Income and Statement of
Cash Flows for the 52 weeks ended 27 July 2019. The impact on opening asset and liability values as
disclosed in the above table have been incorporated in the changes in relevant assets and liabilities in the
reconciliation of net cash flows from operating activities, as disclosed in Note 19(b).

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 28 July 2019, are outlined below:

AASB Interpretation 23 Uncertainty over Income Tax Treatments: The Interpretation clarifies the
application of the recognition and measurement criteria in AASB 112 Income Taxes when there is
uncertainty over income tax treatments. The first application date for the Group will be for the financial year
ending 25 July 2020. The Group does not anticipate that the Interpretation will have a material impact on
the Group.

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(j) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)

Accounting Standards and Interpretations issued but not yet effective (continued)

AASB 16 Leases: AASB 16 Leases is effective for the Group from 28 July 2019. The Standard will replace
AASB 117 Leases and related interpretations. The Standard provides a comprehensive model for the
identification of lease arrangements and their treatment in the financial statements. AASB 16 introduces a
new lease accounting model for lessees that require lessees to recognise all leases on balance sheet,
except short-term leases and leases of low value assets, if the practical expedients were applied. Under
the Standard, the present value of reasonably certain lease payment would be shown as a liability on the
balance sheet together with an asset representing the right-of-use. In addition, the current operating lease
expense recognised in profit or loss in the statement of comprehensive income will largely be replaced with
amortisation and interest expense.

The Group will transition to the new Standard using the modified retrospective approach, with no
restatement of comparative information. The Group expects to be able to provide supplementary
information in investor presentations in the period of initial application to bridge the financial statement
disclosures between the old and new standard.

In applying the modified retrospective approach, the Group expects to apply a number of practical
expedients, which include the use of hindsight in determining the lease term where the contract contains
an option to extend, discount rates applied to a portfolio of leases with similar characteristics, and non-
lease components will not be separated out from lease components of a lease.

The Group is continuing its assessment of the estimated impact that AASB 16 has on its consolidated
financial statements as at 28 July 2019. The actual impact of applying AASB 16 on the financial
statements in the period of initial application will depend on the composition of the Group’s lease portfolio,
the extent to which the Group chooses to use all available practical expedients and recognition
exemptions, final discount rates used in calculating the lease liability and final determination of the
reasonably certain lease terms for leases with options and leases in holdover. An indicative range of the
lease liability on adoption of the new standard is set out below, allowing for these uncertainties. The actual
financial impact on the results for the year ending 25 July 2020 will be dependent on the final
determination of these highly judgemental areas and will also be contingent on any new leases entered
into during the financial year.

Estimated impact on consolidated Statement of Financial Position as at 28 July 2019:

CONSOLIDATED

ESTIMATED IMPACT RANGE

$’000

Lease Liability

390,000

440,000

The overall impact on the consolidated statement of cashflows as a result of adopting AASB 16 is
expected to be nil, as operating lease payments will continue to be paid as previously, however, the cash
outflow will largely be reclassified to financing activities rather than operating activities.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

GROUP PERFORMANCE

3 OPERATING SEGMENTS

Identification of 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 Group 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. The operating segments are identified by management based on the
nature of the business conducted, and for which discrete financial information is available and reported to
the chief operating decision maker on at least a monthly basis.

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.

Reportable Segments

Retail

The retail segment represents the financial performance of a number of speciality retail fashion chains.

Investment

The investment segment represents investments in securities for both long and short term gains, dividend
income and interest.

Accounting policies

The key accounting policies used by the Group in reporting segments internally are the same as those
contained in these financial statements.

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.

Segment capital expenditure

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and
equipment, and intangible assets other than goodwill.

The table on the following page presents revenue and profit information for operating segments for the
periods ended 27 July 2019 and 28 July 2018.

GROUP PERFORMANCE

3 OPERATING SEGMENTS (CONTINUED)

(A) OPERATING SEGMENTS

RETAIL

INVESTMENT

ELIMINATION

CONSOLIDATED

2019
$’000

2018
$’000

2019
$’000

2018
$’000

2019
$’000

2018
$’000

2019
$’000

2018
$’000

REVENUE AND OTHER INCOME

Revenue from contracts

1,270,958 1,182,221

- 1,270,958 1,182,221

270

184

487

106

195

1,193

3,616

3,526

3,886

98,038

82,799

(98,000)

(81,000)

222

487

3,632

1,994

1,193

with customers
Interest revenue

Other revenue

Other income

Total revenue and other

income

1,271,899 1,183,715

101,654

86,325

(98,000)

(81,000) 1,275,553 1,189,040

Total revenue per the statement of comprehensive income

1,275,553 1,189,040

RESULTS

Depreciation and

amortisation

United Kingdom

29,945

27,910

994

accelerated depreciation

21,021

355

30,000

2,084

5,603

5,467

2,084

18,906

16,087

Impairment of property

plant and equipment

Impairment of intangible

asset brand names

Interest expense

Share of profit of

associate

Profit before income

tax expense

Income tax expense

Net profit after tax per the statement of comprehensive income

30,939

28,904

21,021

355

30,000

7,687

7,551

18,906

16,087

(44,935)

(40,327)

106,807

83,638

135,762

142,484

113,980

62,481

(98,000)

(81,000)

151,742

123,965

RETAIL

INVESTMENT

ELIMINATION

CONSOLIDATED

2019
$’000

2018
$’000

2019
$’000

2018
$’000

2019
$’000

2018
$’000

2019
$’000

2018
$’000

ASSETS AND LIABILITIES

Segment assets

515,217

552,218

1,308,263 1,260,913

(54,757)

(61,717) 1,768,723 1,751,414

Segment liabilities

309,573

308,458

111,636

106,637

(1,772)

(8,906)

419,437

406,189

Capital expenditure

25,457

45,854

4,927

25,457

50,781

Premier Investments Limited

NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

GROUP PERFORMANCE

3 OPERATING SEGMENTS (CONTINUED)

(B) GEOGRAPHIC AREAS OF OPERATION

AUSTRALIA

NEW ZEALAND

ASIA

EUROPE

ELIMINATION

CONSOLIDATED

2019
$’000

REVENUE AND OTHER INCOME

Revenue from contracts

with customers

938,052

130,402

78,562

123,942

Other revenue and income

4,377

166

Total revenue and other

income

942,429

130,412

78,728

123,984

1,270,958

4,595

1,275,553

Segment non-current assets

1,355,983

10,828

9,738

29,455

37,194

1,443,198

Capital expenditure

14,250

3,424

387

7,396

25,457

AUSTRALIA

NEW ZEALAND

ASIA

EUROPE

ELIMINATION CONSOLIDATED

2018
$’000

REVENUE AND OTHER INCOME

Revenue from contracts

with customers

873,814

124,005

57,820

126,582

Other revenue and income

6,682

135

Total revenue and other

income

880,496

124,140

57,820

126,584

1,182,221

6,819

1,189,040

Segment non-current assets

1,263,789

8,233

8,363

46,292

37,947

1,364,624

Capital expenditure

33,123

103

2,522

15,033

50,781

Annual Report 2019
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

GROUP PERFORMANCE

4 REVENUE AND OTHER INCOME

REVENUE

Revenue from contracts with customers

1,270,958

1,182,221

CONSOLIDATED

2019
$’000

2018
$’000

Disaggregated revenue from contracts with customers is
presented in Note 3B, Operating Segments – Geographic
areas of operation.

OTHER REVENUE

Membership program fees

Sundry revenue

Interest received

Dividends received from listed equity investment

TOTAL OTHER REVENUE

TOTAL REVENUE

OTHER INCOME

Royalty and licence fees

Other

TOTAL OTHER INCOME

179

3,886

4,108

190

3,632

1,769

5,626

1,275,066

1,187,847

401

487

127

1,066

1,193

TOTAL REVENUE AND OTHER INCOME

1,275,553

1,189,040

REVENUE RECOGNITION ACCOUNTING POLICY

As summarised in note 2, the Group has adopted AASB 15 Revenue from Contracts with Customers as of
29 July 2018. The Group adopted AASB 15 using the modified retrospective approach, with the impact of
adopting the standard on the Group’s financial statements being adjusted in opening retained earnings in the
Statement of Changes in Equity.

For the majority of retail sales, including online sales and concession sales, the adoption of AASB 15 has not
had a material impact on the Group’s revenue and Other Comprehensive Income. Revenue recognition occurs
at the point in time when control of the asset is transferred to the customer, generally at the point of sale or on
delivery of the goods.

The impact of the adoption of AASB 15 has been noted in the areas of right of return, customer loyalty
programmes and revenue resulting from gift cards. Refer to note 2 for a summary of the accounting treatment
and policies prior to, and subsequent to the adoption of AASB 15 in these impacted areas.

Interest 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.

Dividend revenue is recognised when the Group’s right to receive the payment is established.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

GROUP PERFORMANCE

CONSOLIDATED

NOTES

2019
$’000

2018
$’000

5 EXPENSES

OPERATING LEASE EXPENSES

Minimum lease payments – operating leases

Contingent rentals

TOTAL OPERATING LEASE EXPENSES

DEPRECIATION, AMORTISATION AND IMPAIRMENT
OF NON-CURRENT ASSETS

Depreciation of property, plant and equipment

United Kingdom accelerated depreciation of plant and
equipment

Impairment of property, plant and equipment

Amortisation of leasehold premiums

Impairment of intangible asset brand names

TOTAL DEPRECIATION, AMORTISATION AND
IMPAIRMENT OF NON-CURRENT ASSETS

178,335

46,058

224,393

180,089

42,889

222,978

30,914

28,880

21,021

355

30,000

52,315

58,904

FINANCE COSTS

Interest on bank loans and overdraft

TOTAL FINANCE COSTS

OTHER EXPENSES INCLUDE:

Foreign exchange losses

Net loss on disposal of property, plant and equipment

United Kingdom – other expenses associated with
review of lease break options

7,687

153

728

4,837

7,551

989

176

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

GROUP PERFORMANCE

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

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

INCOME TAX EXPENSE REPORTED IN THE STATEMENT
OF COMPREHENSIVE INCOME

(b) STATEMENT OF CHANGES IN EQUITY

Deferred income tax related to items credited directly to equity:

Net deferred income tax on movements on cash-flow hedges
Net deferred income tax on unrealised gain (loss) on listed
equity investment at fair value

INCOME TAX (BENEFIT) EXPENSE REPORTED IN EQUITY

ACCOUNTING PROFIT BEFORE TAX MULTIPLIED BY THE
GROUP’S APPLICABLE AUSTRALIAN INCOME TAX RATE

CONSOLIDATED

2019
$’000

2018
$’000

47,530

1,065

(3,660)

40,680

(77)

2,371

(2,647)

44,935

40,327

(2,381)

1,857

(524)

10,003

(7,913)

2,090

Accounting profit before income tax

151,742

123,965

At the Parent Entity’s statutory income tax rate of
30% (2018: 30%)
Adjustment in respect of current income tax of previous years

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

45,523

1,065

2,700

(574)

(3,717)

(62)

44,935

37,190

(2,814)

10,965

(3,368)

(1,037)

(609)

40,327

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

GROUP PERFORMANCE

INCOME TAX (CONTINUED)

(d) 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 financial instruments

Inventory provisions

Deferred income

Employee provisions

Other receivables and prepayments

Property, plant and equipment

Other

CONSOLIDATED

2019
$’000

2018
$’000

634

(35,087)

(1,083)

498

11,113

6,707

(2,831)

(4,935)

1,489

630

(32,794)

(3,464)

290

12,572

6,302

(1,902)

(6,346)

(2,584)

NET DEFERRED TAX LIABILITIES

(23,495)

(27,296)

REFLECTED IN THE STATEMENT OF FINANCIAL
POSITION AS FOLLOWS:

Deferred tax assets

Deferred tax liabilities

NET DEFERRED TAX LIABILITIES

INCOME TAX ACCOUNTING POLICY

40,380

(63,875)

(23,495)

36,637

(63,933)

(27,296)

Income tax expense comprises current tax (amounts payable or receivable within 12 months) and deferred
tax (amounts payable or receivable after 12 months). Tax expense is recognised in profit or loss, unless it
relates to items that have been recognised in equity as part of other comprehensive income or directly in
equity. In this instance, the related tax expense is also recognised in other comprehensive income or directly
in equity.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the tax authorities based on the current and prior period taxable
income. The tax rates and tax laws used to calculate tax amounts are those that are enacted or substantially
enacted by the reporting date.

Deferred income tax

Deferred income tax is recognised on taxable temporary differences at the reporting date between the tax
base of the assets and liabilities and their carrying amounts for financial reporting purposes based on the
expected manner of recovery of the carrying value of an asset or liability. Deferred 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 substantially enacted at the reporting
date.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

GROUP PERFORMANCE

INCOME TAX (CONTINUED)

INCOME TAX ACCOUNTING POLICY (CONTINUED)

Deferred income tax liabilities are recognised for all 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 the taxable profit or loss: and

- When the taxable temporary difference is associated with investments in subsidiaries, associates and
interest 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 taxable temporary differences, except for the following:

- When the deferred tax asset 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;

- When the deductible temporary difference is associated with investments in subsidiaries, associates and
interest in joint ventures, in which case the 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 to utilise the deferred tax asset.

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.

Tax assets and tax liabilities are offset only if a legally enforceable right exists to set off and the tax assets
and tax 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.

KEY ACCOUNTING ESTIMATES AND JUDGEMENTS

Deferred tax assets are recognised for taxable 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.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

GROUP PERFORMANCE

INCOME TAX (CONTINUED)

KEY ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

Assumptions about the generation of future taxable profits depend on management's estimates of future
cash flows. These depend on estimates of future sales volumes, operating 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 in 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.

CONSOLIDATED

2019
$’000

2018
$’000

7 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

106,807

83,638

Weighted average number of ordinary shares used in
calculating:

- basic earnings per share

- diluted earnings per share

NUMBER OF
SHARES
‘000

158,209
158,969

157,890
158,897

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.

EARNINGS PER SHARE ACCOUNTING POLICY

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.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

GROUP PERFORMANCE

8 A) DIVIDENDS PAID AND PROPOSED

DIVIDENDS PAID

Declared and paid during the year:

Interim franked dividends for 2019:

33 cents per share (2018: 29 cents)

Final franked dividends for 2018:

33 cents per share (2017: 27 cents)

TOTAL DECLARED AND PAID DURING THE YEAR

DIVIDENDS PROPOSED

Final franked dividend proposed for 2019:

37 cents per share (2018: 33 cents)

CONSOLIDATED

2019
$’000

2018
$’000

52,282

45,849

52,201

104,483

42,619

88,468

58,619

52,201

The Directors of Premier Investments Limited declared a final dividend in respect of the 2018 financial
year. The total amount of the dividend is $58,619,000 (2018: $52,201,000) which represents a fully
franked dividend of 37 cents per share (2018: 33 cents per share).

B) 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% (2018: 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

2019
$’000

2018
$’000

208,467

215,483

6,965

4,848

(25,122)

190,310

(22,360)

197,971

The tax rate at which paid dividends have been franked is 30% (2018: 30%). Dividends proposed will be
franked at the rate of 30% (2018: 30%).

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

OPERATING ASSETS AND LIABILITIES

CONSOLIDATED

2019
$’000

2018
$’000

TRADE AND OTHER RECEIVABLES (CURRENT)

Sundry debtors

TOTAL CURRENT TRADE AND OTHER RECEIVABLES

23,011

21,563

(a) Impairment losses

Receivables are non-interest-bearing and are generally on 30 to 60 day terms. An allowance for credit losses is
recognised based on the expected credit loss from the time the financial asset is initially recognised. Bad debts
are written off when identified. No material allowance for credit losses has been recognised by the Group during
the financial year ended 27 July 2019 (2018: $nil). During the year, no bad debt expense (2018: $nil) was
recognised. It is expected that sundry debtor balances will be received when due.

(b) Fair value

Due to the short-term nature of these receivables, their carrying value is considered to approximate their fair
value.

TRADE AND OTHER RECEIVABLES ACCOUNTING POLICY

Trade and other receivables are classified as non-derivative financial assets and are recognised initially at fair
value. After initial measurement, these assets are measured at amortised cost, less any allowance for any
expected credit losses.

INVENTORIES

Finished goods

TOTAL INVENTORIES AT COST

INVENTORIES ACCOUNTING POLICY

CONSOLIDATED

2019
$’000

2018
$’000

171,165

159,313

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:

- 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.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

OPERATING ASSETS AND LIABILITIES

11 OTHER ASSETS (CURRENT)

Deposits and prepayments

TOTAL OTHER CURRENT ASSETS

12 TRADE AND OTHER PAYABLES (CURRENT)

Trade creditors

Other creditors and accruals

TOTAL CURRENT TRADE AND OTHER PAYABLES

(a) Fair values

CONSOLIDATED

2019
$’000

2018
$’000

14,688

35,281

46,657

81,938

15,323

43,282

41,276

84,558

Due to the short-term nature of these payables, their carrying values approximate their fair values.

TRADE AND OTHER PAYABLES ACCOUNTING POLICY

Trade and other payables 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 Group.

Trade liabilities are normally settled on terms of between 7 and 90 days.

CONSOLIDATED

2019
$’000

2018
$’000

13 PROVISIONS

CURRENT

Employee entitlements – Annual Leave

Employee entitlements – Long Service Leave

Provision for make-good in relation to leased premises

Refund liability

Other provisions

TOTAL CURRENT PROVISIONS

NON-CURRENT

Employee entitlements – Long Service Leave

Provision for make-good in relation to leased premises

Other provisions

TOTAL NON-CURRENT PROVISIONS

12,518

8,159

695

2,088

421

23,881

2,285

5,392

3,788

11,465

12,020

7,214

19,234

2,040

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

OPERATING ASSETS AND LIABILITIES

13 PROVISIONS (CONTINUED)

PROVISIONS ACCOUNTING POLICIES

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 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 discount rate that reflects the risks specific to the liability and the time value of money.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance
cost.

EMPLOYEE ENTITLEMENTS ACCOUNTING POLICIES

Current annual leave

The provisions for employee entitlements to wages, salaries and annual leave (which are 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.

Long service leave and non-current annual leave

The liability for long service leave and non-current annual leave (which are 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.

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.

PROVISION FOR MAKE-GOOD IN RELATION TO STORE PLANT AND EQUIPMENT ACCOUNTING POLICY

A provision has been recognised in relation to make-good costs arising from contractual obligations in lease
agreements, in regions where the Group has such a present obligation. The provision recognised represents
the present value of the estimated expenditure required to remove these store plant and equipment.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

OPERATING ASSETS AND LIABILITIES

14 OTHER LIABILITIES

CURRENT

Deferred income

TOTAL CURRENT

NON-CURRENT

Deferred income

TOTAL NON-CURRENT

CONSOLIDATED

2019
$’000

2018
$’000

26,529

29,137

21,629

29,030

DEFERRED INCOME ACCOUNTING POLICY

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.

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.

Unredeemed gift cards are expected to be redeemed within a year.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL INVESTED

15 PROPERTY, PLANT AND EQUIPMENT

CONSOLIDATED

LAND
$’000

BUILDINGS
$’000

PLANT AND
EQUIPMENT
$’000

LEASED
PLANT AND
EQUIPMENT
$’000

CAPITAL
WORKS IN
PROGRESS
$’000

TOTAL
$’000

21,953

54,720

482,337

343

9,977

569,330

(4,497)

(353,635)

(343)

(358,475)

21,953

50,223

128,702

21,953

51,591

152,553

23,612

3,938

(1,368)

(29,546)

(21,021)

(1,631)

(355)

1,152

21,953

50,223

128,702

9,977

210,855

12,070

1,845

(3,938)

238,167

25,457

(30,914)

(21,021)

(1,631)

(355)

1,152

9,977

210,855

21,953

54,720

455,266

343

12,070

544,352

(3,129)

(302,713)

(343)

(306,185)

AT 27 JULY 2019
Cost

Accumulated depreciation and
impairment

NET CARRYING AMOUNT

RECONCILIATIONS:
Carrying amount at beginning of
the financial year

Additions

Transfers between classes

Depreciation

United Kingdom accelerated
depreciation
Disposals

Impairment

Exchange differences

Carrying amount at end of the
financial year

AT 28 JULY 2018

Cost

Accumulated depreciation and
impairment

NET CARRYING AMOUNT

21,953

51,591

152,553

RECONCILIATIONS:
Carrying amount at beginning of
the financial year

Additions

Transfers between classes

Depreciation

Disposals

Exchange differences

Carrying amount at end of the
financial year

21,953

52,959

134,667

40,225

3,285

(1,368)

(27,512)

(502)

2,390

21,953

51,591

152,553

12,070

238,167

4,799

214,378

10,556

(3,285)

50,781

(28,880)

(502)

2,390

12,070

238,167

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL INVESTED

15 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

LAND AND BUILDINGS

The land and buildings with a combined carrying amount of $72,176,000 have been pledged to secure certain
interest-bearing borrowings of the Group (refer to note 20).

PROPERTY, PLANT AND EQUIPMENT ACCOUNTING POLICY

Property, plant and equipment is stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Depreciation is calculated on a systematic 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.

KEY ACCOUNTING ESTIMATES AND ASSUMPTIONS

Estimation of useful lives of assets

The estimation of useful lives of assets has been based on historical experience as well as manufacturers’
warranties (for plant and equipment) and lease terms (for leased equipment). 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 and are accounted for as a change in accounting estimate,
in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.
Depreciation methods used reflect the pattern in which the asset’s future economic benefits are expected to
be consumed and are reviewed at least at each financial year-end. Adjustments to depreciation methods are
made when considered necessary and are accounted for as a change in accounting estimate, in accordance
with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.

As a result of the continued economic and political uncertainty in the United Kingdom, and the impact of these
uncertainties on the landlord and retail markets in particular, the Group reviewed its depreciation methods for
its United Kingdom store plant and equipment. As part of the Group’s lease agreements in this region, shorter
term break options were negotiated for the majority of leases, giving the Group the economic advantage to
renegotiate and reassess its United Kingdom leases in an environment with traditionally longer term leases.
The Group has reassessed its depreciation methods and useful life of store assets in this region in line with
the earlier of contracted shorter term break options or lease end dates, given the uncertainty of the useful life
of these store assets beyond these dates. The changed method resulted in an accelerated depreciation
charge in the current financial year of $21.0 million. Other expenses associated with the Group’s review of its
United Kingdom lease break options amounted to $4.8 million and have been disclosed as “other expenses”
(refer note 5).

Assuming the assets are held until the end of their estimated useful lives, depreciation of the Group in future
years in relation to these assets will increase/ decrease by the following amounts:

Year ending July 2020:

$3.8 million increase

Year ending July 2021:

$1.8 million increase

Year ending July 2022:

$1.4 million decrease

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL INVESTED

15 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

IMPAIRMENT TESTING OF PROPERTY, PLANT AND EQUIPMENT AND SIGNIFICANT ACCOUNTING
ESTIMATES AND ASSUMPTIONS

The carrying values of property, plant and equipment are reviewed for impairment annually. If an indication of
impairment exists, and where the carrying value of the asset exceeds the estimated recoverable amount, the
assets or cash-generating units (CGU) are written down to their recoverable amount. The recoverable amount
is the greater of fair value less costs of disposal and value-in-use. Value-in-use refers to an asset’s value
based on the expected future cash flows arising from its continued use, discounted to present value using a
post-tax discount rate that reflect current market assessments of the risks specific to the asset. These value-
in-use calculations use cash flow projections based on financial budgets approved by management, covering
a five year period, using a post-tax discount rate of 10.5% (2018: 10.5%).

If an asset does not generate largely independent cash inflows, the recoverable amount is determined for the
CGU to which the asset belongs. The recoverable amount was estimated for certain items of plant and
equipment on an individual store basis, as this has been identified as the CGU of the Group’s retail segment.

An impairment loss of $355,000 was recognised during the current financial year (2018: $nil).

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL INVESTED

INTANGIBLES

RECONCILIATION OF CARRYING AMOUNTS AT THE BEGINNING AND END OF THE PERIOD

YEAR ENDED 27 JULY 2019
As at 29 July 2018 net of accumulated
amortisation and impairment

Trademark registrations

Amortisation

Exchange differences

As at 27 July 2019 net of accumulated
amortisation and impairment

CONSOLIDATED

GOODWILL
$’000

BRAND
NAMES
$’000

TRADEMARKS
$’000

LEASEHOLD
PREMIUMS
$’000

TOTAL
$’000

477,085
-

346,179
-

2,638
713

477,085

346,179

3,351

47
-

(25)

825,949
713

(25)

826,639

AS AT 27 JULY 2019

Cost (gross carrying amount)

Accumulated amortisation and impairment

NET CARRYING AMOUNT

477,085

-
477,085

376,179

(30,000)
346,179

YEAR ENDED 28 JULY 2018

As at 30 July 2017 net of accumulated
amortisation and impairment

Trademark registrations

Amortisation

Impairment of brand names

Exchange differences

477,085

376,179

(30,000)

3,351

-
3,351

1,777

861

As at 28 July 2018 net of accumulated
amortisation and impairment

477,085

346,179

2,638

979

(955)
24

857,594

(30,955)
826,639

(24)

(2)

855,114

861

(24)

(30,000)

(2)

825,949

AS AT 28 JULY 2018

Cost (gross carrying amount)

Accumulated amortisation and impairment

NET CARRYING AMOUNT

GOODWILL ACCOUNTING POLICY

477,085

-
477,085

376,179

(30,000)
346,179

2,638

-
2,638

977

(930)
47

856,879

(30,930)
825,949

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 not amortised but is subject to impairment testing.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL INVESTED

INTANGIBLES (CONTINUED)

GOODWILL ACCOUNTING POLICY (CONTINUED)

Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired. Goodwill acquired in a business combination is, from the
date of acquisition, allocated to each of the Group’s cash-generating units (CGUs) that are expected to benefit
from the synergies of the combination. Impairment is determined by assessing the recoverable amount of the
CGU to which the goodwill relates.

Where the recoverable amount of the CGU is less than the carrying amount, an impairment loss is
recognised. Impairment losses recognised for goodwill are not subsequently reversed.

OTHER INTANGIBLE ASSETS (excluding goodwill) ACCOUNTING POLICY

Intangible assets acquired separately are initially measured at cost. Intangible assets acquired in a business
combination are initially recognised at fair value. 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.

A summary of the key accounting policies applied to the Group’s intangible assets are as follows:

Brands

Leasehold Premiums

Trademarks & Licences

Useful life
assessment?

Indefinite

Finite

Indefinite

Method used?

Not amortised or revalued

Amortised over the term
of the lease

Not amortised or revalued

Internally generated
or acquired?

Impairment
test/recoverable
amount testing

Acquired

Annually; for indicators of
impairment

Amortisation method
reviewed at each financial
year end; reviewed
annually for indicators of
impairment

Annually; for indicators of
impairment

Brand names, trademarks and licences are assessed as having an indefinite useful life, as this reflects
management’s intention to continue to operate these to generate net cash inflows into the foreseeable future.
These assets are not amortised but are subject to impairment testing.

Intangible assets are tested for impairment where an indicator of impairment exists, or in the case of indefinite
life intangibles, impairment is tested annually or where an indicator of impairment exists.

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 higher of the asset’s
value-in-use and fair value less costs of disposal. Value-in use refers to an asset’s value based on the
expected future cash flows arising from its continued use, discounted to present value using a post-tax
discount rate that reflect current market assessments of the risks specific to the asset.

If an asset does not generate largely independent cash inflows, the recoverable amount is determined for the
CGU to which the asset belongs.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL INVESTED

INTANGIBLES (CONTINUED)

SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS

The recoverable amounts of CGUs are determined based on the higher of value-in-use calculations or fair value
less costs of disposal. These calculations depend on management estimates and assumptions. In particular,
significant estimates and judgements are made in relation to the key assumptions used in forecasting future
cash flows and the expected growth rates used in these cash flow projections, as well as the discount rates
applied to these cash flows. Management assesses these assumptions each reporting period and considers the
potential impact of changes to these assumptions.

IMPAIRMENT TESTING OF GOODWILL

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, which is also an operating segment for the Group.

The recoverable amount of the CGU has been determined based upon a value-in-use calculation, using cash
flow projections as at July 2019 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 2020 financial year and
are projected for a further four years based on estimated growth rates of 2.5% (2018: 2.4%). 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 2.8% (2018: 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 9.7% (2018: 10.0%). 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 specific to the asset and adjusted for risks specific to the CGU.

Management has considered the reasonably possible changes in expected sales growth, forecast Earnings
Before Interest, Tax and Amortisation (EBITA) and discount rates applied to the CGU to which goodwill relates,
each of which have been subject to sensitivities. A reasonably possible adverse change in these key
assumptions on which the recoverable amount is based would not cause the carrying amount of the CGU to
exceed its recoverable amount.

IMPAIRMENT TESTING OF BRAND NAMES

Brand names acquired through business combinations have been allocated to the following CGU groups
($’000) as no individual brand name is considered significant:

Casual wear - $158,975

Women’s wear - $137,744

Non Apparel - $49,460

The recoverable amounts of brand names acquired in a business combination have been 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 2020 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 2020 financial year and are projected for a further four years based on
estimated growth rates.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL INVESTED

INTANGIBLES (CONTINUED)

IMPAIRMENT TESTING OF BRAND NAMES (CONTINUED)

The extrapolated growth rates at which cash flows have been projected for the individual brands within each of
the CGU groups have been summarised below. Cash flows beyond the five year period are extrapolated using
a growth rate of 2.8% (2018: 3%), which reflects the long-term growth expectation beyond the five year
projection.

CGU

AVERAGE GROWTH RATES APPLIED TO PROJECTED CASH FLOWS

Casual wear

2% to 2.5%

Women’s wear

1% to 3.5%

Non Apparel

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 8.7%
(2018: 8.7%). The discount rate has been determined using the weighted average cost of capital which
incorporates both the cost of debt and cost of capital specific to the asset and adjusted for risks specific to the
CGU.

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% (2018: 3.5% and 8%).

Management has considered reasonably possible adverse changes in key assumptions applied to brands within
the relevant CGU groups, each of which have been subjected to sensitivities. Key assumptions relate to
expected sales growth, net royalty rates and discount rates applied. 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’s to exceed its recoverable amount.

In the 2018 financial year, an impairment expense of $30 million was recognised in relation to brand names
within the Casual Wear CGU group with a historical carrying value of $112.2 million. The impairment expense
decreased the carrying value to $82.2 million, being its recoverable amount at 28 July 2018. In the 2019
financial year, a number of sensitivities have been performed in relation to reasonably possible adverse
changes in sales growth rates relating to these brand names within the Casual Wear CGU group. The
sensitivities included reducing sales growth rates by 1%. This reasonably possible adverse change in sales
growth rates could lead to the brand carrying value approximating its recoverable value.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL INVESTED

17 LISTED EQUITY INVESTMENT AT FAIR VALUE

INVESTMENT

Investment in listed securities at fair value

TOTAL INVESTMENTS

CONSOLIDATED

2019
$’000

2018
$’000

46,879

40,687

FAIR VALUE LISTED EQUITY INVESTMENT ACCOUNTING POLICY

The listed equity investment comprises a non-derivative equity instrument not held for trading and relates to an
equity investment in Myer Holdings Limited. The Group has made the irrevocable election to designate the listed
equity investment as ‘fair value through other comprehensive income’, as it is not held for trading, with only
dividends recognised in profit or loss. Accordingly, the investment is accounted for at fair value through other
comprehensive income, without subsequent reclassification of gains or losses nor impairment to profit or loss.

The fair value of equity investments in listed securities is determined by reference to quoted market bid prices at
the close of business on the reporting date.

INVESTMENT IN ASSOCIATE

Movements in carrying amounts

Carrying amount at the beginning of the financial year

Acquisition of shares in associate

Share of profit after income tax

Share of other comprehensive income

Dividends received

TOTAL INVESTMENT IN ASSOCIATE

Breville Group Limited

CONSOLIDATED

2019
$’000

2018
$’000

223,184

7,872

18,906

1,424

(12,654)

238,732

216,940

16,087

1,424

(11,267)

223,184

As at 27 July 2019, Premier Investments Limited holds 28.06% (2018: 27.5%) of Breville Group Limited
(“BRG”), a company incorporated in Australia whose shares are quoted on the Australian Securities Exchange.
The principal activities of BRG involves the innovation, development, marketing and distribution of small
electrical appliances.

As at 27 July 2019, the fair value of the Group’s interest in BRG as determined based on the quoted market
price was $691,666,245 (2018: $407,380,401).

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 $18,905,536 (2018: $16,086,873).

The financial year end date of BRG is 30 June. For the purpose of applying the equity method of accounting,
the financial statements of BRG for the year ended 30 June 2019 have been used. The accounting policies
applied by BRG in their financial statements materially conform to those used by the Group for like
transactions and events in similar circumstances.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL INVESTED

INVESTMENT IN ASSOCIATE (CONTINUED)

The following table illustrates summarised financial information relating to the Group’s investment in BRG:

EXTRACT OF BRG’S STATEMENT OF FINANCIAL POSITION

30 JUNE 2019
$’000

30 JUNE 2018
$’000

Current assets
Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

NET ASSETS

367,988
141,779

509,767

(143,400)

(56,032)

(199,432)

310,335

315,705
129,644

445,349

(108,801)

(53,313)

(162,114)

283,235

Group’s share of BRG net assets

87,068

77,861

EXTRACT OF BRG’S STATEMENT OF COMPREHENSIVE INCOME

Revenue

Profit after income tax

Other comprehensive income

30 JUNE 2019
$’000

30 JUNE 2018
$’000

759,967

67,385

6,839

652,348

58,519

5,181

Group’s share of BRG profit after income tax

18,906

16,087

INVESTMENT IN ASSOCIATE ACCOUNTING POLICY

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 accounts for its investments in associate using the equity method of accounting in the consolidated
financial statements. Under the equity method, the investment in the associate is initially recognised at cost.
Thereafter, the carrying amount of the investment is adjusted to recognise the Group’s share of profit after tax
of the associate, which is recognised in profit or loss, and the Group’s share of other comprehensive income,
which is recognised in other comprehensive income in the statement of comprehensive income. Dividends
received from the associate generally reduces the carrying amount of the investment.

After application of the equity method, the Group determines whether it is necessary to recognise an
impairment loss on its investment in an associate. At each reporting period, the Group determines whether
there is objective evidence that the investment in the 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 impairment loss in profit or loss in the statement of
comprehensive income.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL STRUCTURE AND RISK MANAGEMENT

19 NOTES TO THE STATEMENT OF CASH FLOWS

(a) RECONCILIATION OF CASH AND CASH EQUIVALENTS

Cash at bank and in hand
Short-term deposits

TOTAL CASH AND CASH EQUIVALENTS

(b)

RECONCILIATION OF NET PROFIT AFTER INCOME TAX
TO NET CASH FLOWS FROM OPERATIONS

Net profit for the period

Adjustments for:

Amortisation
Depreciation
Impairment and write-off of non-current assets
Foreign exchange losses
Share of profit of associate
Dividends received from listed equity investment
Borrowing costs
Net loss on disposal of property, plant and equipment
Share-based payments expense
Gross movement in cash flow hedge reserve
Net exchange differences

Changes in assets and liabilities:

(Increase) decrease in trade and other receivables
Decrease (increase) in other current assets
Increase in inventories
Decrease (increase) in other financial assets
(Increase) decrease in deferred tax assets
Increase in provisions
(Decrease) increase in deferred tax liabilities
Increase in trade and other payables
Increase (decrease) in other financial liabilities
Increase in deferred income
Increase (decrease) in income tax payable

NET CASH FLOWS FROM OPERATING ACTIVITIES

CONSOLIDATED

2019
$’000

2018
$’000

59,426
130,829

190,255

47,020
131,598

178,618

106,807

83,638

25
51,935
355
153
(18,906)
-
(191)
728
2,012
(5,556)
1,925

(733)
635
(11,852)
5,854
(4,262)
5,897
(58)
(2,620)
2,123
1,919
2,624

138,814

24
28,880
30,000
989
(16,087)
(1,769)
209
176
3,178
23,340
2,954

2,119
(3,751)
(18,558)
(11,792)
7,048
81
5,146
13,030
(21,686)
14,671
(7,989)

133,851

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

19 NOTES TO THE STATEMENT OF CASH FLOWS

(CONTINUED)

Working capital and bank overdraft facility
Used
Unused

Finance facility
Used
Unused

Bank guarantee facility
Used
Unused

Interchangeable facility
Used
Unused

Total facilities
Used
Unused
TOTAL

CONSOLIDATED

2019
$’000

2018
$’000

11,800

168,000
61,000

229,000

-
200
200

7,588
5,412

13,000

175,588
78,412

254,000

11,800

176,000
53,000

229,000

51
149
200

7,790
5,210

13,000

183,841
70,159

254,000

CASH AND CASH EQUIVALENTS ACCOUNTING POLICY

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.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL STRUCTURE AND RISK MANAGEMENT

INTEREST-BEARING LIABILITIES

NON-CURRENT

Bank loans* unsecured

Bank loans ** secured

TOTAL INTEREST-BEARING LIABILITIES

CONSOLIDATED

2019
$’000

2018
$’000

98,493

69,000

167,493

106,684

69,000

175,684

* 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 bank borrowings amounting to $69 million. A $19 million borrowing is secured by a
mortgage over Land and Buildings, representing the National Distribution Centre in Truganina, Victoria, and is repayable in full
in January 2022. Premier Investments Limited obtained a further $50 million borrowing which is secured by a mortgage over
Land and Buildings, representing an office building in Melbourne, Victoria, and is repayable in full in December 2021.

(a) Fair values

The carrying values of the Group’s current and non-current interest-bearing liabilities approximate their fair
values.

(b) Defaults and breaches

During the current and prior years, there were no defaults or breaches on any of the loans.

Non-current interest-bearing liabilities

TOTAL INTEREST-BEARING LIABILITIES

CONSOLIDATED

28 JULY 2018
$’000

175,684

CASH
FLOWS
$’000

(8,000)

OTHER
$’000

27 JULY 2019
$’000

(191)

167,493

‘Other’ includes the effect of the amortisation of the capitalised borrowing costs, which are amortised over the
life of the facility.

INTEREST-BEARING LIABILITIES ACCOUNTING POLICY

Interest-bearing liabilities 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 while on-going
borrowing costs are expensed as incurred.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

21 CONTRIBUTED EQUITY

Ordinary share capital

608,615

CONSOLIDATED

2019
$’000

2018
$’000

(a) MOVEMENTS IN SHARES ON ISSUE

Ordinary shares on issue 29 July 2018

Ordinary shares issued during the year (i)

Ordinary shares on issue at 27 July 2019

Ordinary shares on issue 30 July 2017

Ordinary shares issued during the year (i)

Ordinary shares on issue at 28 July 2018

NO. (‘000)

$‘000

158,099

331

158,430

157,748

351

158,099

608,615

Fully paid ordinary shares carry one vote per share and carry the rights to dividends.

(i)

A total of 330,112 ordinary shares (2018: 350,978) 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 interest-bearing borrowings, cash and cash
equivalents and equity attributable to the equity holders of Premier Investments Limited, comprising of
contributed equity, reserves and retained earnings.

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.

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.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL STRUCTURE AND RISK MANAGEMENT

CONSOLIDATED

2019
$’000

2018
$’000

22 RESERVES

RESERVES COMPRISE:

Capital profits reserve

Foreign currency translation reserve (a)

Cash flow hedge reserve (b)

Performance rights reserve (c)

Fair value reserve (d)

TOTAL RESERVES

(a) FOREIGN CURRENCY TRANSLATION RESERVE

Nature and purpose of reserve

Reserve is used to record exchange differences arising from
the translation of the financial statements of foreign
subsidiaries.
- Movements in the reserve

Opening balance

Foreign currency translation of overseas subsidiaries

Net movement in associate entity’s reserves

CLOSING BALANCE

(b) CASH FLOW HEDGE RESERVE

Nature and purpose of reserve

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.

- Movements in the reserve

Opening balance

Net (loss) gain on cash flow hedges

Transferred to statement of financial position/
profit or loss

Deferred income tax movement on cash flow hedges

CLOSING BALANCE

464

7,337

2,503

17,746

(38,908)

(10,858)

2,977

2,936

1,424

7,337

8,059

(18,024)

10,087

2,381

2,503

464

2,977

8,059

15,734

(43,243)

(16,009)

(3,661)

5,214

1,424

2,977

(15,281)

21,370

11,973

(10,003)

8,059

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

CONSOLIDATED

2019
$’000

2018
$’000

15,734

2,012

17,746

12,556

3,178

15,734

(43,243)

(24,178)

6,192

(26,978)

(1,857)

(38,908)

7,913

(43,243)

22 RESERVES (CONTINUED)

Nature and purpose of reserve

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.

- Movements in the reserve

Opening balance

Performance rights expense for the year

CLOSING BALANCE

(d) FAIR VALUE RESERVE

Nature and purpose of reserve

Reserve is used to record unrealised gains and losses on
fair value revaluation of listed equity investment at fair value.

- Movements in the reserve

Opening balance

Unrealised gain (loss) on revaluation of listed investment
at fair value

Net deferred income tax movement on listed equity
investment at fair value

CLOSING BALANCE

23 EXPENDITURE COMMITMENTS

OPERATING LEASE EXPENDITURE COMMITMENTS

Payable within one year

Payable within one to five years

Payable in more than five years

TOTAL OPERATING LEASES

116,517

172,491

15,961

304,969

114,149

228,593

61,091

403,833

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.

LEASES ACCOUNTING POLICY

Operating lease payments are recognised as an expense in profit or loss in the statement of comprehensive
income 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.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL STRUCTURE AND RISK MANAGEMENT

24 OTHER FINANCIAL INSTRUMENTS

CURRENT ASSETS

Derivatives designated as hedging instruments

Forward currency contracts – cash flow hedges

TOTAL CURRENT FINANCIAL INSTRUMENTS

NON –CURRENT LIABILITIES

Derivatives designated as hedging instruments

Interest rate swaps – cash flow hedges

TOTAL NON-CURRENT FINANCIAL INSTRUMENTS

(a) DERIVATIVE INSTRUMENTS USED BY THE GROUP

(i)

Forward currency contracts – cash flow hedges

CONSOLIDATED

2019
$’000

2018
$’000

6,119

11,973

2,548

425

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 predominantly
purchase US Dollars.

The forward currency contracts are considered to be highly effective hedges as they are matched against
forecast inventory purchases and are timed to mature when payments are scheduled to be made. Any gain or
loss on the contracts attributable to the hedge risk are recognised in other comprehensive income and
accumulated in the hedge reserve in equity.

The cash flows are expected to occur between one to twelve months from 27 July 2019 and the profit or loss
within cost of sales will be affected over the next couple of years as the inventory is sold.

(ii)

Interest rate swaps – cash flow hedges

The Group has entered into interest rate swap contracts exchanging floating rate interest amounts for fixed
rate interest amounts on certain of its interest-bearing liabilities. These interest rate swap contracts are
designated as cash flow hedges in order to reduce the Group’s cash flow exposure resulting from variable
interest rates on borrowings. The interest rate swaps and the interest rate payments on the loans occur
simultaneously. The amount accumulated in the hedge reserve in equity is reclassified to profit or loss over
the period that the floating rate interest payments on debt affect profit or loss.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

24 OTHER FINANCIAL INSTRUMENTS (CONTINUED)

(a) DERIVATIVE INSTRUMENTS USED BY THE GROUP (CONTINUED)

At reporting date, the details of outstanding forward currency contracts are:

Buy USD / Sell AUD

Maturity < 6 months

Maturity 6 – 12 months

Buy USD / Sell NZD

Maturity < 6 months

Maturity 6 – 12 months

Buy USD / Sell GBP

Maturity < 6 months

Maturity 6 – 12 months

Buy AUD / Sell NZD

Maturity < 6 months

Buy USD / Sell SGD

Maturity < 6 months

Maturity 6 – 12 months

CONSOLIDATED

2019
$’000

2018
$’000

2019

2018

NOTIONAL AMOUNTS $AUD

AVERAGE EXCHANGE RATE

114,426

90,902

93,367

0.7292

0.7892

0.7637

NOTIONAL AMOUNTS $NZD

AVERAGE EXCHANGE RATE

19,892

10,585

15,284

17,742

0.6863

0.6707

0.7299

0.6916

NOTIONAL AMOUNTS £GBP

AVERAGE EXCHANGE RATE

7,762

7,697

3,485

1.2509

1.4033

1.4414

NOTIONAL AMOUNTS $NZD

AVERAGE EXCHANGE RATE

4,465

3,863

1.0455

1.098

NOTIONAL AMOUNTS $SGD

AVERAGE EXCHANGE RATE

6,352

4,179

4,150

0.7415

0.7650

0.7504

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL STRUCTURE AND RISK MANAGEMENT

24 OTHER FINANCIAL INSTRUMENTS (CONTINUED)

OTHER FINANCIAL INSTRUMENTS AND HEDGING ACCOUNTING POLICY

The Group uses derivative financial instruments such as forward currency contracts and interest rate swaps to
hedge its foreign currency risks and interest rate risks. These 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 at subsequent reporting dates.

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 highly
probable future purchases as well as cash flows 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 due to counterparty credit
risk 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.

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.

25 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES

The Group’s principal financial instruments comprise cash and cash equivalents, derivative financial
instruments, listed equity investments at fair value, receivables, payables, bank overdrafts 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 and includes 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. Liquidity risk is monitored through
development of future cash flow forecast projections.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

CREDIT RISK

The overwhelming majority of the Group’s sales are on cash terms with settlement within 24 hours. As
such, the Group’s exposure to credit risk is minimal. Receivable balances are monitored on an ongoing
basis with the result that the Group’s exposure to bad debts is not significant.

There are no significant concentrations of credit risk within the Group and financial instruments are spread
amongst a number of financial institutions.

With respect to credit risk arising mainly from 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 27 July 2019, the maximum exposure to credit risk of the Group is the amount guaranteed as disclosed in
note 33.

INTEREST RATE RISK

The Group’s exposure to market interest rates relates primarily to its cash and cash equivalents that it holds
and interest-bearing liabilities.

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 and cash equivalents

Financial Liabilities

Bank loans AUD

NET FINANCIAL ASSETS

NOTES

CONSOLIDATED

2019
$’000

190,255

167,493

22,762

2018
$’000

178,618

175,684

2,934

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. The Group manages this by locking in 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 interest-bearing liabilities by having access to both fixed
and variable rate debt which can be drawn down. The Group also entered into interest rate swaps, in which it
agreed to exchange, at specific intervals, the difference between fixed and variable interest amounts,
calculated on an agreed-upon notional principal amount.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

INTEREST RATE RISK (CONTINUED)

Interest rate sensitivity

i)
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the
portion of cash and cash equivalents and interest-bearing liabilities affected. A 100 (2018:100) basis point
increase and decrease in Australian interest rates represents management's assessment of the reasonably
possible change in interest rates. The table indicates an increase or decrease in the Group’s profit before tax.

Impacts of reasonably possible movements:

CONSOLIDATED

+1.0% (100 basis points)

-1.0% (100 basis points)

POST-TAX PROFIT TO
INCREASE (DECREASE) BY:

2019
$000

(159)

2018
$000

356

(21)

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.

- The sensitivity analysis assumes all other variables are held constant, and the change in interest rates take

place at the beginning of the financial year and are held constant throughout the reporting period.

FOREIGN OPERATIONS

The Group has operations in Australia, New Zealand, Singapore, Hong Kong, Malaysia, The Republic of
Ireland and the United Kingdom. As a result, movements in the Australian Dollar and the currencies
applicable to these foreign operations 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 Australian
Dollar and New Zealand Dollar (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 also on occasion, hedges its cash flow exposure in movements in the AUD/SGD and AUD/GBP.

FOREIGN CURRENCY TRANSACTIONS

The Group has exposures to foreign currencies principally arising from purchases by operating entities in
currencies other than their functional currency. Over 80% of the Group’s purchases are denominated in
United States Dollar (USD), which is not the functional currency of any Australian entities or any of the
foreign 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. These forward exchange contracts are designated as cash flow
hedges that are subject to movements through equity and profit or loss respectively as foreign exchange
rates move.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

FOREIGN CURRENCY TRANSACTIONS (CONTINUED)

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 base currency 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

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),
Malaysian Ringgit (MYR), and Euro (EUR):

2019

CONSOLIDATED

FINANCIAL ASSETS

Cash and cash equivalents

Trade and other receivables

Derivative financial assets

FINANCIAL LIABILITIES

USD

NZD

SGD

GBP

HKD

$’000

MYR

$’000

EUR

$’000

1,130

4,617

6,120

3,312

3,160

10,387

906

14,734

1,129

11,867

3,312

3,160

10,387

906

14,734

1,129

Trade and other payables

21,518

3,135

Derivative financial liabilities

21,518

3,135

565

286

NET EXPOSURE

(9,651)

177

2,595

10,101

134

772

14,734

1,129

2018

CONSOLIDATED

FINANCIAL ASSETS

USD

NZD

SGD

GBP

HKD

$’000

MYR

$’000

EUR

$’000

Cash and cash equivalents

157

4,482

908

5,707

581

10,540

Derivative financial assets

11,973

12,130

4,482

908

5,707

581

10,540

FINANCIAL LIABILITIES

Trade and other payables

23,240

3,341

Derivative financial liabilities

23,240

3,341

553

NET EXPOSURE

(11,110)

1,141

837

5,703

532

10,540

553

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

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)

CONSOLIDATED

Impacts of reasonably

possible movements:

CONSOLIDATED

AUD/USD + 2.5%

AUD/USD – 10.0%

AUD/NZD + 2.5%

AUD/NZD – 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%

AUD/EUR + 2.5%

AUD/EUR –10.0%

2019
$000

376

(1,596)

(162)

(63)

288

(224)

1,020

(26)

116

(1,021)

883

(28)

121

2018
$000

(46)

189

(28)

127

(20)

(139)

634

(43)

194

(257)

1,171

(53)

2019
$000

(862)

15,620

2018
$000

(4,161)

16,959

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.

- The sensitivity does not include financial instruments that are non-monetary items as these are not

considered to give rise to currency risk.

LIQUIDITY RISK

Liquidity risk refers to the risk of encountering difficulties in meeting obligations associated with financial
liabilities and other cash flow commitments. Liquidity risk management is 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.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

LIQUIDITY RISK (CONTINUED)

The Group has, at reporting date, $59.4 million (2018: $47.0 million) cash held in deposit with 11am at call
and the remaining $130.8 million (2018: $131.6 million) cash held in deposit with maturity terms ranging
from 30 to 180 days (2018: 30 to 180 days). Hence management believe there is no significant exposure to
liquidity risk at 27 July 2019 and 28 July 2018.

The Group aims to maintain a balance between continuity of funding and flexibility through the use of bank
overdrafts and bank loans with a variety of counterparties.

At reporting date, the remaining undiscounted contractual maturities of the Group’s financial liabilities are:

2019

CONSOLIDATED

FINANCIAL LIABILITIES

Trade and other payables

Bank loans

Forward currency contracts

2018

CONSOLIDATED

FINANCIAL LIABILITIES

Trade and other payables

Bank loans

Forward currency contracts

MATURITY < 6
MONTHS

MATURITY 6 – 12
MONTHS

MATURITY 12 - 24
MONTHS

MATURITY > 24
MONTHS

$’000

81,938

164,934

246,872

10,229

98,493

69,000

98,493

69,000

MATURITY < 6
MONTHS

MATURITY 6 – 12
MONTHS

MATURITY 12 - 24
MONTHS

MATURIT > 24
MONTHS

$’000

84,558

134,779

219,337

123,784

106,684

447

107,131

69,000

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

The Group measures financial instruments, such as derivatives and listed equity investments at fair value, 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.

In determining the fair value of an asset or liability, the Group uses market observable data, to the extent
possible. 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.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (CONTINUED)

Fair value hierarchy
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the following 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 for identical assets or liabilities.

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:

CONSOLIDATED

FINANCIAL YEAR ENDED 27 JULY 2019

FINANCIAL YEAR ENDED 28 JULY 2018

LEVEL 1

LEVEL 2

LEVEL 3

LEVEL 1

LEVEL 2

LEVEL 3

$’000

FINANCIAL ASSETS

Listed equity investment at fair value

46,879

Foreign Exchange Contracts

6,119

46,879

6,119

FINANCIAL LIABILITIES

Interest Rate Swaps

2,548

40,687

11,973

40,687

11,973

425

There have been no transfers between Level 1, Level 2 and Level 3 during the financial year.

At 27 July 2019 and 28 July 2018, 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 and interest rate swaps 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 and interest rate swaps 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.

Interest rate swaps are measured based on forward interest rates from observable yield curves at the end of
the respective reporting period, and contract interest rates, which have been discounted at a rate that
incorporates the credit risk of the counterparties.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

GROUP STRUCTURE

26 SUBSIDIARIES

The consolidated financial statements include that of Premier Investments Limited (ultimate parent entity) and the
subsidiaries listed in the following table. (* Indicates not trading as at the date of this report)

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 Retail Pty Ltd *
Portmans Pty Limited
Dotti Pty Ltd
Smiggle Pty Limited

Just Group International Pty Limited *
Smiggle Group Holdings Pty Limited *

Smiggle 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*
Smiggle Ireland Limited
Smiggle Netherlands B.V.*

ETI Holdings Limited*
Roskill Hill Limited*

RSCA Pty Limited*
RSCB Pty Limited*
Just Group Singapore Private Ltd *
Peter Alexander Singapore Private Ltd *
Smiggle Stores Malaysia SDN BHD

COUNTRY OF INCORPORATION
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia

2019 INTEREST
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

2018 INTEREST
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Australia
Australia

New Zealand
Australia

Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia

Australia
Australia

Australia
Singapore

Hong Kong
Hong Kong
USA
USA
USA
UK
UK
UK
Ireland
Netherlands

New Zealand
New Zealand

Australia
Australia
Singapore
Singapore
Malaysia

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%
100%
100%

100%
100%

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

100%
100%

100%
100%
100%
100%
100%

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

GROUP STRUCTURE

27 PARENT ENTITY INFORMATION

The accounting policies of Premier Investments Limited, being 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.

(a) Summary financial information

Statement of financial position

Current assets

Total assets

Current liabilities

Total liabilities

Shareholders’ equity

Issued capital

Reserves:

- Foreign currency translation reserve

- Performance rights reserve

- Cash flow hedge reserve

Retained earnings

Net profit for the period

Total comprehensive income for the period, net of tax

(b) Guarantees entered into by the parent entity

2019
$’000

2018
$’000

164,212

1,383,336

7,780

78,958

163,694

1,367,975

4,837

75,138

608,615

5,129

17,746

(508)

673,395

113,008

1,002

3,705

15,734

(86)

664,869

90,118

1,427

The parent entity has provided no financial guarantees in respect of bank overdrafts and loans of subsidiaries
(2018: $nil).

The parent entity has also given no unsecured guarantees in respect of finance leases of subsidiaries or
bank overdrafts of subsidiaries (2018: $nil).

The parent entity did not have any contingent liabilities as at 27 July 2019 (2018: $nil).

(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 27 July 2019 or 28 July 2018.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

GROUP STRUCTURE

28 DEED OF CROSS GUARANTEE

Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, dated 17 December 2016,
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 this instrument, 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.

29 RELATED PARTY TRANSACTIONS

(a) PARENT ENTITY AND SUBSIDIARIES

The ultimate parent entity is Premier Investments Limited. Details of subsidiaries are provided in note 26.

(b) KEY MANAGEMENT PERSONNEL

COMPENSATION FOR KEY MANAGEMENT PERSONNEL

Short-term employee benefits

Post-employment benefits

Share-based payments

TOTAL

CONSOLIDATED

2019
$

2018
$

6,743,844

129,875

1,185,719

8,059,438

6,455,827

129,842

2,343,103

8,928,772

Mr. Lanzer is the managing partner of the legal firm Arnold Bloch Leibler. Group companies use the services of
Arnold Bloch Leibler from time to time. Legal services totalling $1,797,386 (2018: $1,996,754), including Mr.
Lanzer's Director fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the Group, with
$30,445 (2018: $58,580) remaining outstanding at year-end. The fees paid for these services 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 $22,842,474 (2018: $16,404,781) including GST have been made by Group companies from Voyager
Distributing Co. Pty Ltd, Playcorp Pty Ltd and Sky Chain Trading Limited, with $1,882,897 (2018: $1,737,758)
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 $518,650 (2018: $476,379) costs including GST incurred by Century Plaza
Trading Pty Ltd.

Annual Report 2019NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)
for the 52 weeks ended 27 July 2019 and 28 July 2018 continued

OTHER DISCLOSURES

30 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 AUDITOR’S REMUNERATION

31 SHARE-BASED PAYMENT PLANS

(a) RECOGNISED SHARE-BASED PAYMENT EXPENSE

TOTAL EXPENSE ARISING FROM EQUITY-SETTLED
SHARE-BASED PAYMENT TRANSACTIONS

(b) TYPE OF SHARE-BASED PAYMENT PLANS

Performance rights

CONSOLIDATED

2019
$

2018
$

791,459

577,732

160,057

951,516

82,438

660,170

CONSOLIDATED

2019
$’000

2,012

2018
$’000

3,178

The Group 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 Group 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 section of the Directors’ Report.

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 in the 2016 financial year and onwards) 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.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 27 JULY 2019 AND 28 JULY 2018 (CONTINUED)

OTHER DISCLOSURES

31 SHARE-BASED PAYMENT PLANS (CONTINUED)

(b) TYPE OF SHARE-BASED PAYMENT PLANS (CONTINUED)

The following table shows the share-based payment arrangements in existence during the current and prior
reporting periods, as well as the factors considered in determining the fair values of the performance rights in
existence:

GRANT DATE
(DD/MM/YYYY)

22/06/2015

24/02/2016

NUMBER OF
RIGHTS
GRANTED

169,365

123,647

26/04/2016

1,000,000

10/04/2017

19/02/2018

12/04/2019

120,124

148,237

124,472

SHARE ISSUE
PRICE

OPTION LIFE

DIVIDEND
YIELD

VOLATILITY

RISK-FREE
RATE

FAIR
VALUE

$10.34

$12.89

$9.88

$15.70

$12.91

$18.18

2.3 years

2.6 years

3-6 years

2.5 years

5.5%

3.4%

40%

30%

16%

30%

1.95%

$10.34

1.75%

$12.89

2.06%

1.79%

2.14%

1.44%

$9.96

$6.89

$7.85

$6.81

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

Balance at the end of the year

2019
No.

862,271

124,472

(15,878)

(330,112)

(25,116)

615,637

2019
WAEP

2018
No.

2018
WAEP

1,149,837

148,237

(42,805)

(350,978)

(42,020)

862,271

(i) The weighted average share price at the date of exercise of rights exercised during the year was $16.78

(2018: $15.01).

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 $6.81 (2018: $7.85).

OTHER DISCLOSURES

31 SHARE-BASED PAYMENT PLANS (CONTINUED)

SHARE-BASED PAYMENT ACCOUNTING POLICIES

The Group provides benefits to its employees in the form of share-based payments, whereby employees render
services in exchange for 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”).

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 or 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.

KEY ACCOUNTING ESTIMATES AND ASSUMPTIONS

The fair value of share-based payment transactions is determined at the grant date using an appropriate
valuation model, which takes into account the terms and conditions upon which the instruments were granted
to key executives. The terms and conditions require estimates to be made of the number of equity instruments
expected to vest, as well as the probabilities of meeting the relevant TSR performance hurdles. These
accounting estimates and assumptions would have no impact on the carrying amounts of assets or liabilities
within the next annual reporting period, but may impact the share-based payment expense and performance
rights reserve within equity.

32 EVENTS AFTER THE REPORTING DATE

The Directors of Premier Investments Limited declared a final dividend in respect of the 2019 financial year. The
total amount of the dividend is $58,619,000 (2018: $52,173,000) which represents a fully franked dividend of
37 cents per share (2018: 33 cents per share).

33 CONTINGENT LIABILITIES

The Group has bank guarantees and outstanding letters of credit totalling $7,587,926 (2018: $7,790,046).

Premier Investments LimitedDirectors’ Declaration
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
27 July 2019 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 27 July 2019
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 27 July 2019.

On behalf of the Board

Solomon Lew
Chairman

2 October 2019

Annual Report 2019Ernst & Young
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

Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001

Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au

Independent Auditor's Report to the Members of Premier
Investments Limited

Report on the Audit of the Financial Report

Opinion
Independent Auditor's Report to the Members of Premier
Investments Limited
We have audited the financial report of Premier Investments Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial
position as at 27 July 2019, the consolidated statement of comprehensive income, consolidated
Report on the Audit of the Financial Report
statement of changes in equity and consolidated statement of cash flows for the year then ended,
notes to the financial statements, including a summary of significant accounting policies, and the
Opinion
directors' declaration.

We have audited the financial report of Premier Investments Limited (the Company) and its
In our opinion:
subsidiaries (collectively the Group), which comprises the consolidated statement of financial
position as at 27 July 2019, the consolidated statement of comprehensive income, consolidated
the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
statement of changes in equity and consolidated statement of cash flows for the year then ended,
including:
notes to the financial statements, including a summary of significant accounting policies, and the
directors' declaration.
giving a true and fair view of the consolidated financial position of the Group as at 27 July
a)
2019 and of its consolidated financial performance for the year ended on that date; and

In our opinion:
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
Basis for Opinion

a)
giving a true and fair view of the consolidated financial position of the Group as at 27 July
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
2019 and of its consolidated financial performance for the year ended on that date; and
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Basis for Opinion
Professional Accountants (the Code) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
Financial Report section of our report. We are independent of the Group in accordance with the
for our opinion.
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Key Audit Matters
Professional Accountants (the Code) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not
for our opinion.
provide a separate opinion on these matters. For each matter below, our description of how our
audit addressed the matter is provided in that context.
Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not
provide a separate opinion on these matters. For each matter below, our description of how our
audit addressed the matter is provided in that context.

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

Premier Investments LimitedErnst & Young
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

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
Independent Auditor's Report to the Members of Premier
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
Investments Limited
accompanying financial report.

Report on the Audit of the Financial Report
1. Assessment of impairment of intangible assets

Opinion

Why significant

How our audit addressed the key audit matter

As at 27 July 2019 the Group held $826.6
million (or 46.7% of total assets) in goodwill and
indefinite-life brand names recognised from
historical business combinations.

We have audited the financial report of Premier Investments Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial
position as at 27 July 2019, the consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended,
notes to the financial statements, including a summary of significant accounting policies, and the
directors' declaration.

► Agreed the cashflows within the impairment
model to board approved forecast cashflows.

Our audit procedures included the following:

► Assessed the application of valuation

methodologies applied.

the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:

► Considered the historical reliability of the Group’s

cash flow forecasting process.

► Compared the forecast cash flows used in the
value in use model to the actual current year
financial performance of the underlying CGUs for
reasonability.

As outlined in Note 16 of the financial report, the
goodwill and brand names are tested by the
Group for impairment annually.

In our opinion:

The recoverable amount of these assets has
been determined based on a value in use model
referencing discounted cash flows of the retail
segment for goodwill, and the casual wear,
women’s wear and non-apparel cash generating
units (CGUs) for brand names. The model
contains estimates and significant judgments
regarding future cash flow projections which are
critical to the assessment of impairment,
particularly planned sales growth in the casual
wear and women’s wear CGUs and discount rates
applied.

Basis for Opinion

giving a true and fair view of the consolidated financial position of the Group as at 27 July
2019 and of its consolidated financial performance for the year ended on that date; and

► Assessed key inputs being discount rates, relief

complying with Australian Accounting Standards and the Corporations Regulations 2001.

from royalty rates and sales growth rates adopted
in the value in use model through comparing to
available market data for comparable businesses.

► Evaluated whether the determination of CGUs was

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Accordingly, given the significant judgements
and estimates involved in assessing impairment
of intangible assets we considered this a key
audit matter.

► Performed sensitivity analysis on key inputs and
assumptions included in the board approved
forecast cashflows and impairment models
including the discount rates, to determine if the
CGU carrying value was in excess of the
recoverable amount.

in accordance with Australian Accounting
Standards.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

► Compared earnings multiples derived from the
Group’s value in use model to those observable
from external market data of comparable listed
entities.

Key Audit Matters

Our valuation specialists were involved in the
conduct of these procedures where considered
relevant.

► Assessed the adequacy of the disclosures

included in the financial report.

A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Liability limited by a scheme approved under Professional Standards Legislation
Liability limited by a scheme approved under Professional Standards Legislation

Annual Report 2019Ernst & Young
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 continued

2. Existence and valuation of inventories

► Assessed the application of valuation

Our audit procedures included the following:

How our audit addressed the key audit matter

Why significant
Independent Auditor's Report to the Members of Premier
Investments Limited
As at 27 July 2019 the Group held $171.2
million in inventories.
Report on the Audit of the Financial Report
Inventories are held at several distribution
centres, as well as at over 1,200 retail stores.
Opinion
As detailed in Note 10 of the financial report,
inventories are valued at the lower of cost and
We have audited the financial report of Premier Investments Limited (the Company) and its
net realisable value.
subsidiaries (collectively the Group), which comprises the consolidated statement of financial
position as at 27 July 2019, the consolidated statement of comprehensive income, consolidated
The cost of finished goods inventories includes a
statement of changes in equity and consolidated statement of cash flows for the year then ended,
recalculated standard costs based on supporting
proportion of purchasing department costs, as
notes to the financial statements, including a summary of significant accounting policies, and the
invoices and assessed the allocation of costs
well as freight, handling, and warehouse costs
directors' declaration.
absorbed from the purchasing department,
incurred to deliver the goods to the point of sale.
freight and warehouse costs.

► Assessed, by testing a sample, the effectiveness
of relevant controls over the determination of
standard costs

methodologies applied for compliance with AASB
102 Inventories.

► Attended store and distribution centre inventory
counts on a sample basis and assessed the stock
counting process which addressed inventory
quantity and condition.

Provisions are recorded for matters such as aged
In our opinion:
and slow moving inventory to ensure inventory is
recorded at the lower of cost and net realisable
the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
value. This requires a level of judgment with
including:
regard to changing consumer demands and
fashion trends. Such judgments include the
a)
Group’s expectations for future sales and
inventory mark downs.
b)
Accordingly, the existence and valuation of
inventory was considered to be a key audit
Basis for Opinion
matter.

► Assessed the basis for inventory provisions,
including the rationale for recording specific
provisions. In doing so we examined the ageing
profile of inventory, considered how the Group
identified specific slow-moving inventories,
assessed future selling prices and historical loss
rates.

giving a true and fair view of the consolidated financial position of the Group as at 27 July
2019 and of its consolidated financial performance for the year ended on that date; and

complying with Australian Accounting Standards and the Corporations Regulations 2001.

► Selected a sample of inventory lines and

► Considered the completeness of inventory

► Tested the slow-moving inventory reports for

accuracy and completeness.

provisions by identifying mark down sales at or
subsequent to year end, completing gross margin
analysis to assess movements impacting net
realisable value during the year and subsequent
to year end, and comparing sale prices against the
value of inventories at balance date.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

Key Audit Matters

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

Premier Investments LimitedErnst & Young
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

3. Accounting for the Group’s interest in Breville Group Limited

Why significant

Independent Auditor's Report to the Members of Premier
Investments Limited

How our audit addressed the key audit matter

Our audit procedures included the following:

At 27 July 2019 the Group held a 28.1% stake in
the ASX-listed entity Breville Group Limited
(“Breville”).

Report on the Audit of the Financial Report

► Enquired with Breville’s auditors to discuss the
audit procedures they completed including
significant areas of audit focus, and subsequent
events.

Opinion

As detailed in Note 18 of the financial report,
this investment was equity-accounted in
accordance with Australian Accounting
Standards. At balance date the Group held an
equity accounted investment of $238.7 million
and recorded an equity accounted profit of
$18.9 million in the overall profit after tax of the
Group.

► Examined the audit work completed by Breville’s
auditors for the 30 June 2019 audit prepared in
forming their audit opinion over the Breville
financial report.

► Considered whether the accounting policies of

Breville were consistent with those of the Group.

In our opinion:

The Group’s accounting for the investment in
Breville was considered to be a key audit matter
due to the quantum of the contribution to the
Group’s result.

the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:

dividends for the year to be equity accounted in
accordance with AASB 128 Investments in
associates.

► Recalculated the Group’s share of profit and

giving a true and fair view of the consolidated financial position of the Group as at 27 July
2019 and of its consolidated financial performance for the year ended on that date; and

evidence.

► Agreed Premier’s shareholding to supporting

b)
Information Other than the Financial Report and Auditor’s Report Thereon

complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion
The directors are responsible for the other information. The other information comprises the
information included in the Group’s 2019 Annual Report, but does not include the financial report
and our auditor’s report thereon. We obtained the Directors’ Report that is to be included in the
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
Annual Report, prior to the date of this auditor’s report, and we expect to obtain the remaining
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
sections of the Annual Report after the date of this auditor’s report.
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
Our opinion on the financial report does not cover the other information and accordingly we do not
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
Professional Accountants (the Code) that are relevant to our audit of the financial report in
and our related assurance opinion.
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

In connection with our audit of the financial report, our responsibility is to read the other
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
information and, in doing so, consider whether the other information is materially inconsistent with
for our opinion.
the financial report or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
Key Audit Matters

If, based on the work we have performed on the other information obtained prior to the date of this
Key audit matters are those matters that, in our professional judgment, were of most significance in
auditor’s report, we conclude that there is a material misstatement of this other information, we are
our audit of the financial report of the current year. These matters were addressed in the context of
required to report that fact. We have nothing to report in this regard.
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not
provide a separate opinion on these matters. For each matter below, our description of how our
audit addressed the matter is provided in that context.
Responsibilities of the Directors 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 such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

Annual Report 2019Ernst & Young
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 continued

In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to
Independent Auditor's Report to the Members of Premier
cease operations, or have no realistic alternative but to do so.
Investments Limited
Auditor's Responsibilities for the Audit of the Financial Report
Report on the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
Opinion
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the Australian Auditing Standards will always detect a
We have audited the financial report of Premier Investments Limited (the Company) and its
material misstatement when it exists. Misstatements can arise from fraud or error and are
subsidiaries (collectively the Group), which comprises the consolidated statement of financial
considered material if, individually or in the aggregate, they could reasonably be expected to
position as at 27 July 2019, the consolidated statement of comprehensive income, consolidated
influence the economic decisions of users taken on the basis of this financial report.
statement of changes in equity and consolidated statement of cash flows for the year then ended,
notes to the financial statements, including a summary of significant accounting policies, and the
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
directors' declaration.
judgment and maintain professional scepticism throughout the audit. We also:

In our opinion:
·

Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain
the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
including:
not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions,
giving a true and fair view of the consolidated financial position of the Group as at 27 July
misrepresentations, or the override of internal control.
2019 and of its consolidated financial performance for the year ended on that date; and
Obtain an understanding of internal control relevant to the audit in order to design audit
complying with Australian Accounting Standards and the Corporations Regulations 2001.
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.

·
b)

Basis for Opinion
·
Evaluate the appropriateness of accounting policies used and the reasonableness of
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
accounting estimates and related disclosures made by the directors.
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
·
Conclude on the appropriateness of the directors’ use of the going concern basis of
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
related to events or conditions that may cast significant doubt on the Group’s ability to
Professional Accountants (the Code) that are relevant to our audit of the financial report in
continue as a going concern. If we conclude that a material uncertainty exists, we are
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
based on the audit evidence obtained up to the date of our auditor’s report. However, future
for our opinion.
events or conditions may cause the Group to cease to continue as a going concern.

Key Audit Matters
·

Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
We communicate with the directors regarding, among other matters, the planned scope and timing
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not
of the audit and significant audit findings, including any significant deficiencies in internal control
provide a separate opinion on these matters. For each matter below, our description of how our
that we identify during our audit.
audit addressed the matter is provided in that context.

We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

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
A member firm of Ernst & Young Global Limited

Liability limited by a scheme approved under Professional Standards Legislation

Premier Investments LimitedErnst & Young
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

From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
Independent Auditor's Report to the Members of Premier
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
Investments Limited
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Audit of the Financial Report
Report on the Audit of the Remuneration Report
Opinion

Opinion on the Remuneration Report
We have audited the financial report of Premier Investments Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial
We have audited the Remuneration Report included in the directors' report for the year ended 27
position as at 27 July 2019, the consolidated statement of comprehensive income, consolidated
July 2019.
statement of changes in equity and consolidated statement of cash flows for the year then ended,
notes to the financial statements, including a summary of significant accounting policies, and the
In our opinion, the Remuneration Report of Premier Investments Limited for the year ended 27 July
directors' declaration.
2019, complies with section 300A of the Corporations Act 2001.
In our opinion:
Responsibilities
the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
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
giving a true and fair view of the consolidated financial position of the Group as at 27 July
a)
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
2019 and of its consolidated financial performance for the year ended on that date; and
accordance with Australian Auditing Standards.

complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Ernst & Young
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Rob Perry
Partner
Key Audit Matters
Melbourne
02 October 2019
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not
provide a separate opinion on these matters. For each matter below, our description of how our
audit addressed the matter is provided in that context.

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 2019ASX ADDITIONAL SHAREHOLDER INFORMATION
ASX Additional Information
AS AT 23 SEPTEMBER 2019
ASX ADDITIONAL SHAREHOLDER INFORMATION
as at 23 September 2019
AS AT 23 SEPTEMBER 2019

TWENTY LARGEST SHAREHOLDERS

NAME
TWENTY LARGEST SHAREHOLDERS
CENTURY PLAZA INVESTMENTS PTY LTD

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NAME

J P MORGAN NOMINEES AUSTRALIA LIMITED
CENTURY PLAZA INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
METREPARK PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
SL SUPERANNUATION NO 1 PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SL SUPERANNUATION NO 1 PTY LTD
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
A/C>
LINFOX SHARE INVESTMENT PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
LINFOX SHARE INVESTMENT PTY LTD
ARGO INVESTMENTS LIMITED
BNP PARIBAS NOMS PTY LTD
MARK MCINNES
UBS NOMINEES PTY LTD
MILTON CORPORATION LIMITED
ARGO INVESTMENTS LIMITED
MR CON ZEMPILAS
MARK MCINNES
WARBONT NOMINEES PTY LTD
MILTON CORPORATION LIMITED
AMP LIFE LIMITED
MR CON ZEMPILAS
BNP PARIBAS NOMINEES PTY LTD
WARBONT NOMINEES PTY LTD
GEOMAR SUPERANNUATION PTY LTD
AMP LIFE LIMITED

TOTAL FOR TOP 20:
BNP PARIBAS NOMINEES PTY LTD

GEOMAR SUPERANNUATION PTY LTD
SUBSTANTIAL SHAREHOLDERS
TOTAL FOR TOP 20:

NAME

SUBSTANTIAL SHAREHOLDERS
CENTURY PLAZA INVESTMENTS PTY LTD AND ASSOCIATES

PERPETUAL LIMITED AND ITS SUBSIDIARIES

NAME

TOTAL

% IC

RANK

51,569,400

32.55%

26,445,647
TOTAL

16.69%
% IC

2
RANK

18,178,448
51,569,400
11,874,263
26,445,647
8,235,331
18,178,448
4,437,699
11,874,263

8,235,331
3,726,754
4,437,699
3,098,128

2,663,040
3,726,754
2,577,014
3,098,128
2,301,063
2,663,040
1,644,123
2,577,014
1,250,000
2,301,063
732,100
1,644,123
590,321
1,250,000
470,000
732,100
382,627
590,321
362,620
470,000
353,000
382,627
250,000
362,620

11.47%
32.55%
7.49%
16.69%
5.20%
11.47%
2.80%
7.49%

5.20%
2.35%
2.80%
1.96%

1.68%
2.35%
1.63%
1.96%
1.45%
1.68%
1.04%
1.63%
0.79%
1.45%
0.46%
1.04%
0.37%
0.79%
0.30%
0.46%
0.24%
0.37%
0.23%
0.30%
0.22%
0.24%
0.16%
0.23%

141,141,578
353,000

89.08%
0.22%

250,000

0.16%

141,141,578

89.08%

3
1
4
2
5
3
6
4

5
7
6
8

9
7
10
8
11
9
12
10
13
11
14
12
15
13
16
14
17
15
18
16
19
17
20
18

TOTAL UNITS

% IC

58,552,420

42.43%

TOTAL UNITS
18,398,231

% IC
11.63%

AIRLIE FUNDS MANAGEMENT PTY LTD ON ITS OWN BEHALF AND ON BEHALF OF MAGELLAN
CENTURY PLAZA INVESTMENTS PTY LTD AND ASSOCIATES
FINANCIAL GROUP LIMITED AND RELATED BODIES CORPORATE
PERPETUAL LIMITED AND ITS SUBSIDIARIES

58,552,420
10,279,271
18,398,231

42.43%
6.50%
11.63%

AIRLIE FUNDS MANAGEMENT PTY LTD ON ITS OWN BEHALF AND ON BEHALF OF MAGELLAN
DISTRIBUTION OF EQUITY SHAREHOLDERS
FINANCIAL GROUP LIMITED AND RELATED BODIES CORPORATE

10,279,271

6.50%

DISTRIBUTION OF EQUITY SHAREHOLDERS

1
TO
1,000

1,001
TO
5,000

Holders

Ordinary Fully Paid Shares

1
5,659
TO
2,197,105
1,000

1,001
2,641
TO
5,946,572
5,000

5,001
TO
10,000

5,001
338
TO
2,446,953
10,000

10,001
TO
100,000

10,001
223
TO
4,991,758
100,000

100,001
TO
(MAX)

100,001
29
TO
142,847,468
(MAX)

TOTAL

8,890

158,429,856
TOTAL

Holders
The number of investors holding less than a marketable parcel of 27 securities ($19.17 on 23 September 2019)
Ordinary Fully Paid Shares
5,946,572
is 194 and they hold 797 securities.

142,847,468

2,197,105

4,991,758

2,446,953

5,659

2,641

223

338

8,890

158,429,856

The number of investors holding less than a marketable parcel of 27 securities ($19.17 on 23 September 2019)
VOTING RIGHTS
is 194 and they hold 797 securities.
All ordinary shares carry one vote per share without restriction.

VOTING RIGHTS
All ordinary shares carry one vote per share without restriction.

Premier Investments LimitedCorporate Directory

A.C.N. 006 727 966

DIRECTORS
Mr. Solomon Lew (Chairman)

Dr. David M. Crean (Deputy Chairman)

Mr. Timothy Antonie (Lead Independent Director)

Ms. Sylvia Falzon

Ms. Sally Herman

Mr. Henry D. Lanzer AM

Mr. Terrence L. McCartney

Mr. Mark McInnes

Mr. Michael R.I. McLeod

COMPANY SECRETARY
Ms. Marinda Meyer (appointed 4 February 2019)

Mr. Kim Davis (retired 4 February 2019)

REGISTERED OFFICE
Level 53

101 Collins Street

Melbourne Victoria 3000

Telephone (03) 9650 6500

Facsimile (03) 9654 6665

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

WEBSITE
www.premierinvestments.com.au

EMAIL
info@premierinvestments.com.au