Premier Investments Limited Annual Report 2020

FY2020 Annual Report · Premier Investments Limited

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Annual Report 2020

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 25 July 2020 (“2020”).

The year has been an incredibly difficult year for all Australians
in the context of the COVID-19 health crisis. While the likely
long-term impacts of this global pandemic are yet to be properly
understood, your company’s clear priorities continue to be the
safety and wellbeing of our employees and customers while
also ensuring the continued underlying strength of our business
as we deal with the reality of the times and also look forward.

Your Directors have always focused their attention on
maintaining a strong business to grow long-term sustainable
shareholder value. The strategic decisions the Board has taken
over the past decade have resulted in year on year record
financial results while also maintaining a strong balance sheet
to provide security and flexibility.

As a result of this approach – and notwithstanding the global
health crisis – your company reported Net Profit After Tax
(NPAT) of $137.8 million for 2020, up 29% on last year.
Our wholly-owned retail businesses (Premier Retail) contributed
a record underlying earnings before interest and tax (EBIT) of
$187.2 million1 to this result, up 11.9% on 2019. Premier’s
26.73% investment in Breville Group Limited was also a
significant contributor to group profits.

PREMIER RETAIL – TWO VERY DIFFERENT HALVES

The 2020 financial year has been like no other with two very
different halves.

The first half saw Premier trading through Brexit uncertainty
in the United Kingdom, protests in Hong Kong, devastating
bushfires in Australia and a continuing fall in the
Australian Dollar. Yet Premier Retail was able to deliver record
sales and profit. Highlights of the first half included record
online sales, record Peter Alexander sales, record Smiggle
global sales and strong like-for-like sales growth across all of
our apparel brands.

Second half trading globally was severely impacted by
COVID-19, but Premier Retail’s senior management team
proved to be nimble and resilient. In consultation with the

Global Stores Trading by week

Board, the management team adapted quickly, making very
hard decisions for the long-term health of the Group.

ONLINE CHANNELS AND PETER ALEXANDER –
DELIVERING RECORD SALES

The Peter Alexander brand has developed to be an
exceptionally powerful brand in Australia and New Zealand
and continues to deliver record results. Annual sales of
$288.2 million in 2020 were up 16.3% on prior year with
positive like-for-like sales growth in both Australia and
New Zealand despite the pandemic.

To demonstrate the strength of the brand, during the key
Mother’s Day trading week (the week ending 2 May 2020)
all 122 Peter Alexander stores in Australia were closed, yet
Peter Alexander in Australia still delivered sales growth of
18% on prior year – purely through the online channel. This is
truly a brand that Australians and New Zealanders love.

In fact, Premier Retail’s online businesses across all seven
brands went from strength to strength in 2020. Online sales
were $220.4 million, up 48.8% on prior year – with second
half sales up 70.0% on 2H19. This was partly a response to
the pandemic which your Board believes has accelerated the
long-term structural shift to online. This strong trading result
was facilitated by strategic, decade long investments in both
online experience and the critical infrastructure required to
deliver a world-class online shopping experience.

Overall, in 2020 the online business contributed 18.1% of
total Premier Retail sales for the year and 25.5% of the total
sales for the second half.

COVID-19 IMPACTS ON 2H20 RESULTS

The devastating global impact of the COVID-19 health crisis
resulted in the very difficult decision to temporarily shut down
Premier Retail’s global operations on 26 March 2020 and
stand down over 9,000 employees. At the time, there was
no certainty of when global stores would be able to reopen,
and no wage subsidy scheme was in existence in Australia.

1,400

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400

200

1
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2

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New Zealand

Europe

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1 Refer to page 9 of the Director’s Report for a reconciliation between underlying EBIT and statutory reported operating profit before taxation for the Retail Segment.

Annual Report 2020 1

Chairman’s Report continued

The financial impact of the COVID-19 was most severe during
the period 11 March 2020 to 15 May 2020, with retail stores
down 78.4% and global sales down $131.1 million on the
comparable period in 2H19.

Due to the devastating impact on Premier Retail’s sales
resulting from the COVID-19 health crisis, the Group
became eligible for a range of global government subsidy
programs, across seven countries, designed to keep people
connected to their employers and in jobs. Eligible Premier
team members received wages subsidies in full while they
were not working. In addition, in Australia, many of Premier’s
casual and part-time workforce received subsidy payments in
excess of their normal wages, in accordance with the rules
of the government schemes. The funds Premier received
were used to support standing up its employees as stores
gradually reopened under COVID-19 safe plans. This public
policy initiative ensured that Premier was able to fulfill the
respective Governments’ objectives of keeping people in
jobs and connected to their employers in the midst of the
global pandemic.

RETAIL INDUSTRY RESTRUCTURE ACCELERATING DUE
TO COVID-19

Globally, the temporary closures of retail stores, “stay
at home” health directives and ongoing government
implementation of social distancing in each of the countries
and markets we operate in, has significantly changed
customer shopping behaviour. Customers are increasingly
choosing to shop online in this highly uncertain environment.

Over the past nine years, Premier has made significant
investment in its fully integrated online channel and is
well placed to maximise this significant swing in customer
shopping preference.

Premier Retail today has:

•

Seven brands each with a strong, distinctive,
and competitive market position

• A world class customer facing website platform trading

in three countries

• A fully integrated and owned Australian

Distribution Centre

•

Significant digital capability, online technology and IT
infrastructure – including dedicated teams focused on
online growth

As a result, Premier delivered 2H20 online sales growth of
70% with online contributing 25.5% of total Premier Retail
sales in the second half. It is also worth noting that Premier
Retail’s online business has a significantly higher EBIT margin
than the retail store channel.

As a result of this efficiency and the accelerated swing in
customer preferences to shopping online, Premier Retail has
further increased its focus on individual store profitability.
Premier Retail has maximum flexibility in managing its cost

Premier Investments Limited

base and store footprint, with over 70% of stores in Australia
and New Zealand either in holdover or with leases that expire
in 2020.

While it is not Premier Retail’s objective to close any stores,
should landlords not accept the major shift in consumer
shopping behaviour and adjust their rents according
to customer shopping preferences, store closures will
be inevitable.

BALANCE SHEET AND DIVIDENDS

Throughout the health crisis, Premier has maintained a
very strong balance sheet. At year end the Group had
$448.8 million of cash on hand. Our year-end balance sheet
reflects our holding in Breville Group Limited at $257.4 million
in line with Accounting Standards on equity accounting,
however the market value of this stake at year-end was
$947.9 million.

Premier paid its fully franked interim dividend of 34 cents
per share on 30 September 2020. In making the decision on
the final dividend, the Board considered the impact of wage
subsidies on the profit and cash position of the company and
determined that the net global government subsidies received
were not required for the payment of the final dividend.
The Board approved a fully franked final dividend of 36 cents
per share, payable on 28 January 2021. Together, 2020 full
year dividends of 70 cents per share fully franked are in line
with last year.

LEADERSHIP AND GOVERNANCE

Premier’s Board and management team remain focused,
flexible and nimble in response to the current environment.

The Board and I are extremely proud of our team’s dedication
and commitment during these unprecedented times.
On behalf of the Board and all shareholders, I thank Premier
Retail CEO Mark McInnes, his senior leadership group and our
entire team of employees for their outstanding contribution.

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 all shareholders, I would also like to thank my
fellow Directors for their valuable contribution, insights,
and counsel throughout this very difficult year.

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.

Solomon Lew
Chairman and Non-Executive Director

The 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 2020 3

Brand Performance Premier Retail

Peter Alexander, is a powerful brand in Australia and New Zealand and delivered record sales in FY20, up 16.3%
to $288.2 million - underpinned by strong like for like (LFL) sales growth. The strength of the brand was clearly
demonstrated in Australia during the key Mothers’ Day week (week ended 2 May 2020). Peter Alexander online sales
alone with all 122 stores closed due to the COVID-19 health crisis were up 18% on the prior year’s total sales when all
stores and online were open. Under the leadership of Judy Coomber, Managing Director Peter Alexander and Dotti, and
Peter Alexander, Founder and Creative Director, the growth is set to continue. Peter Alexander is extremely well placed as
the leading gift destination for the upcoming Christmas trading period.

Just Jeans, under Matthew McCormack’s leadership, delivered exceptional 1H20 results with sales up
9.6% to $134.4 million - a particularly pleasing result for the group’s original brand now celebrating its
50th anniversary. As stores re-opened and most regions of Australia and New Zealand gradually returned
to business after the COVID-19 shutdowns, in the final 10 weeks of FY20 Just Jeans delivered sales growth
up 26.3% on the comparable period in 2H19 on a LFL basis. Just Jeans has a strong, distinctive and
competitive market position and is well positioned for future growth.

Jay Jays, under Linda Whitehead’s leadership, has delivered 1H20 sales growth up 4.2% to
$96.1 million - a strong result for the brand. As stores re-opened and most regions of Australia and
New Zealand gradually returned to business after the COVID-19 shutdowns, in the final 10 weeks of FY20
Jay Jays delivered sales growth up 47.2% on the comparable period in 2H19 on a LFL basis.
In a year severely disrupted by the impact of the COVID-19 health crisis, Jay Jays still delivered full year sales
growth in FY20, up 0.8% on FY19. Jay Jays has a strong, distinctive and competitive market position and is
well positioned for future growth.

Dotti, under Deanna Moylan’s leadership, delivered strong results in 1H20 with sales growth up 8.2% to
$57.5 million. 1H20 LFL sales up 11.8% were stronger than overall sales, with continued improvement in profit margins
being delivered through changes to sourcing strategy. As stores gradually re-opened in regions largely free
of COVID-19 social distancing restrictions, Dotti sales in the final 10 weeks of FY20 in Western Australia were up 31%
and New Zealand were up 16% on a LFL basis. Online Sales continued to grow ahead of the market with this channel
delivering significantly higher EBIT margin than the Brand average. Dotti has a strong, distinctive and competitive market
position and is well positioned for future growth.

Jacqui E, under the leadership of Nicole Naccarella, delivered strong results in 1H20 with sales growth up 8.1% to
$40.0 million. Jacqui E has been significantly impacted by the temporary exodus of workers from CBD areas during the
COVID-19 health crisis. As stores gradually re-opened in regions largely free of COVID-19 social distancing restrictions,
Jacqui E sales in the final 10 weeks of FY20 in Western Australia were up 17.2% on a LFL basis. Jacqui E has an extremely
strong and distinctive market position and is well positioned for future growth.

Portmans, delivered strong results in 1H20 with 2 year LFL sales up 11.1% from 1H18 to 1H20. Online Sales continue
to drive overall growth at a significantly higher EBIT margin than the store portfolio. Portmans has been significantly
impacted by the temporary exodus of workers from CBD areas during the COVID-19 health crisis. As stores gradually
re-opened in regions largely free of COVID-19 social distancing restrictions, Portmans sales in the final 10 weeks of FY20
in Western Australia were up 2.2% on a LFL basis. We are delighted to announce that Jade Wyatt and Vicki Skidmore will
now lead the Portmans business to drive a step change in Performance. Both Jade and Vicki are already on the company’s
executive team and have long track records of creating shareholder value in all roles they have occupied.

Smiggle, delivered record 1H20 global retail sales including wholesale partners sales to consumers up 14.2% on 1H19.
The impact of COVID-19 was particularly severe on the Smiggle business as schools were closed for extended periods
of time, international borders were shut across all Smiggle Retail and Wholesale Markets, and families no longer felt
safe shopping with children in stores in the midst of a once in a century global health crisis. Smiggle is a powerful global
brand flourishing where children are back at school and is set to rebound and grow in a post-COVID-19 environment.
John Cheston, Managing Director Smiggle, continues to lead a strong and focused management team growing a truly
unique global brand.

Premier Investments Limited

Peter Alexander

Powerful Brand Delivers a Record Result

• Record FY20 sales of $288.2 million, up a record $40.4 million or 16.3% on FY19, underpinned by strong

LFL growth both online and in stores

• Demonstrating the strength of Peter Alexander and the investment made over the last nine years in the

online channel, in Australia during the key Mothers Day week ended 2 May 2020, with all 122 stores closed
due to the COVID-19 health crisis, online sales alone were up 18% on the prior year’s total sales when all
stores were open

• Children’s sleepwear continued to deliver outstanding growth. FY20 sales were up 34% on FY19 on a

LFL basis, with 35% of all Children’s sleepwear sales delivered through the online channel

•

P.A. Plus continued to deliver outstanding results. FY20 sales up 48% on FY19 on a LFL basis, with
64% of all P.A. Plus sales delivered through the online channel

Peter Alexander is extremely well placed as the leading gift destination for the upcoming Christmas
trading period

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

Peter Alexander Sales

m
$
D
U
A
s
e
l
a
S

300

280

260

240

220

200

180

160

140

120

100

$288

$248

$219

$191

$167

$140

$122

$101

$86

$73

$61

$50

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

Peter Alexander
Founder and Creative Director

Annual Report 2020 5

Internet Performance Premier Retail

Full Year Online Sales Growth

250

225

200

175

150

125

100

18.1%

220.4

11.7%

148.2

9.5%
112.5

2.8%
24.6

3.6%
34.4

6.2%
68.1

4.5%
47.2

FY14

FY15

FY16

FY17

FY18

FY19

FY20

Online Sales ($'M)

Online Sales as % of Total Sales

2H Online Sales Growth

200

180

160

140

120

100

2.4%
9.2

3.0%
12.7

4.1%
18.8

5.1%

24.7

7.0%

35.4

25.5%

123.3

12.3%

72.5

10.2%

56.5

2H13

2H14

2H15

2H16

2H17

2H18

2H19

2H20

Online Sales ($'M)

Online Sales as % of Total Sales

18%

16%

14%

12%

10%

25%

20%

15%

10%

• Record online sales of $220.4 million, up 48.4% on a previous record FY19 and contributed 18.1% of total

FY20 sales (FY19: 11.7%)

• Online sales growth accelerated during 2H20, up 70% on 2H19 and contributed 25.5% of total sales

(2H19: 12.3%)

• Recently launched New Zealand Websites for Smiggle, Just Jeans, Portmans and Jacqui E, in addition to
the rapidly growing Peter Alexander and Dotti Online businesses already in New Zealand, far exceeded
expectations in FY20 up 144% on FY19

• 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 both the retail store and group average

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

platform and customer experience in FY21 and beyond

Premier Investments Limited

Smiggle

Strong Global Brand Flourishing Where Children are Back at School

•

Smiggle is a powerful global brand

• Record 1H20 global retail sales including wholesale partners sales to consumers up 14.2% on 1H19

•

The impact of COVID-19 was particularly severe on the Smiggle business as schools were closed for extended
periods of time, international borders were shut across all Smiggle Retail and Wholesale Markets, and families
no longer felt safe shopping with children in stores in the midst of a once in a century global health crisis

The key to Smiggle’s success is children attending school

In countries and markets where schools have re-opened and these markets are largely free of COVID-19
restrictions the brand is flourishing. Since children have returned to school and stores have reopened, LFL sales
are up: 7% in New Zealand, 9% in Western Australia, 11% in South Australia, 37% in Tasmania, 54% in
Northern Territory and in the Wholesale channel, up 109% in Qatar

Smiggle delivered record global online sales in FY20 of $42.3 million, up 41.8% on FY19, and contributed
16.5% of total Smiggle FY20 sales (FY19: 9.7%)

Smiggle is a powerful global brand flourishing where children are back at school and is set to rebound and
grow in a post-COVID-19 environment

Like for Like sales in markets where schools have reopened and these
markets are largely free of COVID-19 restrictions

Like for Like sales in Wholesale market
where schools have reopened and the
market is largely free of COVID-19 restrictions

60%

50%

40%

30%

20%

10%

54%

37%

11%

TAS

120%

100%

80%

60%

40%

20%

109%

Qatar

Annual Report 2020 7

Our Commitment To Business Sustainability

Premier acknowledges the importance of respecting our stakeholders, including
employees, shareholders, customers and suppliers.

PEOPLE

COMMUNITY

ENVIRONMENT

ETHICAL SOURCING

•

Attraction and retention

Development

Reward and recognition

• Workplace Safety

•

Peter Alexander and
RSPCA/PAW JUSTICE

Smiggle Community
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.

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
3 Stage Just Getting Started Induction Program. All existing
team members complete sales training seasonally online
and participate in regular instore H&S training. Leadership
and Management Development training is provided for our
leaders, and this year 176 workshops were led by our People
& Culture and Senior Leadership Teams.

% FEMALE EMPLOYEES

91%

ATTRACTION AND RETENTION

By Christmas 2020, Premier will employ over 10,200 staff in
seven countries.

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 FY20, 91% of our total team members are women, who
held 75% 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 ecommerce, 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.

REWARD AND RECOGNITION

We recognise and reward outstanding contributions to our
Group results, both individually and for team performance.
Our annual Just Excellence Awards recognise our best
performing Retail Leaders and salespeople for their excellent
performance and contribution to achieving our financial goals.
The top performing Regional Managers, Store Managers and
Visual Merchandisers for each of our brands are rewarded
publicly amongst their peers for their great leadership and
delivery of their 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.

Premier Investments Limited

Our Commitment to the Community

Premier has a long history of philanthropic support, particularly with our
Peter Alexander and Smiggle brands.

PETER ALEXANDER AND THE RSPCA

PETER ALEXANDER AND PAW JUSTICE

As much as Peter Alexander has become famous for his
pyjamas, he has also become known for his dogs, and
is a huge supporter of animal welfare organisations.
Peter Alexander has worked closely for the last 14 years
with the RSPCA in Australia, and for the last six 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 $1,141,000
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 six years have raised
almost $125,000.

Paw Justice works to stop violent animal abuse; and they
have been instrumental in focusing the New Zealand public’s
attention on the need for reform of animal welfare laws
through youth education and advocacy for pets.

During the year Peter Alexander continued its commitment to
the prevention of cruelty to animals. The involvement with the
RSPCA in Australia and Paw Justice in New Zealand continues
to be the key charity supported by the brand. Each year, Peter
develops a special product to be made available in store in
the lead up to Christmas. In 2019, 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 $157,274 to the RSPCA and $15,147 to Paw Justice.

Since we’ve been working with
RSPCA shelters in Australia
and Paw Justice in New Zealand,
Peter has raised over
$1.2 Million

Peter Alexander
Founder and Creative Director

Annual Report 2020 9

Our Commitment to the Community continued

SMIGGLE 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 FY20 Smiggle continued to partner 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 $10,000 AUD (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.

In the same period, Smiggle also partnered with the
Jonathan Thurston Academy, an organisation which
provides outstanding initiatives and community programs
throughout Australia. Smiggle is proud to sponsor the
JTBelieve Kowanyama program, donating $12,000 AUD (RRP)
worth of school supplies and prizes for the JTBelieve program
awards. The JTBelieve program supports young Australians
in Indigenous communities to reach their full potential by
providing educational and wellbeing support. The program
helps improve kids’ self-belief, confidence and courage in
their future abilities and opportunities.

Children in the Jonathan Thurston JT Believe
Kowanyama program.

Premier Investments Limited

Our Commitment to the Environment

PACKAGING STEWARDSHIP

Premier and Just Group are committed to managing and
reducing the impact our business operations have on the
environment. Just Group 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. Just Group has
submitted its Action Plan outlining its objectives in relation to:

1. Having a strategy to improve packaging sustainability;

2. Preparing a procedure that requires the use of the
Sustainable Packaging Guidelines or equivalent to
evaluate packaging during design or procurement;

3. Developing a documented plan to optimise

material efficiency;

Investigating opportunities to increase the use of recycled
and/or renewable materials in packaging; and

Investigating opportunities to improve recoverability in
packaging and amount of single use business-to-business

packaging.

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.

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 372 stores to LED
lighting, all of the DC high bay lighting to LED, and converting
over 80% of our support office lighting to LED. In addition to
the Support office lighting upgrade the lights are controlled
by timers and motion sensors to ensure that they are on only
when required. 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.

Annual Report 2020 11

Our Commitment to Ethical Sourcing

Premier commits to the highest standards of ethical conduct
and responsible product sourcing practices.

We support this commitment by our models for sourcing
products, the principles that back-up those models,
together with our policies and assurance program.

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. Premier will
publish its full Modern Slavery Statement in March 2021.

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.

Our sourcing activities include direct sourcing from fully
audited factories across Asia. In addition, we work with
known established and trusted Australian importers.

We currently source products in the following countries:
China, Australia, Bangladesh, India, Pakistan, Taiwan, Turkey
and Vietnam.

SOURCE COUNTRIES (THE JUST GROUP, UNITS)

Rest of the world 13%

China 87%

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.

Premier Investments Limited

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

ASSURANCES WHICH SUPPORT OUR SOURCING
PRINCIPLES

Background checks. We conduct thorough and ongoing
compliance activities of all direct suppliers by qualified
audit firms.

Factory inspections. All factories that manufacture for us are
audited and inspected. We continue factory visits and ensure
audits are up to date throughout our relationship with our
suppliers to ensure our principles are strictly adhered to.

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.

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

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.

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

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

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.

Annual Report 2020 13

Our 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 recently reviewed and updated 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 which
they need to formally acknowledge. Additionally, they are
re-issued with a copy annually and again are asked to formally
acknowledge receipt in line with any amendments which may
have been made to the Code.

Premier Investments Limited

Premier Investments Limited
A.C.N. 006 727 966

Financial Report

For the 52 week period
28 July 2019 to 25 July 2020

Annual Report 2020 15

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

101

102

DIRECTORS’ REPORT

The Board of Directors of Premier Investments Limited (A.B.N. 64 006 727 966) has pleasure in submitting its report in

respect of the financial year ended 25 July 2020.

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 28 July 2019 to 25 July 2020,

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.

DIRECTORS’ 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 25 July 2020.

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 28 July 2019 to 25 July 2020,
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.

Annual Report 2020DIRECTORS’ REPORT
(CONTINUED)
Director’s 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 and turning David Jones into a fashion and financial
powerhouse creating in excess of $2billion of Shareholder value in his time as CEO.

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.

Since his appointment, Mark, as CEO of Premier Retail, has assembled and led the executive team to completely
restructure and rebuild the organisation to deliver long-term strategic competitive advantage and sustainable growth
platforms, which has delivered in excess of $2billion of Shareholder value since he joined the group

Premier Retail has delivered record underlying Earnings before Interest and Tax each year over the past nine years.
Today, the Group has a world-class, fully integrated, and highly profitable online operation, with seven high performing
and distinctive brands delivering exceptional results through a highly capable senior leadership team.

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 Suncorp Group Limited and Regis Healthcare. In the not-for-profit sector,
she is the Chairman of Cabrini Australia Limited. Ms. Falzon previously served on the board of ASX listed companies
Perpetual Limited until October 2019 and 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.

DIRECTORS’ REPORT

(CONTINUED)

Sally Herman Non-Executive Director (continued)

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.

Company Directors.

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 Bachelor of Arts from the University of New South Wales and is a Graduate of the Australian Institute of

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 Limited

DIRECTORS’ REPORT
(CONTINUED)

Sally Herman Non-Executive Director (continued)

Prior to that, she had spent 16 years with the Westpac Group, running major business units in most operating divisions
of the Group as well as heading up Corporate Affairs and Sustainability through the merger with St. George and the
global financial crisis.

Ms. Herman sits on both listed and 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 Bachelor of Arts 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.

Annual Report 2020

DIRECTORS’ REPORT
(CONTINUED)
Director’s Report continued

COMPANY SECRETARY

Marinda Meyer

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 approved for 2020
Dividends approved in the year:

CENTS

36.00

$’000

57,141

Interim for the half-year ended 25 January 2020 (payable 30 September 2020)

34.00

53,966

previous year corresponding period. The retail segment delivered revenue of $732.1 million during the first half of the

Dividends paid in the year:

Final for 2019 shown as recommended in the 2019 report

37.00

58,636

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. Just Group is a leading specialty fashion retailer with operations in
Australia, New Zealand, Asia and Europe. The 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 continues to deliver results for the Group. 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.

The Group’s reported revenue from contracts with customers, total income and net profit before income tax for the 52
week period ended 25 July 2020 (2019: 52 week period ended 27 July 2019) are summarised below:

CONSOLIDATED

52 WEEKS
ENDED 25 JULY
2020
$’000

52 WEEKS
ENDED 27 JULY
2019
$’000

Revenue from contracts with customers

1,216,316

1,270,958

Total interest income

Total other income and revenue

Total revenue and other income

2,290

30,356

3,886

709

1,248,962

1,275,553

% CHANGE

-4.3%

-41.1%

-2.1%

DIRECTORS’ REPORT

(CONTINUED)

OPERATING AND FINANCIAL REVIEW (CONTINUED)

Retail Segment:

As Premier’s core business, Just Group was the key contributor to the Group’s operating results for the financial year.

Key financial indicators for the retail segment for the 52 week period ended 25 July 2020 are highlighted below:

RETAIL SEGMENT

52 WEEKS

ENDED 25 JULY

ENDED 27 JULY

2020

$’000

2019

$’000

% CHANGE

Revenue from contracts with customers

Total segment income

1,216,316

1,230,918

1,270,958

1,271,899

-4.3%

-3.2%

Segment net profit before income tax

165,776

136,667

+21.3%

The Retail Segment contributed $165.8 million to the Group’s net profit before income tax for the 52 week period

ended 25 July 2020 (2019: $136.7 million net profit before income tax for the 52 week period ended 27 July 2019).

The Retail Segment net profit before income tax was delivered through a very challenging year. The onset of COVID-

19 in early 2020 created an extremely challenging operating environment in the second half of the 2020 financial year.

The Retail Segment’s result has been delivered through two very different half-years. For the first 26 weeks ended

25 January 2020, the Retail Segment reported net profit before income tax of $124.4 million – up 11.69% on the

year, up 7.63% on the previous year corresponding period.

The second half of the year (26 weeks ended 25 July 2020) saw a changed and challenging environment due to the

significant global impact of the COVID-19 health crisis. During this time, the Group’s absolute priority has been, and

continues to be, the safety and wellbeing of its team members and the broader community in which it operates. With

this in mind, the Group made the very difficult decision to temporarily shut down its global operations on 26 March

2020 and stand down over 9,000 employees. At that time, there was no certainty of when global stores would be able

to reopen, and no wage subsidy scheme was in existence in Australia. The financial impact of COVID-19 was most

severe for the period 11 March 2020 to 15 May 2020, when global sales were down $131.1 million on the prior year

comparable period, with retail store sales down 78.4%. Due to the devastating impact on Group Sales resulting from

the COVID-19 health crisis, the Group became eligible for global wage subsidies across seven countries (refer to note

5 of the financial statements for further information).

Notwithstanding the temporary store closures during the second half of the year, the Retail Segment delivered record

online sales of $220.4 million for the 52 weeks ended 25 July 2020 – up 48.8% on the prior year (2019: $148.2 million).

The online business contributed 18.1% of the Group’s sales for the financial year ended 25 July 2020 (2019: 11.7%).

Peter Alexander delivered an outstanding result, with record sales for the financial year ended 25 July 2020 of

$288.2 million (up 16.3% on the prior comparable period).

Globally, the temporary closure of retail stores and the ongoing government implementation of social distancing in

each of the countries and markets we operate, has significantly changed customer shopping behaviour. Consumers

are increasingly choosing to shop online in this highly uncertain environment.

Over the past nine years, the Group has made significant investment in its fully integrated online channel and is well

placed to maximise this significant swing in customer shopping preference.

The Group prides itself on having:

Seven unique brands, each with a strong and distinctive competitive market position.

A world-class customer facing website platform trading in three countries.

A fully integrated and owned Australian Distribution Centre.

Significant investment in digital capability, online technology and IT infrastructure.

Significant investment in dedicated teams focusing on online growth.

Reported profit before income tax

195,199

151,742

+28.6%

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

OPERATING AND FINANCIAL REVIEW (CONTINUED)

Retail Segment:

As Premier’s core business, Just Group was the key contributor to the Group’s operating results for the financial year.
Key financial indicators for the retail segment for the 52 week period ended 25 July 2020 are highlighted below:

RETAIL SEGMENT

52 WEEKS
ENDED 25 JULY
2020
$’000

52 WEEKS
ENDED 27 JULY
2019
$’000

% CHANGE

Revenue from contracts with customers

Total segment income

1,216,316

1,230,918

1,270,958

1,271,899

-4.3%

-3.2%

Segment net profit before income tax

165,776

136,667

+21.3%

The Retail Segment contributed $165.8 million to the Group’s net profit before income tax for the 52 week period
ended 25 July 2020 (2019: $136.7 million net profit before income tax for the 52 week period ended 27 July 2019).

The Retail Segment net profit before income tax was delivered through a very challenging year. The onset of COVID-
19 in early 2020 created an extremely challenging operating environment in the second half of the 2020 financial year.
The Retail Segment’s result has been delivered through two very different half-years. For the first 26 weeks ended
25 January 2020, the Retail Segment reported net profit before income tax of $124.4 million – up 11.69% on the
previous year corresponding period. The retail segment delivered revenue of $732.1 million during the first half of the
year, up 7.63% on the previous year corresponding period.

The second half of the year (26 weeks ended 25 July 2020) saw a changed and challenging environment due to the
significant global impact of the COVID-19 health crisis. During this time, the Group’s absolute priority has been, and
continues to be, the safety and wellbeing of its team members and the broader community in which it operates. With
this in mind, the Group made the very difficult decision to temporarily shut down its global operations on 26 March
2020 and stand down over 9,000 employees. At that time, there was no certainty of when global stores would be able
to reopen, and no wage subsidy scheme was in existence in Australia. The financial impact of COVID-19 was most
severe for the period 11 March 2020 to 15 May 2020, when global sales were down $131.1 million on the prior year
comparable period, with retail store sales down 78.4%. Due to the devastating impact on Group Sales resulting from
the COVID-19 health crisis, the Group became eligible for global wage subsidies across seven countries (refer to note
5 of the financial statements for further information).

Notwithstanding the temporary store closures during the second half of the year, the Retail Segment delivered record
online sales of $220.4 million for the 52 weeks ended 25 July 2020 – up 48.8% on the prior year (2019: $148.2 million).
The online business contributed 18.1% of the Group’s sales for the financial year ended 25 July 2020 (2019: 11.7%).

Peter Alexander delivered an outstanding result, with record sales for the financial year ended 25 July 2020 of
$288.2 million (up 16.3% on the prior comparable period).

Globally, the temporary closure of retail stores and the ongoing government implementation of social distancing in
each of the countries and markets we operate, has significantly changed customer shopping behaviour. Consumers
are increasingly choosing to shop online in this highly uncertain environment.

Over the past nine years, the Group has made significant investment in its fully integrated online channel and is well
placed to maximise this significant swing in customer shopping preference.

The Group prides itself on having:

-
-
-
-
-

Seven unique brands, each with a strong and distinctive competitive market position.
A world-class customer facing website platform trading in three countries.
A fully integrated and owned Australian Distribution Centre.
Significant investment in digital capability, online technology and IT infrastructure.
Significant investment in dedicated teams focusing on online growth.

Annual Report 2020DIRECTORS’ REPORT

(CONTINUED)

OPERATING AND FINANCIAL REVIEW (CONTINUED)

Investment Segment:

The Group’s balance sheet remains strong, primarily due to the significant asset holding of the investment segment. As

at 25 July 2020, the Group continued to reflect its 26.73% (2019: 28.06%) shareholding in Breville Group Limited as an

investment in associate, with an equity accounted value of $257.4 million (2019: $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 25 July

2020 was $947.9 million (2019: $691.7 million). Dividends received from Breville Group Limited during the year

amounted to $14.2 million (2019: $12.7 million).

During the 2017 financial year, the Group acquired a strategic investment of 10.77% in Myer Holdings Limited. At the

end of the 2020 financial year the fair value of this listed equity investment is reflected as $18.1 million (2019: $46.9

Premier Investments owns its Australian Distribution Centre, as well as the global head office building of Premier Retail

in Melbourne. These properties are carried at a combined written down value at 25 July 2020 of $70.8 million (2019:

million).

$72.2 million).

DIRECTORS’ REPORT
(CONTINUED)
Director’s Report continued
DIRECTORS’ REPORT
(CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)

Retail Segment (continued):
OPERATING AND FINANCIAL REVIEW (CONTINUED)
The accelerated swing in customer preference to shopping online has further increased the Group’s focus on each
Retail Segment (continued):
store’s profitability. Given these changed consumer behaviours, the Group reviewed each retail store’s future
estimated cash flows. Consideration was also given to the fact that the Group has maximum flexibility within its current
The accelerated swing in customer preference to shopping online has further increased the Group’s focus on each
store portfolio, given that over 70% of its Australian and New Zealand store leases are currently in holdover, or are due
store’s profitability. Given these changed consumer behaviours, the Group reviewed each retail store’s future
to expire within 2020. As a result of the uncertain future trading environment of traditional bricks-and-mortar stores due
estimated cash flows. Consideration was also given to the fact that the Group has maximum flexibility within its current
to COVID-19, together with the accelerating growth of the online channel, the Group has recognised an impairment
store portfolio, given that over 70% of its Australian and New Zealand store leases are currently in holdover, or are due
loss on store plant and equipment during the second half of the year amounting to $26.2 million, and associated costs
to expire within 2020. As a result of the uncertain future trading environment of traditional bricks-and-mortar stores due
of $2.8 million. In addition, the Group recognised an impairment loss of $2.4 million in relation to the Group’s right-of-
to COVID-19, together with the accelerating growth of the online channel, the Group has recognised an impairment
use assets. This relates to the closure of Hong Kong retail stores, writing down the associated right-of-use asset to its
loss on store plant and equipment during the second half of the year amounting to $26.2 million, and associated costs
recoverable amount.
of $2.8 million. In addition, the Group recognised an impairment loss of $2.4 million in relation to the Group’s right-of-
use assets. This relates to the closure of Hong Kong retail stores, writing down the associated right-of-use asset to its
The impact of the COVID-19 health crisis during the second half of the year, resulted in the very difficult decision to
recoverable amount.
temporarily shut down the Group’s global operations on 26 March 2020, with no certainty at that time as to when the
Group would be able to reopen. During this time of uncertainty, the Group closed out of its US Dollar currency hedge
The impact of the COVID-19 health crisis during the second half of the year, resulted in the very difficult decision to
books. As a result, the Group recognised a net gain on settlement of its cash flow hedges of $13.2 million.
temporarily shut down the Group’s global operations on 26 March 2020, with no certainty at that time as to when the
Group would be able to reopen. During this time of uncertainty, the Group closed out of its US Dollar currency hedge
books. As a result, the Group recognised a net gain on settlement of its cash flow hedges of $13.2 million.

Premier Retail Underlying EBIT History
Premier Retail Underlying EBIT History

$187.2

$200.0

$180.0

$160.0

$150.0
$200.0

$140.0

$120.0

$100.0
$150.0

$100.0

$50.0
$100.0

$65.3

$-
$50.0

$80.0

$60.0

$40.0

$20.0

Premier Retail Underlying EBIT History

$167.3

$150.1

$136.0

$126.7

$83.7

$65.3 $80.4 $83.7 $92.8 $105.7
$80.4

$92.8

$65.3 $80.4 $83.7 $92.8 $105.7

$' MILLIONS

$105.7

$126.7 $136.0 $150.1

$187.2

$167.3

$187.2

$167.3

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

$' MILLIONS

FY 16 underlying EBIT represents a comparable 52 week period. Refer to page 9 for a reconciliation between underlying EBIT and

FY16
FY12
FY12
statutory reported operating profit before taxation for the Retail Segment.

FY11
FY11

FY15

FY14

FY13

FY14

FY15

FY13

FY17
FY16*

FY18
FY17

FY19

FY18

FY19

FY20

FY 16 underlying EBIT represents a comparable 52 week period. Refer to page 9 for a reconciliation between underlying EBIT and

$' millions

statutory reported operating profit before taxation for the Retail Segment.

Revenue from customers per Geographic Segment for the year ended 25 July 2020

Revenue from customers per Geographic Segment for the year ended 25 July 2020
Europe
8%

Asia
5%

8%
Europe

New Zealand
10%

5%
Asia

New Zealand
10%
10%
New Zealand

Asia
5%

Europe
8%

77%
Australia

Australia
77%

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

OPERATING AND FINANCIAL REVIEW (CONTINUED)

Investment Segment:

The Group’s balance sheet remains strong, primarily due to the significant asset holding of the investment segment. As
at 25 July 2020, the Group continued to reflect its 26.73% (2019: 28.06%) shareholding in Breville Group Limited as an
investment in associate, with an equity accounted value of $257.4 million (2019: $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 25 July
2020 was $947.9 million (2019: $691.7 million). Dividends received from Breville Group Limited during the year
amounted to $14.2 million (2019: $12.7 million).

During the 2017 financial year, the Group acquired a strategic investment of 10.77% in Myer Holdings Limited. At the
end of the 2020 financial year the fair value of this listed equity investment is reflected as $18.1 million (2019: $46.9
million).

Premier Investments owns its Australian Distribution Centre, as well as the global head office building of Premier Retail
in Melbourne. These properties are carried at a combined written down value at 25 July 2020 of $70.8 million (2019:
$72.2 million).

Annual Report 2020e
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DIRECTORS’ 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.

2020

2019

2018

2017

2016

Closing share price at end of financial year

$17.57

$16.28

$17.35

$13.35

$16.22

Basic earnings per share (cents)

86.89

67.51

52.97

Dividend paid per share (cents)

37.01

66.0

56.0

66.8

51.0

66.3

44.0

Return on equity (%)

10.2%

7.9%

8.5%2

7.9%

7.8%

Net debt/equity ratio (%)

(22.4%)3

(1.7%)

(0.2%)

0.2%

(13.3%)

1 Excludes the approved interim fully franked dividend of 34 cents per share, which is payable on 30 September 2020.

2 Return on Equity excludes the impact of a non-cash impairment of intangible assets in FY18 ($30 million).

3 Net debt has been calculated as cash and cash equivalents, less interest-bearing liabilities, representing bank loans.

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

25 July 2020.

SIGNIFICANT EVENTS AFTER THE REPORTING DATE

The Directors of Premier Investments Limited approved a final dividend in respect of the 2020 financial year. The

total amount of the dividend is $57,141,000 (2019: $58,636,000) which represents a fully franked dividend of 36

cents per share (2019: 37 cents per share).

The Group temporarily closed all of its 165 Melbourne metropolitan stores to customers from 8 July 2020, in direct

response to the Victorian Government’s COVID-19 directive whereby Stage 3 “stay at home” restrictions were

reinstated. As of 5 August 2020, the Victorian Government introduced Stage 4 restrictions across metropolitan

Melbourne for a period of at least 6 weeks. As a result, these Melbourne metropolitan stores remain temporarily

closed. In response to the Victorian Government directives, all 47 regional Victorian stores were temporarily

closed from 4 August 2020 and reopened on 14 September 2020.

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 25 July 2020 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.

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Premier Investments Limited

DIRECTORS’ 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.

2020

2019

2018

2017

2016

Closing share price at end of financial year

$17.57

$16.28

$17.35

$13.35

$16.22

Basic earnings per share (cents)

86.89

67.51

52.97

Dividend paid per share (cents)

37.01

66.0

56.0

66.8

51.0

66.3

44.0

Return on equity (%)

10.2%

7.9%

8.5%2

7.9%

7.8%

Net debt/equity ratio (%)

(22.4%)3

(1.7%)

(0.2%)

0.2%

(13.3%)

1 Excludes the approved interim fully franked dividend of 34 cents per share, which is payable on 30 September 2020.

2 Return on Equity excludes the impact of a non-cash impairment of intangible assets in FY18 ($30 million).

3 Net debt has been calculated as cash and cash equivalents, less interest-bearing liabilities, representing bank loans.

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
25 July 2020.

SIGNIFICANT EVENTS AFTER THE REPORTING DATE

The Directors of Premier Investments Limited approved a final dividend in respect of the 2020 financial year. The
total amount of the dividend is $57,141,000 (2019: $58,636,000) which represents a fully franked dividend of 36
cents per share (2019: 37 cents per share).

The Group temporarily closed all of its 165 Melbourne metropolitan stores to customers from 8 July 2020, in direct
response to the Victorian Government’s COVID-19 directive whereby Stage 3 “stay at home” restrictions were
reinstated. As of 5 August 2020, the Victorian Government introduced Stage 4 restrictions across metropolitan
Melbourne for a period of at least 6 weeks. As a result, these Melbourne metropolitan stores remain temporarily
closed. In response to the Victorian Government directives, all 47 regional Victorian stores were temporarily
closed from 4 August 2020 and reopened on 14 September 2020.

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 25 July 2020 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.

Annual Report 2020DIRECTORS’ REPORT
(CONTINUED)
Director’s Report continued

DIRECTORS’ REPORT

(CONTINUED)

SHARE OPTIONS AND SHARES ISSUED DURING THE FINANCIAL YEAR

DIRECTOR INTERESTS IN SHARES AND RIGHTS OF THE COMPANY

Unissued Shares:

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

As at the date of this report, there were 813,410 unissued performance rights. 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 294,579 shares (2019: 330,112) were issued during the year pursuant to the Group’s Performance Rights
Plan. No other shares were issued during the year.

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 35.

REMUNERATION REPORT

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 31 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.

Solomon Lew

Chairman

1 October 2020

Solomon Lew

Timothy Antonie

Sally Herman

Henry Lanzer AM

Michael McLeod

Mark McInnes

4,437,699 ordinary shares**

5,001 ordinary shares

11,500 ordinary shares

27,665 ordinary shares

28,186 ordinary shares

982,100 ordinary shares

**Mr. Lew is an associate of Century Plaza Investments Pty. Ltd. and Metrepark Pty. Ltd (Associated Entities). The

Associated Entities, collectively, have a relevant interest in 59,804,731 shares in the company. However, Mr. Lew

does not have a relevant interest in the shares of the company held by the Associated Entities.

The number of meetings of the Board of Directors during the financial year, and the number of meetings attended by

DIRECTORS’ MEETINGS

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

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.

Premier Investments LimitedDIRECTORS’ REPORT
(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
Timothy Antonie
Sally Herman
Henry Lanzer AM
Michael McLeod
Mark McInnes

4,437,699 ordinary shares**
5,001 ordinary shares
11,500 ordinary shares
27,665 ordinary shares
28,186 ordinary shares
982,100 ordinary shares

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

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
1 October 2020

Annual Report 2020DIRECTORS’ REPORT
(CONTINUED)
Director’s Report continued

REMUNERATION REPORT

Dear Shareholders,

As Chairman of the Remuneration and Nomination Committee, I am pleased to present Premier Investments’
remuneration report for the 52 weeks ended 25 July 2020. This report outlines, in detail, the remuneration outcomes
and incentive arrangements, related to our performance.

The onset of COVID-19 in early 2020 created an extremely challenging operating environment in the second half of
the 2020 financial year. During this global pandemic, the Group’s absolute priority has been, and continues to be, the
safety and wellbeing of our teams, our customers, and the broader community in each of the regions in which we
operate. The devastating global impact of the COVID-19 health crisis resulted in the very difficult decision to
temporarily shut down the Group’s global operations on 26 March 2020 and stand down over 9,000 employees. At
the time there was no certainty of when the Group would be able to reopen its retail stores, and there was no
government wage subsidy scheme in existence in Australia.

The financial impact of COVID-19 was most severe during the period 11 March 2020 to 15 May 2020, with retail
store sales down 78.4% and global sales down $131.1 million on the prior year comparable period.

Due to the devastating impact on the Group’s sales resulting from the COVID-19 health crisis, the Group became
eligible for a range of global government wage subsidy programs, across seven countries, designed to keep people
in jobs. Eligible Group employees received wage subsidies whilst they were unable to work. In addition, in Australia,
many of the Group’s casual and part time work force received subsidy payments in excess of their normal working
arrangements in accordance with the rules of the government scheme. The funds that the Group received were used
to support standing up its employees as stores gradually reopened under COVID-19 safe plans. This ensured that
the Group was able to fulfill the government’s objectives of keeping people in jobs and connected to their employees
amid a global pandemic.

In response to the uncertainties surrounding the COVID-19 pandemic, Premier Retail CEO, Mark McInnes, together
with the entire Just Group Senior Executive team voluntarily did not receive any remuneration for the month of April
2020, and received only 80% of their monthly gross remuneration for the month of May 2020 as stores gradually
reopened. Normal monthly remuneration was restored from June 2020. In addition, Premier’s Non-Executive
Directors voluntarily did not receive any remuneration for April 2020 and received 80% of their monthly director’s fees
for May 2020 through to July 2020.

The Directors believe that the strong result delivered for this financial year, amidst a very challenging global
background, was a function of the swift response of the Group’s world-class management team. This has been a
year of great turmoil in the retail market, here in Australia as well as for our international operations, which has
required the very best executives to deliver the result. Premier Retail CEO, Mark McInnes, has expertly led a talented
executive team to deliver reported revenue of $1.22 billion, with statutory reported retail segment operating profit
before taxation of $165.8 million and underlying Earnings before Interest and Taxation (“EBIT”) 1, of $187.2 million, up
11.9% on the prior financial year. This year’s result was delivered through two very different halves. Premier
announced first half revenue for the 26 weeks ended 25 January 2020 of $733.9 million - up 7.53% on the previous
corresponding period. The second half of the year was significantly impacted by temporary store closures resulting
from the COVID-19 health crisis.

For the 9th consecutive year, Premier Retail has delivered growth in underlying EBIT.

DIRECTORS’ REPORT

(CONTINUED)

DIRECTORS’ REPORT

(CONTINUED)

REMUNERATION REPORT (CONTINUED)

Underlying EBIT History1

$167.3 $187.2

$150.1

$136.0

$126.7

$80.4 $83.7

$65.3

$105.7

$92.8

$200.0

$150.0

$100.0

$50.0

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

$'millions

1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of underlying EBIT. FY20 Underlying

EBIT is presented on a pre-AASB 16 basis. FY16 Underlying EBIT represents a comparable 52 week period

1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of underlying EBIT. FY20 Underlying

EBIT is presented on a pre-AASB 16 basis. FY16 Underlying EBIT represents a comparable 52 week period

The senior executive team, many of whom are female, are highly skilled, experienced and very well respected within

the retail industry. Female senior leaders are responsible for five of our seven retail brands, and two of our major

The senior executive team, many of whom are female, are highly skilled, experienced and very well respected within

support functions, being Internet and Marketing and People and Culture. 50%2 of the CEO’s direct reports are

the retail industry. 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. 50%2 of the CEO’s direct reports are

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 Group’s workforce are

Across our over 1,200 stores in Australia, New Zealand, Asia and Europe, the critical support functions within those

female. Female management represents approximately 75%2 of management.

markets, our fast-growing online business and in the Group’s head office, over 90% of the Group’s workforce are

female. Female management represents approximately 75%2 of management.

We will continue to encourage and support a business leadership structure that reflects the values of equal

female.

opportunity.

The retail environment in all markets have experienced difficult conditions as the general economic environment has

damaged consumer confidence. Global health concerns have brought an accelerated swing in traditional channels of

The retail environment in all markets have experienced difficult conditions as the general economic environment has

retail. Premier remains well placed to maximise this significant swing in customer shopping preference. The Group

damaged consumer confidence. Global health concerns have brought an accelerated swing in traditional channels of

benefits from its diversified portfolio of brands, each with a strong and distinctive market position, together with a

retail. Premier remains well placed to maximise this significant swing in customer shopping preference. The Group

world-class customer facing website platform, currently trading in three countries. The significant investments of the

benefits from its diversified portfolio of brands, each with a strong and distinctive market position, together with a

past decade in the Group’s fully integrated online channel as well as the Group’s integrated and owned Australian

world-class customer facing website platform, currently trading in three countries. The significant investments of the

Distribution Centre places the Group in a strong position for the future.

past decade in the Group’s fully integrated online channel as well as the Group’s integrated and owned Australian

Distribution Centre places the Group in a strong position for the future.

Now more than ever, in this rapidly changing global retail world, Premier continues to encourage, incentivise and

develop executives who understand this complex retail environment and proactively develop business outcomes that

Now more than ever, in this rapidly changing global retail world, Premier continues to encourage, incentivise and

build shareholder wealth. With that in mind, the Premier Board is committed to supporting executives to ensure that

develop executives who understand this complex retail environment and proactively develop business outcomes that

strong financial returns are continued to be enjoyed by our shareholders.

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.

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.

2 As per the Just Group Limited Australian Workplace Gender Equality Agency Report 2019-2020.

Terrence McCartney

Chairman, Remuneration and Nomination Committee

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

DIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (CONTINUED)

Underlying EBIT History1

$200.0
REMUNERATION REPORT (CONTINUED)
$180.0
REMUNERATION REPORT (CONTINUED)

$200.0

Underlying EBIT History1

$187.2

$167.3

$167.3 $187.2
$150.1

Underlying EBIT History1
$136.0
Underlying EBIT History1

$126.7

$105.7

$150.1

$136.0

$150.1

$126.7
$126.7

$126.7

$136.0

$167.3 $187.2
$167.3 $187.2

$150.0

$200.0

$100.0

$200.0
$150.0

$65.3

$150.0
$100.0

$50.0
$65.3
$100.0
$-
$50.0

$80.4

$65.3

$80.4 $83.7

$92.8

$105.7

$92.8

$105.7

$92.8

$80.4 $83.7
$83.7

$80.4 $83.7

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

$50.0
$-

$'millions

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

$20.0

$'millions
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of underlying EBIT. FY20 Underlying
EBIT is presented on a pre-AASB 16 basis. FY16 Underlying EBIT represents a comparable 52 week period

$'millions

$160.0

$140.0

$120.0

$100.0

$80.0

$60.0

$40.0

FY13

FY12

FY11

FY20

FY18

FY17

FY15

FY16*

$' millions

FY19
FY14
1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of underlying EBIT. FY20 Underlying
EBIT is presented on a pre-AASB 16 basis. FY16 Underlying EBIT represents a comparable 52 week period
1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of underlying EBIT. FY20 Underlying
EBIT is presented on a pre-AASB 16 basis. FY16 Underlying EBIT represents a comparable 52 week period

We will continue to encourage and support a business leadership structure that reflects the values of equal
opportunity.

The senior executive team, many of whom are female, are highly skilled, experienced and very well respected within
the retail industry. 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. 50%2 of the CEO’s direct reports are
female.

The senior executive team, many of whom are female, are highly skilled, experienced and very well respected within
the retail industry. Female senior leaders are responsible for five of our seven retail brands, and two of our major
The senior executive team, many of whom are female, are highly skilled, experienced and very well respected within
support functions, being Internet and Marketing and People and Culture. 50%2 of the CEO’s direct reports are
the retail industry. Female senior leaders are responsible for five of our seven retail brands, and two of our major
Across our over 1,200 stores in Australia, New Zealand, Asia and Europe, the critical support functions within those
female.
support functions, being Internet and Marketing and People and Culture. 50%2 of the CEO’s direct reports are
markets, our fast-growing online business and in the Group’s head office, over 90% of the Group’s workforce are
female.
Across our over 1,200 stores in Australia, New Zealand, Asia and Europe, the critical support functions within those
female. Female management represents approximately 75%2 of management.
markets, our fast-growing online business and in the Group’s head office, over 90% of the Group’s workforce are
Across our over 1,200 stores in Australia, New Zealand, Asia and Europe, the critical support functions within those
female. Female management represents approximately 75%2 of management.
markets, our fast-growing online business and in the Group’s head office, over 90% of the Group’s workforce are
female. Female management represents approximately 75%2 of management.
We will continue to encourage and support a business leadership structure that reflects the values of equal
The retail environment in all markets have experienced difficult conditions as the general economic environment has
opportunity.
We will continue to encourage and support a business leadership structure that reflects the values of equal
damaged consumer confidence. Global health concerns have brought an accelerated swing in traditional channels of
opportunity.
The retail environment in all markets have experienced difficult conditions as the general economic environment has
retail. Premier remains well placed to maximise this significant swing in customer shopping preference. The Group
damaged consumer confidence. Global health concerns have brought an accelerated swing in traditional channels of
benefits from its diversified portfolio of brands, each with a strong and distinctive market position, together with a
The retail environment in all markets have experienced difficult conditions as the general economic environment has
retail. Premier remains well placed to maximise this significant swing in customer shopping preference. The Group
world-class customer facing website platform, currently trading in three countries. The significant investments of the
damaged consumer confidence. Global health concerns have brought an accelerated swing in traditional channels of
benefits from its diversified portfolio of brands, each with a strong and distinctive market position, together with a
past decade in the Group’s fully integrated online channel as well as the Group’s integrated and owned Australian
retail. Premier remains well placed to maximise this significant swing in customer shopping preference. The Group
world-class customer facing website platform, currently trading in three countries. The significant investments of the
Distribution Centre places the Group in a strong position for the future.
benefits from its diversified portfolio of brands, each with a strong and distinctive market position, together with a
past decade in the Group’s fully integrated online channel as well as the Group’s integrated and owned Australian
world-class customer facing website platform, currently trading in three countries. The significant investments of the
Now more than ever, in this rapidly changing global retail world, Premier continues to encourage, incentivise and
Distribution Centre places the Group in a strong position for the future.
past decade in the Group’s fully integrated online channel as well as the Group’s integrated and owned Australian
develop executives who understand this complex retail environment and proactively develop business outcomes that
Distribution Centre places the Group in a strong position for the future.
Now more than ever, in this rapidly changing global retail world, Premier continues to encourage, incentivise and
build shareholder wealth. With that in mind, the Premier Board is committed to supporting executives to ensure that
develop executives who understand this complex retail environment and proactively develop business outcomes that
strong financial returns are continued to be enjoyed by our shareholders.
Now more than ever, in this rapidly changing global retail world, Premier continues to encourage, incentivise and
build shareholder wealth. With that in mind, the Premier Board is committed to supporting executives to ensure that
develop executives who understand this complex retail environment and proactively develop business outcomes that
strong financial returns are continued to be enjoyed by our shareholders.
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.
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.

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

Terrence McCartney
Chairman, Remuneration and Nomination Committee

2 As per the Just Group Limited Australian Workplace Gender Equality Agency Report 2019-2020.

Chairman, Remuneration and Nomination Committee

2 As per the Just Group Limited Australian Workplace Gender Equality Agency Report 2019-2020.

Annual Report 2020DIRECTORS’ REPORT
(CONTINUED)
Director’s Report continued

REMUNERATION REPORT (AUDITED)

This remuneration report for the 52 weeks ended 25 July 2020 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

Group STI pool.

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 25 July 2020. 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

DIRECTORS’ REPORT

(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

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

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

Further information relating to the Committee’s role, responsibilities and membership can be seen at

remuneration arrangements.

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.

No remuneration advisors were engaged during the 2020 financial year.

Premier Investments LimitedDIRECTORS’ REPORT
(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

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.

No remuneration advisors were engaged during the 2020 financial year.

Annual Report 2020DIRECTORS’ REPORT
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Director’s 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. Globally, as a result of the COVID-19 health crisis, temporary store closures
and align the interests of executives with shareholders.
and the ongoing government implementation of social distancing in each of the countries and markets the Group
The Group operates mainly in the retail industry, with significant revenues earned in its traditional markets of Australia
operates in, customer shopping behaviour has significantly changed.
and New Zealand. The retail industry in these markets has seen marked structural change over recent years, including
Complementing its strong market position in Australia and New Zealand, the Group continues to operate in
a prevalence in the use of new and existing technology, an increase in international competitors and significant
international markets in Asia and Europe. The Group remains committed to growing its existing international presence.
changes in general consumer sentiment. Globally, as a result of the COVID-19 health crisis, temporary store closures
During the 2019 financial year, the Group launched its wholesale business internationally, expanding its overseas
and the ongoing government implementation of social distancing in each of the countries and markets the Group
footprint.
operates in, customer shopping behaviour has significantly changed.

REVENUE FROM CUSTOMERS PER GEOGRAPHIC AREA FY20

Complementing its strong market position in Australia and New Zealand, the Group continues to operate in
international markets in Asia and Europe. The Group remains committed to growing its existing international presence.
During the 2019 financial year, the Group launched its wholesale business internationally, expanding its overseas
footprint.

Revenue from Customers per Geographic Area FY20

Europe
8%

Asia
5%

8%
Europe

REVENUE FROM CUSTOMERS PER GEOGRAPHIC AREA FY20

New Zealand
5%
10%
Asia

10%
New Zealand

Asia
5%

Europe
8%

New Zealand
10%

Australia
77%

77%
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
77%

Given these structural changes and the Group’s growth focus, the Board believes it is both critical to the future success
of the business, and in the best interest of shareholders, to attract, retain and develop the best possible executive team
The market for skilled and experienced executives in the retail industry continues to be increasingly competitive and
through the provision of competitive remuneration packages, and incentive arrangements which are aligned to growth
international in nature. The Group’s strong domestic position, as well as global reach, provides exposure to an
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 growth focus, the Board believes it is both critical to the future success
shareholders.
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
The Group is committed to ensuring that executive remuneration outcomes are explicitly linked to the overall
and performance.
performance and success of the Group. This section illustrates this link between the Group’s strategic objectives and
its executive remuneration strategies.
The Group’s strategic objective is to be recognised as a leader in the retail industry and build long term value for
shareholders.

The Group is committed to ensuring that executive remuneration outcomes are explicitly linked to the overall
performance and success of the Group. This section illustrates this link between the Group’s strategic objectives and
its executive remuneration strategies.

DIRECTORS’ REPORT

(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

Attract, motivate and retain high performing

• The remuneration framework incorporates “at-

individuals

risk” components, through STI and LTI plans.

• Remuneration is competitive as compared to

• Performance is assessed against a suite of

companies of a similar size and complexity.

financial and non-financial measures relevant

•

Longer-term remuneration frameworks and

to the success of the Group and generating

“at-risk” components encourage retention,

returns for shareholders.

development and a multi-year performance

focus.

Component

Vehicle

Purpose

Link to performance

Fixed

remuneration

Comprises

base salary,

superannuation

contributions

and other

benefits

To provide competitive

fixed remuneration with

Both the executive’s performance,

and the performance of the Group,

reference to the applicable

are considered during regular

role, market and relevant

executive’s experience.

remuneration reviews.

STI

Awarded in

cash

Rewards executives for

their contribution to

Key financial metrics based

primarily on Premier Retail’s

achievement of Group and

underlying earnings before interest

business unit annual

and taxation (“EBIT”) of each

outputs and performance

business unit, as well as a suite of

outcomes.

other internal financial and non-

financial measures.

LTI

Awarded in

performance

rights

Rewards executives for

their contribution to the

creation of shareholder

Vesting of performance rights is

dependent on both a positive total

shareholder return (“TSR”) Premier

value over the long term.

and testing against the Comparison

Peer Group (defined in Section 3D

of this report).

Discretionary

Awarded in

Rewards executives in

Granted at the discretion of the

Bonus

cash or

performance

rights

exceptional circumstances

Board upon recommendation of the

linked to long term

Committee in exceptional

shareholder outcomes.

circumstances, and when in the

best interests of the Group.

Premier Investments LimitedDIRECTORS’ REPORT
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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 generating
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”) Premier
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.

Annual Report 2020DIRECTORS’ REPORT
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Director’s Report continued

REMUNERATION REPORT (AUDITED) (CONTINUED)

3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)

3B. Approach to setting remuneration

For the 52 weeks ended 25 July 2020, the executive remuneration framework comprised of fixed remuneration, STI
and LTI, as outlined below. Details of Mr. McInnes’ remuneration is 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.

In response to the uncertainties surrounding the COVID-19 pandemic, the Just Group Executive team voluntarily did
not receive any remuneration for the month of April 2020 and received only 80% of their monthly gross remuneration
for the month of May 2020. Normal monthly remuneration was restored from June 2020.

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.

DIRECTORS’ REPORT

(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)

3D. Detail of incentive plans (continued)

Short-term incentive (“STI”) (continued)

non-financial

performance

measures?

What are the applicable

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.

How is performance

After the end of the financial year, following consideration of the financial and non-

assessed?

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”)

Group’s strategic objectives.

Premier’s LTI plan seeks to create shareholder value over the long term by aligning executive remuneration with the

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

Prior to the 2020 financial year, LTI performance rights were granted to executives annually and eligible to vest three

years from the date of the grant. During the 2020 financial year, certain amendments were made to LTI performance

rights granted to executives, which have been described in more detail below.

Who participates?

Executives.

How is LTI delivered?

Performance rights.

What were the

performance measures

for the 2020 and 2019

financial years?

LTI rights awarded to each executive are subject to a two-stage performance test -

an absolute and relative test - based on Premier’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.

lapse.

The absolute test requires Premier to achieve a positive TSR over the testing

period. If the TSR is negative over the testing period, then the performance rights

If the TSR is positive over the testing period, the relative test is undertaken, which

compares Premier’s TSR with the S&P/ASX200 Industrials excluding overseas

and resource companies (“Comparison Peer Group”). The Comparison Peer

Group was chosen to reflect Premier’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)

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”)

Premier’s LTI plan seeks to create shareholder value over the long term by aligning executive remuneration with the
Group’s strategic objectives.

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

Prior to the 2020 financial year, LTI performance rights were granted to executives annually and eligible to vest three
years from the date of the grant. During the 2020 financial year, certain amendments were made to LTI performance
rights granted to executives, which have been described in more detail below.

Who participates?

Executives.

How is LTI delivered?

Performance rights.

What were the
performance measures
for the 2020 and 2019
financial years?

LTI rights awarded to each executive are subject to a two-stage performance test -
an absolute and relative test - based on Premier’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 Premier 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 Premier’s TSR with the S&P/ASX200 Industrials excluding overseas
and resource companies (“Comparison Peer Group”). The Comparison Peer
Group was chosen to reflect Premier’s competitors for both capital and talent.

Annual Report 2020DIRECTORS’ REPORT
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Director’s 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 2020 and 2019
financial years
(continued)?

Premier’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 for the 2019 financial year was 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%

For LTI rights issued during the 2020 financial year, the vesting schedule has been
amended 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 75th percentile

75th percentile and above

50%

Pro Rata

100%

The absolute test ensures that shareholders and executives are aligned in the goal
of absolute wealth creation. The relative test provides alignment between
comparative shareholder return and reward for executives.

Premier 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.

DIRECTORS’ REPORT

(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)

3D. Detail of incentive plans (continued)

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

When does the LTI

For rights issued prior to the 2020 financial year, the performance rights will

vest?

generally vest over a period of three years subject to meeting performance

measures.

For rights issued during the 2020 financial year, the performance rights will vest in

accordance with the following schedule:

Tranche A: LTI rights will be tested for vesting from 1 May 2020 to 1 October 2022

Tranche B: LTI rights will be tested for vesting from 1 May 2020 to 1 October 2023

(being the 1st Vesting Date).

(being the 2nd Vesting Date).

(being the 3rd Vesting Date).

Tranche C: LTI rights will be tested for vesting from 1 May 2020 to 1 May 2024

The performance rights issued during the 2020 financial year will be tested for

vesting in three equal tranches. The three-tranche performance rights issue

replaces the previous annual performance rights issue during the above vesting

periods (e.g. additional performance rights will not be granted during the above

vesting periods).

Performance rights have no opportunity to re-test.

How are grants treated

Generally, all rights (whether vested or unvested) lapse and terminate on cessation

on termination?

of employment.

May participants enter

Executives are prohibited from entering into transactions to hedge or limit the

into hedging

arrangements?

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.

Are there restrictions

on disposals?

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.

Do participants receive

distributions or

dividends on unvested

LTI grants?

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)

When does the LTI
vest?

For rights issued prior to the 2020 financial year, the performance rights will
generally vest over a period of three years subject to meeting performance
measures.

For rights issued during the 2020 financial year, the performance rights will vest in
accordance with the following schedule:

Tranche A: LTI rights will be tested for vesting from 1 May 2020 to 1 October 2022
(being the 1st Vesting Date).
Tranche B: LTI rights will be tested for vesting from 1 May 2020 to 1 October 2023
(being the 2nd Vesting Date).
Tranche C: LTI rights will be tested for vesting from 1 May 2020 to 1 May 2024
(being the 3rd Vesting Date).

The performance rights issued during the 2020 financial year will be tested for
vesting in three equal tranches. The three-tranche performance rights issue
replaces the previous annual performance rights issue during the above vesting
periods (e.g. additional performance rights will not be granted during the above
vesting periods).

Performance rights have no opportunity to re-test.

How are grants treated
on termination?

Generally, all rights (whether vested or unvested) lapse and terminate on cessation
of employment.

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 2020DIRECTORS’ REPORT
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Director’s Report continued
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)

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

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.

DIRECTORS’ REPORT

(CONTINUED)

DIRECTORS’ REPORT

(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

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

REMUNERATION REPORT (AUDITED) (CONTINUED)

The below chart shows the Premier TSR against the S&P/ASX200 Index, from 4 April 2011 to 25 July 2020:

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

The below chart shows the Premier TSR against the S&P/ASX200 Index, from 4 April 2011 to 25 July 2020:

ASX200 Index from 4 April 2011 to 25 July 2020

Premier Investments Limited TSR against the

ASX200 Index from 4 April 2011 to 25 July 2020

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

$136.0 $150.1

$126.7

$105.7

$92.8

$136.0 $150.1
$136.0

$126.7

$167.3 $187.2

$167.3

$187.2

$167.3 $187.2
$150.1

$80.4

$83.7

$65.3

$80.4

$83.7

$105.7

$92.8
$92.8

$65.3

$200.0

$180.0

$160.0

$140.0

$120.0

$100.0

$80.0

$60.0

$40.0

$20.0

$200.0
$180.0
$160.0
$200.0
$140.0
$180.0
$120.0
$160.0
$100.0
$140.0
$80.0
$120.0
$60.0
$100.0
$40.0
$80.0
$20.0
$60.0
$-
$40.0
$20.0
$-

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

$'millions

Note: The term underlying EBIT is not an IFRS defined term. Please refer to page 9 for a reconciliation between underlying EBIT and

FY11

FY12

FY13

FY14

$'millions
FY15

FY16*

FY17

FY18

FY19

FY20

statutory reported operating profit before tax for the Retail Segment. FY16 Underlying EBIT represents a comparable 52 week period.

$' millions

Note: The term underlying EBIT is not an IFRS defined term. Please refer to page 9 for a reconciliation between underlying EBIT and
Performance compared to STI payments made during the financial year ended 25 July 2020
statutory reported operating profit before tax for the Retail Segment. FY16 Underlying EBIT represents a comparable 52 week period.
During the 2020 financial year, an amount of $215,851 was paid to Mr Bryce and combined both an STI payment and
Performance compared to STI payments made during the financial year ended 25 July 2020
discretionary bonus payment. The STI payment was in line with hurdles and qualifiers relating to his 2019 financial
year STI plan. This included the achievement of Premier Retail underlying EBIT. No STI was paid to Mr. Bryce during
During the 2020 financial year, an amount of $215,851 was paid to Mr Bryce and combined both an STI payment and
the 2019 financial year.
discretionary bonus payment. The STI payment was in line with hurdles and qualifiers relating to his 2019 financial
year STI plan. This included the achievement of Premier Retail underlying EBIT. No STI was paid to Mr. Bryce during
Group performance and its link to LTI
the 2019 financial year.
The performance measure which drives LTI vesting is dependent on an absolute test, being a positive Premier TSR
Group performance and its link to LTI
performance and a relative test, being a comparison against the Comparison Peer Group (as defined in section 3D of
this report).
The performance measure which drives LTI vesting is dependent on an absolute test, being a positive Premier TSR
performance and a relative test, being a comparison against the Comparison Peer Group (as defined in section 3D of
The table below illustrates the outcomes of the TSR testing performed during the 2019 and 2020 financial years in
this report).
relation to KMP:

The table below illustrates the outcomes of the TSR testing performed during the 2019 and 2020 financial years in
relation to KMP:

Share price
at start of
testing
Share price
period
at start of
testing
period

$9.95

Share price
at end of
testing
Share price
period
at end of
testing
period

$15.65

Dividends
paid

TSR
percentage

TSR
percentile

TSR
100.58%
percentage

TSR
74.53
percentile

Number of
Performance
Rights
Number of
tested for
Performance
KMP
Rights
250,000*
tested for
KMP

Testing Period

4 Apr 2014 to 4 Apr 2019

Testing Period

4 Apr 2014 to 4 Apr 2019
4 Apr 2014 to 4 Apr 2020

$9.95
$9.95

$15.65
$11.55

$11.55
* Relates to Mr. McInnes, refer to section 5 of this report.

4 Apr 2014 to 4 Apr 2020

$9.95

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

Dividends
$2.54 fully
paid
franked

$2.54 fully
$3.24 fully
franked
franked

$3.24 fully
franked

100.58%
54.73%

74.53
68.0

250,000*
250,000*

54.73%

68.0

250,000*

35.00

30.00

25.00

20.00

15.00

10.00

5.00

–

Apr-11

Apr-12

Apr-13

Apr-14

Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

Apr-20

Apr-11

Apr-12

Apr-13

Apr-14

PMV

Apr-15

Apr-16

ASX 200

Apr-17

Apr-18

Apr-19

Apr-20

5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES

ASX 200

PMV

Mr. McInnes’ fixed remuneration

5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES

Mr. McInnes’ annual fixed remuneration increased from $2,500,000 to $2,750,000, effective from the beginning of the

Mr. McInnes’ fixed remuneration

2020 financial year. This was Mr. McInnes’ first increase in fixed remuneration since the end of the 2015 financial year.

In response to the COVID-19 pandemic and to support the Group as a result of these uncertainties, Mr McInnes

Mr. McInnes’ annual fixed remuneration increased from $2,500,000 to $2,750,000, effective from the beginning of the

voluntarily did not receive any remuneration for the month of April 2020 and received only 80% of his monthly gross

2020 financial year. This was Mr. McInnes’ first increase in fixed remuneration since the end of the 2015 financial year.

remuneration for the month of May 2020. Normal monthly remuneration was restored from June 2020 onwards.

In response to the COVID-19 pandemic and to support the Group as a result of these uncertainties, Mr McInnes

voluntarily did not receive any remuneration for the month of April 2020 and received only 80% of his monthly gross

Mr. McInnes’ notice period

remuneration for the month of May 2020. Normal monthly remuneration was restored from June 2020 onwards.

Upon cessation of his employment, Mr. McInnes is entitled to 12 months’ notice (“Notice Period”) if he resigns or is

Mr. McInnes’ notice period

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”).

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

During the Notice Period, Premier may direct Mr. McInnes to continue in his role, perform no duties, reduced duties or

entitlement at law to summarily dismiss (“Terminated Without Cause”).

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

During the Notice Period, Premier may direct Mr. McInnes to continue in his role, perform no duties, reduced duties or

$2,750,000 gross, less applicable tax.

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

If Mr. McInnes is terminated for serious misconduct or Premier is otherwise entitled at law to summarily dismiss Mr.

$2,750,000 gross, less applicable tax.

McInnes (“Terminated for Cause”), Premier may terminate Mr. McInnes’ employment without providing the Notice

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

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).

+299%

+84%

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)

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

The below chart shows the Premier TSR against the S&P/ASX200 Index, from 4 April 2011 to 25 July 2020:

The below chart shows the Premier TSR against the S&P/ASX200 Index, from 4 April 2011 to 25 July 2020:
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE) (CONTINUED)
Premier Investments Limited TSR against the
Premier Investments Limited TSR against the
ASX200 Index from 4 April 2011 to 25 July 2020
ASX200 Index from 4 April 2011 to 25 July 2020
Premier Investments Limited TSR against the
ASX200 Index from 4 April 2011 to 25 July 2020

35.00

35.00
35.00
30.00

30.00
30.00
25.00

25.00
25.00
20.00

20.00
20.00
15.00

15.00
15.00
10.00

10.00
10.00
5.00

5.00
5.00
–
Apr-11
–
–
Apr-11

Apr-11

+299%

+299%
+299%

+84%

+84%
+84%

Apr-12

Apr-13

Apr-14

Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

Apr-20

Apr-12

Apr-13

Apr-14

PMV

Apr-15

Apr-16

Apr-17

ASX 200
Apr-17

Apr-18

Apr-19

Apr-20

5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES

PMV
PMV

ASX 200
ASX 200

Mr. McInnes’ fixed remuneration
5. REMUNERATION OF CEO PREMIER RETAIL, MR. MCINNES
Mr. McInnes’ annual fixed remuneration increased from $2,500,000 to $2,750,000, effective from the beginning of the
Mr. McInnes’ fixed remuneration
2020 financial year. This was Mr. McInnes’ first increase in fixed remuneration since the end of the 2015 financial year.
In response to the COVID-19 pandemic and to support the Group as a result of these uncertainties, Mr McInnes
Mr. McInnes’ annual fixed remuneration increased from $2,500,000 to $2,750,000, effective from the beginning of the
voluntarily did not receive any remuneration for the month of April 2020 and received only 80% of his monthly gross
2020 financial year. This was Mr. McInnes’ first increase in fixed remuneration since the end of the 2015 financial year.
remuneration for the month of May 2020. Normal monthly remuneration was restored from June 2020 onwards.
In response to the COVID-19 pandemic and to support the Group as a result of these uncertainties, Mr McInnes
voluntarily did not receive any remuneration for the month of April 2020 and received only 80% of his monthly gross
Mr. McInnes’ notice period
remuneration for the month of May 2020. Normal monthly remuneration was restored from June 2020 onwards.
Upon cessation of his employment, Mr. McInnes is entitled to 12 months’ notice (“Notice Period”) if he resigns or is
Mr. McInnes’ notice period
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”).
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
During the Notice Period, Premier may direct Mr. McInnes to continue in his role, perform no duties, reduced duties or
entitlement at law to summarily dismiss (“Terminated Without Cause”).
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
During the Notice Period, Premier may direct Mr. McInnes to continue in his role, perform no duties, reduced duties or
$2,750,000 gross, less applicable tax.
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
If Mr. McInnes is terminated for serious misconduct or Premier is otherwise entitled at law to summarily dismiss Mr.
$2,750,000 gross, less applicable tax.
McInnes (“Terminated for Cause”), Premier may terminate Mr. McInnes’ employment without providing the Notice
Period (or payment in lieu of the Notice Period).
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).

Annual Report 2020DIRECTORS’ REPORT
(CONTINUED)
Director’s Report continued

REMUNERATION REPORT (AUDITED) (CONTINUED)

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

Mr. McInnes was 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

Mr. McInnes’ STI arrangements

be exercisable at no cost.

Mr. McInnes is entitled to receive a STI if the applicable performance targets and conditions set out below are met.

Shareholders approved the right of the Group to issue the 1,000,000 performance rights to Mr. McInnes at the 2015

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

$1,375,000.

EBIT growth between 5% and 10% of
Base Year

$1,375,000 plus a pro rata payment based on the % of the EBIT
growth above 5%, up to a maximum of $2,750,000 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 $2,750,000, 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 2019 or 2020 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.

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 25 July 2020 and 27 July 2019

During the 2020 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 2019 financial year.

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.

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 2020 financial year will be finalised in December 2020.

DIRECTORS’ REPORT

(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

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

Mr. McInnes’ LTI arrangements

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 vested 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 has been 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

•

(each date being a “Vesting Date”).

Tranche C – 4 April 2014 to 4 April 2019 (Tested in FY19, see further details provided in Section 5)

Tranche D – 4 April 2014 to 4 April 2020 (Tested in FY20, see further details provided in Section 5)

The share price baseline for each tranche was $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 was 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 required that the TSR over the testing period is positive.

If the TSR is positive, the second stage relative test required the TSR to be assessed against the relative performance

of the Comparison Peer Group.

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

Conversion ratio of performance rights to shares

available to vest under the TSR performance condition:

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

25%

Pro Rata

50%

Pro Rata

100%

Premier’s TSR and ranking within the Comparison Peer Group for each testing period was 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 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.

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

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

Mr. McInnes’ LTI arrangements

Mr. McInnes was 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 vested 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 has been tested against the TSR performance measure over different testing
periods, as follows:

•

Tranche A – 4 April 2014 to 4 April 2017

Tranche B – 4 April 2014 to 4 April 2018

Tranche C – 4 April 2014 to 4 April 2019 (Tested in FY19, see further details provided in Section 5)

Tranche D – 4 April 2014 to 4 April 2020 (Tested in FY20, see further details provided in Section 5)

(each date being a “Vesting Date”).

The share price baseline for each tranche was $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 was 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 required that the TSR over the testing period is positive.

If the TSR is positive, the second stage relative test required the TSR to be assessed against the relative performance
of the Comparison Peer Group.

The relative TSR performance targets and the corresponding vesting percentages were 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 was 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 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.

Annual Report 2020DIRECTORS’ REPORT
(CONTINUED)
Director’s Report continued

REMUNERATION REPORT (AUDITED) (CONTINUED)

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

Mr. McInnes’ LTI arrangements (continued)

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.

Shares issued as a result of vesting of performance rights issued to Mr McInnes for the financial years ended
25 July 2020 and 27 July 2019

During the 2020 financial year, the final tranche of 250,000 performance rights (being Tranche D) were tested for the
period 4 April 2014 to 4 April 2020. The TSR over this period was 54.73%, placing Premier in the 68.0 percentile of the
Comparison Peer Group, resulting in vesting of 72% of the performance rights. Details of this test have been
presented in Section 4 of this report. The Board, in its absolute discretion under the Performance Rights Plan,
performed an indicative TSR test over two alternative testing periods, being 4 April 2014 to 29 April 2020, and 4 April
2014 and 28 February 2020, to provide the Board with further clarity on the impact on the short-term global share price
volatility on the Premier’s TSR resulting from the COVID-19 pandemic. The results of these two TSR tests reflected an
indicative percentile ranking of 75.7 percentile and 78.6 percentile, respectively. Therefore, both indicative tests would
have resulted in 100% of the performance rights qualifying for vesting into newly issued shares. Based on the
circumstances surrounding the testing period for Tranche D, the results of the extended indicative TSR tests and the
Group’s compounding growth achieved over the testing period, the Board exercised its discretion provided under the
Performance Rights Plan. As a result, 250,000 performance rights vested into newly issued shares in May 2020. This
is the first incidence where the Board has exercised its discretion under the Performance Rights Plan in relation to
performance rights for members of Premier’s KMP.

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.

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”).

DIRECTORS’ REPORT

(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

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

Mr. McInnes’ post-employment restrictions (continued)

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 $5,500,000 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 $2,750,000 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.

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 Ms. Meyer, whose relevant terms of employment are set out below). Material

provisions of the service agreements are set out below:

Termination benefits

Notice

period

required

Upon

Notice

period

required

Start

date

Term of

Review

from

agreement

period

Premier

initiated

diminution

from

of role

employee

Mr. McInnes

Open

Annual

12 months

Nil

Mr. Bryce

Open

Annual

12 months

Nil

12 months

Ms. Meyer

Open

Annual

12 months Nil

Nil

12 months

fixed rem.

including

notice

12 months

fixed rem.

including

notice

12 months

fixed rem.

including

notice

4 April

2011

13 Dec

2016

4 Feb

2019

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

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

Mr. McInnes’ post-employment restrictions (continued)

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 $5,500,000 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 $2,750,000 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.

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 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

Open

Annual

12 months

Mr. Bryce

Ms. Meyer

13 Dec
2016

4 Feb
2019

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

Open

Annual

12 months Nil

Nil

12 months

Annual Report 2020DIRECTORS’ REPORT
(CONTINUED)
Director’s Report continued

REMUNERATION REPORT (AUDITED) (CONTINUED)

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.

The Non-Executive Directors voluntarily did not receive any remuneration for the month of April 2020 and reduced their
fees by 20% for the months of May – July 2020 to support the Group as a result of the severe uncertainty surrounding
the COVID-19 pandemic.

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).

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DIRECTORS’ REPORT

(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

1
3

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

9. ADDITIONAL DISCLOSURES RELATING TO RIGHTS AND SHARES OF KMP

The table below discloses the number of performance rights granted to KMP as remuneration for the financial

year ended 25 July 2020, as well as the number of rights vested and lapsed during the year:

Terms and conditions

Grant

year

granted

during

the year

No.

Rights

Grant date

Fair value

Expiry and Exercise

per right at

grant date

date

Rights vested and

lapsed during

2020

Rights

vested

Rights

lapsed

No.

2020

dates.

Mr. M. McInnes

Mr. J.S. Bryce

2016

2020

26-Apr-16

250,000

25,548 *

1-May-20

8.33

1-Oct-22, 1-Oct-23,

1-May-24 *

* The total number of rights granted equals 25,548, to be tested for vesting in 3 equal tranches on the relevant vesting

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

Value of rights granted

Value of rights

during the year

exercised during

lapsed during the

2020

the year

year

Mr. M. McInnes

Mr. J.S. Bryce

212,815

3,825,000

Remuneration

consisting of

rights for the year

8.20%

8.84%

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

The value of rights exercised during the year represent the intrinsic value of the rights based on the share price on

the relevant day of vesting.

c) Shares issued on exercise of rights:

2020

Mr. M. McInnes

Shares issued

Paid per share

Unpaid per share

250,000

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

.
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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 25 July 2020, as well as the number of rights vested and lapsed during the year:

Terms and conditions

Grant
year

Rights
granted
during
the year
No.

Grant date

Fair value
per right at
grant date
$

2020

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

2016
2020

-
25,548 *

26-Apr-16
1-May-20

-
8.33

Rights vested and
lapsed during
2020

Expiry and Exercise
date

Rights
vested

Rights
lapsed

No.

250,000
-

-
-

1-Oct-22, 1-Oct-23,
1-May-24 *

* The total number of rights granted equals 25,548, to be tested for vesting in 3 equal tranches on the relevant vesting

dates.

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

Value of rights granted
during the year

2020

Value of rights
exercised during
the year
$

Value of rights
lapsed during the
year
$

Remuneration
consisting of
rights for the year
%

Mr. M. McInnes

Mr. J.S. Bryce

212,815

3,825,000

8.20%

8.84%

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

c) Shares issued on exercise of rights:

2020

Mr. M. McInnes

Shares issued
No

Paid per share
$

Unpaid per share
$

250,000

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

Annual Report 2020
DIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

Director’s Report continued

DIRECTORS’ REPORT

(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

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

10. ADDITIONAL DISCLOSURES RELATING TO TRANSACTIONS AND BALANCES WITH KMP

d) Rights holdings of KMP:

2020

Balance at
27 July
2019

Granted as
remuneration

Rights
exercised

Rights
lapsed

Balance at
25 July 2020

Rights not
exercisable

At 25 July 2020

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

250,000
14,901

-
25,548

(250,000)
-

-
-

-
40,449

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

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

2020

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

TOTAL

Balance at
27 July 2019

Share Purchase

Shares acquired
under
performance
rights plan

Balance at
25 July 2020

4,437,699

11,500

27,665

28,186

732,100

5,001

4,437,699

5,001

11,500

27,665

28,186

250,000

982,100

5,237,150

5,001

250,000

5,492,151

* 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 (2019: 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.

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 $2,396,209 (2019: $1,797,386),

including Mr. Lanzer's Director fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the

Group, with $713,866 (2019: $30,445) remaining outstanding at year-end. The fees paid for these services

were at arm's length and on normal commercial terms.

Mr. Lanzer is a director of Loch Awe Pty Ltd. During the year, operating lease payments totalling $223,293

(2019: $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 $17,273,036 (2019: $22,842,474) including GST have been made by Group companies

from Voyager Distributing Co. Pty Ltd, Playcorp Pty Ltd and Sky Chain Trading Limited, with $4,058,067

(2019: $1,882,897) 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. Premier 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 Premier. Premier is required to reimburse Century Plaza

Trading for costs it incurs in providing the Company with the services under the Service Agreement.

Premier reimbursed a total of $512,600 (2019: $518,650) 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

2020

$’000

4,772

2020

$’000

15,923

203

2,178

513

18,817

Premier Investments LimitedDIRECTORS’ REPORT
(CONTINUED)

REMUNERATION REPORT (AUDITED) (CONTINUED)

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 $2,396,209 (2019: $1,797,386),
including Mr. Lanzer's Director fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the
Group, with $713,866 (2019: $30,445) remaining outstanding at year-end. The fees paid for these services
were at arm's length and on normal commercial terms.

Mr. Lanzer is a director of Loch Awe Pty Ltd. During the year, operating lease payments totalling $223,293
(2019: $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 $17,273,036 (2019: $22,842,474) including GST have been made by Group companies
from Voyager Distributing Co. Pty Ltd, Playcorp Pty Ltd and Sky Chain Trading Limited, with $4,058,067
(2019: $1,882,897) 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. Premier 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 Premier. Premier is required to reimburse Century Plaza
Trading for costs it incurs in providing the Company with the services under the Service Agreement.
Premier reimbursed a total of $512,600 (2019: $518,650) 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

2020
$’000

4,772

2020
$’000

15,923

203

2,178

513

18,817

Annual Report 2020Ernst & 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

Auditor’s Independence Declaration

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

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

As lead auditor for the audit of the financial report of Premier Investments Limited for the financial
period ended 25 July 2020, 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.

Auditor’s Independence Declaration to the Directors of Premier
This declaration is in respect of Premier Investments Limited and the entities it controlled during the
Investments Limited
financial period.

As lead auditor for the audit of the financial report of Premier Investments Limited for the financial
period ended 25 July 2020, I declare to the best of my knowledge and belief, there have been:
Ernst & Young

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
financial period.

Glenn Carmody
Ernst & Young
Partner
1 October 2020

Glenn Carmody
Partner
1 October 2020

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

CONSOLIDATED

NOTES

2020

$’000

2019

$’000

STATEMENT OF COMPREHENSIVE INCOME

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019

Revenue from contracts with customers

Other revenue

Total revenue

Other income

Total revenue and other income

Changes in inventories

Employee expenses

Lease rental expenses

Advertising and direct marketing

Finance costs

Other expenses

Total expenses

Share of profit of associate

Depreciation, impairment and amortisation of non-current assets

Profit from continuing operations before income tax

Income tax expense

Net profit for the period attributable to owners

Other comprehensive (loss) income

Items that may be reclassified subsequently to profit or loss

Net loss on cash flow hedges

Foreign currency translation

Net movement in other comprehensive (loss) income of associates

Income tax on items of other comprehensive (loss) income

Other comprehensive loss 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 (loss) gain on listed equity investment

Income tax on items of other comprehensive (loss) income

Other comprehensive (loss) income not to be reclassified to

profit or loss in subsequent periods, net of tax

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

ATTRIBUTABLE TO THE OWNERS

Earnings per share from continuing operations attributable to

the ordinary equity holders of the parent:

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

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

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

1,216,316

2,464

1,218,780

30,182

1,248,962

(474,582)

(247,612)

(17,532)

(250,060)

(14,171)

(16,716)

(50,786)

17,696

195,199

(57,446)

137,753

(9,886)

(868)

(688)

2,964

(8,478)

(28,747)

8,623

(1,071,459)

(1,142,717)

(20,124)

4,335

109,151

109,946

86.89

86.56

67.51

67.19

1,270,958

4,108

1,275,066

487

1,275,553

(484,380)

(302,642)

(224,393)

(52,315)

(15,896)

(7,687)

(55,404)

18,906

151,742

(44,935)

106,807

(7,937)

2,936

1,424

2,381

(1,196)

6,192

(1,857)

Premier Investments LimitedSTATEMENT OF COMPREHENSIVE INCOME
Statement of Comprehensive Income
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019

for the 52 weeks ended 25 July 2020 and 27 July 2020

CONSOLIDATED

NOTES

2020
$’000

2019
$’000

Revenue from contracts with customers

Other revenue

Total revenue

Other income

Total revenue and other income

Changes in inventories

Employee expenses

Lease rental expenses

Depreciation, impairment and amortisation of non-current assets

Advertising and direct marketing

Finance costs

Other expenses

Total expenses

Share of profit of associate

Profit from continuing operations before income tax

Income tax expense

Net profit for the period attributable to owners

Other comprehensive (loss) income

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

Foreign currency translation

Net movement in other comprehensive (loss) income of associates

Income tax on items of other comprehensive (loss) income

Other comprehensive loss 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 (loss) gain on listed equity investment

Income tax on items of other comprehensive (loss) income

Other comprehensive (loss) income not to be reclassified to
profit or loss in subsequent periods, net of tax
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
ATTRIBUTABLE TO THE OWNERS

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

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

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

1,216,316

2,464

1,218,780

30,182

1,248,962

(474,582)

(247,612)

(17,532)

(250,060)

(14,171)

(16,716)

(50,786)

1,270,958

4,108

1,275,066

487

1,275,553

(484,380)

(302,642)

(224,393)

(52,315)

(15,896)

(7,687)

(55,404)

(1,071,459)

(1,142,717)

17,696

195,199

(57,446)

137,753

(9,886)

(868)

(688)

2,964

(8,478)

(28,747)

8,623

18,906

151,742

(44,935)

106,807

(7,937)

2,936

1,424

2,381

(1,196)

6,192

(1,857)

(20,124)

4,335

109,151

109,946

86.89

86.56

67.51

67.19

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

Annual Report 2020STATEMENT OF FINANCIAL POSITION
Statement of Financial Position
AS AT 25 JULY 2020 AND 27 JULY 2019

as at 25 July 2020 and 27 July 2019

STATEMENT OF CASH FLOWS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019

CONSOLIDATED

NOTES

2020
$’000

2019
$’000

CONSOLIDATED

NOTES

2020

$’000

2019

$’000

ASSETS

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Other financial instruments

Other current assets

Total current assets

Non-current assets

Property, plant and equipment

Right-of-use assets

Intangible assets

Deferred tax assets

Listed equity investment at fair value

Investment in associate

Total non-current assets

TOTAL ASSETS

LIABILITIES
Current liabilities

Trade and other payables

Income tax payable

Lease liabilities

Provisions

Other financial instruments

Other current liabilities

Total current liabilities

Non-current liabilities

Interest-bearing liabilities

Deferred tax liabilities

Lease liabilities

Provisions

Other financial instruments

Other non-current liabilities

Total non-current liabilities

TOTAL LIABILITIES

NET ASSETS

EQUITY

Contributed equity

Reserves

Retained earnings

TOTAL EQUITY

448,832

30,320

156,590

10,531

646,273

155,134

231,790

826,888

66,924

18,132

257,391

190,255

23,011

171,165

6,119

14,688

405,238

210,855

826,639

40,380

46,879

238,732

1,556,259

2,202,532

1,363,485

1,768,723

NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

208,979

66,172

189,221

38,297

4,008

8,588

515,265

146,659

65,427

114,668

10,603

2,316

146

339,819

855,084

81,938

12,571

23,881

26,529

144,919

167,493

63,875

11,465

2,548

29,137

274,518

419,437

1,347,448

1,349,286

608,615

(37,847)

776,680

608,615

(10,858)

751,529

1,347,448

1,349,286

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers (inclusive of GST)

Payments to suppliers and employees (inclusive of GST)

Interest received

Borrowing costs paid

Interest on lease liabilities

Income taxes paid

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received from investment in associate

Payment for trademarks

Purchase of investments

Payment for property, plant and equipment

NET CASH FLOWS FROM OPERATING ACTIVITIES

21(b)

Equity dividends paid

Payment of lease liabilities

Proceeds from borrowings

Repayment of borrowings

NET CASH FLOWS USED IN FINANCING ACTIVITIES

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

21(a)

1,344,202

(829,742)

2,436

(5,422)

(11,080)

(16,812)

483,582

14,235

(273)

(7,316)

6,646

(58,636)

(150,958)

137,000

(158,000)

(230,594)

259,634

190,255

(1,057)

448,832

1,397,331

(1,209,685)

3,919

(7,892)

(44,859)

138,814

12,654

(714)

(7,872)

(19,618)

(15,550)

(104,483)

173,000

(181,000)

(112,483)

10,781

178,618

856

190,255

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

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

Premier Investments LimitedSTATEMENT OF CASH FLOWS
Statement of Cash Flows
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019

for the 52 weeks ended 25 July 2020 and 27 July 2019

CONSOLIDATED

NOTES

2020
$’000

2019
$’000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers (inclusive of GST)

Payments to suppliers and employees (inclusive of GST)

Interest received

Borrowing costs paid

Interest on lease liabilities

Income taxes paid

NET CASH FLOWS FROM OPERATING ACTIVITIES

21(b)

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received from investment in associate

Payment for trademarks

Purchase of investments

Payment for property, plant and equipment

NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Equity dividends paid

Payment of lease liabilities

Proceeds from borrowings

Repayment of borrowings

NET CASH FLOWS USED IN FINANCING ACTIVITIES

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

21(a)

1,344,202

(829,742)

2,436

(5,422)

(11,080)

(16,812)

483,582

14,235

(273)

(7,316)

6,646

(58,636)

(150,958)

137,000

(158,000)

(230,594)

259,634

190,255

(1,057)

448,832

1,397,331

(1,209,685)

3,919

(7,892)

(44,859)

138,814

12,654

(714)

(7,872)

(19,618)

(15,550)

(104,483)

173,000

(181,000)

(112,483)

10,781

178,618

856

190,255

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

Annual Report 2020L
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NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

9
3

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 25 July 2020. The financial report was authorised for issue in accordance with a resolution of

the Directors on 1 October 2020.

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 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

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

generate the Group’s performance.

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 28 July 2019 to 25 July 2020.

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.

(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).

Premier Investments Limited

NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)
for the 52 weeks ended 25 July 2020 and 27 July 2019

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 25 July 2020. The financial report was authorised for issue in accordance with a resolution of
the Directors on 1 October 2020.

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 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 28 July 2019 to 25 July 2020.

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.

(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).

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)
for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

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 27.

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, 28 July 2019 to 25 July 2020, represents 52 weeks and the comparative
reporting period is from 29 July 2018 to 27 July 2019 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.

During the second half of the 2020 financial year, the Group’s operations were impacted as a direct result of
the ongoing COVID-19 pandemic. In particular, the Group experienced a disruption to trading conditions,
mainly due to widespread temporary retail store closures. In respect of the financial statements for the 2020
financial year, the impact of COVID-19 is particularly relevant to estimates of future performance. This, in
turn, has an impact on areas of impairment of assets as well as the estimation of the expected lease term of
retail store leases in holdover. The extent of the impact of the pandemic on future trading performance is
unclear, and estimations in this environment entail a great degree of uncertainty. In response to these
estimation uncertainties, key assumptions have been critically assessed and incorporate the possibility of
continued COVID-19 restrictions and regulations, along with the Group’s proposed responses in these
circumstances. Assumptions have been based on management’s best estimates and information available in
respect of conditions that existed at the reporting date, amidst a once in a century global health crisis.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(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.

(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-

(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

current.

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.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(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.

(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.

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

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

the use of hindsight in determining the lease term where the contract contains options to extend or

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.

(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 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 Group has adopted the Interpretation from
28 July 2019, with no material impact on the consolidated financial statements of the Group.

AASB 16 Leases

The Group has adopted AASB 16 Leases from 28 July 2019, which replaces AASB 117 Leases and
related interpretations. AASB 16 sets out the principles for the recognition, measurement, presentation
and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet
model. The impact of the adoption of AASB 16 on the Group’s financial statements and a summary of the
new accounting policies that have been applied from 28 July 2019 have been noted below.

(i) Initial application and nature of the effect of adoption of AASB16

Prior to the adoption of AASB 16, the Group classified leases of property, plant and equipment as
operating leases under AASB 117. Payments made under operating leases were expensed in profit or
loss in the statement of comprehensive income on a straight-line basis over the lease term. Operating
lease incentives were recognised as a liability when received and subsequently reduced by allocating
lease payments between rental expense and a reduction of the liability, over the term of the store lease to
which it related.

Upon the adoption of AASB 16, the Group recognises lease liabilities in relation to its contracted obligation
to make future lease payments, and a right-of-use asset representing the future economic benefit
associated with the right to use the underlying asset. The Group recognises a lease liability and a right-of-
use asset for all leases where it is the lessee, except for leases of low-value assets.

The Group has adopted AASB 16 using a modified retrospective approach. Under the transition provisions
of the Standard, comparative information has not been restated and continues to be reported under AASB
117. As at 28 July 2019 (being the date of initial application), the Group has measured the right-of-use
asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease
payments relating to that lease recognised in the statement of financial position immediately prior to the
date of initial application. The Group recognised lease liabilities in relation to leases which had previously
been classified as operating leases under AASB 117. The Group has measured these lease liabilities at
the present value of the remaining future lease payments, discounted using the Group’s weighted average
incremental borrowing rate of 3.15% as at 28 July 2019.

In applying AASB 16 for the first time, the Group has applied the following practical expedients permitted
by the Standard:

the use of a single discount rate to a portfolio of leases with reasonably similar characteristics;

reliance on previous assessments on whether leases are onerous immediately before the date of
initial application as an alternative to performing an impairment review;

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(j) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)

(i) Initial application and nature of the effect of adoption of AASB16 (continued)

the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial

AASB 16 Leases (continued)

application, and;

terminate the lease.

The following table summarises the impact of adopting AASB 16 on the Group’s Statement of Financial

Position on adoption at 28 July 2019 for each of the line items affected:

AASB 117

(PREVIOUS

STANDARD)

$’000

CONSOLIDATED

ADJUSTMENTS

$’000

AASB 16

(ADOPTED

STANDARD)

$’000

1,768,723

364,643

2,133,366

ASSETS

Right-of-use asset

TOTAL ASSETS

LIABILITIES

Current liabilities

Other current liabilities

Lease liability

Total current liabilities

Non-current liabilities

Other non-current liabilities

Lease liability

Total non-current liabilities

TOTAL LIABILITIES

NET ASSETS

26,529

144,919

29,137

274,518

419,437

1,349,286

Operating lease expenditure commitments as disclosed in the financial statements for the 52 weeks ended

27 July 2019 can be reconciled to the lease liabilities recognised in the statement of financial position as at

28 July 2019 as follows:

Operating lease commitments disclosed as at 27 July 2019

Impact of discounting using the Group’s weighted average incremental borrowing

Adjustments for changes in leases (reasonably certain options, leases in holdover)

Total lease liability recognised as at 28 July 2019

Comprising of:

Current lease liability

Non-current lease liability

Total lease liability recognised as at 28 July 2019

(16,738)

177,086

160,348

(28,812)

233,107

204,295

364,643

1,349,286

CONSOLIDATED

9,791

177,086

305,267

325

233,107

478,813

784,080

$’000

304,969

(20,405)

125,629

410,193

177,086

233,107

410,193

Premier Investments Limited

NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(j) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)

AASB 16 Leases (continued)

(i) Initial application and nature of the effect of adoption of AASB16 (continued)

the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial
application, and;

the use of hindsight in determining the lease term where the contract contains options to extend or
terminate the lease.

The following table summarises the impact of adopting AASB 16 on the Group’s Statement of Financial
Position on adoption at 28 July 2019 for each of the line items affected:

ASSETS

Right-of-use asset

TOTAL ASSETS

LIABILITIES

Current liabilities

Other current liabilities

Lease liability

Total current liabilities
Non-current liabilities

Other non-current liabilities

Lease liability

Total non-current liabilities
TOTAL LIABILITIES

NET ASSETS

AASB 117
(PREVIOUS
STANDARD)
$’000

CONSOLIDATED

ADJUSTMENTS
$’000

AASB 16
(ADOPTED
STANDARD)
$’000

1,768,723

364,643

2,133,366

26,529

144,919

29,137

274,518

419,437

1,349,286

(16,738)

177,086

160,348

(28,812)

233,107

204,295

364,643

9,791

177,086

305,267

325

233,107

478,813

784,080

1,349,286

Operating lease expenditure commitments as disclosed in the financial statements for the 52 weeks ended
27 July 2019 can be reconciled to the lease liabilities recognised in the statement of financial position as at
28 July 2019 as follows:

Operating lease commitments disclosed as at 27 July 2019

Impact of discounting using the Group’s weighted average incremental borrowing

Adjustments for changes in leases (reasonably certain options, leases in holdover)

Total lease liability recognised as at 28 July 2019

Comprising of:

Current lease liability

Non-current lease liability

Total lease liability recognised as at 28 July 2019

CONSOLIDATED

$’000

304,969

(20,405)

125,629

410,193

177,086

233,107

410,193

Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)
for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(j) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)

AASB 16 Leases (continued)

(i) Initial application and nature of the effect of adoption of AASB16 (continued)

As at 25 July 2020, the right-of-use asset amounted to $231.8 million and the total lease liability amounted
to $303.9 million in the statement of financial position as a result of applying AASB 16 in the current
financial year.

Furthermore, for the 52 weeks ended 25 July 2020 the Group has recognised depreciation and interest
expense, instead of operating lease expenses in relation to leases under AASB 16. For the 52 weeks
ended 25 July 2020, the Group recognised $172.7 million of depreciation charges and $11.1 million of
interest expenses in the statement of other comprehensive income in relation to leases.

(ii) Summary of new accounting policies

The Group has applied the practical expedient where non-lease components are not separated out from
the lease components of a lease. The below sets out a summary of the new accounting policies under
AASB 16.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease, being the date that the
underlying asset is available for use. Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement date of the lease less any lease incentives
received and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the condition required by
the terms and conditions of the lease, unless those costs are incurred to produce inventories. Unless the
Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the
recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated
useful life and the lease term. Right-of-use assets are subject to impairment.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate initially measured using the index or rate as at the commencement date, and
amount expected to be paid under residual value guarantees. The variable lease payments which are not
included in the measurement of the lease liability are recognised as an expense in the period on which the
event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the
lease commencement date, if the rate implicit in the lease cannot be readily determined, using inputs such
as government bond rates for the lease period and the Group’s expected borrowing margin. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a change in the in-substance fixed lease payments, a
change in the assessment to purchase the underlying asset, or a change in the amounts expected to be
payable under a residual value guarantee.

Leases of low-value assets

The Group applies the low-value assets recognition exemption to leases of certain office equipment that
are considered of low value. Lease payments on low-value assets are recognised as a lease expense on
a straight-line basis over the lease term.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(j) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)

AASB 16 Leases (continued)

(ii) Summary of new accounting policies (continued)

Significant judgement in determining the lease term

The Group determines the lease term as the non-cancellable term of the lease, together with any periods

covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by

an option to terminate the lease, if it is reasonably certain not to be exercised.

After the lease commencement date, the Group reassesses the lease term if there is a significant event or

change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the

option to renew.

Where a lease enters holdover, the Group estimates the expected lease term based on reasonably certain

information available as at balance date. Any adjustments required due to changes in estimates or entering

into a new lease agreement are recognised in the period in which the adjustments are made.

Significant judgement in determining the incremental borrowing rate

The Group has applied judgement to determine the incremental borrowing rate, which affects the amount of

lease liabilities and right-of-use assets recognised. The Group assesses and applies the incremental

borrowing rate on a lease by lease basis at the relevant lease commencement date, based on the term of the

lease. The incremental borrowing rate is determined using inputs including the Group’s expected lending

facility margin and applicable government bond rates at the time of entering into the lease, which reflects the

expected lease term.

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, have not been

early adopted by the Group for the reporting period ended 25 July 2020. The Group does not anticipate that the

below amended standards and interpretations will have a material impact on the Group:

AASB 2019-1: Amendments to Australian Accounting Standards: References to Conceptual Framework;

and

AASB 2018-7: Amendments to Australian Accounting Standards: Definition of Material.

Premier Investments Limited

NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)

(j) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)

AASB 16 Leases (continued)

(ii) Summary of new accounting policies (continued)

Significant judgement in determining the lease term

The Group determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by
an option to terminate the lease, if it is reasonably certain not to be exercised.

After the lease commencement date, the Group reassesses the lease term if there is a significant event or
change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the
option to renew.

Where a lease enters holdover, the Group estimates the expected lease term based on reasonably certain
information available as at balance date. Any adjustments required due to changes in estimates or entering
into a new lease agreement are recognised in the period in which the adjustments are made.

Significant judgement in determining the incremental borrowing rate

The Group has applied judgement to determine the incremental borrowing rate, which affects the amount of
lease liabilities and right-of-use assets recognised. The Group assesses and applies the incremental
borrowing rate on a lease by lease basis at the relevant lease commencement date, based on the term of the
lease. The incremental borrowing rate is determined using inputs including the Group’s expected lending
facility margin and applicable government bond rates at the time of entering into the lease, which reflects the
expected lease term.

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, have not been
early adopted by the Group for the reporting period ended 25 July 2020. The Group does not anticipate that the
below amended standards and interpretations will have a material impact on the Group:

AASB 2019-1: Amendments to Australian Accounting Standards: References to Conceptual Framework;
and

AASB 2018-7: Amendments to Australian Accounting Standards: Definition of Material.

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 25 July 2020 and 27 July 2019.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

3 OPERATING SEGMENTS (CONTINUED)

(A) OPERATING SEGMENTS

RETAIL

INVESTMENT

ELIMINATION

CONSOLIDATED

2020

$’000

2019

$’000

2020

$’000

2019

$’000

2020

$’000

2019

$’000

2020

$’000

2019

$’000

REVENUE AND OTHER INCOME

Revenue from contracts

Interest revenue

Other revenue

Other income

Total revenue and other

with customers

1,216,316 1,270,958

- 1,216,316 1,270,958

159

147

14,296

270

184

487

15,886

2,131

3,616

2,290

3,886

53,027

98,038

(53,000)

(98,000)

174

30,182

222

487

income

1,230,918 1,271,899

71,044

101,654

(53,000)

(98,000) 1,248,962 1,275,553

Total revenue per the statement of comprehensive income

1,248,962 1,275,553

RESULTS

Depreciation and

amortisation

Impairment – property,

Depreciation – right-of-

use asset

Impairment – right-of-

use asset

Interest expense

Share of profit of

associate

Profit before income

tax expense

Income tax expense

plant and equipment

31,254

355

31,254

355

42,337

50,592

1,368

43,705

51,960

175,932

2,420

(3,251)

172,681

2,420

14,057

4,808

2,879

(220)

16,716

7,687

17,696

18,906

17,696

18,906

165,776

136,667

82,343

113,322

(52,920)

(98,247)

195,199

151,742

Net profit after tax per the statement of comprehensive income

(57,446)

(44,935)

137,753

106,807

RETAIL

INVESTMENT

ELIMINATION

CONSOLIDATED

2020

$’000

2019

$’000

2020

$’000

2019

$’000

2020

$’000

2019

$’000

2020

$’000

2019

$’000

ASSETS AND LIABILITIES

Segment assets

970,254

537,684

1,381,509 1,324,521

(149,231)

(93,482) 2,202,532 1,768,723

Segment liabilities

733,215

299,299

242,195

130,636

(120,326)

(10,498)

855,084

419,437

Capital expenditure

19,024

25,457

19,024

25,457

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

3 OPERATING SEGMENTS (CONTINUED)

(A) OPERATING SEGMENTS

RETAIL

INVESTMENT

ELIMINATION

CONSOLIDATED

2020
$’000

2019
$’000

2020
$’000

2019
$’000

2020
$’000

2019
$’000

2020
$’000

2019
$’000

REVENUE AND OTHER INCOME

Revenue from contracts

with customers

1,216,316 1,270,958

159

147

14,296

270

184

487

2,131

3,616

- 1,216,316 1,270,958

2,290

3,886

53,027

98,038

(53,000)

(98,000)

174

15,886

30,182

222

487

Interest revenue

Other revenue

Other income

Total revenue and other
income

1,230,918 1,271,899

71,044

101,654

(53,000)

(98,000) 1,248,962 1,275,553

Total revenue per the statement of comprehensive income

1,248,962 1,275,553

RESULTS

Depreciation and

amortisation

Impairment – property,

42,337

50,592

1,368

plant and equipment

31,254

355

(3,251)

43,705

51,960

31,254

355

172,681

2,420

16,716

7,687

175,932

2,420

14,057

4,808

2,879

(220)

17,696

18,906

17,696

18,906

165,776

136,667

82,343

113,322

(52,920)

(98,247)

195,199

151,742

Depreciation – right-of-

use asset

Impairment – right-of-

use asset

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

(57,446)

(44,935)

137,753

106,807

RETAIL

INVESTMENT

ELIMINATION

CONSOLIDATED

2020
$’000

2019
$’000

2020
$’000

2019
$’000

2020
$’000

2019
$’000

2020
$’000

2019
$’000

ASSETS AND LIABILITIES

Segment assets

970,254

537,684

1,381,509 1,324,521

(149,231)

(93,482) 2,202,532 1,768,723

Segment liabilities

733,215

299,299

242,195

130,636

(120,326)

(10,498)

855,084

419,437

Capital expenditure

19,024

25,457

19,024

25,457

GROUP PERFORMANCE

3 OPERATING SEGMENTS (CONTINUED)

(B) GEOGRAPHIC AREAS OF OPERATION

AUSTRALIA NEW ZEALAND

ASIA

EUROPE

ELIMINATION CONSOLIDATED

4 REVENUE AND OTHER INCOME

2020
$’000

Revenue from contracts with customers

1,216,316

1,270,958

REVENUE AND OTHER INCOME

Revenue from contracts

with customers

929,747

126,507

Other revenue and income

49,250

61,709

14,594

98,353

1,216,316

296

(31,500)

32,646

Total revenue and other

income

978,997

126,513

76,303

98,649

(31,500)

1,248,962

Segment non-current assets

1,420,303

33,522

17,767

47,281

37,386

1,556,259

Capital expenditure

15,633

2,221

1,139

19,024

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

1,276,270

10,828

9,738

29,455

37,194

1,363,485

Capital expenditure

14,250

3,424

387

7,396

25,457

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

(Disaggregated revenue from contracts with customers is

presented in Note 3B, Operating Segments)

REVENUE

OTHER REVENUE

Membership program fees

Sundry revenue

Interest received

TOTAL OTHER REVENUE

TOTAL REVENUE

OTHER INCOME

Net gain from settlement of cash flow hedges

Gain on investment in associate resulting from equity raising

Other

TOTAL OTHER INCOME

CONSOLIDATED

2020

$’000

2019

$’000

1,218,780

1,275,066

144

2,290

2,464

13,207

15,886

1,089

30,182

179

3,886

4,108

487

TOTAL REVENUE AND OTHER INCOME

1,248,962

1,275,553

REVENUE RECOGNITION ACCOUNTING POLICY

Revenue recognition occurs at the point in time when control of the goods is transferred to the customer, generally

at the point of sale or on delivery of the goods.

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.

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. 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.

The Group recognises a contract liability upon the sale of gift cards and subsequently derecognises the liability

when gift card breakage occurs. 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.

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.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

4 REVENUE AND OTHER INCOME

REVENUE

CONSOLIDATED

2020
$’000

2019
$’000

Revenue from contracts with customers

1,216,316

1,270,958

(Disaggregated revenue from contracts with customers is
presented in Note 3B, Operating Segments)

OTHER REVENUE

Membership program fees

Sundry revenue

Interest received

TOTAL OTHER REVENUE

TOTAL REVENUE

OTHER INCOME

Net gain from settlement of cash flow hedges

Gain on investment in associate resulting from equity raising

Other

TOTAL OTHER INCOME

144

2,290

2,464

179

3,886

4,108

1,218,780

1,275,066

13,207

15,886

1,089

30,182

487

TOTAL REVENUE AND OTHER INCOME

1,248,962

1,275,553

REVENUE RECOGNITION ACCOUNTING POLICY

Revenue recognition occurs at the point in time when control of the goods is transferred to the customer, generally
at the point of sale or on delivery of the goods.

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.

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. 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.

The Group recognises a contract liability upon the sale of gift cards and subsequently derecognises the liability
when gift card breakage occurs. 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.

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.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

GROUP PERFORMANCE

CONSOLIDATED

NOTES

2020
$’000

2019
$’000

5 EXPENSES

LEASE RENTAL EXPENSES

Variable lease expenses

Other lease expenses

NET LEASE RENTAL EXPENSES

DEPRECIATION, AMORTISATION AND IMPAIRMENT
OF NON-CURRENT ASSETS

Depreciation of property, plant and equipment

Depreciation of right-of-use assets

Impairment of right-of-use asset

Impairment of property, plant and equipment

Amortisation of leasehold premiums

TOTAL DEPRECIATION, AMORTISATION AND
IMPAIRMENT OF NON-CURRENT ASSETS

FINANCE COSTS

Interest on lease liabilities

Interest on bank loans and overdraft

TOTAL FINANCE COSTS

OTHER EXPENSES INCLUDE:

Net loss on disposal of property, plant and equipment

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

EMPLOYEE EXPENSES

12,011

5,521

17,532

43,682

172,681

2,420

31,254

19,935

204,458

224,393

51,935

355

250,060

52,315

(b) STATEMENT OF CHANGES IN EQUITY

Deferred income tax related to items credited directly to equity:

11,080

5,636

16,716

982

7,687

728

4,837

The Group’s absolute priority during this time has been the safety and wellbeing of its team members and the
broader community. With this in mind, the Group made the very difficult decision to temporarily shut down its
global operations on 26 March 2020 and stand down over 9,000 employees. At that time, there was no certainty
of when global stores would be able to reopen, and no wage subsidy scheme was in existence in Australia. The
financial impact of COVID-19 was most severe for the period 11 March 2020 to 15 May 2020, when global sales
were down $131.1 million on the prior year comparable period, with retail store sales down 78.4%.

Due to the devastating impact on Group sales resulting from the COVID-19 health crisis, the Group became
eligible for $68.7 million of global wage subsidies across seven countries (of which $49 million was received as
at 25 July 2020). Of the total amount, $35.5 million was passed directly through to eligible employees unable to
work. In addition, in Australia, many of the Group’s casual and part time work force received subsidy payments
in excess of their normal working arrangements in accordance with the rules of the government scheme. The
funds received were used to support standing up the Group’s employees as stores gradually re-opened under
COVID-19 safe plans. This ensured that the Group was able to fulfill the government’s objectives of keeping
people in jobs and connected to their employees in the midst of a global pandemic.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

5 EXPENSES (CONTINUED)

EMPLOYEE EXPENSES (CONTINUED)

Government grants are recognised where there is reasonable assurance that the grant will be received, and all

attached conditions will be complied with. The Government wage subsidies are recorded as a reduction in

employee expenses in the statement of comprehensive income.

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

DEFERRED INCOME TAX

Adjustment in respect of current income tax of previous years

CONSOLIDATED

2020

$’000

2019

$’000

68,047

(479)

47,530

1,065

Relating to origination and reversal of temporary differences

(10,122)

(3,660)

INCOME TAX EXPENSE REPORTED IN THE STATEMENT

OF COMPREHENSIVE INCOME

57,446

44,935

Net deferred income tax on movements on cash-flow hedges

(2,964)

(2,381)

Net deferred income tax on unrealised gain (loss) on listed

equity investment at fair value

INCOME TAX BENEFIT REPORTED IN EQUITY

(8,623)

(11,587)

1,857

(524)

ACCOUNTING PROFIT BEFORE TAX MULTIPLIED BY THE

GROUP’S APPLICABLE AUSTRALIAN INCOME TAX RATE

Accounting profit before income tax

At the Parent Entity’s statutory income tax rate of

30% (2019: 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

Effect of tax losses not recognised

Income not assessable for tax purposes

Other

AGGREGATE INCOME TAX EXPENSE

195,199

151,742

58,560

(479)

544

2,203

693

(4,175)

100

57,446

45,523

1,065

2,700

(574)

(3,717)

(62)

44,935

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

5 EXPENSES (CONTINUED)

EMPLOYEE EXPENSES (CONTINUED)

Government grants are recognised where there is reasonable assurance that the grant will be received, and all
attached conditions will be complied with. The Government wage subsidies are recorded as a reduction in
employee expenses in the statement of comprehensive income.

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

CONSOLIDATED

2020
$’000

2019
$’000

68,047

(479)

47,530

1,065

Relating to origination and reversal of temporary differences

(10,122)

(3,660)

INCOME TAX EXPENSE REPORTED IN THE STATEMENT
OF COMPREHENSIVE INCOME

57,446

44,935

(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

(2,964)

(2,381)

Net deferred income tax on unrealised gain (loss) on listed
equity investment at fair value

INCOME TAX BENEFIT REPORTED IN EQUITY

(8,623)

(11,587)

1,857

(524)

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

Accounting profit before income tax

195,199

151,742

At the Parent Entity’s statutory income tax rate of
30% (2019: 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

Effect of tax losses not recognised

Income not assessable for tax purposes

Other

AGGREGATE INCOME TAX EXPENSE

58,560

(479)

544

2,203

693

(4,175)

100

57,446

45,523

1,065

2,700

(574)

(3,717)

(62)

44,935

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (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

Lease arrangements

Deferred income and deferred rent

Employee provisions

Other receivables and prepayments

Property, plant and equipment

Impairment of store plant and equipment

Other provisions

Other

NET DEFERRED TAX ASSETS (LIABILITIES)

REFLECTED IN THE STATEMENT OF FINANCIAL
POSITION AS FOLLOWS:

Deferred tax assets

Deferred tax liabilities

NET DEFERRED TAX ASSETS (LIABILITIES)

INCOME TAX ACCOUNTING POLICY

CONSOLIDATED

2020
$’000

2019
$’000

1,162

(30,654)

1,910

878

11,001

7,519

(1,679)

(3,195)

6,822

3,461

4,272

1,497

66,924

(65,427)

1,497

634

(35,087)

(1,083)

498

11,113

6,707

(2,831)

(4,935)

1,489

(23,495)

40,380

(63,875)

(23,495)

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.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

INCOME TAX (CONTINUED)

INCOME TAX ACCOUNTING POLICY (CONTINUED)

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.

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 it is

probable that future taxable profits will be available to utilise those temporary differences.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

INCOME TAX (CONTINUED)

INCOME TAX ACCOUNTING POLICY (CONTINUED)

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.

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 it is
probable that future taxable profits will be available to utilise those temporary differences.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

GROUP PERFORMANCE

INCOME TAX (CONTINUED)

KEY ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

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 together with future tax
planning strategies.

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

2020
$’000

2019
$’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

137,753

106,807

Weighted average number of ordinary shares used in
calculating:

- basic earnings per share

- diluted earnings per share

NUMBER OF
SHARES
‘000

158,540
159,134

158,209
158,969

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.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

8 A) DIVIDENDS

DIVIDENDS APPROVED AND/ OR PAID

Approved during the year:

Interim franked dividends:

2020 Approved: 34 cents per share

2019 Approved and paid: 33 cents per share

Paid during the year:

Final franked dividends for 2019:

37 cents per share (2018: 33 cents)

TOTAL APPROVED AND/ OR PAID DURING THE YEAR

DIVIDENDS APPROVED AND NOT RECOGNISED AS A

LIABILITY:

Final franked dividend for 2020:

36 cents per share (2019: 37 cents)

CONSOLIDATED

2020

$’000

2019

$’000

53,966

52,282

58,636

112,602

52,201

104,483

CONSOLIDATED

2020

$’000

2019

$’000

196,701

208,467

17,761

6,965

(47,630)

166,832

(25,122)

190,310

The Directors of Premier Investments Limited approved a final dividend in respect of the 2020 financial year.

The total amount of the dividend is $57,141,000 (2019: $58,636,000) which represents a fully franked

dividend of 36 cents per share (2019: 37 cents per share).

The 2020 interim dividend is payable on 30 September 2020.

57,141

58,636

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% (2019: 30%)

franking credits that will arise from the payment of

income tax payable as at the end of the financial year

franking debits that will arise from the payment of

dividends as at the end of the financial year

TOTAL FRANKING CREDIT BALANCE

The tax rate at which paid dividends have been franked is 30% (2019: 30%). Dividends proposed will be

franked at the rate of 30% (2019: 30%).

Premier Investments Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP PERFORMANCE

8 A) DIVIDENDS

DIVIDENDS APPROVED AND/ OR PAID

Approved during the year:

Interim franked dividends:

2020 Approved: 34 cents per share

2019 Approved and paid: 33 cents per share

Paid during the year:

Final franked dividends for 2019:

37 cents per share (2018: 33 cents)

TOTAL APPROVED AND/ OR PAID DURING THE YEAR

DIVIDENDS APPROVED AND NOT RECOGNISED AS A
LIABILITY:

Final franked dividend for 2020:

36 cents per share (2019: 37 cents)

CONSOLIDATED

2020
$’000

2019
$’000

53,966

52,282

58,636

112,602

52,201

104,483

57,141

58,636

The Directors of Premier Investments Limited approved a final dividend in respect of the 2020 financial year.
The total amount of the dividend is $57,141,000 (2019: $58,636,000) which represents a fully franked
dividend of 36 cents per share (2019: 37 cents per share).

The 2020 interim dividend is payable on 30 September 2020.

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% (2019: 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

2020
$’000

2019
$’000

196,701

208,467

17,761

6,965

(47,630)

166,832

(25,122)

190,310

The tax rate at which paid dividends have been franked is 30% (2019: 30%). Dividends proposed will be
franked at the rate of 30% (2019: 30%).

Annual Report 2020
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OPERATING ASSETS AND LIABILITIES

TRADE AND OTHER RECEIVABLES (CURRENT)

Sundry debtors

TOTAL CURRENT TRADE AND OTHER RECEIVABLES

30,320

23,011

11 OTHER ASSETS (CURRENT)

Deposits and prepayments

TOTAL OTHER CURRENT ASSETS

CONSOLIDATED

2020
$’000

2019
$’000

(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 25 July 2020 (2019: $nil). During the year, no bad debt expense (2019: $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
their transaction 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

2020
$’000

2019
$’000

156,590

171,165

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.

CONSOLIDATED

2020

$’000

2019

$’000

10,531

14,688

364,643

43,700

(172,681)

(2,420)

(1,452)

231,790

12 RIGHT-OF-USE ASSETS

Recognition of right-of-use asset on initial application of

AASB 16

Additions

Depreciation expense

Impairment expense

Exchange differences

TOTAL RIGHT-OF-USE ASSETS

RIGHT-OF-USE ASSETS ACCOUNTING POLICY

As summarised in note 2, the Group has adopted AASB 16 Leases as of 28 July 2019 using the modified

retrospective approach. The new accounting policies under AASB 16 have been summarised in note 2.

KEY ACCOUNTING ESTIMATES AND ASSUMPTIONS

Impairment of right-of-use assets

The carrying values of the right-of-use assets 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.

The recoverable amount was estimated on an individual store basis, as this has been identified as the CGU of

the Group’s retail segment.

An impairment loss of $2,420,000 was recognised in relation to the Group’s right-of-use assets during the

current financial year. The impairment loss relates to the closure of certain retail stores ahead of their

contracted lease end dates, therefore writing down the associated right-of-use assets to their recoverable

amount.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OPERATING ASSETS AND LIABILITIES

11 OTHER ASSETS (CURRENT)

Deposits and prepayments

TOTAL OTHER CURRENT ASSETS

12 RIGHT-OF-USE ASSETS

Recognition of right-of-use asset on initial application of
AASB 16

Additions

Depreciation expense

Impairment expense

Exchange differences

TOTAL RIGHT-OF-USE ASSETS

CONSOLIDATED

2020
$’000

2019
$’000

10,531

14,688

364,643
43,700

(172,681)

(2,420)

(1,452)

231,790

-
-

RIGHT-OF-USE ASSETS ACCOUNTING POLICY

As summarised in note 2, the Group has adopted AASB 16 Leases as of 28 July 2019 using the modified
retrospective approach. The new accounting policies under AASB 16 have been summarised in note 2.

KEY ACCOUNTING ESTIMATES AND ASSUMPTIONS

Impairment of right-of-use assets

The carrying values of the right-of-use assets 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.

The recoverable amount was estimated on an individual store basis, as this has been identified as the CGU of
the Group’s retail segment.

An impairment loss of $2,420,000 was recognised in relation to the Group’s right-of-use assets during the
current financial year. The impairment loss relates to the closure of certain retail stores ahead of their
contracted lease end dates, therefore writing down the associated right-of-use assets to their recoverable
amount.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

OPERATING ASSETS AND LIABILITIES

13 TRADE AND OTHER PAYABLES (CURRENT)

Trade creditors

Interim dividend payable

Other creditors and accruals

TOTAL CURRENT TRADE AND OTHER PAYABLES

(a) Fair values

CONSOLIDATED

2020
$’000

2019
$’000

69,637

53,966

85,376

208,979

35,281

46,657

81,938

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.

The interim dividend is payable on 30 September 2020.

14 LEASE LIABILITIES

Recognition of lease liability on initial application of AASB 16

Additions

Interest expense

Payments

COVID-19 related rent concessions

Exchange rate differences

TOTAL LEASE LIABILITIES

COMPRISING OF:

Current lease liability

Non-current lease liability

TOTAL LEASE LIABILITIES

CONSOLIDATED

2020
$’000

2019
$’000

410,193

50,315

11,080

(150,958)

(15,013)

(1,728)

303,889

189,221

114,668

303,889

LEASE LIABILITIES ACCOUNTING POLICY

As summarised in note 2, the Group has adopted AASB 16 Leases as of 28 July 2019 using the modified
retrospective approach. The new accounting policies under AASB 16 have been summarised in note 2.

COVID-19 RELATED RENT CONCESSIONS

The Group has adopted the practical expedient issued by the Australian Accounting Standards Board whereby
it has not accounted for rent concessions which are a direct consequence of the COVID-19 pandemic as lease
modifications. Instead, the Group recognised these concessions in the statement of comprehensive income for
the year ended 25 July 2020 as a variable amount as and when incurred.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OPERATING ASSETS AND LIABILITIES

14 LEASE LIABILITIES (CONTINUED)

COVID-19 RELATED RENT CONCESSIONS (continued)

The practical expedient may be applied where the following conditions apply:

The changed lease payments were substantially the same or less than the payments prior to the rent

concession;

The reductions only affect payments which fall due before 30 June 2021; and

There has been no substantive change in the terms and conditions of the lease.

CONSOLIDATED

2020

$’000

2019

$’000

15 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

MOVEMENT IN PROVISIONS

Provision for make-good in relation to leased premises

Opening balance

Charged to profit or loss

Utilised during the period

CLOSING BALANCE (CURRENT AND NON-CURRENT)

12,591

9,297

13,091

2,088

1,230

38,297

2,061

4,764

3,778

10,603

6,087

11,988

(220)

17,855

12,518

8,159

695

2,088

421

23,881

2,285

5,392

3,788

11,465

6,087

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OPERATING ASSETS AND LIABILITIES

14 LEASE LIABILITIES (CONTINUED)

COVID-19 RELATED RENT CONCESSIONS (continued)

The practical expedient may be applied where the following conditions apply:

The changed lease payments were substantially the same or less than the payments prior to the rent
concession;

The reductions only affect payments which fall due before 30 June 2021; and

There has been no substantive change in the terms and conditions of the lease.

15 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

MOVEMENT IN PROVISIONS

Provision for make-good in relation to leased premises

Opening balance

Charged to profit or loss

Utilised during the period

CLOSING BALANCE (CURRENT AND NON-CURRENT)

CONSOLIDATED

2020
$’000

2019
$’000

12,591

9,297

13,091

2,088

1,230

38,297

2,061

4,764

3,778

10,603

6,087

11,988

(220)

17,855

12,518

8,159

695

2,088

421

23,881

2,285

5,392

3,788

11,465

6,087

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

OPERATING ASSETS AND LIABILITIES

15 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.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OPERATING ASSETS AND LIABILITIES

16 OTHER LIABILITIES

CURRENT

Deferred income

TOTAL CURRENT

NON-CURRENT

Deferred income

TOTAL NON-CURRENT

CONSOLIDATED

2020

$’000

2019

$’000

8,588

146

26,529

29,137

DEFERRED INCOME ACCOUNTING POLICY

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

Deferred lease incentives and deferred rent included in prior comparative amounts

The prior year comparative amounts include lease incentives and deferred rent in relation to operating lease

expenses. Upon the adoption of AASB 16, the Group adjusted the right-of-use asset by the amount of accrued

lease payments, lease incentives and deferred rent recognised in the statement of financial position

immediately prior to the date of initial application.

Prior to the adoption of AASB 16, lease incentives have been capitalised in the financial statements when

received and was credited to rent expense over the term of the store lease to which they related. Operating

lease expenses were recognised on a straight-line basis over the lease term, which included the impact of

annual fixed rate percentage increases.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OPERATING ASSETS AND LIABILITIES

16 OTHER LIABILITIES

CURRENT

Deferred income

TOTAL CURRENT

NON-CURRENT

Deferred income

TOTAL NON-CURRENT

CONSOLIDATED

2020
$’000

2019
$’000

8,588

146

26,529

29,137

DEFERRED INCOME ACCOUNTING POLICY

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

Deferred lease incentives and deferred rent included in prior comparative amounts

The prior year comparative amounts include lease incentives and deferred rent in relation to operating lease
expenses. Upon the adoption of AASB 16, the Group adjusted the right-of-use asset by the amount of accrued
lease payments, lease incentives and deferred rent recognised in the statement of financial position
immediately prior to the date of initial application.

Prior to the adoption of AASB 16, lease incentives have been capitalised in the financial statements when
received and was credited to rent expense over the term of the store lease to which they related. Operating
lease expenses were recognised on a straight-line basis over the lease term, which included the impact of
annual fixed rate percentage increases.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

CAPITAL INVESTED

17 PROPERTY, PLANT AND EQUIPMENT

CONSOLIDATED

as follows:

AT 25 JULY 2020
Cost

Accumulated depreciation and
impairment

NET CARRYING AMOUNT

RECONCILIATIONS:
Carrying amount at beginning of
the financial year

Additions

Transfers between classes

Depreciation

Disposals

Impairment

Exchange differences

Carrying amount at end of the
financial year

AT 27 JULY 2019

Cost

Accumulated depreciation and
impairment

LAND
$’000

BUILDINGS
$’000

PLANT AND
EQUIPMENT
$’000

LEASED
PLANT AND
EQUIPMENT
$’000

CAPITAL
WORKS IN
PROGRESS
$’000

TOTAL
$’000

21,953

54,720

500,069

343

11,460

588,545

(5,865)

(427,203)

(343)

(433,411)

21,953

48,855

72,866

21,953

50,223

128,702

15,696

1,845

(1,368)

(42,314)

(982)

(31,254)

1,173

21,953

48,855

72,866

11,460

155,134

9,977

3,328

(1,845)

210,855

19,024

(43,682)

(982)

(31,254)

1,173

11,460

155,134

21,953

54,720

482,337

343

9,977

569,330

Group’s review of its United Kingdom lease break options amounted to $4.8 million and have been disclosed

(4,497)

(353,635)

(343)

(358,475)

NET CARRYING AMOUNT

21,953

50,223

128,702

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

LAND AND BUILDINGS

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

238,167

1,845

(3,938)

25,457

(30,914)

(21,021)

(1,631)

(355)

1,152

9,977

210,855

shop online in this highly uncertain macro-environment.

The land and buildings with a combined carrying amount of $70,808,000 have been pledged to secure certain
interest-bearing borrowings of the Group (refer to note 22).

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL INVESTED

17 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

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

Buildings

40 years

Store plant and equipment

3 to 10 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). 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.

In the prior year, as a result of the 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. The changed method resulted in an accelerated

depreciation charge in the previous financial year of $21.0 million. Other expenses associated with the

as “other expenses” in the prior year (refer note 5).

Impairment testing of Property, Plant and Equipment and key 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 estimated 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. 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.

A total impairment loss of $31,254,000 was recognised during the current financial year (2019: $355,000).

The COVID-19 health crisis has accelerated the retail industry restructure already underway. The temporary

global closures of stores and ongoing government implementation of social distancing measures due to

COVID-19 has significantly impacted customer shopping behaviour. Customers are increasingly choosing to

Premier Investments Limited

NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL INVESTED

17 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

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

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). 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.

In the prior year, as a result of the 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. The changed method resulted in an accelerated
depreciation charge in the previous 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” in the prior year (refer note 5).

Impairment testing of Property, Plant and Equipment and key 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 estimated 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. 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.

A total impairment loss of $31,254,000 was recognised during the current financial year (2019: $355,000).

The COVID-19 health crisis has accelerated the retail industry restructure already underway. The temporary
global closures of stores and ongoing government implementation of social distancing measures due to
COVID-19 has significantly impacted customer shopping behaviour. Customers are increasingly choosing to
shop online in this highly uncertain macro-environment.

Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

CAPITAL INVESTED

17 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Impairment testing of Property, Plant and Equipment and key accounting estimates and assumptions
(continued)

Given these changed consumer behaviours, the Group reviewed each retail store’s future estimated cash
flows, using financial estimates covering a period of up to five years, discounted using a post-tax discount rate
of 10.5% (2019: 10.5%). These estimated cash flows consider the possibility of a continued adverse impact
on future estimated cash flows as a result of the COVID-19 pandemic. Furthermore, consideration was given
to the fact that the Group has maximum flexibility within its current retail store portfolio, given that over 70% of
its Australian and New Zealand store leases are currently in holdover, or are due to expire within 2020. As a
result of the uncertain future trading environment of traditional bricks-and-mortar stores due to COVID-19,
together with the accelerating growth of the online channel the Group has recognised an impairment loss on
store plant and equipment during the second half of the year of $26,229,000.

INTANGIBLES

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

YEAR ENDED 25 JULY 2020
As at 28 July 2019 net of accumulated
amortisation and impairment

Trademark registrations

Amortisation

Exchange differences

As at 25 July 2020 net of accumulated
amortisation and impairment

CONSOLIDATED

GOODWILL
$’000

BRAND
NAMES
$’000

TRADEMARKS
$’000

LEASEHOLD
PREMIUMS
$’000

TOTAL
$’000

477,085
-

346,179
-

3,351
273

24
-

(23)

(1)

826,639
273

(23)

(1)

477,085

346,179

3,624

826,888

AS AT 25 JULY 2020

Cost (gross carrying amount)

Accumulated amortisation and impairment

NET CARRYING AMOUNT

477,085

-
477,085

376,179

(30,000)
346,179

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

AS AT 27 JULY 2019

Cost (gross carrying amount)

Accumulated amortisation and impairment

NET CARRYING AMOUNT

3,624

-
3,624

2,638

713

979

(979)
-

857,867

(30,979)
826,888

(25)

825,949

713

(25)

477,085

346,179

477,085

346,179

3,351

826,639

477,085

-
477,085

376,179

(30,000)
346,179

3,351

-
3,351

979

(955)
24

857,594

(30,955)
826,639

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL INVESTED

INTANGIBLES (CONTINUED)

GOODWILL ACCOUNTING POLICY (CONTINUED)

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.

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

Indefinite

Finite

Indefinite

Method used?

Not amortised or revalued

Amortised over the term

of the lease

Acquired

Annually or more

Amortisation method

Annually or more

frequently if there are

reviewed at each financial

frequently if there are

indicators of impairment

year end; reviewed

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.

Useful life

assessment?

Internally generated

or acquired?

Impairment

test/recoverable

amount testing

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL INVESTED

INTANGIBLES (CONTINUED)

GOODWILL ACCOUNTING POLICY (CONTINUED)

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.

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?

Acquired

Impairment
test/recoverable
amount testing

Annually or more
frequently if there are
indicators of impairment

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

Annually or more
frequently if there are
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 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (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 COVID-19 pandemic has had a significant impact on the recent trading performance of the Group. The
extent of the impact of the pandemic on future trading performance is unclear, and an assessment of the
impacts as they relate to estimated future cash flow projections entail a significant degree of estimation
uncertainty. In response to these estimation uncertainties, the recoverable amount of the CGU has been
determined based upon a range of value-in-use calculations, using estimated cash flow scenarios for a period
of five years plus a terminal value.

The value-in-use calculations have been determined based on scenarios of cash flows using financial estimates
for the 2021 financial year (FY21) and are projected for a further four years (FY22 – FY25) based on estimated
growth rates. As part of the annual impairment test for goodwill, management assesses the reasonableness of
profit margin assumptions by reviewing historical cash flow projections as well as future growth objectives.

The financial estimates for FY21 include a COVID-19 overlay, whereby the cash flow estimates have been
adjusted to reflect the possibility of a continued adverse impact in FY21 on the Group’s Sales and Earnings
Before Interest, Tax and Amortisation (EBITA). These financial estimates are projected for a further four years
based on average annual estimated growth rates for FY22 to FY25 ranging between 0.6% to 1.6%
(2019: 2.5%). Cash flow estimates beyond the five year period have been extrapolated using a growth rate
ranging from 2% to 2.5% (2019: 2.8%), which reflects the long-term growth expectations beyond the five year
period.

The post-tax discount rate applied to these cash flow projections is 9.5% (2019: 9.7%). The discount rate has
been determined using the weighted average cost of capital which incorporates both the cost of debt and the
cost of capital specific to the asset and adjusted for risks specific to the CGU.

In determining the possible scenarios of cash flows, management considered the reasonably possible changes
in estimated sales growth, estimated EBITA and discount rates applied to the CGU to which goodwill relates.
These reasonably possible adverse change in 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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL INVESTED

INTANGIBLES (CONTINUED)

IMPAIRMENT TESTING OF BRAND NAMES (CONTINUED)

The recoverable amounts of brand names acquired in a business combination have been determined on an

individual brand basis based upon value-in-use calculations. The value-in-use calculations have been

determined based upon the relief from royalty method using cash flow estimates for a period of five years plus a

terminal value

The COVID-19 pandemic has had a significant impact on the recent trading performance of the Group as a

whole, as well as on an individual brand level. The extent of the impact of the pandemic on future trading

performance is unclear, and an assessment of the impacts as they relate to estimated future cash flow

projections entail a significant degree of estimation uncertainty. In response to these estimation uncertainties,

the recoverable amount of brand names has been determined based upon a range of value-in-use calculations,

using estimated cash flow scenarios for a period of five years plus a terminal value.

The value-in-use calculations have been determined based on scenarios of cash flows using financial estimates

for the 2021 financial year (FY21) and are projected for a further four years (FY22 – FY25) based on estimated

growth rates.

The financial estimates for FY21 include a COVID-19 overlay, whereby the cash flow estimates have been

adjusted to reflect the possibility of a continued adverse impact in FY21 in relation to sales. These financial

estimates are projected for a further four years based on average annual estimated growth rates for FY22 to

FY25. These extrapolated growth rate ranges at which cash flows have been estimated for the individual brands

within each of the CGU groups have been summarised below.

CGU

RANGE OF AVERAGE GROWTH RATES APPLIED TO ESTIMATED CASH

FLOW SCENARIOS (FY22 – FY25)

Casual wear

0.6% - 2.5%

Women’s wear

0.6% - 6.1%

Non Apparel

0.6% - 3%

The range of growth rates are a function of the COVID-19 overlay included in FY21 financial estimates. The

higher end of the above growth rate ranges reflects the impact of COVID-19 on FY20 performance, widespread

store closures experienced during FY20, and economic conditions. These growth rates incorporate a cautious

estimated return to pre-COVID-19 average sales levels for individual brands within each CGU by FY23.

Cash flow estimates beyond the five year period have been extrapolated using a growth rate ranging from 2%

to 2.5% (2019: 2.8%), which reflects the long-term growth expectations beyond the five year period.

The post-tax discount rate applied to the cash flow projections for each of the three CGU groups is 8.5%

(2019: 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% (2019: 3.5% and 8%).

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL INVESTED

INTANGIBLES (CONTINUED)

IMPAIRMENT TESTING OF BRAND NAMES (CONTINUED)

The recoverable amounts of brand names acquired in a business combination have been determined on an
individual brand basis based upon value-in-use calculations. The value-in-use calculations have been
determined based upon the relief from royalty method using cash flow estimates for a period of five years plus a
terminal value

The COVID-19 pandemic has had a significant impact on the recent trading performance of the Group as a
whole, as well as on an individual brand level. The extent of the impact of the pandemic on future trading
performance is unclear, and an assessment of the impacts as they relate to estimated future cash flow
projections entail a significant degree of estimation uncertainty. In response to these estimation uncertainties,
the recoverable amount of brand names has been determined based upon a range of value-in-use calculations,
using estimated cash flow scenarios for a period of five years plus a terminal value.

The financial estimates for FY21 include a COVID-19 overlay, whereby the cash flow estimates have been
adjusted to reflect the possibility of a continued adverse impact in FY21 in relation to sales. These financial
estimates are projected for a further four years based on average annual estimated growth rates for FY22 to
FY25. These extrapolated growth rate ranges at which cash flows have been estimated for the individual brands
within each of the CGU groups have been summarised below.

CGU

RANGE OF AVERAGE GROWTH RATES APPLIED TO ESTIMATED CASH

FLOW SCENARIOS (FY22 – FY25)

Casual wear

0.6% - 2.5%

Women’s wear

0.6% - 6.1%

Non Apparel

0.6% - 3%

The range of growth rates are a function of the COVID-19 overlay included in FY21 financial estimates. The
higher end of the above growth rate ranges reflects the impact of COVID-19 on FY20 performance, widespread
store closures experienced during FY20, and economic conditions. These growth rates incorporate a cautious
estimated return to pre-COVID-19 average sales levels for individual brands within each CGU by FY23.

Cash flow estimates beyond the five year period have been extrapolated using a growth rate ranging from 2%
to 2.5% (2019: 2.8%), which reflects the long-term growth expectations beyond the five year period.

The post-tax discount rate applied to the cash flow projections for each of the three CGU groups is 8.5%
(2019: 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% (2019: 3.5% and 8%).

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

CAPITAL INVESTED

INTANGIBLES (CONTINUED)

IMPAIRMENT TESTING OF BRAND NAMES (CONTINUED)

In addition to the range of cash flow scenarios, 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 estimate sales growth, net royalty rates and discount rates
applied.

A brand within the Casual Wear CGU group with a carrying value of $82.2 million, indicated sensitivity to
possible adverse changes to the post-tax discount rate applied to the cash flow estimates, as well as indicating
sensitivity to a possible adverse change in long-term growth expectations. The sensitivities included reducing
the long-term growth expectation to 2% and increasing the post-tax discount rate applied to cash flow estimates
to 8.7%. These reasonably possible adverse changes could result in a potential impairment of up to $5 million.
The potential impairment loss as a result of the reasonably possible adverse change to these key assumptions
are not considered material to the overall recoverable amount of the CGU to which the brand relates.

In addition, a brand within the Women’s Wear CGU group with a carrying value of $31.7 million, indicated
sensitivity to possible adverse changes to the post-tax discount rate applied to the cash flow estimates, as well
as indicating sensitivity to a possible adverse change in long-term growth expectations. The sensitivities
included reducing the long-term growth expectation to 2% and increasing the post-tax discount rate applied to
cash flow estimates to 8.7%. These reasonably possible adverse changes could result in a potential impairment
of up to $2 million. The potential impairment loss as a result of the reasonably possible adverse change to these
key assumptions are not considered material to the overall recoverable amount of the CGU to which the brand
relates.

19 LISTED EQUITY INVESTMENT AT FAIR VALUE

INVESTMENT

Investment in listed securities at fair value

TOTAL INVESTMENTS

CONSOLIDATED

2020
$’000

2019
$’000

18,132

46,879

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.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL INVESTED

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

Gain resulting from associate equity raising

Share of other comprehensive income

Dividends received

TOTAL INVESTMENT IN ASSOCIATE

CONSOLIDATED

2020

$’000

2019

$’000

238,732

17,696

15,886

(688)

(14,235)

257,391

223,184

7,872

18,906

1,424

(12,654)

238,732

As at 25 July 2020, Premier Investments Limited holds 26.73% (2019: 28.06%) 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.

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 $17,695,527 (2019: $18,905,536). As at 25 July 2020, the fair value of the Group’s interest in BRG

as determined based on the quoted market price was $947,893,002 (2019: $691,666,245).

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 2020 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.

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 2020

$’000

30 JUNE 2019

$’000

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

NET ASSETS

443,328

200,836

644,164

(181,517)

(36,247)

(217,764)

426,400

367,988

141,779

509,767

(143,400)

(56,032)

(199,432)

310,335

Group’s share of BRG net assets

113,977

87,080

EXTRACT OF BRG’S STATEMENT OF COMPREHENSIVE INCOME

Revenue

Profit after income tax

Other comprehensive income

30 JUNE 2020

$’000

30 JUNE 2019

$’000

952,244

66,201

759,967

67,385

6,839

Group’s share of BRG profit after income tax

17,696

18,906

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL INVESTED

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

Gain resulting from associate equity raising

Share of other comprehensive income

Dividends received

TOTAL INVESTMENT IN ASSOCIATE

CONSOLIDATED

2020
$’000

2019
$’000

238,732

17,696

15,886

(688)

(14,235)

257,391

223,184

7,872

18,906

1,424

(12,654)

238,732

As at 25 July 2020, Premier Investments Limited holds 26.73% (2019: 28.06%) 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.

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 $17,695,527 (2019: $18,905,536). As at 25 July 2020, the fair value of the Group’s interest in BRG
as determined based on the quoted market price was $947,893,002 (2019: $691,666,245).

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 2020 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.

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 2020
$’000

30 JUNE 2019
$’000

Current assets
Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

NET ASSETS

443,328
200,836

644,164

(181,517)

(36,247)

(217,764)

426,400

367,988
141,779

509,767

(143,400)

(56,032)

(199,432)

310,335

Group’s share of BRG net assets

113,977

87,080

EXTRACT OF BRG’S STATEMENT OF COMPREHENSIVE INCOME

Revenue

Profit after income tax

Other comprehensive income

30 JUNE 2020
$’000

30 JUNE 2019
$’000

952,244

66,201

759,967

67,385

6,839

Group’s share of BRG profit after income tax

17,696

18,906

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

CAPITAL INVESTED

INVESTMENT IN ASSOCIATE (CONTINUED)

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.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

21 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 of non-current assets

Share of profit of associate

Gain on investment in associate resulting from equity

raising

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 in trade and other receivables

Decrease in other current assets

Decrease (increase) in inventories

Decrease in other financial assets

Increase in deferred tax assets

Increase in provisions

Increase (decrease) in deferred tax liabilities

Increase (decrease) in trade and other payables

Increase in other financial liabilities

(Decrease) increase in deferred income

Increase in income tax payable

NET CASH FLOWS FROM OPERATING ACTIVITIES

CONSOLIDATED

2020

$’000

2019

$’000

305,960

142,872

448,832

59,426

130,829

190,255

137,753

106,807

216,363

33,674

(17,696)

(15,886)

166

982

1,613

(6,922)

188

(7,309)

4,157

14,575

6,119

(16,626)

1,786

1,552

73,075

3,776

(1,382)

53,601

483,582

51,935

355

(18,906)

(191)

728

2,012

(5,556)

2,078

(733)

635

(11,852)

5,854

(4,262)

5,897

(58)

(2,620)

2,123

1,919

2,624

138,814

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

21 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 of non-current assets
Share of profit of associate
Gain on investment in associate resulting from equity
raising
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 in trade and other receivables
Decrease in other current assets
Decrease (increase) in inventories
Decrease in other financial assets
Increase in deferred tax assets
Increase in provisions
Increase (decrease) in deferred tax liabilities
Increase (decrease) in trade and other payables
Increase in other financial liabilities
(Decrease) increase in deferred income
Increase in income tax payable

NET CASH FLOWS FROM OPERATING ACTIVITIES

CONSOLIDATED

2020
$’000

2019
$’000

305,960
142,872

448,832

59,426
130,829

190,255

137,753

106,807

23
216,363
33,674
(17,696)

(15,886)

166
982
1,613
(6,922)
188

(7,309)
4,157
14,575
6,119
(16,626)
1,786
1,552
73,075
3,776
(1,382)
53,601

483,582

25
51,935
355
(18,906)

(191)
728
2,012
(5,556)
2,078

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

138,814

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

21 NOTES TO THE STATEMENT OF CASH FLOWS

INTEREST-BEARING LIABILITIES

CONSOLIDATED

2020
$’000

2019
$’000

(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

9,800

147,000
82,000
229,000

-
200

200

6,169
6,831

13,000

153,169
98,831

252,000

11,800

168,000
61,000
229,000

-
200

200

7,588
5,412

13,000

175,588
78,412

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.

CONSOLIDATED

2020

$’000

2019

$’000

77,659

69,000

146,659

98,493

69,000

167,493

NON-CURRENT

Bank loans* unsecured

Bank loans ** secured

TOTAL INTEREST-BEARING LIABILITIES

* 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.

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

(a) Fair values

values.

(b) Defaults and breaches

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

CONSOLIDATED

27 JULY 2019

$’000

CASH

FLOWS

$’000

OTHER

$’000

25 JULY 2020

$’000

Non-current interest-bearing liabilities

TOTAL INTEREST-BEARING LIABILITIES

167,493

(21,000)

166

146,659

‘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 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

INTEREST-BEARING LIABILITIES

NON-CURRENT

Bank loans* unsecured

Bank loans ** secured

TOTAL INTEREST-BEARING LIABILITIES

CONSOLIDATED

2020
$’000

2019
$’000

77,659

69,000

146,659

98,493

69,000

167,493

* 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.

CONSOLIDATED

27 JULY 2019
$’000

CASH
FLOWS
$’000

OTHER
$’000

25 JULY 2020
$’000

Non-current interest-bearing liabilities

TOTAL INTEREST-BEARING LIABILITIES

167,493

(21,000)

166

146,659

‘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.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

CONSOLIDATED

2020
$’000

2019
$’000

CONSOLIDATED

2020

$’000

2019

$’000

23 CONTRIBUTED EQUITY

Ordinary share capital

608,615

(a) MOVEMENTS IN SHARES ON ISSUE

Ordinary shares on issue 28 July 2019

Ordinary shares issued during the year (i)

Ordinary shares on issue at 25 July 2020

Ordinary shares on issue 29 July 2018

Ordinary shares issued during the year (i)

Ordinary shares on issue at 27 July 2019

NO. (‘000)

$‘000

158,430

294

158,724

158,099

331

158,430

608,615

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

(i)

A total of 294,579 ordinary shares (2019: 330,112) 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 Group.

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 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.

24 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

Reserve records the portion of the gain or loss on a hedging

instrument in a cash flow hedge that is determined to be an

CLOSING BALANCE

(b) CASH FLOW HEDGE RESERVE

Nature and purpose of reserve

effective hedge.

- Movements in the reserve

Opening balance

Net loss on cash flow hedges

Transferred to statement of financial position/

profit or loss

Deferred income tax movement on cash flow hedges

CLOSING BALANCE

464

5,781

(4,419)

19,359

(59,032)

(37,847)

7,337

(868)

(688)

5,781

2,503

(3,387)

(6,499)

2,964

(4,419)

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

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

24 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 on cash flow hedges

Transferred to statement of financial position/
profit or loss

Deferred income tax movement on cash flow hedges

CLOSING BALANCE

CONSOLIDATED

2020
$’000

2019
$’000

464

5,781

(4,419)

19,359

(59,032)

(37,847)

7,337

(868)

(688)

5,781

2,503

(3,387)

(6,499)

2,964

(4,419)

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

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

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

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

CLOSING BALANCE

CONSOLIDATED

2020
$’000

2019
$’000

17,746

1,613

19,359

15,734

2,012

17,746

(38,908)

(43,243)

(28,747)

6,192

8,623

(59,032)

(1,857)

(38,908)

25 OTHER FINANCIAL INSTRUMENTS

CURRENT ASSETS

Derivatives designated as hedging instruments

Forward currency contracts – cash flow hedges

TOTAL CURRENT ASSETS

CURRENT LIABILITIES

Derivatives designated as hedging instruments

Forward currency contracts – cash flow hedges

TOTAL CURRENT LIABILITIES

NON –CURRENT LIABILITIES

Derivatives designated as hedging instruments

Interest rate swaps – cash flow hedges

TOTAL NON-CURRENT LIABILITIES

CONSOLIDATED

2020

$’000

2019

$’000

6,119

4,008

2,316

2,548

(a) DERIVATIVE INSTRUMENTS USED BY THE GROUP

(i)

Forward currency contracts – cash flow hedges

The majority of the Group’s inventory purchases are denominated in US Dollars. In order to protect against

exchange rates movements, the Group has entered into forward exchange contracts to 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 25 July 2020 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 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 OTHER FINANCIAL INSTRUMENTS

CURRENT ASSETS

Derivatives designated as hedging instruments

Forward currency contracts – cash flow hedges

TOTAL CURRENT ASSETS

CURRENT LIABILITIES

Derivatives designated as hedging instruments

Forward currency contracts – cash flow hedges

TOTAL CURRENT LIABILITIES

NON –CURRENT LIABILITIES

Derivatives designated as hedging instruments

Interest rate swaps – cash flow hedges

TOTAL NON-CURRENT LIABILITIES

CONSOLIDATED

2020
$’000

2019
$’000

6,119

4,008

2,316

2,548

(a) DERIVATIVE INSTRUMENTS USED BY THE GROUP

(i)

Forward currency contracts – cash flow hedges

The majority of the Group’s inventory purchases are denominated in US Dollars. In order to protect against
exchange rates movements, the Group has entered into forward exchange contracts to 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 25 July 2020 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.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 OTHER FINANCIAL INSTRUMENTS (CONTINUED)

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

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

CONSOLIDATED

2020
$’000

2019
$’000

2020

2019

NOTIONAL AMOUNTS $AUD

AVERAGE EXCHANGE RATE

128,198

114,909

114,426

0.6938

0.7049

0.7292

NOTIONAL AMOUNTS $NZD

AVERAGE EXCHANGE RATE

21,876

21,149

19,892

10,585

0.6479

0.6573

0.6863

0.6707

NOTIONAL AMOUNTS £GBP

AVERAGE EXCHANGE RATE

7,762

1.2509

NOTIONAL AMOUNTS $NZD

AVERAGE EXCHANGE RATE

4,602

4,465

1.0365

1.0455

NOTIONAL AMOUNTS $SGD

AVERAGE EXCHANGE RATE

bearing liabilities.

6,352

0.7415

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 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.

26 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-

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 Limited

NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

25 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.

26 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.

Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

Notes to the Financial Statements

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

CAPITAL STRUCTURE AND RISK MANAGEMENT

26 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 25 July 2020, the maximum exposure to credit risk of the Group is the amount guaranteed as disclosed in
note 34.

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:

CONSOLIDATED

FOREIGN OPERATIONS

Financial Assets

Cash and cash equivalents

Financial Liabilities

Bank loans AUD

NET FINANCIAL ASSETS

NOTES

2020
$’000

448,832

146,659

302,173

2019
$’000

190,255

167,493

22,762

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.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

INTEREST RATE RISK (CONTINUED)

Interest rate sensitivity

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 (2019:100) 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:

2020

$000

1,934

(2,552)

2019

$000

(159)

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.

to in the next twelve months.

- The net exposure at reporting date is representative of what the Group was and is expecting to be exposed

- 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.

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 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

26 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 (2019:100) 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:

2020
$000

1,934

(2,552)

2019
$000

(159)

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.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

FOREIGN CURRENCY RISK

26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

The following sensitivity is based on the foreign exchange risk exposures in existence at the reporting date:

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):

2020

CONSOLIDATED

FINANCIAL ASSETS

USD

NZD

SGD

GBP

HKD

$’000

MYR

$’000

EUR

$’000

Cash and cash equivalents

14,076

27,477

14,787

12,669

1,802

5,124

904

Trade and other receivables

Derivative financial assets

755

14,831

27,477

14,835

12,669

1,802

5,124

904

FINANCIAL LIABILITIES

Trade and other payables

44,954

5,876

191

3,297

Derivative financial liabilities

4,008

48,962

5,876

191

3,297

257

NET EXPOSURE

(34,131)

21,601

14,644

9,372

1,545

5,124

904

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

6,119

3,312

3,160

10,387

906

14,734

1,129

11,866

3,312

3,160

10,387

906

14,734

1,129

to meet medium term requirements, with flexibility and headroom to make acquisitions for cash in the

Trade and other payables

21,518

3,135

Derivative financial liabilities

21,518

3,135

565

286

NET EXPOSURE

(9,652)

177

2,595

10,101

134

772

14,734

1,129

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%

POST-TAX PROFIT

HIGHER/(LOWER)

OTHER COMPREHENSIVE INCOME

HIGHER/(LOWER)

2020

$000

(5,015)

21,836)

2019

$000

(862)

15,620

2020

$000

685

(3,129)

(527)

3,285

(357)

1,627

(229)

1,041

(50)

229

(125)

569

(22)

100

2019

$000

376

(1,596)

(162)

(63)

288

(224)

1,020

(26)

116

(1,021)

883

(28)

121

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

event an opportunity should arise.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

26 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%

2020
$000

685

(3,129)

(527)

3,285

(357)

1,627

(229)

1,041

(50)

229

(125)

569

(22)

100

2019
$000

376

(1,596)

(162)

(63)

288

(224)

1,020

(26)

116

(1,021)

883

(28)

121

2020
$000

(5,015)

21,836)

2019
$000

(862)

15,620

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.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

CAPITAL STRUCTURE AND RISK MANAGEMENT

26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)

LIQUIDITY RISK (CONTINUED)

The Group has, at reporting date, $306.0 million (2019: $59.4 million) cash held in deposit with 11am at call
and the remaining $142.8 million (2019: $130.8 million) cash held in deposit with maturity terms ranging
from 30 to 90 days (2019: 30 to 180 days). Hence management believe there is no significant exposure to
liquidity risk at 25 July 2020 and 27 July 2019.

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:

2020

CONSOLIDATED

FINANCIAL LIABILITIES

Trade and other payables

Bank loans

Lease liabilities

Forward currency contracts

2019

CONSOLIDATED

FINANCIAL LIABILITIES

Trade and other payables

Bank loans

Forward currency contracts

MATURITY 0 - 12

MONTHS

MATURITY > 12
MONTHS

$’000

208,979

189,221

283,742

681,942

146,659

114,668

261,327

MATURITY 0 - 12

MONTHS

MATURITY > 12
MONTHS

$’000

81,938

167,493

175,163

257,101

167,493

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.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

26 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

The following table provides the fair value measurement hierarchy of the Group’s financial assets and

market data.

liabilities:

FINANCIAL YEAR ENDED 25 JULY 2020

FINANCIAL YEAR ENDED 27 JULY 2019

CONSOLIDATED

LEVEL 1

LEVEL 2

LEVEL 3

LEVEL 1

LEVEL 2

LEVEL 3

$’000

FINANCIAL ASSETS

Listed equity investment at fair value

18,132

46,879

Foreign Exchange Contracts

6,119

18,132

46,879

6,119

2,316

4,008

6,324

2,548

FINANCIAL LIABILITIES

Interest Rate Swaps

Foreign Exchange Contracts

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

At 25 July 2020 and 27 July 2019, 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 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

CAPITAL STRUCTURE AND RISK MANAGEMENT

26 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:

FINANCIAL YEAR ENDED 25 JULY 2020

FINANCIAL YEAR ENDED 27 JULY 2019

CONSOLIDATED

LEVEL 1

LEVEL 2

LEVEL 3

LEVEL 1

LEVEL 2

LEVEL 3

$’000

FINANCIAL ASSETS

Listed equity investment at fair value

18,132

Foreign Exchange Contracts

18,132

FINANCIAL LIABILITIES

Interest Rate Swaps

Foreign Exchange Contracts

2,316

4,008

6,324

46,879

6,119

46,879

6,119

2,548

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

At 25 July 2020 and 27 July 2019, 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.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

GROUP STRUCTURE

27 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)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP STRUCTURE

28 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.

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

2020 INTEREST
100%
100%
100%
100%
100%

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

Australia
Australia
Australia
Australia

Australia
Australia
Australia
New Zealand

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%

(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

2020

$’000

2019

$’000

608,615

225,111

1,461,108

114,731

190,029

4,442

19,359

(449)

639,112

78,319

(628)

164,212

1,383,336

7,780

78,958

5,129

17,746

(508)

673,395

113,008

1,002

Net profit for the period

Total comprehensive (loss) income for the period, net of tax

(b) Guarantees entered into by the parent entity

The parent entity has provided no financial guarantees in respect of bank overdrafts and loans of subsidiaries

(2019: $nil).

The parent entity has also given no unsecured guarantees in respect of finance leases of subsidiaries or

bank overdrafts of subsidiaries (2019: $nil).

The parent entity did not have any contingent liabilities as at 25 July 2020 (2019: $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 25 July 2020 or 27 July 2019.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

GROUP STRUCTURE

28 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 (loss) income for the period, net of tax

(b) Guarantees entered into by the parent entity

2020
$’000

2019
$’000

225,111

1,461,108

114,731

190,029

164,212

1,383,336

7,780

78,958

608,615

4,442

19,359

(449)

639,112

78,319

(628)

5,129

17,746

(508)

673,395

113,008

1,002

The parent entity has provided no financial guarantees in respect of bank overdrafts and loans of subsidiaries
(2019: $nil).

The parent entity has also given no unsecured guarantees in respect of finance leases of subsidiaries or
bank overdrafts of subsidiaries (2019: $nil).

The parent entity did not have any contingent liabilities as at 25 July 2020 (2019: $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 25 July 2020 or 27 July 2019.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

GROUP STRUCTURE

29 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.

30 RELATED PARTY TRANSACTIONS

(a) PARENT ENTITY AND SUBSIDIARIES

The ultimate parent entity is Premier Investments Limited. Details of subsidiaries are provided in note 28.

(b) KEY MANAGEMENT PERSONNEL

COMPENSATION FOR KEY MANAGEMENT PERSONNEL

Short-term employee benefits

Post-employment benefits

Share-based payments

TOTAL

CONSOLIDATED

2020
$

2019
$

6,828,408

113,168

504,722

7,446,298

6,743,844

129,875

1,185,719

8,059,438

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 $2,396,209 (2019: $1,797,386), including Mr.
Lanzer's Director fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the Group, with
$713,866 (2019: $30,445) 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 $17,273,036 (2019: $22,842,474) including GST have been made by Group companies from Voyager
Distributing Co. Pty Ltd, Playcorp Pty Ltd and Sky Chain Trading Limited, with $4,058,067 (2019: $1,882,897)
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 $512,600 (2019: $518,650) costs including GST incurred by Century Plaza
Trading Pty Ltd.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OTHER DISCLOSURES

31 AUDITOR’S REMUNERATION

The auditor of Premier Investments Limited is Ernst & Young

(Australia). Amounts received, or due and receivable, by

Ernst & Young (Australia) for:

Audit or review of the statutory financial report of the parent

covering the group and auditing the statutory financial

reports of any controlled entities

Other assurance services or agreed-upon-procedures under

other legislation or contractual arrangements not required to

be performed by the auditor

Other non-audit services

SUB-TOTAL

Amounts received, or due and receivable, by overseas

member firms of Ernst & Young (Australia) for:

Audit of the financial report of any controlled entities

TOTAL AUDITOR’S REMUNERATION

32 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

2020

2019

804,262

608,982

38,696

29,144

872,102

100,432

40,695

750,109

225,209

1,097,311

201,407

951,516

CONSOLIDATED

2020

$’000

1,613

2019

$’000

2,012

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.

Premier Investments LimitedNOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OTHER DISCLOSURES

31 AUDITOR’S REMUNERATION

The auditor of Premier Investments Limited is Ernst & Young
(Australia). Amounts received, or due and receivable, by
Ernst & Young (Australia) for:

Audit or review of the statutory financial report of the parent
covering the group and auditing the statutory financial
reports of any controlled entities

Other assurance services or agreed-upon-procedures under
other legislation or contractual arrangements not required to
be performed by the auditor

Other non-audit services

SUB-TOTAL

Amounts received, or due and receivable, by overseas
member firms of Ernst & Young (Australia) for:

Audit of the financial report of any controlled entities

TOTAL AUDITOR’S REMUNERATION

32 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

2020
$

2019
$

804,262

608,982

38,696

29,144

872,102

100,432

40,695

750,109

225,209

1,097,311

201,407

951,516

CONSOLIDATED

2020
$’000

1,613

2019
$’000

2,012

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.

Annual Report 2020NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

for the 52 weeks ended 25 July 2020 and 27 July 2019 (continued)

OTHER DISCLOSURES

32 SHARE-BASED PAYMENT PLANS (CONTINUED)

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

Performance rights (continued)

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 the Monte-Carlo simulation pricing model is
dependent on the assumptions underlying the performance rights granted to ensure these are appropriately
factored into the determination of fair value.

In determining the share-based payments expense for the period, the number of instruments expected to vest
has been adjusted to reflect the number of executives expected to remain with the Group until the end of the
performance period, as well as the probability of not meeting the Total Shareholder Return (“TSR”) performance
hurdles.

The following 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)

24/02/2016

26/04/2016

10/04/2017

19/02/2018

12/04/2019

01/05/2020

NUMBER OF
RIGHTS
GRANTED

123,647

1,000,000

120,124

148,237

124,472

544,809

SHARE ISSUE
PRICE

OPTION LIFE

DIVIDEND
YIELD

VOLATILITY

RISK-FREE
RATE

FAIR
VALUE

$12.89

$9.88

$15.70

$12.91

$18.18

2.6 years

3-6 years

2.5 years

$13.21

2.5 – 4 years

5.5%

3.4%

3.5%

40%

30%

16%

30%

36%

1.75%

$12.89

2.06%

1.79%

2.14%

1.44%

0.40%

$9.96

$6.89

$7.85

$6.81

$8.33

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 (i)

Forfeited during the year

Exercised during the year (ii)

Expired during the year

Balance at the end of the year

2020
No.

615,637

544,809

(294,579)

(52,457)

813,410

2020
WAEP

2019
No.

2019
WAEP

862,271

124,472

(15,878)

(330,112)

(25,116)

615,637

(i) The 544,809 performance rights granted in relation to the grant date 1 May 2020 were issued since the end of the

financial year, but before the date of this report. No other performance rights were granted since the end of the financial
year but up to the date of this report.

(ii) The weighted average share price at the date of exercise of rights exercised during the year was $15.86 (2019: $16.78).

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 forfeited and no performance rights have expired.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OTHER DISCLOSURES

32 SHARE-BASED PAYMENT PLANS (CONTINUED)

(d) WEIGHTED AVERAGE FAIR VALUE

The weighted average fair value of performance rights granted during the year was $8.33 (2019: $6.81).

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: the grant date fair value of the award, the extent to which the vesting

period has expired, and 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.

33 EVENTS AFTER THE REPORTING DATE

The Directors of Premier Investments Limited approved a final dividend in respect of the 2020 financial year.

The total amount of the dividend is $57,141,000 (2019: $58,636,000) which represents a fully franked dividend

of 36 cents per share (2019: 37 cents per share).

The Group temporarily closed all of its 165 Melbourne metropolitan stores to customers from 8 July 2020, in

direct response to the Victorian Government’s COVID-19 directive whereby Stage 3 “stay at home” restrictions

were reinstated. As of 5 August 2020, the Victorian Government introduced Stage 4 restrictions across

metropolitan Melbourne for a period of at least 6 weeks. As a result, these Melbourne metropolitan stores

remain temporarily closed. In response to the Victorian Government directives, all 47 regional Victorian stores

were temporarily closed from 4 August 2020 and reopened on 14 September 2020.

34 CONTINGENT LIABILITIES

The Group has bank guarantees and outstanding letters of credit totalling $6,168,632 (2019: $7,587,926).

Premier Investments Limited

NOTES TO THE FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 25 JULY 2020 AND 27 JULY 2019 (CONTINUED)

OTHER DISCLOSURES

32 SHARE-BASED PAYMENT PLANS (CONTINUED)

(d) WEIGHTED AVERAGE FAIR VALUE

The weighted average fair value of performance rights granted during the year was $8.33 (2019: $6.81).

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: the grant date fair value of the award, the extent to which the vesting
period has expired, and 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.

33 EVENTS AFTER THE REPORTING DATE

The Directors of Premier Investments Limited approved a final dividend in respect of the 2020 financial year.
The total amount of the dividend is $57,141,000 (2019: $58,636,000) which represents a fully franked dividend
of 36 cents per share (2019: 37 cents per share).

The Group temporarily closed all of its 165 Melbourne metropolitan stores to customers from 8 July 2020, in
direct response to the Victorian Government’s COVID-19 directive whereby Stage 3 “stay at home” restrictions
were reinstated. As of 5 August 2020, the Victorian Government introduced Stage 4 restrictions across
metropolitan Melbourne for a period of at least 6 weeks. As a result, these Melbourne metropolitan stores
remain temporarily closed. In response to the Victorian Government directives, all 47 regional Victorian stores
were temporarily closed from 4 August 2020 and reopened on 14 September 2020.

34 CONTINGENT LIABILITIES

The Group has bank guarantees and outstanding letters of credit totalling $6,168,632 (2019: $7,587,926).

Annual Report 2020

DIRECTORS’ 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
25 July 2020 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 25 July 2020
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 25 July 2020.

On behalf of the Board

Solomon Lew
Chairman

1 October 2020

Ernst & Young

8 Exhibition Street

Tel: +61 3 9288 8000

Fax: +61 3 8650 7777

Melbourne VIC 3000 Australia

ey.com/au

GPO Box 67 Melbourne VIC 3001

Independent Auditor's Report to the Members of Premier Investments

Report on the Audit of the Financial 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 position

as at 25 July 2020, 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'

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations

giving a true and fair view of the consolidated financial position of the Group as at 25 July 2020

and of its consolidated financial performance for the year ended on that date; and

complying with Australian Accounting Standards and the Corporations Regulations 2001.

Limited

Opinion

Declaration.

Act 2001, including:

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under

those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial

Report section of our report. 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 Ethics for Professional

Accountants (including Independence Standards) (the Code) that are relevant to our audit of the

financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with

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

the Code.

for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in

our audit of the financial report of the current 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.

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

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

accompanying financial report.

Premier Investments Limited

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

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 25 July 2020, 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.

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

giving a true and fair view of the consolidated financial position of the Group as at 25 July 2020
and of its consolidated financial performance for the year ended on that date; and

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 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 Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current 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.

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
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
accompanying financial report.

Annual Report 2020

Independent Auditor’s Report continued

1. Carrying value of intangible assets
1. Carrying value of intangible assets
Why significant

Why significant
As at 25 July 2020 the Group held $826.6
million (or 37.8% of total assets) in goodwill and
As at 25 July 2020 the Group held $826.6
indefinite-life brand names recognised from
million (or 37.8% of total assets) in goodwill and
historical business combinations.
indefinite-life brand names recognised from
As outlined in Note 18 of the financial report, the
historical business combinations.
goodwill and brand names are tested by the
As outlined in Note 18 of the financial report, the
Group for impairment annually.
goodwill and brand names are tested by the
The recoverable amount of these assets was
Group for impairment annually.
determined based on a value in use model
The recoverable amount of these assets was
referencing discounted cash flows of the retail
determined based on a value in use model
segment for goodwill, and the casual wear,
referencing discounted cash flows of the retail
women’s wear and non-apparel cash generating
segment for goodwill, and the casual wear,
units (CGUs) for brand names. The model
women’s wear and non-apparel cash generating
contains estimates and significant judgements
units (CGUs) for brand names. The model
regarding future cash flow projections which are
contains estimates and significant judgements
critical to the assessment of impairment,
regarding future cash flow projections which are
particularly planned sales growth in the casual
critical to the assessment of impairment,
wear and women’s wear CGUs and discount rates
particularly planned sales growth in the casual
applied.
wear and women’s wear CGUs and discount rates
At 25 July 2020 the Group’s performance and
applied.
the economy as a whole, were impacted by the
At 25 July 2020 the Group’s performance and
restrictions and economic uncertainty resulting
the economy as a whole, were impacted by the
from the COVID-19 pandemic. Significant
restrictions and economic uncertainty resulting
assumptions used in the impairment testing
from the COVID-19 pandemic. Significant
referred to above are inherently subjective and
assumptions used in the impairment testing
in times of economic uncertainty the degree of
referred to above are inherently subjective and
subjectivity is higher than it might otherwise be.
in times of economic uncertainty the degree of
Changes in certain assumptions can lead to
subjectivity is higher than it might otherwise be.
significant changes in the recoverable amount of
Changes in certain assumptions can lead to
these assets.
significant changes in the recoverable amount of
Accordingly, given the significant judgements
these assets.
and estimates involved in assessing impairment
Accordingly, given the significant judgements
of intangible assets we considered this a key
and estimates involved in assessing impairment
audit matter. For the same reasons we consider
of intangible assets we considered this a key
it important that attention is drawn to the
audit matter. For the same reasons we consider
information in Note 18.
it important that attention is drawn to the
information in Note 18.

How our audit addressed the key audit matter

How our audit addressed the key audit matter
Our audit procedures included the following:

► Assessed the application of the valuation
Our audit procedures included the following:

methodologies applied.

► Assessed the application of the valuation
► Evaluated whether the determination of CGUs was

► Evaluated whether the determination of CGUs was

methodologies applied.
in accordance with Australian Accounting
Standards.
in accordance with Australian Accounting
► Agreed the cashflows within the impairment
Standards.
model to forecast cashflows.

► Agreed the cashflows within the impairment
► Considered the impact of COVID-19 on the cash
model to forecast cashflows.
flow assumptions used in the impairment model.
► Considered the impact of COVID-19 on the cash
► Considered the historical accuracy of the Group’s
flow assumptions used in the impairment model.
cash flow forecasting process.

► Assessed key inputs being discount rates, relief

► Considered the historical accuracy of the Group’s
► Compared the forecast cash flows used in the
cash flow forecasting process.
value in use model to the actual current year
► Compared the forecast cash flows used in the
financial performance of the underlying CGUs for
value in use model to the actual current year
reasonability.
financial performance of the underlying CGUs for
reasonability.
from royalty rates and sales growth rates adopted
in the value in use model including comparison to
from royalty rates and sales growth rates adopted
available market data for comparable businesses.
in the value in use model including comparison to
► Performed sensitivity analysis on key inputs and
available market data for comparable businesses.
assumptions included in the forecast cashflows
► Performed sensitivity analysis on key inputs and
and impairment models including the discount
assumptions included in the forecast cashflows
rates, to assess the risk of the CGU carrying value
and impairment models including the discount
exceeding the recoverable amount.
rates, to assess the risk of the CGU carrying value
► Compared earnings multiples derived from the
exceeding the recoverable amount.
Group’s value in use model to those observable
► Compared earnings multiples derived from the
from external market data of comparable listed
Group’s value in use model to those observable
entities.
from external market data of comparable listed
entities.
included in the financial report.

► Assessed the adequacy of the disclosures

included in the financial report.

► Assessed the adequacy of the disclosures
Our valuation specialists were involved in the
conduct of these procedures where considered
Our valuation specialists were involved in the
relevant.
conduct of these procedures where considered
relevant.

2. Existence and valuation of inventory

Why significant

As at 25 July 2020 the Group held $156.6

million in inventories.

Inventories are held at several distribution

How our audit addressed the key audit matter

Our audit procedures included the following:

► Assessed the application of valuation

methodologies applied for compliance with

Inventories are held at several distribution

centres, as well as at over 1,200 retail stores.

methodologies applied for compliance with

Australian Accounting Standards.

centres, as well as at over 1,200 retail stores.

As detailed in Note 10 of the financial report,

Australian Accounting Standards.

► Assessed the effectiveness of relevant controls

As detailed in Note 10 of the financial report,

inventories are valued at the lower of cost and

► Assessed the effectiveness of relevant controls

over the determination of standard costs

inventories are valued at the lower of cost and

net realisable value.

The cost of finished goods inventories is

over the determination of standard costs

► Selected a sample of inventory lines and

recalculated standard costs based on supporting

The cost of finished goods inventories is

determined using a standard cost approach and

recalculated standard costs based on supporting

supplier invoices and assessed the allocation of

determined using a standard cost approach and

includes a proportion of purchasing department

supplier invoices and assessed the allocation of

costs absorbed from the purchasing department,

includes a proportion of purchasing department

costs, as well as freight, handling, and

costs absorbed from the purchasing department,

freight and warehouse costs.

costs, as well as freight, handling, and

warehouse costs incurred to deliver the goods to

the point of sale.

Provisions are recorded for matters such as aged

freight and warehouse costs.

► Attended store and distribution centre inventory

counts on a sample basis and assessed the stock

counting process which addressed inventory

Provisions are recorded for matters such as aged

and slow moving inventory to ensure inventory is

counting process which addressed inventory

quantity and condition.

and slow moving inventory to ensure inventory is

recorded at the lower of cost and net realisable

value. This requires a level of judgement with

regard to changing consumer demands and

fashion trends. Such judgements include the

Group’s expectations for future sales and

inventory mark downs.

Accordingly, the existence and valuation of

inventory was considered to be a key audit

matter.

quantity and condition.

► 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.

► Tested the slow-moving inventory reports for

accuracy and completeness.

► Considered the completeness of inventory

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.

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
95

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 Limited

2. Existence and valuation of inventory
2. Existence and valuation of inventory
Why significant
Why significant
As at 25 July 2020 the Group held $156.6
As at 25 July 2020 the Group held $156.6
million in inventories.
million in inventories.
Inventories are held at several distribution
Inventories are held at several distribution
centres, as well as at over 1,200 retail stores.
centres, as well as at over 1,200 retail stores.
As detailed in Note 10 of the financial report,
As detailed in Note 10 of the financial report,
inventories are valued at the lower of cost and
inventories are valued at the lower of cost and
net realisable value.
net realisable value.
The cost of finished goods inventories is
The cost of finished goods inventories is
determined using a standard cost approach and
determined using a standard cost approach and
includes a proportion of purchasing department
includes a proportion of purchasing department
costs, as well as freight, handling, and
costs, as well as freight, handling, and
warehouse costs incurred to deliver the goods to
warehouse costs incurred to deliver the goods to
the point of sale.
the point of sale.
Provisions are recorded for matters such as aged
Provisions are recorded for matters such as aged
and slow moving inventory to ensure inventory is
and slow moving inventory to ensure inventory is
recorded at the lower of cost and net realisable
recorded at the lower of cost and net realisable
value. This requires a level of judgement with
value. This requires a level of judgement with
regard to changing consumer demands and
regard to changing consumer demands and
fashion trends. Such judgements include the
fashion trends. Such judgements include the
Group’s expectations for future sales and
Group’s expectations for future sales and
inventory mark downs.
inventory mark downs.
Accordingly, the existence and valuation of
Accordingly, the existence and valuation of
inventory was considered to be a key audit
inventory was considered to be a key audit
matter.
matter.

How our audit addressed the key audit matter
How our audit addressed the key audit matter
Our audit procedures included the following:
Our audit procedures included the following:
► Assessed the application of valuation
► Assessed the application of valuation
methodologies applied for compliance with
methodologies applied for compliance with
Australian Accounting Standards.
Australian Accounting Standards.

► Assessed the effectiveness of relevant controls
► Assessed the effectiveness of relevant controls

over the determination of standard costs
over the determination of standard costs
► Selected a sample of inventory lines and
► Selected a sample of inventory lines and

recalculated standard costs based on supporting
recalculated standard costs based on supporting
supplier invoices and assessed the allocation of
supplier invoices and assessed the allocation of
costs absorbed from the purchasing department,
costs absorbed from the purchasing department,
freight and warehouse costs.
freight and warehouse costs.

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

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

► Tested the slow-moving inventory reports for
► Tested the slow-moving inventory reports for

accuracy and completeness.
accuracy and completeness.

► Considered the completeness of inventory
► Considered the completeness of inventory

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

Annual Report 2020

Independent Auditor’s Report continued

3. Investment in associate – Breville Group Limited
3. Investment in associate – Breville Group Limited
Why significant
Why significant

How our audit addressed the key audit matter
How our audit addressed the key audit matter

At 25 July 2020 the Group held a 26.73% stake
At 25 July 2020 the Group held a 26.73% stake
in the ASX-listed entity Breville Group Limited
in the ASX-listed entity Breville Group Limited
(“Breville”).
(“Breville”).
The Group did not participate in the equity
The Group did not participate in the equity
raising conducted by Breville during the year,
raising conducted by Breville during the year,
which resulted in the dilution of its interest to
which resulted in the dilution of its interest to
this level.
this level.
As detailed in Note 20 of the financial report,
As detailed in Note 20 of the financial report,
this investment was equity-accounted in
this investment was equity-accounted in
accordance with Australian Accounting
accordance with Australian Accounting
Standards.
Standards.
At balance date the Group’s investment in
At balance date the Group’s investment in
Breville was carried at $257.4 million. The
Breville was carried at $257.4 million. The
Group’s results included an equity accounted
Group’s results included an equity accounted
profit of $17.7 million and a gain of $15.9
profit of $17.7 million and a gain of $15.9
million on the dilution in shareholding in the
million on the dilution in shareholding in the
overall profit after tax of the Group.
overall profit after tax of the Group.
The Group’s accounting for the investment in
The Group’s accounting for the investment in
Breville was considered a key audit matter due to
Breville was considered a key audit matter due to
the significance of the contribution to the
the significance of the contribution to the
Group’s result.
Group’s result.

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

► Examined the audit work completed by Breville’s
► Examined the audit work completed by Breville’s
auditors for the 30 June 2020 audit prepared in
auditors for the 30 June 2020 audit prepared in
forming their audit opinion over the Breville
forming their audit opinion over the Breville
financial report.
financial report.

► Considered whether the accounting policies of
► Considered whether the accounting policies of

Breville were materially consistent with those of
Breville were materially consistent with those of
the Group.
the Group.

► Recalculated the Group’s share of profit and
► Recalculated the Group’s share of profit and
dividends for the year equity accounted in
dividends for the year equity accounted in
accordance with Australian Accounting
accordance with Australian Accounting
Standards.
Standards.

► Recalculated the gain recognised on dilution in
► Recalculated the gain recognised on dilution in

► Agreed the Group’s shareholding to supporting
► Agreed the Group’s shareholding to supporting

shareholding.
shareholding.

evidence.
evidence.

4. Adoption of new accounting standard for leases
4. Adoption of new accounting standard for leases
Why significant
Why significant
The 25 July 2020 financial year was the first
year of adoption of Australian Accounting
The 25 July 2020 financial year was the first
Standard AASB 16 - Leases (“AASB 16”). The
year of adoption of Australian Accounting
Group holds a significant volume of leases by
Standard AASB 16 - Leases (“AASB 16”). The
number and value over retail sites as lessee.
Group holds a significant volume of leases by
number and value over retail sites as lessee.
Note 2 describes the accounting for the
transition and describes the accounting policy
Note 2 describes the accounting for the
for leases on an ongoing basis.
transition and describes the accounting policy
for leases on an ongoing basis.
Upon transition a lease liability of $410.2 million
and right of use asset of $364.6 million were
Upon transition a lease liability of $410.2 million
recognised on the statement of financial
and right of use asset of $364.6 million were
position. The volume of leases and the
recognised on the statement of financial
quantitative impact of the transition adjustments
position. The volume of leases and the
quantitative impact of the transition adjustments

How our audit addressed the key audit matter
How our audit addressed the key audit matter

Our audit procedures included the following:
Our audit procedures included the following:
► Considered whether the Group’s new accounting
► Considered whether the Group’s new accounting

policies as set out in Note 2, satisfied the
policies as set out in Note 2, satisfied the
requirements of AASB 16 including the adoption
requirements of AASB 16 including the adoption
of any of the available practical expedients
of any of the available practical expedients
selected by the Group as part of the transition
selected by the Group as part of the transition
process.
process.

► Assessed the mathematical accuracy of the
► Assessed the mathematical accuracy of the
Group’s AASB 16 lease calculation model.
Group’s AASB 16 lease calculation model.

► For a sample of leases, agreed the Group’s inputs
► For a sample of leases, agreed the Group’s inputs
in the AASB 16 lease calculation model in relation
in the AASB 16 lease calculation model in relation
to those leases, such as, key dates, fixed and
to those leases, such as, key dates, fixed and
variable rent payments, renewal options and
variable rent payments, renewal options and

make the impact of this new standard significant

to the financial statements of the Group.

In addition, the complexity in the modelling of

the accounting for the leases including the

calculation of the incremental borrowing rate

and the judgement involved in the treatment of

the option to extend and the lease term under

holdover is significant.

Given the financial significance to the Group of

its leasing arrangements, the complexity and

judgements involved in the application of AASB

16, and the transition requirements of the

standard, this was considered to be a key audit

matter.

incentives, to the relevant terms of the underlying

signed lease agreements

► Considered the Group’s assumptions in relation to

the treatment of the option to extend and lease

term under holdover.

► Assessed whether the Group had included all of its

leases taking into consideration the modified

retrospective transition approach and practical

expedients adopted by the Group.

► Assessed the rates used to discount future lease

payments to present value.

► Assessed the adequacy of the disclosures

included in the financial report.

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

The directors are responsible for the other information. The other information comprises the

information included in the Group’s 2020 Annual Report other than the financial report and our

auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual

Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the

Annual Report after the date of this auditor’s report.

Our opinion on the financial report does not cover the other information and accordingly we do not

and will not express any form of assurance conclusion thereon, with the exception of the

Remuneration Report and our related assurance opinion.

In connection with our audit of the financial report, our responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial

report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this

auditor’s report, we conclude that there is a material misstatement of this other information, we are

required to report that fact. We have nothing to report in this regard.

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.

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 cease

operations, or have no realistic alternative but to do so.

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 Limited

make the impact of this new standard significant
make the impact of this new standard significant
to the financial statements of the Group.
to the financial statements of the Group.
In addition, the complexity in the modelling of
In addition, the complexity in the modelling of
the accounting for the leases including the
the accounting for the leases including the
calculation of the incremental borrowing rate
calculation of the incremental borrowing rate
and the judgement involved in the treatment of
and the judgement involved in the treatment of
the option to extend and the lease term under
the option to extend and the lease term under
holdover is significant.
holdover is significant.
Given the financial significance to the Group of
Given the financial significance to the Group of
its leasing arrangements, the complexity and
its leasing arrangements, the complexity and
judgements involved in the application of AASB
judgements involved in the application of AASB
16, and the transition requirements of the
16, and the transition requirements of the
standard, this was considered to be a key audit
standard, this was considered to be a key audit
matter.
matter.

incentives, to the relevant terms of the underlying
incentives, to the relevant terms of the underlying
signed lease agreements
signed lease agreements

► Considered the Group’s assumptions in relation to
► Considered the Group’s assumptions in relation to
the treatment of the option to extend and lease
the treatment of the option to extend and lease
term under holdover.
term under holdover.

► Assessed whether the Group had included all of its
► Assessed whether the Group had included all of its

leases taking into consideration the modified
leases taking into consideration the modified
retrospective transition approach and practical
retrospective transition approach and practical
expedients adopted by the Group.
expedients adopted by the Group.

► Assessed the rates used to discount future lease
► Assessed the rates used to discount future lease

payments to present value.
payments to present value.

► Assessed the adequacy of the disclosures
► Assessed the adequacy of the disclosures

included in the financial report.
included in the financial report.

Information Other than the Financial Report and Auditor’s Report Thereon
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the
The directors are responsible for the other information. The other information comprises the
information included in the Group’s 2020 Annual Report other than the financial report and our
information included in the Group’s 2020 Annual Report other than the financial report and our
auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual
auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual
Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the
Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the
Annual Report after the date of this auditor’s report.
Annual Report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and accordingly we do not
Our opinion on the financial report does not cover the other information and accordingly we do not
and will not express any form of assurance conclusion thereon, with the exception of the
and will not express any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
Remuneration Report and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
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
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
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
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
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
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
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 cease
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
operations, or have no realistic alternative but to do so.

Annual Report 2020

Independent Auditor’s Report continued

Auditor's Responsibilities for the Audit of the Financial Report
Auditor's Responsibilities for the Audit of the Financial Report
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
judgement and maintain professional scepticism throughout the audit. We also:
•
•
•

Identify and assess the risks of material misstatement of the financial report, whether due to
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 audit
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 audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
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.
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
concern. If we conclude that a material uncertainty exists, we are 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 based on the audit evidence obtained up
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 based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.
to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.
to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
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
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.
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
responsible for our audit opinion.

•
•
•

We communicate with the directors regarding, among other matters, the planned scope and timing of
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
We also provide the directors with a statement that we have complied with relevant ethical
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
requirements regarding independence, and to communicate with them all relationships and other
requirements regarding independence, and to communicate with them all relationships and other
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
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
99

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

matters that may reasonably be thought to bear on our independence, and where applicable, actions

taken to eliminate threats or safeguards applied.

matters that may reasonably be thought to bear on our independence, and where applicable, actions

taken to eliminate threats or safeguards applied.

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

From the matters communicated to the directors, we determine those matters that were of most

matters. We describe these matters in our auditor’s report unless law or regulation precludes public

significance in the audit of the financial report of the current year and are therefore the key audit

disclosure about the matter or when, in extremely rare circumstances, we determine that a matter

matters. We describe these matters in our auditor’s report unless law or regulation precludes public

should not be communicated in our report because the adverse consequences of doing so would

disclosure about the matter or when, in extremely rare circumstances, we determine that a matter

reasonably be expected to outweigh the public interest benefits of such communication.

should not be communicated in our report because the adverse consequences of doing so would

reasonably be expected to outweigh the public interest benefits of such communication.

Report on the Audit of the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in the directors' report for the year ended 25 July

2020.

We have audited the Remuneration Report included in the directors' report for the year ended 25 July

2020.

In our opinion, the Remuneration Report of Premier Investments Limited for the year ended 25 July

2020, complies with section 300A of the Corporations Act 2001.

In our opinion, the Remuneration Report of Premier Investments Limited for the year ended 25 July

2020, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the

Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our

The directors of the Company are responsible for the preparation and presentation of the

responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in

Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our

accordance with Australian Auditing Standards.

responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in

accordance with Australian Auditing Standards.

Ernst & Young

Glenn Carmody

Partner

Glenn Carmody

Melbourne

Partner

1 October 2020

Melbourne

1 October 2020

Premier Investments Limited

matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
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
From the matters communicated to the directors, we determine those matters that were of most
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
significance in the audit of the financial report of the current year and are therefore the key audit
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
should not be communicated in our report because the adverse consequences of doing so would
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
reasonably be expected to outweigh the public interest benefits of such communication.
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Audit of the Remuneration Report
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 25 July
2020.
We have audited the Remuneration Report included in the directors' report for the year ended 25 July
2020.
In our opinion, the Remuneration Report of Premier Investments Limited for the year ended 25 July
2020, complies with section 300A of the Corporations Act 2001.
In our opinion, the Remuneration Report of Premier Investments Limited for the year ended 25 July
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
The directors of the Company are responsible for the preparation and presentation of the
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
accordance with Australian Auditing Standards.
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.

Ernst & Young
Ernst & Young

Glenn Carmody
Partner
Glenn Carmody
Melbourne
Partner
1 October 2020
Melbourne
1 October 2020

100

Annual Report 2020ASX ADDITIONAL SHAREHOLDER INFORMATION
ASX Additional Information
AS AT 25 SEPTEMBER 2020

as at 25 September 2020

TWENTY LARGEST SHAREHOLDERS

NAME

TOTAL

% IC

RANK

CENTURY PLAZA INVESTMENTS PTY LTD

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED

CITICORP NOMINEES PTY LIMITED

METREPARK PTY LTD

SL SUPERANNUATION NO 1 PTY LTD

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

NATIONAL NOMINEES LIMITED

BNP PARIBAS NOMINEES PTY LTD

LINFOX SHARE INVESTMENT PTY LTD

BNP PARIBAS NOMS PTY LTD

ARGO INVESTMENTS LIMITED

MARK MCINNES

UBS NOMINEES PTY LTD

MILTON CORPORATION LIMITED

MR CON ZEMPILAS

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2

AMP LIFE LIMITED

BRISPOT NOMINEES PTY LTD

GEOMAR SUPERANNUATION PTY LTD

51,569,400

32.49%

25,328,341

15.96%

22,651,331

14.27%

10,357,723

8,235,331

4,437,699

3,946,310

3,275,126

3,120,452

2,577,014

1,525,192

1,250,000

982,100

868,175

590,321

470,000

353,334

282,229

259,815

250,000

6.53%

5.19%

2.80%

2.49%

2.06%

1.97%

1.62%

0.96%

0.79%

0.62%

0.55%

0.37%

0.30%

0.22%

0.18%

0.16%

TOTAL FOR TOP 20:

142,329,893

89.67%

SUBSTANTIAL SHAREHOLDERS

NAME

CENTURY PLAZA INVESTMENTS PTY LTD AND ASSOCIATES

PERPETUAL LIMITED AND ITS SUBSIDIARIES

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

DISTRIBUTION OF EQUITY SHAREHOLDERS

TOTAL UNITS

% IC

58,552,420

42.43%

15,817,595

9.97%

12,381,525

7.80%

Holders

1
TO
1,000

5,952

1,001
TO
5,000

2,439

5,001
TO
10,000

298

10,001
TO
100,000

206

100,001
TO
(MAX)

TOTAL

8,924

Ordinary Fully Paid Shares

2,181,615

5,405,536

2,166,435

4,982,790

143,988,059

158,724,435

The number of investors holding less than a marketable parcel of 27 securities ($19.00 on 25 September 2020)
is 240 and they hold 1,135 securities.

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

101

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

REGISTERED OFFICE
Level 7

417 St Kilda Road

Melbourne Victoria 3004

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

102

Annual Report 2020C

Annual Report 2020