Annual Report 2021
Annual Report 2021
Chairman’s Report
Solomon Lew
Chairman
Richard Murray
Premier Retail CEO
On behalf of the Premier Investments Limited (“Premier”) Board
of Directors, it is my pleasure to present the Annual Report for the
year ended 31 July 2021 (“2021”).
As a result of this prudent approach –
and notwithstanding the global health
crisis – your company reported Net
Profit After Tax of $271.8 million for
2021, up 97.3% on last year1. Our
wholly-owned retail businesses
(Premier Retail) contributed a record
Earnings Before Interest and Tax (EBIT)
of $351.9 million to this result, up
88.0% on 20202.
$271.8m
NET PROFIT AFTER TAX
2021 has been an incredibly difficult
year for consumers and businesses in
the context of the COVID-19 health
crisis. Yet, Premier is proud to have
delivered record results for our
shareholders. This is a testament to
the skills and dedication of our
entire global team.
Your Directors have always focused
their attention on maintaining a strong
and sustainable business. Over the past
decade, this has manifested in a
strong balance sheet with a significant
cash balance and investment in both
owning and operating critical
business infrastructure.
1 The 2021 financial year represented a 53 week period, ended 31 July 2021. The 2020 financial year represented a 52 week period, ended 25 July 2020.
2 Refer to page 9 of the Directors Report for a reconciliation between underlying EBIT and statutory reported profit before taxation for the Retail Segment.
Premier Investments Limited 1
PETER ALEXANDER
DELIVERS $100 MILLION SALES
GROWTH IN ONE YEAR
The Peter Alexander brand is a
powerful brand in Australia and
New Zealand that continues to deliver
record results. Annual sales of
$388.2 million in 2021 were up 34.7%
on prior year with positive LFL sales
growth in both Australia and New
Zealand despite the pandemic.
All Peter Alexander channels delivered
exceptional growth across both
Australia and New Zealand – full priced
stores, outlet stores and online, with
some outstanding results from
suburban and regional stores.
Peter Alexander’s unique design-led
product combined with the Group’s
strategic decision, early in the global
health crisis, to continuously invest in
inventory enabled Peter Alexander to
be in stock of its much-loved products
at the key gift giving periods of Black
Friday/Cyber Monday, Christmas,
Easter, Mother’s Day and Father’s Day.
This is a credit to the design, sourcing
and supply chain teams who adapted
to the ever-changing circumstances to
ensure Peter Alexander was able to
deliver for its customers.
$388.2m
PETER ALEXANDER
FY21 SALES
$351.9m
PREMIER RETAIL
FY21 EBIT
SMIGGLE
POWERFUL GLOBAL BRAND
STARTING TO REBOUND
The impact of COVID-19 was
particularly severe on the Smiggle
global business as families no longer
felt safe shopping with children in-store
and schools were closed for long
periods of time.
A fundamental aspect to Smiggle’s
success is children attending school.
Pleasingly, in countries and markets
where schools have re-opened largely
free of COVID-19 restrictions, Smiggle
is flourishing.
In the key “back to school” periods,
Smiggle has demonstrated its unique
product and competitive advantage.
Both our Northern Hemisphere retail
store network and our wholesale
channel partners have recently seen
very strong responses to our products
as countries reach high COVID-19
vaccination rates and COVID-19
restrictions ease. These positive
responses give every confidence that
the Smiggle business has started to
rebound and grow.
Annual Report 2021
PREMIER RETAIL
GOVERNMENT MANDATED
STORE CLOSURES
Premier Retail includes our five iconic
Apparel Brands (Just Jeans, Jay Jays,
Portmans, Dotti and Jacqui E), Smiggle
and Peter Alexander. During the year,
Premier Retail faced temporary store
closures across our global store
network due to government mandated
lockdowns. For 52 of the 53 trading
weeks during the 2021 financial year,
Premier faced temporary closures
across our global store network.
On average, 176 stores were forced
into temporary closures in any given
week during the year. This resulted in
50,581 lost retail store trading days
during the year. This added immense
operational complexity across every
aspect of our business.
However, notwithstanding this, the
Group’s five iconic Apparel Brands
delivered record sales of $841.6 million,
up 25.3% on 2020 with like-for-like
(“LFL”) sales growth for the year up
18.7%. We continue to manage
through these unprecedented
conditions whilst doing our best to
balance the needs of our customers,
our team members and you,
our shareholders.
We are optimistic that accelerating
vaccination rates in Australia and
New Zealand will allow the reopening
of our stores in these jurisdictions as
has occurred in other parts of the
world. Premier Retail has made the
strategic decision to invest in inventory
for the all-important second quarter of
2022 (Black Friday/Cyber Monday;
Christmas, Boxing Day, ‘Back to
School’) and we have the appropriate
supply chains to support this decision
and ensure we remain in stock of
wanted product.
2
Annual Report 2021 ONLINE – NOW REPRESENTS
20% GROUP SALES
Premier Retail delivered record online
sales of $300.7 million in 2021, up
$80.3 million or 36.4% on a previous
record 2020 (2020: $220.4 million).
The online business contributed
20.8% of total Group sales for the year
(2020: 18.1%) and has a significantly
higher EBIT margin than the retail
store channel.
Premier’s strategic decision to invest in
a wholly owned Australian Distribution
Centre has allowed the Group to
remain agile and to scale up its online
fulfillment in response to
unprecedented customer demand
providing the Group with significant
operating leverage. Plans have
commenced to expand this facility in
calendar 2022 to meet ongoing
demand resulting from the accelerating
industry restructure as customers
increasingly choose to shop online.
The Group today has world class
customer facing websites and will
continue to make major investments in
its people, its information technology,
digital marketing capability and
distribution centres to maximise the
increasing customer preference to
shop online.
$300.7m
RECORD FY21
ONLINE SALES
RETAIL INDUSTRY
RESTRUCTURE – PREMIER IS
PREPARED
The temporary global closures of retail
stores 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
macro environment.
Over the past ten 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 distinct 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
The accelerated swing in customer
preference to shopping online has
further increased Premier Retail’s focus
on each store’s profitability. Pleasingly,
many landlords recognise the
long-term financial strength of Premier
and its seven iconic brands. During
2021 Premier Retail was able to reach
mutual agreement with key landlords
that appropriately rebased the
Group’s rent.
Premier Retail maintains maximum
flexibility in reviewing each store’s
profitability, with over 75% of its
global store network either in holdover
or with leases expiring in less than
12 months.
20.8%
OF TOTAL GROUP
SALES WERE FROM
ONLINE BUISNESS
BALANCE SHEET
AND DIVIDENDS
Throughout the crisis Premier has
maintained a very strong balance
sheet. At year-end the Group had
$523 million of cash on hand.
Our year-end balance sheet reflects our
holding in Breville Group Limited at
$271 million in line with accounting
standards, with a fair market value at
year-end of $1.2 billion.
The Premier Board remains optimistic
about the future as the COVID-19
vaccination rollout across Australia and
New Zealand increases, however the
Board also recognises that the Group is
operating in highly uncertain times.
The Board also notes that the
environment, whilst challenging for
many businesses, may present new
opportunities for the Group given the
strength of its balance sheet.
In balancing these considerations, the
Board has approved a final fully franked
dividend of 46 cents per share (up
10 cents per share or 27.8% on 2020).
The final dividend will be paid on
27 January 2022. Total 2021 full year
dividends amounted to 80 cents per
share, fully franked. This is an increase
of 10 cents per share or 14.3%.
Premier Investments Limited 3
I have no doubt that 2022
will bring both challenges
and opportunities, but I
feel confident that Premier
is well positioned and
well invested to deliver
long term returns to
shareholders.
Chairman’s Report continued
We welcomed Richard to our strong
and committed team in September
2021, and we look forward to
introducing you to Richard at Premier’s
Annual General Meeting.
This is the beginning of a new chapter
for Premier as the Group continues to
grow its brands both locally and
globally while carefully managing
through continued pandemic
conditions across numerous
jurisdictions. With a very strong
balance sheet, Premier is exceptionally
well placed to continue to grow our
existing businesses and seek out new
opportunities into the future.
As I reflect on 2021, I am as always
indebted to my fellow Directors for
their valuable contribution, insights and
counsel. I am incredibly thankful for the
skill and dedication of our senior
leadership team who have provided
stewardship across our global business
during another challenging year. I am
grateful for the knowledge, hard work
and enthusiasm of our entire
workforce. But most importantly I
acknowledge the support of our
shareholders which, during
unprecedented times, has allowed us
to make long term decisions and invest
with certainty.
Solomon Lew
Chairman and
Non-Executive Director
LEADERSHIP AND GOVERNANCE
Premier’s Board and management team
remain focused, flexible and nimble in
response to the current environment.
The Directors are extremely proud of
our team’s dedication and commitment
during these unprecedented times.
As announced during the year, Mark
McInnes stepped down from his role
following the conclusion of the 2021
financial year. Mark was an Executive
Director of Premier and the CEO of
Premier Retail for ten years – a long
and distinguished tenure during which
he guided the business to deliver
record year-on-year operational and
financial performance. On behalf of the
Board and fellow Premier shareholders,
I thank Mark for his service.
As I have said previously, the 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. So, I’d
also like to thank Premier Retail’s senior
leadership group and our entire team
of employees for their outstanding
contribution and their resilience during
this challenging period.
I have no doubt that 2022 will bring
both challenges and opportunities, but
I feel confident that Premier is well
positioned and well invested to deliver
long term returns to shareholders.
During the year, the Board was
delighted to announce that Richard
Murray has been appointed as CEO of
Premier Retail, succeeding Mark
McInnes. Richard is unquestionably one
of the best retailers in Australia, having
delivered significant growth,
transformation and shareholder value
during his career at the JB Hi-Fi Group.
Richard’s appointment continues
Premier’s track record of recruiting and
retaining the best executives in
the industry.
4
Annual Report 2021 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
Non-Executive Director
Terrence McCartney
Non-Executive Director
Mark McInnes
Executive Director
Michael R.I. McLeod
Non-Executive Director
Premier Investments Limited 5
Brand Performance Premier Retail
Jay Jays, under Linda Whitehead’s
leadership, delivered FY21 sales growth
up 19.0% to $202.3 million - a strong
result for the brand underpinned by
strong LFL growth both in stores and
online. Sales have grown 28.0% over
3 years from FY18 to FY21. Jay Jays 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 FY21
with sales growth up 13.6% to $70.1 million
underpinned by strong LFL growth both in
stores and online. While Jacqui E continues
to be significantly impacted by the temporary
exodus of workers from CBD areas during
the COVID-19 health crisis, the FY21 sales
growth demonstrates the long term strength
of the brand. In regions living with easing
COVID-19 social distancing restrictions,
Jacqui E sales were significantly stronger.
Jacqui E has an extremely strong and
distinctive market position and is well
positioned for future growth.
Smiggle, is a powerful global brand
flourishing where children are back at
school. The brand’s strength has been
demonstrated in FY21 with strong LFL sales
growth across all states in Australia up
5.7% and New Zealand up 6.3%, and in the
key Back to School periods as children were
able to return to school strong LFL Sales up
39% in Australia, up 27% in New Zealand
and up 143% in Malaysia. John Cheston,
Managing Director Smiggle, continues to
lead a strong and focused management
team behind a powerful global brand
starting to rebound.
Portmans, under the leadership of Jade
Wyatt, delivered record FY21 sales of
$141.7 million, up a record $36.5 million or
34.6% on FY20. Online sales continue to
drive overall growth at a significantly higher
EBIT margin than the store portfolio.
Portmans has an extremely strong and
distinctive market position and is well
positioned for future growth, particularly
looking beyond the current temporary
exodus of workers from CBD areas during
the COVID-19 health crisis.
Dotti, under Deanna Moylan’s leadership,
delivered strong results in FY21 with sales
growth up 16.3% to $111.6 million
underpinned by strong LFL growth both in
stores and online. Dotti continues to deliver
improvement in profit margins being
delivered through changes to sourcing
strategy. 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.
Peter Alexander, is a powerful brand in
Australia and New Zealand and delivered
record sales in FY21, up $100 million or
34.7% to $388.2 million - underpinned by
strong Like-for-Like (LFL) sales growth.
Peter Alexander’s unique design led
product, combined with the Group’s
strategic decision to be in stock for the
critical gift giving periods has enabled the
brand to deliver increased full priced sales
with much less promotional activity
delivering significantly higher gross
margins in FY21. Under the leadership of
Judy Coomber, Managing Director Peter
Alexander and Dotti, and Peter Alexander,
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 record FY21 sales of
$315.8 million, up a record $77 million or
32.2% on FY20 – a particularly pleasing
result for the Group’s iconic original brand.
FY21 sales growth was underpinned by
strong LFL growth both in stores and
online, with sales growth up 48.5% over
3 years from FY18 to FY21. Just Jeans has
a strong, distinctive and competitive
market position and is well positioned for
future growth.
6
Annual Report 2021 Peter Alexander
Delivers $100 Million Sales Growth in One Year
• Record FY21 sales of $388.2 million,
up a record $100.0 million or 34.7%
on FY20, underpinned by strong LFL
growth both in stores and online
• Peter Alexander delivered three year
sales growth of 77.5% from FY18 to
FY21 and over 400% sales growth
in the past 10 years
• Peter Alexander’s unique design led
product, combined with the Group’s
strategic decision early in the global
health crisis to be in stock for the
critical gift giving periods has
enabled the brand to deliver
increased full priced sales with much
less promotional activity delivering
significantly higher gross margins in
FY21
Peter Alexander Sales
• All Peter Alexander channels
• 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 (Creative
Director: Peter Alexander)
delivered exceptional growth across
both Australia and New Zealand –
online, full priced & outlet stores -
including several outstanding results
from suburban and regional retail
stores
• Peter Alexander’s record sales result
was driven by exceptional
performance across all product
categories
• Womenswear
• Menswear
• Childrenswear
• PA Plus
• Footwear
• Gift & Home Fragrance
m
$
D
U
A
s
e
l
a
S
450
400
350
300
250
200
150
100
50
0
$388
$288
$248
$219
$191
$167
$140
$122
$101
$86
$73
$61
$50
FY09
FY10
FY11
FY12
FY13
FY14
FY15 FY16 FY17 FY18 FY19 FY20 FY21
Premier Investments Limited 7
Internet Performance Premier Retail
• Record online sales of
$300.7 million, up $80.3 million or
36.4% on a previous record FY20
and contributed 20.8% of total
FY21 sales (FY20: 18.1%)
• The Group’s 2013 investment in
a centralised and specifically
customised Australian Distribution
Centre servicing 100% order
fulfilment of 100% of Premier Retail
products in Australia has enabled
the business to be agile and scale up
operations in response to
unprecedented customer demand,
providing the Group with significant
operating leverage
• Plans have progressed to expand the
100% owned Australian Distribution
Centre in calendar 2022 to meet
ongoing demand resulting from the
accelerating industry restructure as
customers increasingly choose to
shop online
• Under the leadership of Georgia
Chewing, major investment
continues in people, technology,
digital marketing and distribution
centres whilst continuing to deliver
a world class platform and
customer experience
• The online channel continues to
deliver significantly higher EBIT
margin than the retail store network
providing significant operating
leverage for future growth
$300.7m
RECORD ONLINE SALES
100%
ORDER FULFILMENT OF ALL
PREMIER RETAIL PRODUCTS
IS IN AUSTRALIA
Full Year Online Sales Growth
20.8%
300.7
18.1%
220.4
11.7%
9.5%
148.2
112.5
20%
15%
10%
5%
0%
6.2%
68.1
4.5%
47.5
3.6%
34.4
1.0%
8.3
1.7%
13.8
2.3%
18.9
2.8%
24.6
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Online Sales ($'M)
Online Sales as % of Total Sales
325
300
275
250
225
200
175
150
125
100
75
50
25
0
8
Annual Report 2021 Smiggle
Strong Global Brand Flourishing Where Children are Back at School
• Smiggle is a powerful global brand
• With children back in the classroom
• This positive response in the
• Despite the ongoing impact of
COVID-19 throughout FY21, the
brand’s true strength was proven,
delivering full year LFL sales growth
up 5.7% in Australia, with all states
recording LFL sales growth,
and up 6.3% in New Zealand
• Smiggle delivered record global
online sales in FY21 of $52.6 million,
up 24.4% on FY20, and contributed
24.7% of total Smiggle FY21 sales
(FY20: 16.5%)
• In countries and markets where
schools have reopened under easing
COVID-19 restrictions, the brand is
flourishing
• In the key ‘back to school’ periods
as children have returned to school,
Smiggle has demonstrated its
unique product competitive
advantage by delivering LFL sales
growth up 39% in Australia, up
27% in New Zealand and up 143%
in Malaysia in FY21
there has been a very strong
response to Smiggle’s product
offering for ‘back to school’
essentials, with sales for the key
‘back to school’ period in 1H22
significantly ahead of expectations.
Retail store LFL growth is up 69% in
the UK and up 64% in the Republic
of Ireland, delivering record ‘back to
school’ sales results at full margin
• In the wholesale channel, for the
key ‘back to school’ period in 1H22,
in the Middle East where children
have returned to school in highly
vaccinated societies, sales have
significantly exceeded expectations
delivering record sales and LFL
growth up 131%. The strong Middle
East performance gives the Group
confidence that the wholesale
channel will flourish in an
environment under easing COVID-19
restrictions
Like for Like sales during the key “back to school” period as children have
returned to school in a normal setting free of COVID-19 restrictions
143%
39%
27%
69%
64%
150%
120%
90%
60%
30%
0%
Australia
New Zealand
Malaysia
UK
Ireland
Wholesale partner Like for Like “back to school” sales
160%
140%
120%
100%
80%
60%
40%
20%
0%
131%
Middle East
Northern Hemisphere gives every
confidence that the business in the
Southern Hemisphere will bounce
back strongly as restrictions ease,
children return to the classroom and
retail and wholesale stores are able
to reopen
• John Cheston, Managing Director
Smiggle, continues to lead a strong
and focused management team
behind a powerful global brand
starting to rebound
Premier Investments Limited 9
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
• 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.
92%
% FEMALE EMPLOYEES
ATTRACTION AND RETENTION
By Christmas 2021, Premier will employ
over 11,000 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.
10
In FY21, 92% of our total team
members are women, who held
74% 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, People & Culture, and five
out of our seven brands, to deliver
exceptional results. We rely on the
passion and commitment of our
employees to achieve the results
we do.
DEVELOPMENT
Premier provides ongoing and regular
training throughout the year to support
and develop all team members.
Upon commencement, all new team
members complete our 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. This year a
suite of online modules were designed
for our leaders to access remotely via
our JUST Learn platform. Zoom
sessions were lead by our People &
Culture Team to support all newly
appointed leaders and all Store
Managers participated in seasonal
sessions lead by the Senior
Leadership Teams.
REWARD AND RECOGNITION
We recognise and reward
outstanding contributions to our
Group results, both individually and
for team performance. Our annual Just
Excellence Awards 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. Using
the ‘Just Play it Safe’ and ‘Safety Eyes’
themes, we want to create a culture
where all employees feel responsible
for all aspects of health and safety.
Workplace safety is considered in all
our business decisions, including
workplace design and development,
supply chain, visual merchandising and
store planning. We have clear and
measurable performance targets.
However, in the event that a work
related injury or illness occurs, we are
also committed to fully supporting
affected employees to return to work
and continuing their career.
We will continue to develop Premier
as a great place to work, and a great
company in which our team build
their careers.
Annual Report 2021 Our Commitment to the Community
Premier has a long history of philanthropic support, particularly
with our Peter Alexander and Smiggle brands.
Peter Alexander
Founder and Creative Director
PETER ALEXANDER
AND THE RSPCA
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 15 years
with the RSPCA in Australia, and for
the last seven years with Paw Justice in
New Zealand. Our work has included
a variety of fundraising activities
which raise awareness for these
animal charities.
Working with the RSPCA, Peter has
raised over $1,250,000 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.
$136,000
RAISED FOR PAW JUSTICE
IN NZ IN THE LAST 7 YEARS
$109,535
DONATED TO
RSPCA IN FY21
PETER ALEXANDER
AND PAW JUSTICE
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 seven years have raised
almost $136,000.
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.
Since we’ve been working
with RSPCA shelters in
Australia and Paw Justice
in New Zealand, Peter has
raised over $1.2 Million
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 gift giving events. In 2020 and 2021,
a range of chocolate bars featuring
Peter Alexander prints were sold over
the Christmas and Easter periods with
100% of all proceeds donated to these
charities. During the year we donated
$109,535 to the RSPCA and $10,981 to
Paw Justice.
Premier Investments Limited 11
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 FY21 Smiggle partnered with Dolly’s
Dream, a sister charity of the Alannah
& Madeline Foundation in Australia.
Dolly’s Dream is an organisation
committed to educating parents and
communities on the issues of bullying
and cyber bullying. Smiggle raised
$8,000 AUD through promoting the
charities ‘digi-pledge’ programme and
selling our partnership keyrings. All
money raised goes towards the
development of bullying prevention
and online safety programs that can be
provided to children, families, schools,
and communities across Australia.
Smiggle also partnered with The Diana
Award in the UK, which is a charity
legacy to Diana, Princess of Wales that
develops and delivers anti-bullying
programmes to schools across the UK.
The Diana Award Anti-Bullying
Programme engages young people,
parents and teachers to change the
attitudes, behaviour and culture of
bullying. Through their school
programmes they help children build
the skills and confidence they need to
address different bullying situations,
both online and offline. Smiggle
sponsored the facilitation of 10 school
workshops valued at £5,000 GBP and
donated over £3,000 GBP worth of
Smiggle product.
12
Smiggle also supported Camp Quality,
an organisation that gives children
facing cancer the chance to be children
again. Camp Quality provides children
and their families with fun experiences,
trusted information, coping tools and a
supportive community; in-hospital,
online, at school and away from it all
on camps and at their retreats. Smiggle
donated $20,000 AUD worth of
Smiggle stationery to be included in
packs provided to children in hospital.
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 $6,000 AUD 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 well-being support.
Annual Report 2021 Our Commitment to the Environment
PACKAGING STEWARDSHIP
WASTE AND RECYCLING
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
2
3
4
5
Having a strategy to
improve packaging
sustainability
Preparing a procedure
that requires the use of
the Sustainable Packaging
Guidelines or equivalent to
evaluate packaging during
design or procurement
Developing a documented
plan to optimise
material efficiency
Investigating opportunities
to increase the use of
recycled and/or renewable
materials in packaging
Investigating opportunities
to improve recoverability
in packaging and amount
of single use
business-to-business
packaging
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.
Partnered with Orora
Upgraded stores and
support offices to
LED lighting
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 stores and support
office to LED lighting. 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.
Premier Investments Limited 13
Our Commitment to Ethical Sourcing
Premier commits to the highest standards of ethical conduct
and responsible product sourcing practices.
We support this commitment by our
models for sourcing products, the
principles that back-up those models,
together with our policies and
assurance program.
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.
Premier published its full Modern
Slavery Statement in March 2021 and it
is available on Premier Investments’
website at premierinvestments.com.au
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, Turkey
and Vietnam.
Source Countries
(The Just Group, Units)
Rest of the
world 16%
China 84%
14
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, which incorporate both
our Code of Conduct and clauses
relating to the Modern Slavery
legislation. In addition suppliers must
sign a Modern Slavery commitment
and we will not do business with
suppliers who do not comply with
these requirements.
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
In each case our model is
supported by the following
strict sourcing principles:
1
2
3
4
5
We comply with all laws in
the countries we source
from and operate
We have zero tolerance
for modern slavery in all
its forms
We insist on workers’ legal
rights – including worker
empowerment and
free association
We have zero tolerance for
bribery and corruption
We have zero tolerance
for animal cruelty
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.
Annual Report 2021 BANGLADESH SOURCING
Background
OUR ACTIVITIES IN
BANGLADESH
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
As of the 31st July 2021 The Just Group
was a member of the Accord on Fire
and Building Safety in Bangladesh (the
Accord). This has since expired and will
be replaced by both a government run
program RSC and the New Accord
jointly signed by International Brands
and unions. The Just Group plans to
join the Brand Association and new
Accord agreement in due course,
once finalised.
The Accord shares 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 operational processes have
included the establishment of our own
office in Bangladesh, which we opened
in March 2014. Our investment in on
the ground infrastructure in
Bangladesh, including employing staff
at our sourcing office directly, supports
our audit and compliance activities in
that market with particular focus on
social compliance and safety
which includes:
1. Senior management personally
inspect ALL factories that
manufacture for us prior to
commencing business. We continue
factory visits throughout our
relationship with our suppliers to
ensure our principles are strictly
adhered to. Our Code includes
the ability for us to make
unannounced visits in Bangladesh for
the purposes of our audit and
compliance activities.
2. Prior to placing orders with any
factory, we also engage
independent, internationally
recognised 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, an
independent audit firm or our own
Just Group quality inspectors,
inspect all audits.
4. In addition, we will not conduct
business with factories that do
not comply with the requirements
of the Accord. All factories have
been disclosed to the Accord
for assessment under its
operational processes.
ETHICAL RAW MATERIAL
PROCUREMENT
Our sourcing commitment is supported
by the following initiatives relating to
fibre procurement:
Cotton
1. On 1 January 2021 Just Jeans
became a member of the Better
Cotton Initiative (BCI) now known
as Better Cotton. Through our
membership we support initiatives
to make global cotton production
better for the people who produce
it, better for the environment it
grows in and better for the
sector’s future.
2. We will not source cotton harvested
in Uzbekistan or Turkmenistan. We
will maintain this position until the
government of Uzbekistan and
Turkmenistan 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 and
Turkmen 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.
Premier has zero
tolerance to modern
slavery in all its forms
Premier Investments Limited 15
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.
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.
Our Business
CODE OF CONDUCT
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
16
Annual Report 2021 Premier Investments Limited
A.C.N. 006 727 966
Financial Report
For the 53 week period
26 July 2020 to 31 July 2021
Premier Investments Limited 1
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
2
35
36
37
38
39
40
90
91
99
Corporate Directory
100
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 31 July 2021.
The Directors present their report together with the consolidated financial report of Premier Investments Limited (the
“Company” or “Premier") and its controlled entities (the “Group”) for the 53-week period 26 July 2020 to 31 July 2021,
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.
2
DIRECTORS’ REPORT
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 31 July 2021.
The Directors present their report together with the consolidated financial report of Premier Investments Limited (the
“Company” or “Premier") and its controlled entities (the “Group”) for the 53-week period 26 July 2020 to 31 July 2021,
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.
2
Premier Investments Limited 2
DIRECTORS’ REPORT
(CONTINUED)
Directors’ Report continued
DIRECTORS’ REPORT
(CONTINUED)
Mark McInnes Executive Director (Resigned as Director: 19 August 2021)
Sally Herman Non-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 $2 billion 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.
global financial crisis.
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 significant shareholder value since he joined the Group.
Premier Retail has delivered record underlying earnings before interest and tax each year over the past ten 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. Mark holds an
MBA from the University of Melbourne.
In December 2012, Mark was appointed as an Executive Director of Premier Investments Limited. In January 2021,
Mark advised the Board of his decision to step down from his role as Premier Retail CEO. Mark resigned as Executive
Director effective 19 August 2021.
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 Breville Group Limited, Chairman of Netwealth Group Limited and is a
Principal of Stratford Advisory Group. Mr. Antonie was also a Non-Executive Director of Village Roadshow Limited
(retired 4 December 2019).
Sylvia Falzon Non-Executive Director
Terrence L. McCartney 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, aged care, e-commerce and retail. 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 Zebit Inc. 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 Regis Healthcare until October 2021, 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.
Ms. Herman is an experienced Non-Executive Director in the fields of financial services, retail, manufacturing and
property. She had a successful executive career spanning 25 years in financial services in both Australia and the US,
transitioning in late 2010 to a full time career as a Non-Executive Director.
Prior to that, she had spent 16 years with the Westpac Group, running major business units in most operating divisions
of the Group as well as heading up Corporate Affairs and Sustainability through the merger with St. George and the
Ms. Herman sits on both listed and not-for-profit Boards, including Suncorp Group Limited, Breville Group Limited, E&P
Financial Group Limited and Irongate Funds Management 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 Australian commercial law firm, Arnold Bloch Leibler. Henry has over 40
years’ experience in providing legal, corporate finance and strategic advice to some of Australia’s leading companies.
Mr. Lanzer was appointed to the Board of Directors in 2008. He is a Non-Executive Director of Just Group Limited,
Thorney Opportunities Limited and previously the TarraWarra Museum of Art and the Burnett Institute. He is also a Life
Governor of the Mount Scopus College Council. In June 2015, Mr. Lanzer 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.
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.
3
3
4
Annual Report 2021
DIRECTORS’ REPORT
(CONTINUED)
Sally Herman Non-Executive Director
Ms. Herman is an experienced Non-Executive Director in the fields of financial services, retail, manufacturing and
property. She had a successful executive career spanning 25 years in financial services in both Australia and the US,
transitioning in late 2010 to a full time career as a Non-Executive Director.
Prior to that, she had spent 16 years with the Westpac Group, running major business units in most operating divisions
of the Group as well as heading up Corporate Affairs and Sustainability through the merger with St. George and the
global financial crisis.
Ms. Herman sits on both listed and not-for-profit Boards, including Suncorp Group Limited, Breville Group Limited, E&P
Financial Group Limited and Irongate Funds Management 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 Australian commercial law firm, Arnold Bloch Leibler. Henry has over 40
years’ experience in providing legal, corporate finance and strategic advice to some of Australia’s leading companies.
Mr. Lanzer was appointed to the Board of Directors in 2008. He is a Non-Executive Director of Just Group Limited,
Thorney Opportunities Limited and previously the TarraWarra Museum of Art and the Burnett Institute. He is also a Life
Governor of the Mount Scopus College Council. In June 2015, Mr. Lanzer 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.
4
Premier Investments Limited 4
DIRECTORS’ REPORT
(CONTINUED)
Directors’ Report continued
COMPANY SECRETARY
Marinda Meyer
Ms. Meyer has over 17 years’ experience as a practising Chartered Accountant in senior finance roles. 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 2021
Dividends paid in the year:
Interim for the half-year ended 25 January 2020 (paid on 30 September 2020)
Final for 2020 (paid on 28 January 2021)
Interim for the half-year ended 30 January 2021 (paid on 29 July 2021)
OPERATING AND FINANCIAL REVIEW
Group Overview:
CENTS
46.00
34.00
36.00
34.00
$’000
73,077
53,966
57,191
54,014
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 53-
week period ended 31 July 2021 (2020: 52 week period ended 25 July 2020) are summarised below:
CONSOLIDATED
53 WEEKS ENDED 31
JULY 2021
$’000
52 WEEKS ENDED 25
JULY 2020
$’000
% CHANGE
Revenue from contracts with customers
1,443,174
1,216,316
+18.7%
Total interest income
Total other income and revenue
Total revenue and other income
1,148
14,337
2,290
30,356
-49.9%
-52.8%
1,458,659
1,248,962
+16.8%
Reported profit before income tax
379,583
195,199
+94.5%
5
5
in the final key trading weeks of July 2021.
DIRECTORS’ REPORT
(CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Retail Segment:
DIRECTORS’ REPORT
(CONTINUED)
highlighted below:
OPERATING AND FINANCIAL REVIEW (CONTINUED)
As Premier’s core business, Just Group (Premier Retail) was the key contributor to the Group’s operating results for
the financial year. Key financial indicators for the retail segment for the 53-week period ended 31 July 2021 are
Retail Segment:
RETAIL SEGMENT
53 WEEKS
52 WEEKS
ENDED 31 JULY
ENDED 25 JULY
2021
2020
As Premier’s core business, Just Group (Premier Retail) was the key contributor to the Group’s operating results for
$’000
$’000
% CHANGE
the financial year. Key financial indicators for the retail segment for the 53-week period ended 31 July 2021 are
highlighted below:
Revenue from contracts with customers
Total segment income
RETAIL SEGMENT
Segment net profit before income tax
1,443,174
1,448,752
53 WEEKS
2021
352,112
$’000
1,216,316
1,230,918
52 WEEKS
2020
165,776
$’000
+18.7%
+17.7%
+112.4%
% CHANGE
ENDED 31 JULY
ENDED 25 JULY
The Retail Segment contributed $352.1 million to the Group’s net profit before income tax for the 53-week period
Revenue from contracts with customers
ended 31 July 2021 (2020: $165.8 million net profit before income tax for the 52-week period ended 25 July 2020). The
1,443,174
1,216,316
+18.7%
Total segment income
results for the 2021 financial year include a 53rd trading week, which contributed $19.1 million in sales, and $7.9 million
1,448,752
1,230,918
+17.7%
to the Retail Segment’s earnings before interest and tax (“EBIT”). Refer to page 9 of the directors’ report for a
reconciliation of Underlying EBIT and reported Premier Retail Profit before Tax.
Segment net profit before income tax
352,112
165,776
+112.4%
The Retail Segment contributed $352.1 million to the Group’s net profit before income tax for the 53-week period
Premier Retail Underlying EBIT History (52-week basis)
ended 31 July 2021 (2020: $165.8 million net profit before income tax for the 52-week period ended 25 July 2020). The
results for the 2021 financial year include a 53rd trading week, which contributed $19.1 million in sales, and $7.9 million
to the Retail Segment’s earnings before interest and tax (“EBIT”). Refer to page 9 of the directors’ report for a
reconciliation of Underlying EBIT and reported Premier Retail Profit before Tax.
Premier Retail Underlying EBIT History (52-week basis)
$344.0
$65.3 $80.4 $83.7 $92.8 $105.7 $126.7 $136.0 $150.1 $167.3 $187.2
$' MILLIONS
$344.0
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY21 and FY16 underlying EBIT represents a comparable 52-week period. Refer to page 9 for a reconciliation between underlying
$50.0
$65.3 $80.4 $83.7 $92.8 $105.7 $126.7 $136.0 $150.1 $167.3 $187.2
EBIT and statutory reported operating profit before taxation for the Retail Segment.
$' MILLIONS
The onset of COVID-19 in early 2020 created an extremely challenging operating environment in the second half of the
FY11
FY12
FY21
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
2020 financial year and has continued to impact the operating environment throughout the 2021 financial year. Since
the onset of COVID-19, the Group’s absolute priority has been, and continues to be, the safety and wellbeing of its
FY21 and FY16 underlying EBIT represents a comparable 52-week period. Refer to page 9 for a reconciliation between underlying
team members and the broader community in which it operates.
EBIT and statutory reported operating profit before taxation for the Retail Segment.
The Retail Segment faced temporary government mandated store closures across its global store network for 52 of the
53 trading weeks during 2021 financial year. All geographic segments in which the Group operates have been affected
The onset of COVID-19 in early 2020 created an extremely challenging operating environment in the second half of the
by these temporary store closures during this financial year. On average, 176 stores were forced into temporary
2020 financial year and has continued to impact the operating environment throughout the 2021 financial year. Since
closures in any given week of the 2021 financial year, adding immense operational complexity across every aspect of
the onset of COVID-19, the Group’s absolute priority has been, and continues to be, the safety and wellbeing of its
the entire business. Furthermore, mandated store closures increased from late June 2021, with over 400 stores closed
team members and the broader community in which it operates.
in the final key trading weeks of July 2021.
The Retail Segment faced temporary government mandated store closures across its global store network for 52 of the
53 trading weeks during 2021 financial year. All geographic segments in which the Group operates have been affected
by these temporary store closures during this financial year. On average, 176 stores were forced into temporary
closures in any given week of the 2021 financial year, adding immense operational complexity across every aspect of
the entire business. Furthermore, mandated store closures increased from late June 2021, with over 400 stores closed
$400.0
$350.0
$300.0
$250.0
$200.0
$400.0
$150.0
$350.0
$100.0
$300.0
$50.0
$250.0
$-
$200.0
$150.0
$100.0
$-
6
6
Annual Report 2021 DIRECTORS’ REPORT
(CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Retail Segment:
(CONTINUED)
(CONTINUED)
As Premier’s core business, Just Group (Premier Retail) was the key contributor to the Group’s operating results for
the financial year. Key financial indicators for the retail segment for the 53-week period ended 31 July 2021 are
OPERATING AND FINANCIAL REVIEW (CONTINUED)
highlighted below:
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Retail Segment:
Retail Segment:
As Premier’s core business, Just Group (Premier Retail) was the key contributor to the Group’s operating results for
As Premier’s core business, Just Group (Premier Retail) was the key contributor to the Group’s operating results for
the financial year. Key financial indicators for the retail segment for the 53-week period ended 31 July 2021 are
the financial year. Key financial indicators for the retail segment for the 53-week period ended 31 July 2021 are
highlighted below:
highlighted below:
53 WEEKS
ENDED 31 JULY
2021
$’000
52 WEEKS
ENDED 25 JULY
2020
$’000
Revenue from contracts with customers
RETAIL SEGMENT
1,443,174
1,216,316
% CHANGE
+18.7%
Total segment income
RETAIL SEGMENT
RETAIL SEGMENT
Segment net profit before income tax
53 WEEKS
1,448,752
ENDED 31 JULY
53 WEEKS
2021
ENDED 31 JULY
$’000
2021
352,112
$’000
52 WEEKS
1,230,918
ENDED 25 JULY
52 WEEKS
2020
ENDED 25 JULY
$’000
2020
165,776
$’000
+17.7%
% CHANGE
% CHANGE
+112.4%
1,443,174
1,443,174
1,448,752
1,448,752
Segment net profit before income tax
Segment net profit before income tax
Revenue from contracts with customers
Revenue from contracts with customers
Total segment income
Total segment income
The Retail Segment contributed $352.1 million to the Group’s net profit before income tax for the 53-week period
ended 31 July 2021 (2020: $165.8 million net profit before income tax for the 52-week period ended 25 July 2020). The
results for the 2021 financial year include a 53rd trading week, which contributed $19.1 million in sales, and $7.9 million
to the Retail Segment’s earnings before interest and tax (“EBIT”). Refer to page 9 of the directors’ report for a
reconciliation of Underlying EBIT and reported Premier Retail Profit before Tax.
The Retail Segment contributed $352.1 million to the Group’s net profit before income tax for the 53-week period
Premier Retail Underlying EBIT History (52-week basis)
The Retail Segment contributed $352.1 million to the Group’s net profit before income tax for the 53-week period
ended 31 July 2021 (2020: $165.8 million net profit before income tax for the 52-week period ended 25 July 2020). The
ended 31 July 2021 (2020: $165.8 million net profit before income tax for the 52-week period ended 25 July 2020). The
results for the 2021 financial year include a 53rd trading week, which contributed $19.1 million in sales, and $7.9 million
results for the 2021 financial year include a 53rd trading week, which contributed $19.1 million in sales, and $7.9 million
to the Retail Segment’s earnings before interest and tax (“EBIT”). Refer to page 9 of the directors’ report for a
to the Retail Segment’s earnings before interest and tax (“EBIT”). Refer to page 9 of the directors’ report for a
reconciliation of Underlying EBIT and reported Premier Retail Profit before Tax.
reconciliation of Underlying EBIT and reported Premier Retail Profit before Tax.
Premier Retail Underlying EBIT History (52-week basis)
1,216,316
1,216,316
1,230,918
1,230,918
+18.7%
+18.7%
+17.7%
+17.7%
+112.4%
+112.4%
352,112
352,112
165,776
165,776
$344.0
$400.0
$350.0
$350.0
$400.0
$300.0
$250.0
$400.0
$200.0
$400.0
$350.0
$150.0
$350.0
$300.0
$100.0
$300.0
$250.0
$50.0
$250.0
$200.0
$200.0
$150.0
$150.0
$100.0
$100.0
$50.0
$50.0
$-
$-
$-
$300.0
$250.0
$200.0
$150.0
$100.0
$50.0
$-
Premier Retail Underlying EBIT History (52-week basis)
Premier Retail Underlying EBIT History (52-week basis)
$344.0
$187.2
$65.3 $80.4 $83.7 $92.8 $105.7 $126.7 $136.0 $150.1 $167.3 $187.2
$136.0
$150.1
$126.7
$167.3
$80.4 $83.7 $92.8
$105.7
$' MILLIONS
$344.0
$344.0
FY13
FY14
FY15
FY16
$65.3 $80.4 $83.7 $92.8 $105.7 $126.7 $136.0 $150.1 $167.3 $187.2
$65.3 $80.4 $83.7 $92.8 $105.7 $126.7 $136.0 $150.1 $167.3 $187.2
FY17
FY18
FY19
FY20
FY21
$65.3
FY12
FY11
FY21 and FY16 underlying EBIT represents a comparable 52-week period. Refer to page 9 for a reconciliation between underlying
FY13
FY12
FY11
FY21
FY20
FY18
FY17
FY16
FY14
FY11
FY11
FY20
FY20
FY12
FY12
FY13
FY13
FY19
FY19
FY18
FY18
FY15
FY15
FY14
FY14
FY21
FY21
FY17
FY17
$' millions
EBIT and statutory reported operating profit before taxation for the Retail Segment.
FY19
$' MILLIONS
FY15
$' MILLIONS
FY16
FY16
The onset of COVID-19 in early 2020 created an extremely challenging operating environment in the second half of the
2020 financial year and has continued to impact the operating environment throughout the 2021 financial year. Since
FY21 and FY16 underlying EBIT represents a comparable 52-week period. Refer to page 9 for a reconciliation between underlying
the onset of COVID-19, the Group’s absolute priority has been, and continues to be, the safety and wellbeing of its
FY21 and FY16 underlying EBIT represents a comparable 52-week period. Refer to page 9 for a reconciliation between underlying
EBIT and statutory reported operating profit before taxation for the Retail Segment.
team members and the broader community in which it operates.
EBIT and statutory reported operating profit before taxation for the Retail Segment.
The Retail Segment faced temporary government mandated store closures across its global store network for 52 of the
The onset of COVID-19 in early 2020 created an extremely challenging operating environment in the second half of the
53 trading weeks during 2021 financial year. All geographic segments in which the Group operates have been affected
The onset of COVID-19 in early 2020 created an extremely challenging operating environment in the second half of the
2020 financial year and has continued to impact the operating environment throughout the 2021 financial year. Since
by these temporary store closures during this financial year. On average, 176 stores were forced into temporary
2020 financial year and has continued to impact the operating environment throughout the 2021 financial year. Since
the onset of COVID-19, the Group’s absolute priority has been, and continues to be, the safety and wellbeing of its
closures in any given week of the 2021 financial year, adding immense operational complexity across every aspect of
the onset of COVID-19, 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.
the entire business. Furthermore, mandated store closures increased from late June 2021, with over 400 stores closed
team members and the broader community in which it operates.
in the final key trading weeks of July 2021.
The Retail Segment faced temporary government mandated store closures across its global store network for 52 of the
The Retail Segment faced temporary government mandated store closures across its global store network for 52 of the
53 trading weeks during 2021 financial year. All geographic segments in which the Group operates have been affected
53 trading weeks during 2021 financial year. All geographic segments in which the Group operates have been affected
by these temporary store closures during this financial year. On average, 176 stores were forced into temporary
by these temporary store closures during this financial year. On average, 176 stores were forced into temporary
closures in any given week of the 2021 financial year, adding immense operational complexity across every aspect of
6
closures in any given week of the 2021 financial year, adding immense operational complexity across every aspect of
the entire business. Furthermore, mandated store closures increased from late June 2021, with over 400 stores closed
the entire business. Furthermore, mandated store closures increased from late June 2021, with over 400 stores closed
in the final key trading weeks of July 2021.
in the final key trading weeks of July 2021.
Premier Investments Limited 6
6
6
DIRECTORS’ REPORT
(CONTINUED)
Directors’ Report continued
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Retail Segment (continued):
Despite these significant challenges, the Retail Segment reported net profit before income tax for the 53-week period
ended 31 July 2021 of $352.1 million – up 112.4% on the previous year (2020: $165.8 million), and delivered revenue
for the year of $1,443.2 million, up 18.7% on the previous year (2020: $1,216.3 million). In addition, the Retail Segment
increased its gross margin to 64.3% (2020: 61.0%). The strong sales and uplift in gross profit, together with operational
excellence and strong cost control has delivered a record EBIT of $351.9 million, up 88.0% on the previous year (2020:
$187.2 million).
The Retail Segment delivered record online sales of $300.7 million for the 53 weeks ended 31 July 2021 – an increase
of 36.4% on the prior year (2020: $220.4 million). The online channel contributed 20.8% of total group sales to
customers for the period ended 31 July 2021 (2020: 18.1%). The Group is pleased to have world class customer facing
websites and it will continue to make major investments in its people, its information technology, digital marketing
capability and distribution centres to maximise the increasing customer preference to shop online.
Peter Alexander delivered record sales to customers for the period ended 31 July 2021 of $388.2 million, up 34.7% on
a record set in the prior year (2020: $288.2 million). The record result was driven across all Peter Alexander product
categories. The Group’s decision to continuously invest in inventory, enabled Peter Alexander to be in-stock during key
gift giving periods during the year – Black Friday/Cyber Monday, Christmas, Easter, Mother’s Day and Father’s Day.
Pleasingly, the Group’s five iconic Apparel Brands (Just Jeans, Jay Jays, Portmans, Dotti and Jacqui-E) delivered a
combined record sales result for the period ended 31 July 2021 of $841.6 million (up 25.3% on the prior year sales of
$671.8 million). The Group’s strategic decisions taken mid-2020 to significantly invest in inventory, which continued
into the second half of 2021, ensured that the Group was in-stock during key trading periods – summer season,
Christmas and January sale periods, April holiday season and winter season. This ensured the Group had a strong
inventory position, delivering strong sales and growth margin growth across the Group.
Since the onset of COVID-19, the Group’s absolute priority has been the safety and wellbeing of its team members
and customers. The Group recognises that the Australian Federal Government’s JobKeeper initiative has been
fundamental to keeping employees and employers connected during COVID-19 – an unprecedented health crisis. On
3 May 2021, the Group announced that it will voluntarily return the $15.6 million net JobKeeper wage subsidy benefit
that it received under the scheme rules during the 2021 financial year, to the Australian Taxation Office. As a result,
the Group recorded no net JobKeeper benefit in its statement of comprehensive income for the period ended 31 July
2021. The Group was not eligible for the second phase of the Australian Government JobKeeper scheme from 28
September 2020 onwards. The Group continued to pay its full and part time Australian team members their contracted
hours whilst these teams were unable to work during various state government mandated temporary store closures
from October 2020 through to July 2021; when the Federal Government made its temporary COVID-19 disaster
payment scheme available directly to impacted team members (refer to note 5 of the financial statements for further
information).
In January 2021, Premier Retail CEO, Mark McInnes, advised Premier of his decision to step down from his role. Mr.
McInnes continued in his role as CEO Premier Retail until 13 August 2021 and commenced gardening leave on 14
August 2021 until the end of his 12-month Notice Period, being 15 January 2022 (refer to the Remuneration Report
included in the Directors’ Report, for further information). In April 2021, Premier announced the appointment of Mr.
Richard Murray as CEO Premier Retail. Mr. Murray commenced with the Group on 6 September 2021.
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
DIRECTORS’ REPORT
(CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Retail Segment (continued):
Revenue from customers per Geographic Segment for the year ended 31 July 2021
Asia
3% Europe
5%
New Zealand
11%
Australia
81%
COVID-19 continued to impact on the Group’s global operations. Smiggle, which also operates throughout Asia and
Europe, was impacted by long periods of school closures and remote learning during the financial year, and families
not feeling safe shopping in-store. A fundamental aspect of Smiggle’s success is children attending school. Pleasingly,
the response to the brand has been strong during key “back-to-school” periods, in countries and regions where schools
have reopened in highly vaccinated societies where there are easing COVID-19 restrictions.
Investment Segment:
The Group’s balance sheet remains strong, primarily due to the significant asset holding of the investment segment. As
at 31 July 2021, the Group continued to reflect its 26.27% (2020: 26.73%) shareholding in Breville Group Limited as an
investment in associate, with an equity accounted value of $271.4 million (2020: $257.4 million). The fair value of the
Group’s interest in Breville Group Limited as determined based on the quoted market price for the shares as at 31 July
2021 was $1,173.5 million (2020: $947.9 million). Dividends received from Breville Group Limited during the year
amounted to $12.2 million (2020: $14.2 million).
During the 2017 financial year, the Group acquired a strategic investment of 10.77% in Myer Holdings Limited. A
further 5% was acquired during the 2021 financial year, taking the total investment to 15.77%. At the end of the 2021
financial year the fair value of this listed equity investment is reflected as $63.5 million (2020: $18.1 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 31 July 2021 of $74.2 million (2020:
$70.8 million).
7
7
8
Annual Report 2021 DIRECTORS’ REPORT
(CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
DIRECTORS’ REPORT
Retail Segment (continued):
(CONTINUED)
Revenue from customers per Geographic Segment for the year ended 31 July 2021
Revenue from customers per Geographic Segment for the year ended 31 July 2021
OPERATING AND FINANCIAL REVIEW (CONTINUED)
5%
Europe
Retail Segment (continued):
Asia
3% Europe
5%
Revenue from customers per Geographic Segment for the year ended 31 July 2021
New Zealand
11%
3%
Asia
11%
New Zealand
New Zealand
11%
Asia
3% Europe
5%
81%
Australia
Australia
81%
Australia
81%
COVID-19 continued to impact on the Group’s global operations. Smiggle, which also operates throughout Asia and
Europe, was impacted by long periods of school closures and remote learning during the financial year, and families
not feeling safe shopping in-store. A fundamental aspect of Smiggle’s success is children attending school. Pleasingly,
the response to the brand has been strong during key “back-to-school” periods, in countries and regions where schools
have reopened in highly vaccinated societies where there are easing COVID-19 restrictions.
COVID-19 continued to impact on the Group’s global operations. Smiggle, which also operates throughout Asia and
Europe, was impacted by long periods of school closures and remote learning during the financial year, and families
Investment Segment:
not feeling safe shopping in-store. A fundamental aspect of Smiggle’s success is children attending school. Pleasingly,
the response to the brand has been strong during key “back-to-school” periods, in countries and regions where schools
The Group’s balance sheet remains strong, primarily due to the significant asset holding of the investment segment. As
have reopened in highly vaccinated societies where there are easing COVID-19 restrictions.
at 31 July 2021, the Group continued to reflect its 26.27% (2020: 26.73%) shareholding in Breville Group Limited as an
investment in associate, with an equity accounted value of $271.4 million (2020: $257.4 million). The fair value of the
Group’s interest in Breville Group Limited as determined based on the quoted market price for the shares as at 31 July
Investment Segment:
2021 was $1,173.5 million (2020: $947.9 million). Dividends received from Breville Group Limited during the year
The Group’s balance sheet remains strong, primarily due to the significant asset holding of the investment segment. As
amounted to $12.2 million (2020: $14.2 million).
at 31 July 2021, the Group continued to reflect its 26.27% (2020: 26.73%) shareholding in Breville Group Limited as an
During the 2017 financial year, the Group acquired a strategic investment of 10.77% in Myer Holdings Limited. A
investment in associate, with an equity accounted value of $271.4 million (2020: $257.4 million). The fair value of the
further 5% was acquired during the 2021 financial year, taking the total investment to 15.77%. At the end of the 2021
Group’s interest in Breville Group Limited as determined based on the quoted market price for the shares as at 31 July
2021 was $1,173.5 million (2020: $947.9 million). Dividends received from Breville Group Limited during the year
financial year the fair value of this listed equity investment is reflected as $63.5 million (2020: $18.1 million).
amounted to $12.2 million (2020: $14.2 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 31 July 2021 of $74.2 million (2020:
During the 2017 financial year, the Group acquired a strategic investment of 10.77% in Myer Holdings Limited. A
further 5% was acquired during the 2021 financial year, taking the total investment to 15.77%. At the end of the 2021
$70.8 million).
financial year the fair value of this listed equity investment is reflected as $63.5 million (2020: $18.1 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 31 July 2021 of $74.2 million (2020:
$70.8 million).
8
Premier Investments Limited 8
8
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DIRECTORS’ REPORT
(CONTINUED)
9
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.
2021
2020
2019
2018
2017
Closing share price at end of financial year
$26.84
$17.57
$16.28
$17.35
$13.35
Basic earnings per share (cents)
Dividend paid per share (cents)
Return on equity (%)
171.15
104.01
86.89
37.01
17.7%
10.2%
67.51
52.97
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7.9%
56.0
8.5%2
Net debt/equity ratio (%)
(24.6%)3
(22.4%)3
(1.7%)
(0.2%)
1 The FY20 approved interim fully franked dividend of 34 cents per share was paid on 30 September 2020 and is therefore
reflected in FY21.
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.
66.8
51.0
7.9%
0.2%
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
31 July 2021.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
The Directors of Premier Investments Limited approved a final dividend in respect of the 2021 financial year. The
total amount of the dividend is $73,077,000 (2020: $57,191,000) which represents a fully franked dividend of 46
cents per share (2020: 36 cents per share). The dividend has not been provided for in the 2021 financial statements.
Subsequent to 31 July 2021, the Group’s retail store network continues to be impacted by various Government
mandated retail store closures related to COVID-19. The Group has had 661 stores temporarily closed across
Australia and New Zealand through the majority of the month of August 2021, noting it has since progressively been
able to reopen over 170 of these stores in the past two weeks. During the temporary store closures, the Group
continues to operate through its online channel.
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 31 July 2021 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.
10
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Annual Report 2021
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.
2021
2020
2019
2018
2017
Closing share price at end of financial year
$26.84
$17.57
$16.28
$17.35
$13.35
Basic earnings per share (cents)
Dividend paid per share (cents)
Return on equity (%)
171.15
104.01
86.89
37.01
17.7%
10.2%
67.51
52.97
66.0
7.9%
56.0
8.5%2
Net debt/equity ratio (%)
(24.6%)3
(22.4%)3
(1.7%)
(0.2%)
1 The FY20 approved interim fully franked dividend of 34 cents per share was paid on 30 September 2020 and is therefore
reflected in FY21.
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.
66.8
51.0
7.9%
0.2%
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
31 July 2021.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
The Directors of Premier Investments Limited approved a final dividend in respect of the 2021 financial year. The
total amount of the dividend is $73,077,000 (2020: $57,191,000) which represents a fully franked dividend of 46
cents per share (2020: 36 cents per share). The dividend has not been provided for in the 2021 financial statements.
Subsequent to 31 July 2021, the Group’s retail store network continues to be impacted by various Government
mandated retail store closures related to COVID-19. The Group has had 661 stores temporarily closed across
Australia and New Zealand through the majority of the month of August 2021, noting it has since progressively been
able to reopen over 170 of these stores in the past two weeks. During the temporary store closures, the Group
continues to operate through its online channel.
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 31 July 2021 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.
10
Premier Investments Limited 10
DIRECTORS’ REPORT
(CONTINUED)
Directors’ 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 673,886 (2020: 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 139,524 shares (2020: 294,579) 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 2021
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 (resigned as director: 19 August 2021)
**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
15
15
15
15
15
15
15
15
15
BOARD MEETINGS
AUDIT AND RISK COMMITTEE
REMUNERATION AND
NOMINATION COMMITTEE
MEETINGS
HELD
NUMBER
ATTENDED
MEETINGS
HELD
NUMBER
ATTENDED
MEETINGS
HELD
NUMBER
ATTENDED
15
9
15
14
14
13
15
15
15
-
-
5
5
5
5
-
-
-
-
1
5
5
5
5
2
3
-
-
-
2
-
-
-
-
2
2
-
-
2
-
-
-
-
2
2
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.
11
11
12
Annual Report 2021
DIRECTORS’ 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 (resigned as director: 19 August 2021)
**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
15
15
15
15
15
15
15
15
15
15
9
15
14
14
13
15
15
15
-
-
5
5
5
5
-
-
-
-
1
5
5
5
5
2
3
-
-
-
2
-
-
-
-
2
2
-
-
2
-
-
-
-
2
2
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 2021
12
Premier Investments Limited 12
DIRECTORS’ REPORT
DIRECTORS’ REPORT
(CONTINUED)
Directors’ Report continued
(CONTINUED)
REMUNERATION REPORT
REMUNERATION REPORT
$400.0
$350.0
$300.0
$250.0
$200.0
$150.0
$100.0
$50.0
$-
Dear Shareholders,
Dear Shareholders,
As Chairman of the Remuneration and Nomination Committee, I am pleased to present Premier Investments’
remuneration report for the 53 weeks ended 31 July 2021. This report outlines, in detail, the remuneration outcomes
As Chairman of the Remuneration and Nomination Committee, I am pleased to present Premier Investments’
and incentive arrangements, related to our performance.
remuneration report for the 53 weeks ended 31 July 2021. This report outlines, in detail, the remuneration outcomes
and incentive arrangements, related to our performance.
It has been a year like no other. The COVID-19 health crisis has continued to present numerous challenges for our
It has been a year like no other. The COVID-19 health crisis has continued to present numerous challenges for our
business, many that required swift and decisive action from our experienced Board and leadership team in an effort
to protect and build on the success of our business, for our teams, shareholders and many other stakeholders, reliant
business, many that required swift and decisive action from our experienced Board and leadership team in an effort
on a robust Premier business. Premier has remained focused on the safety and wellbeing of our global teams and
to protect and build on the success of our business, for our teams, shareholders and many other stakeholders, reliant
on a robust Premier business. Premier has remained focused on the safety and wellbeing of our global teams and
our customers during this health crisis.
our customers during this health crisis.
It is our exceptional and highly experienced business leadership, through their meticulous execution of the Group’s
strategies, and dedication of our entire global team that have delivered a result for this financial year that have
It is our exceptional and highly experienced business leadership, through their meticulous execution of the Group’s
strategies, and dedication of our entire global team that have delivered a result for this financial year that have
surpassed expectations.
surpassed expectations.
For the 2021 financial year, Premier Retail has delivered a record Earnings before Interest and Taxation (“EBIT”) of
$344.0 million (comparable 52 weeks) – a remarkable result amidst a challenging and uncertain macro-economic
For the 2021 financial year, Premier Retail has delivered a record Earnings before Interest and Taxation (“EBIT”) of
$344.0 million (comparable 52 weeks) – a remarkable result amidst a challenging and uncertain macro-economic
backdrop.
backdrop.
Underlying EBIT History1
Underlying EBIT History1
Underlying EBIT History1
$344.0
344.0
344.0
$187.2
$167.3
$80.4 $83.7 $92.8 $105.7
$126.7 $136.0 $150.1
$126.7 $136.0 $150.1
$167.3
$126.7 $136.0
$167.3
$187.2
$150.1
$187.2
$65.3 $80.4 $83.7 $92.8 $105.7
$65.3 $80.4 $83.7 $92.8 $105.7
$65.3
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY11
FY12
FY11
FY13
FY12
FY14
FY13
FY15
FY15
FY17
$'millions
FY16
FY14
$'millions
FY18
FY16
FY19
FY17
FY20
FY18
FY21
FY19
FY20
FY21
$' millions
1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of underlying EBIT. FY20 and FY21 Underlying
EBIT is presented on a pre-AASB 16 basis. FY21 and FY16 Underlying EBIT represent a comparable 52-week period.
1 Refer to page 9 of the Directors’ Report for a definition and reconciliation of underlying EBIT. FY20 and FY21 Underlying
EBIT is presented on a pre-AASB 16 basis. FY21 and FY16 Underlying EBIT represent a comparable 52-week period.
For 52 of the 53 trading weeks during the 2021 financial year, Premier faced temporary store closures across its
For 52 of the 53 trading weeks during the 2021 financial year, Premier faced temporary store closures across its
global store network due to government mandated closures. Over 400 stores were closed in July 2021 - the final key
trading weeks of the reporting period.
global store network due to government mandated closures. Over 400 stores were closed in July 2021 - the final key
trading weeks of the reporting period.
The Directors believe that the exceptional result delivered for this financial year, amidst a very challenging global
The Directors believe that the exceptional 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, led by Premier
Retail CEO, Mark McInnes. This has been a year of great turmoil in the retail market, here in Australia as well as for
background, was a function of the swift response of the Group’s world-class management team, led by Premier
our international operations, which has required the very best executives to deliver the result. Key strategic decisions
Retail CEO, Mark McInnes. 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. Key strategic decisions
to significantly invest in inventory, to be in stock for critical trading periods such as Black Friday, Christmas, Mother’s
Day and across both the summer and winter seasons have set the Group apart from its competitors.
to significantly invest in inventory, to be in stock for critical trading periods such as Black Friday, Christmas, Mother’s
Day and across both the summer and winter seasons have set the Group apart from its competitors.
A skilled and experienced Board, working together with a highly motivated and proven management team, have led
A skilled and experienced Board, working together with a highly motivated and proven management team, have led
to Premier shareholders consistently enjoying some of the best returns of any listed company within the ASX200
over the past decade. Premier continues to encourage, incentivise and develop executives who understand this
to Premier shareholders consistently enjoying some of the best returns of any listed company within the ASX200
complex retail environment and proactively develop business outcomes that build shareholder wealth.
over the past decade. Premier continues to encourage, incentivise and develop executives who understand this
complex retail environment and proactively develop business outcomes that build shareholder wealth.
13
13
13
DIRECTORS’ REPORT
DIRECTORS’ REPORT
(CONTINUED)
(CONTINUED)
REMUNERATION REPORT (CONTINUED)
REMUNERATION REPORT (CONTINUED)
Premier Investments Limited Total Shareholder Return against the ASX200 Index – 2011 to 2021
Premier Investments Limited Total Shareholder Return against the ASX200 Index – 2011 to 2021
PMV:
+540%
PMV:
+540%
ASX200:
+133%
ASX200:
+133%
50.00
50.00
45.00
45.00
40.00
40.00
35.00
35.00
30.00
30.00
25.00
25.00
20.00
20.00
15.00
15.00
10.00
10.00
5.00
5.00
–
Apr-11
–
Apr-11
Apr-12
Apr-12
Apr-13
Apr-13
Apr-14
Apr-14
Apr-16
Apr-16
Apr-17
Apr-17
Apr-18
Apr-18
Apr-19
Apr-19
Apr-20
Apr-20
Apr-21
Apr-21
Apr-15
Apr-15
PMV
PMV
ASX 200
ASX 200
The Board believes that the strong financial returns enjoyed by shareholders stem, in large part, from the strategic
The Board believes that the strong financial returns enjoyed by shareholders stem, in large part, from the strategic
appointment of high calibre key management personnel. The Board is proud of its diverse senior executive team,
appointment of high calibre key management personnel. The Board is proud of its diverse senior executive team,
whom are all very well respected within the retail industry. Female senior leaders are responsible for five of our
whom are all 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.
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.
50%2 of the CEO’s direct reports are female.
Across our over 1,100 stores in Australia, New Zealand, Asia and Europe, the critical support functions within those
Across our over 1,100 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
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 74%2 of management. We will continue to encourage and
female. Female management represents approximately 74%2 of management. We will continue to encourage and
support a business leadership structure that reflects the values of equal opportunity across the Group.
support a business leadership structure that reflects the values of equal opportunity across the Group.
In January 2021, Premier Retail CEO, Mark McInnes advised the Board of his decision to step down from his role.
In January 2021, Premier Retail CEO, Mark McInnes advised the Board of his decision to step down from his role.
Mark’s exceptional leadership over the past 10 years have led to record year on year Premier Retail operational and
Mark’s exceptional leadership over the past 10 years have led to record year on year Premier Retail operational and
financial performance. Premier Retail have thrived during this time, whilst many of our competitors have come and
financial performance. Premier Retail have thrived during this time, whilst many of our competitors have come and
gone. The Board expresses its sincere thanks to Mark for a decade of service to the Group.
gone. The Board expresses its sincere thanks to Mark for a decade of service to the Group.
Following Mark’s resignation, the Board was delighted to advise the market in April 2021 of the appointment of
Following Mark’s resignation, the Board was delighted to advise the market in April 2021 of the appointment of
Richard Murray to the role of Premier Retail CEO. Richard commenced with the Group on 6 September 2021. This
Richard Murray to the role of Premier Retail CEO. Richard commenced with the Group on 6 September 2021. This
represents a new chapter for the Group, as we continue to grow our brands both locally and globally, whilst carefully
represents a new chapter for the Group, as we continue to grow our brands both locally and globally, whilst carefully
managing through the continued effects of COVID-19.
managing through the continued effects of COVID-19.
The Group received a disappointing “first strike” against its Remuneration Report at its 2020 Annual General
The Group received a disappointing “first strike” against its Remuneration Report at its 2020 Annual General
Meeting. The Board is committed to transparent disclosure of Key Management Personnel remuneration, and
Meeting. The Board is committed to transparent disclosure of Key Management Personnel remuneration, and
therefore certain areas of this year’s remuneration report have been expanded on.
therefore certain areas of this year’s remuneration report have been expanded on.
The report summarises our remuneration strategies, the way in which incentives are calculated and the connection
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.
between those strategies and the achievement of positive returns for shareholders.
Terrence McCartney
Terrence McCartney
Chairman, Remuneration and Nomination Committee
Chairman, Remuneration and Nomination Committee
2 As per the Just Group Limited Australian Workplace Gender Equality Agency Report 2020-2021.
2 As per the Just Group Limited Australian Workplace Gender Equality Agency Report 2020-2021.
14
14
Annual Report 2021
DIRECTORS’ REPORT
DIRECTORS’ REPORT
(CONTINUED)
(CONTINUED)
REMUNERATION REPORT (CONTINUED)
REMUNERATION REPORT (CONTINUED)
Premier Investments Limited Total Shareholder Return against the ASX200 Index – 2011 to 2021
Premier Investments Limited Total Shareholder Return against the ASX200 Index – 2011 to 2021
Premier Investments Limited Total Shareholder Return
against the ASX200 Index - 2011 to 2021
PMV:
+540%
PMV:
+540%
+540%
+133%
ASX200:
+133%
ASX200:
+133%
50.00
50.00
50.00
45.00
45.00
45.00
40.00
40.00
40.00
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-13
Apr-11 Dec-11 Aug-12 Apr-13 Dec-13 Aug-14
Apr-13
Apr-14
Apr-14
Apr-12
Apr-12
Apr-15
Apr-15
Apr-15
PMV
PMV
Apr-18
Apr-17
Apr-16
Dec-15 Aug-16 Apr-17 Dec-17
Apr-18
Apr-16
Apr-17
ASX 200
ASX 200
ASX 200
PMV
Apr-19
Aug-18
Apr-19
Apr-19
Apr-20
Dec-19 Aug-20 Apr-21
Apr-20
Apr-21
Apr-21
The Board believes that the strong financial returns enjoyed by shareholders stem, in large part, from the strategic
The Board believes that the strong financial returns enjoyed by shareholders stem, in large part, from the strategic
appointment of high calibre key management personnel. The Board is proud of its diverse senior executive team,
appointment of high calibre key management personnel. The Board is proud of its diverse senior executive team,
whom are all very well respected within the retail industry. Female senior leaders are responsible for five of our
whom are all 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.
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.
50%2 of the CEO’s direct reports are female.
Across our over 1,100 stores in Australia, New Zealand, Asia and Europe, the critical support functions within those
Across our over 1,100 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
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 74%2 of management. We will continue to encourage and
female. Female management represents approximately 74%2 of management. We will continue to encourage and
support a business leadership structure that reflects the values of equal opportunity across the Group.
support a business leadership structure that reflects the values of equal opportunity across the Group.
In January 2021, Premier Retail CEO, Mark McInnes advised the Board of his decision to step down from his role.
In January 2021, Premier Retail CEO, Mark McInnes advised the Board of his decision to step down from his role.
Mark’s exceptional leadership over the past 10 years have led to record year on year Premier Retail operational and
Mark’s exceptional leadership over the past 10 years have led to record year on year Premier Retail operational and
financial performance. Premier Retail have thrived during this time, whilst many of our competitors have come and
financial performance. Premier Retail have thrived during this time, whilst many of our competitors have come and
gone. The Board expresses its sincere thanks to Mark for a decade of service to the Group.
gone. The Board expresses its sincere thanks to Mark for a decade of service to the Group.
Following Mark’s resignation, the Board was delighted to advise the market in April 2021 of the appointment of
Following Mark’s resignation, the Board was delighted to advise the market in April 2021 of the appointment of
Richard Murray to the role of Premier Retail CEO. Richard commenced with the Group on 6 September 2021. This
Richard Murray to the role of Premier Retail CEO. Richard commenced with the Group on 6 September 2021. This
represents a new chapter for the Group, as we continue to grow our brands both locally and globally, whilst carefully
represents a new chapter for the Group, as we continue to grow our brands both locally and globally, whilst carefully
managing through the continued effects of COVID-19.
managing through the continued effects of COVID-19.
The Group received a disappointing “first strike” against its Remuneration Report at its 2020 Annual General
The Group received a disappointing “first strike” against its Remuneration Report at its 2020 Annual General
Meeting. The Board is committed to transparent disclosure of Key Management Personnel remuneration, and
Meeting. The Board is committed to transparent disclosure of Key Management Personnel remuneration, and
therefore certain areas of this year’s remuneration report have been expanded on.
therefore certain areas of this year’s remuneration report have been expanded on.
The report summarises our remuneration strategies, the way in which incentives are calculated and the connection
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.
between those strategies and the achievement of positive returns for shareholders.
Terrence McCartney
Terrence McCartney
Chairman, Remuneration and Nomination Committee
Chairman, Remuneration and Nomination Committee
2 As per the Just Group Limited Australian Workplace Gender Equality Agency Report 2020-2021.
2 As per the Just Group Limited Australian Workplace Gender Equality Agency Report 2020-2021.
Premier Investments Limited 14
14
14
DIRECTORS’ REPORT
(CONTINUED)
Directors’ Report continued
REMUNERATION REPORT (AUDITED)
This remuneration report for the 53 weeks ended 31 July 2021 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:
(iii) Executives
1.
Introduction
2. Remuneration Governance
3. Executive remuneration arrangements:
A. Remuneration principles and strategy
B. Approach to setting remuneration
C. Fixed remuneration objectives
D. Detail of incentive plans
4. Executive remuneration outcomes (including link to performance)
5. Remuneration of outgoing CEO Premier Retail, Mr. McInnes
6. Remuneration framework of incoming CEO Premier Retail, Mr. Murray
7. Executive service agreements
8. Non-Executive Director remuneration arrangements
9. Remuneration of Key Management Personnel
10. Additional disclosures relating to Rights and Shares
11. Additional disclosures relating to transactions and balances with Key Management Personnel
1.
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 53 weeks ended 31 July 2021. Unless otherwise indicated, the
individuals were KMP for the entire financial year.
Group STI pool.
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
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)
1. INTRODUCTION (CONTINUED)
KEY MANAGEMENT PERSONNEL (CONTINUED)
(ii) Executive Director
Mark McInnes
Executive Director and Chief Executive Officer Premier Retail (see note (a))
John Bryce
Chief Financial Officer, Just Group Limited
Marinda Meyer
Company Secretary, Premier Investments Limited
(a) Mr. McInnes resigned on 15 January 2021 and commenced gardening leave on 14 August 2021 until the end
of his 12-month notice period, being 15 January 2022. Mr. McInnes resigned as a Director of Premier
Investments Limited effective 19 August 2021. Refer to Section 5 for further information. Mr. Richard Murray
was appointed as CEO Premier Retail effective 6 September 2021.
There were no other 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 2021 financial year.
15
15
16
Annual Report 2021
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
1. INTRODUCTION (CONTINUED)
KEY MANAGEMENT PERSONNEL (CONTINUED)
(ii) Executive Director
Mark McInnes
Executive Director and Chief Executive Officer Premier Retail (see note (a))
(iii) Executives
John Bryce
Chief Financial Officer, Just Group Limited
Marinda Meyer
Company Secretary, Premier Investments Limited
(a) Mr. McInnes resigned on 15 January 2021 and commenced gardening leave on 14 August 2021 until the end
of his 12-month notice period, being 15 January 2022. Mr. McInnes resigned as a Director of Premier
Investments Limited effective 19 August 2021. Refer to Section 5 for further information. Mr. Richard Murray
was appointed as CEO Premier Retail effective 6 September 2021.
There were no other 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 2021 financial year.
16
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(CONTINUED)
(CONTINUED)
Directors’ Report continued
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS
3. EXECUTIVE REMUNERATION ARRANGEMENTS
3A. Remuneration principles and strategy
3A. Remuneration principles and strategy
The Group’s executive remuneration strategy is designed to attract, motivate and retain high performing individuals,
The Group’s executive remuneration strategy is designed to attract, motivate and retain high performing individuals,
and align the interests of executives with shareholders.
and align the interests of executives with shareholders.
The Group operates mainly in the retail industry, with significant revenues earned in its traditional markets of Australia
The Group operates mainly in the retail industry, with significant revenues earned in its traditional markets of Australia
and New Zealand. The retail industry in these markets has seen marked structural change over recent years, including
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
a prevalence in the use of new and existing technology, an increase in international competitors and significant
changes in general consumer sentiment. Globally, as a result of the COVID-19 health crisis, temporary store closures
changes in general consumer sentiment. Globally, as a result of the COVID-19 health crisis, temporary store closures
and the ongoing government implementation of social distancing in each of the countries and markets the Group
and the ongoing government implementation of social distancing in each of the countries and markets the Group
operates in, customer shopping behaviour continues to change significantly.
operates in, customer shopping behaviour continues to change significantly.
Complementing its strong market position in Australia and New Zealand, the Group continues to operate in
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.
international markets in Asia and Europe. The Group remains committed to growing its existing international presence.
REVENUE FROM CUSTOMERS PER GEOGRAPHIC AREA FY21
REVENUE FROM CUSTOMERS PER GEOGRAPHIC AREA FY21
Revenue from customers per Geographic Area FY21
Europe
Europe
5%
5%
Asia
Asia
3%
3%
5%
Europe
New Zealand
New Zealand
11%
11%
3%
Asia
11%
New Zealand
81%
Australia
Australia
Australia
81%
81%
The market for skilled and experienced executives in the retail industry continues to be increasingly competitive and
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 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.
international pool of talent and access to a diverse range of strategies to respond to industry changes.
Given these structural changes and the Group’s growth focus, the Board believes it is both critical to the future success
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
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
through the provision of competitive remuneration packages, and incentive arrangements which are aligned to growth
and performance. The year-on-year growth in performance and shareholder value over the last 10 years, is a
and performance. The year-on-year growth in performance and shareholder value over the last 10 years, is a
testament to Premier’s remuneration strategy.
testament to Premier’s remuneration strategy.
The Group’s strategic objective is to be recognised as a leader in the retail industry and build long term value for
The Group’s strategic objective is to be recognised as a leader in the retail industry and build long term value for
shareholders.
shareholders.
The Group is committed to ensuring that executive remuneration outcomes are explicitly linked to the overall
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
performance and success of the Group. This section illustrates this link between the Group’s strategic objectives and
its executive remuneration strategies.
its executive remuneration strategies.
17
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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.
18
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REMUNERATION REPORT (AUDITED) (CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3B. Approach to setting remuneration
For the 53 weeks ended 31 July 2021, 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.
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.
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 2021 and 2020
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 represents over 100 companies in the ASX200, which reflects the Group’s
competitors for both capital and talent. The Comparator Peer Group consists of
ASX200 companies, including companies within the consumer discretionary,
consumer staple and information technology sectors.
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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 2021 and 2020
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 represents over 100 companies in the ASX200, which reflects the Group’s
competitors for both capital and talent. The Comparator Peer Group consists of
ASX200 companies, including companies within the consumer discretionary,
consumer staple and information technology sectors.
20
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Directors’ Report continued
REMUNERATION REPORT (AUDITED) (CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3. EXECUTIVE REMUNERATION ARRANGEMENTS (CONTINUED)
3D. Detail of incentive plans (continued)
Long-term incentive (“LTI”) (continued)
What were the
performance measures
for the 2021 and 2020
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 rights issued prior to the 2020 financial year was as
follows:
3D. Detail of incentive plans (continued)
Long-term incentive (“LTI”) (continued)
vest?
When does the LTI
No new performance rights have been granted in the 2021 financial year.
Target
Conversion ratio of rights to shares
available to vest under the TSR
performance condition
Below 50th percentile
50th percentile
Between 50th and 62.5th percentile
62.5th percentile
Between 62.5th and 75th percentile
75th percentile and above
0%
25%
Pro Rata
50%
Pro Rata
100%
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
0%
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 10 of this report, titled “Additional disclosures relating to rights and shares”,
provides details of performance rights granted, vested, exercised and lapsed during
the year.
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
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?
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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?
No new performance rights have been granted in the 2021 financial year.
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.
22
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(CONTINUED)
(CONTINUED)
Directors’ Report continued
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE)
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE)
Group performance and its link to STI
Group performance and its link to STI
STI payment outcomes are primarily driven by Premier Retail’s underlying EBIT growth. The following chart shows
STI payment outcomes are primarily driven by Premier Retail’s underlying EBIT growth. The following chart shows
Premier Retail’s underlying EBIT for the past ten years.
Premier Retail’s underlying EBIT for the past ten years.
Premier Retail Underlying EBIT (52-week basis)
Premier Retail Underlying EBIT (52-week basis)
Premier Retail Underlying EBIT (52-week basis)
$344.0
$344.0
$344.0
$187.2
$187.2
$187.2
$105.7 $126.7
$105.7 $126.7
$80.4 $83.7 $92.8 $105.7
$92.8
$92.8
$80.4 $83.7
$80.4 $83.7
$65.3
$65.3
$65.3
$167.3
$167.3
$150.1
$167.3
$136.0 $150.1
$136.0 $150.1
$126.7 $136.0
$400.0
$350.0
$300.0
$250.0
$200.0
$150.0
$100.0
$50.0
$-
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
$' millions
Note: The term underlying EBIT is not an IFRS defined term. Please refer to page 9 for a reconciliation between underlying EBIT and
Note: The term underlying EBIT is not an IFRS defined term. Please refer to page 9 for a reconciliation between underlying EBIT and
statutory reported operating profit before tax for the Retail Segment. FY21 and FY16 Underlying EBIT represent a comparable 52-
statutory reported operating profit before tax for the Retail Segment. FY21 and FY16 Underlying EBIT represent a comparable 52-
week period.
week period.
Performance compared to STI payments made during the financial years ended 31 July 2021 and 25 July 2020
Performance compared to STI payments made during the financial years ended 31 July 2021 and 25 July 2020
Mr Bryce received a discretionary bonus payment during the 2021 financial year amounting to $225,000. During the
Mr Bryce received a discretionary bonus payment during the 2021 financial year amounting to $225,000. During the
2020 financial year, an amount of $215,851 was paid to Mr Bryce and combined both an STI payment and
2020 financial year, an amount of $215,851 was paid to Mr Bryce and combined both an STI payment and
discretionary bonus payment. The STI payment was in line with hurdles and qualifiers relating to his 2019 financial
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.
year STI plan. This included the achievement of Premier Retail underlying EBIT.
Group performance and its link to LTI
Group performance and its link to LTI
The performance measure which drives LTI vesting is dependent on an absolute test, being a positive Premier TSR
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
performance and a relative test, being a comparison against the Comparison Peer Group (as defined in section 3D of
this report).
this report).
The table below illustrates the outcomes of the TSR testing performed during the 2020 and 2021 financial years in
The table below illustrates the outcomes of the TSR testing performed during the 2020 and 2021 financial years in
relation to KMP:
relation to KMP:
Testing Period
Testing Period
Share price
Share price
at start of
at start of
testing
testing
period
period
Share price
Share price
at end of
at end of
testing
testing
period
period
Dividends
Dividends
paid
paid
TSR
TSR
percentage
percentage
TSR
TSR
percentile
percentile
Number of
Number of
Performance
Performance
Rights
Rights
tested for
tested for
KMP
KMP
4 Apr 2014 to 4 Apr 2020
4 Apr 2014 to 4 Apr 2020
$9.95
$9.95
$11.55
$11.55
1 Oct 2017 to 30 Sept 2020
1 Oct 2017 to 30 Sept 2020
$13.01
$13.01
$20.56
$20.56
$3.24 fully
$3.24 fully
franked
franked
$1.93 fully
$1.93 fully
franked
franked
54.73%
54.73%
68.0
68.0
250,000*
250,000*
75.38%
75.38%
88.2
88.2
8,713
8,713
* Relates to Mr. McInnes, refer to section 5 of this report.
* Relates to Mr. McInnes, refer to section 5 of this report.
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DIRECTORS’ REPORT
(CONTINUED)
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE) (CONTINUED)
4. EXECUTIVE REMUNERATION OUTCOMES (INCLUDING LINK TO PERFORMANCE) (CONTINUED)
The below chart shows the Premier TSR against the S&P/ASX200 Index, from April 2011 to 31 July 2021:
The below chart shows the Premier TSR against the S&P/ASX200 Index, from April 2011 to 31 July 2021:
Premier Investments Limited TSR against the
Premier Investments Limited TSR against the
ASX200 Index from April 2011 to 31 July 2021
ASX200 Index from April 2011 to 31 July 2021
Premier Investments Limited TSR against the
ASX200 Index from April 2011 to 31 July 2021
+540%
+540%
+540%
+133%
+133%
+133%
Apr-11 Dec-11 Aug-12 Apr-13 Dec-13 Aug-14
Apr-15
Dec-15 Aug-16 Apr-17 Dec-17
Aug-18
Apr-19
Dec-19 Aug-20 Apr-21
50.00
50.00
45.00
45.00
50.00
40.00
40.00
45.00
35.00
35.00
30.00
30.00
40.00
35.00
30.00
25.00
25.00
25.00
20.00
20.00
15.00
15.00
20.00
15.00
10.00
10.00
10.00
5.00
5.00
5.00
-
–
–
PMV
Apr-11Dec-11Aug-12Apr-13Dec-13Aug-14Apr-15Dec-15Aug-16Apr-17Dec-17Aug-18Apr-19Dec-19Aug-20Apr-21
Apr-11Dec-11Aug-12Apr-13Dec-13Aug-14Apr-15Dec-15Aug-16Apr-17Dec-17Aug-18Apr-19Dec-19Aug-20Apr-21
ASX 200
PMV
PMV
ASX 200
ASX 200
5. REMUNERATION OF OUTGOING CEO PREMIER RETAIL, MR. MCINNES
5. REMUNERATION OF OUTGOING CEO PREMIER RETAIL, MR. MCINNES
Mr. McInnes’ fixed remuneration
Mr. McInnes’ fixed remuneration
Mr. McInnes’ annual fixed remuneration for each of the 2020 and 2021 financial years was $2,750,000.
Mr. McInnes’ annual fixed remuneration for each of the 2020 and 2021 financial years was $2,750,000.
Mr. McInnes’ notice period
Mr. McInnes’ notice period
Upon cessation of his employment, Mr. McInnes is entitled to 12 months’ notice (“Notice Period”) if he resigns or is
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
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”).
entitlement at law to summarily dismiss (“Terminated Without Cause”).
During the Notice Period, Premier may direct Mr. McInnes to continue in his role, perform no duties, reduced duties or
During the Notice Period, Premier may direct Mr. McInnes to continue in his role, perform no duties, reduced duties or
alternative duties during the Notice Period, or elect to provide Mr. McInnes with payment in lieu of the Notice Period.
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
The maximum amount of any payment in lieu of the Notice Period based on Mr. McInnes’ current fixed remuneration
for a 12-month period is $2,750,000 gross, less applicable tax.
for a 12-month period is $2,750,000 gross, less applicable tax.
Mr. McInnes provided notice of his resignation on 15 January 2021. Mr. McInnes remained CEO Premier Retail for the
Mr. McInnes provided notice of his resignation on 15 January 2021. Mr. McInnes remained CEO Premier Retail for the
full financial year ended 31 July 2021, and commenced gardening leave on 14 August 2021 until the end of his Notice
full financial year ended 31 July 2021, and commenced gardening leave on 14 August 2021 until the end of his Notice
Period, being 15 January 2022.
Period, being 15 January 2022.
24
24
Premier Investments Limited 24
DIRECTORS’ REPORT
(CONTINUED)
Directors’ Report continued
REMUNERATION REPORT (AUDITED) (CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
5. REMUNERATION OF OUTGOING CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
5. REMUNERATION OF OUTGOING CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
Mr. McInnes’ STI arrangements
Mr. McInnes’ LTI arrangements (continued)
Mr. McInnes is entitled to receive a STI if the applicable performance targets and conditions set out below are met.
Calculation of Mr. McInnes’ STI is based on growth of Premier Retail EBIT, as compared to the previous financial year
(“Base Year”). The relevant performance targets and corresponding STI payment amounts are as follows:
The performance rights granted vested in four equal tranches subject to the achievement of both an absolute and
relative TSR test. No value was received by Mr. McInnes if the performance rights lapsed prior to the vesting date.
Each tranche of performance rights has been tested against the TSR performance measure over different testing
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. The Chairman has not used such
discretion during the 2020 or 2021 financial years.
As Mr. McInnes has resigned from his employment, he remains entitled to continue participating in the STI scheme
until the end of the Notice Period in accordance with the above table (on a pro rata basis for the 2022 financial year as
the Notice Period ends part way through the year).
Mr. McInnes’ STI entitlements for the financial years ended 31 July 2021 and 25 July 2020
For the 2021 financial year, Mr. McInnes was entitled to an STI payment of $2,750,000 which primarily reflected the
significant growth achieved in Premier Retail’s EBIT for the 2021 financial year. This STI payment was paid on 27
September 2021 and has been reflected as part of Mr. McInnes’ remuneration for the 2021 financial year in section 9.
For the 2020 financial year, Mr. McInnes was entitled to an STI payment of $2,750,000 which primarily reflected the
significant growth achieved in Premier Retail’s EBIT for the 2020 financial year. This STI payment was paid during the
2021 financial year, however, has been reflected as part of Mr. McInnes’ remuneration for the 2020 financial year in
section 9.
The historical growth in Premier Retail’s underlying EBIT is detailed in the graph in section 4 of this report.
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 were
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.
Mr. McInnes’ final tranche of performance rights vested during the 2020 financial year. McInnes had no active
performance rights arrangements during the 2021 financial year.
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
•
•
•
•
(each date being a “Vesting Date”).
Tranche D – 4 April 2014 to 4 April 2020 (Final tranche tested in FY20, see 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
0%
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 lapsed if the applicable performance hurdles are not met (unless otherwise
determined by the Board in its absolute discretion).
Shares issued as a result of vesting of performance rights issued to Mr McInnes for the financial years ended
31 July 2021 and 25 July 2020
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 Premier’s TSR resulting from the COVID-19 pandemic.
25
25
26
Annual Report 2021 DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
5. REMUNERATION OF OUTGOING CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
Mr. McInnes’ LTI arrangements (continued)
The performance rights granted vested in four equal tranches subject to the achievement of both an absolute and
relative TSR test. No value was received by Mr. McInnes if the performance rights lapsed 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
Tranche D – 4 April 2014 to 4 April 2020 (Final tranche tested in FY20, see 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:
0%
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 lapsed if the applicable performance hurdles are not met (unless otherwise
determined by the Board in its absolute discretion).
Shares issued as a result of vesting of performance rights issued to Mr McInnes for the financial years ended
31 July 2021 and 25 July 2020
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 Premier’s TSR resulting from the COVID-19 pandemic.
26
Premier Investments Limited 26
DIRECTORS’ REPORT
(CONTINUED)
Directors’ Report continued
REMUNERATION REPORT (AUDITED) (CONTINUED)
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
5. REMUNERATION OF OUTGOING CEO PREMIER RETAIL, MR. MCINNES (CONTINUED)
6. REMUNERATION FRAMEWORK OF INCOMING CEO PREMIER RETAIL, MR. MURRAY
Shares issued as a result of vesting of performance rights issued to Mr McInnes for the financial years ended
31 July 2021 and 25 July 2020 (continued)
On 28 April 2021, Premier announced the appointment of Mr. Richard Murray as incoming CEO Premier Retail,
commencing 6 September 2021. The material terms of Mr. Murray’s employment contract were provided to the ASX on
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.
Mr. McInnes had no performance rights plans in place during the 2021 financial year, therefore no performance rights
were tested for vesting during the year ended 31 July 2021. No shares were issued to Mr. McInnes during the 2021
financial year.
Mr. McInnes’ post-employment restrictions
If Mr. McInnes’ employment ends, Premier may elect to restrict Mr. McInnes from certain conduct in competition with
Premier for a period of either 12 months or 24 months from the end of the Notice Period (“Post-employment
Restrictions”).
If Premier elects to enforce the Post-employment Restrictions, it is required to provide Mr. McInnes with his total fixed
remuneration during the relevant period (up to a maximum period of 24 months).
Following Mr. McInnes’ resignation on 15 January 2021, Premier elected to implement the Post-employment
Restrictions for a 12-month period, ending on 15 January 2023. As a result, Mr. McInnes will receive a total of
$2,750,000 gross, less applicable tax.
Premier remains entitled to implement the Post-employment Restrictions for a further 12-month period ending 15
January 2024 (therefore a maximum 24-month period). If Premier elects to enforce the Post-employment Restrictions
for maximum of 24 months, Mr. McInnes would receive a total of $5,500,000 gross, less applicable tax.
The payments outlined above may be considered a termination benefit within the meaning of Part 2D.2 of the Act.
Termination benefits
The STI 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.
28 April 2021, and are summarised below:
Contract Term
No fixed term, ongoing until terminated by either party in accordance with the employment
contract.
Fixed Remuneration
$2,000,000 per annum (subject to annual review).
Sign-on Retention
Subject to shareholder approval and other threshold conditions, the Company will grant
Mr. Murray 200,000 performance rights as a once off sign-on retention. The performance
rights will be tested, and if applicable, will vest in four equal tranches as follows:
•
•
•
•
Tranche 1: 50,000 performance rights, tested 1 year after Commencement
Tranche 2: 50,000 performance rights, tested 2 years after Commencement
Tranche 3: 50,000 performance rights, tested 3 years after Commencement
Tranche 4: 50,000 performance rights, tested 4 years after Commencement
Vesting of each tranche of performance rights is subject to Mr. Murray being actively
employed on the relevant vesting date of the respective tranche. If vested, each
performance right is an entitlement to a fully paid ordinary share of the Company
(Performance Shares).
The Retention performance rights is subject to the terms and conditions of the Company’s
Performance Rights Plan Rules (Rules). In accordance with the Rules, disposal of
Performance Shares is subject to restrictions whereby Board approval is required to sell
shares granted within 7 years.
Short-term Incentive
The Company will provide Mr. Murray with an FY22 STI opportunity equivalent to
between 37.5% and 75% of his fixed remuneration (pro-rata), subject to achievement of
performance hurdles and other conditions to be determined.
Long-term Incentive
Subject to shareholder approval and other threshold conditions, on Commencement the
Company will grant Mr. Murray 600,000 performance rights. The performance rights will
be tested, and if applicable, will vest in four equal tranches as follows:
(STI)
(LTI)
•
•
•
•
Tranche 1: 150,000 performance rights, tested on 1 October 2024
Tranche 2: 150,000 performance rights, tested on 1 October 2025
Tranche 3: 150,000 performance rights, tested on 1 October 2026
Tranche 4: 150,000 performance rights, tested on 1 October 2027
Vesting of each tranche of performance rights is subject to Mr. Murray being actively
employed on the relevant vesting date of the respective tranche and a two-stage
performance test – an absolute and relative test based on the Company’s total
shareholder return, with performance measures which are in line with Premier’s current
LTI plan. If vested, each performance right is an entitlement to a fully paid ordinary share
of the Company.
The Performance Rights are subject to the terms and conditions of the Company’s Rules.
In accordance with the Rules, disposal of Performance Shares is subject to restrictions
whereby Board approval is required to sell shares granted within 7 years. Mr. Murray will
not be entitled to any additional performance rights for the first four years of employment.
Notice Period
Either party may terminate the employment by providing 12 months’ notice.
Post-employment
Mr. Murray is subject to post-employment non-solicit and non-compete restraints for a
restraint
maximum of two years commencing from the end of his employment. The Company may
elect to pay Mr. Murray his base salary during some or all of this period.
27
27
28
Annual Report 2021 DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
6. REMUNERATION FRAMEWORK OF INCOMING CEO PREMIER RETAIL, MR. MURRAY
On 28 April 2021, Premier announced the appointment of Mr. Richard Murray as incoming CEO Premier Retail,
commencing 6 September 2021. The material terms of Mr. Murray’s employment contract were provided to the ASX on
28 April 2021, and are summarised below:
Contract Term
No fixed term, ongoing until terminated by either party in accordance with the employment
contract.
Fixed Remuneration
$2,000,000 per annum (subject to annual review).
Sign-on Retention
Subject to shareholder approval and other threshold conditions, the Company will grant
Mr. Murray 200,000 performance rights as a once off sign-on retention. The performance
rights will be tested, and if applicable, will vest in four equal tranches as follows:
•
•
•
•
Tranche 1: 50,000 performance rights, tested 1 year after Commencement
Tranche 2: 50,000 performance rights, tested 2 years after Commencement
Tranche 3: 50,000 performance rights, tested 3 years after Commencement
Tranche 4: 50,000 performance rights, tested 4 years after Commencement
Vesting of each tranche of performance rights is subject to Mr. Murray being actively
employed on the relevant vesting date of the respective tranche. If vested, each
performance right is an entitlement to a fully paid ordinary share of the Company
(Performance Shares).
The Retention performance rights is subject to the terms and conditions of the Company’s
Performance Rights Plan Rules (Rules). In accordance with the Rules, disposal of
Performance Shares is subject to restrictions whereby Board approval is required to sell
shares granted within 7 years.
Short-term Incentive
(STI)
The Company will provide Mr. Murray with an FY22 STI opportunity equivalent to
between 37.5% and 75% of his fixed remuneration (pro-rata), subject to achievement of
performance hurdles and other conditions to be determined.
Long-term Incentive
(LTI)
Subject to shareholder approval and other threshold conditions, on Commencement the
Company will grant Mr. Murray 600,000 performance rights. The performance rights will
be tested, and if applicable, will vest in four equal tranches as follows:
•
•
•
•
Tranche 1: 150,000 performance rights, tested on 1 October 2024
Tranche 2: 150,000 performance rights, tested on 1 October 2025
Tranche 3: 150,000 performance rights, tested on 1 October 2026
Tranche 4: 150,000 performance rights, tested on 1 October 2027
Vesting of each tranche of performance rights is subject to Mr. Murray being actively
employed on the relevant vesting date of the respective tranche and a two-stage
performance test – an absolute and relative test based on the Company’s total
shareholder return, with performance measures which are in line with Premier’s current
LTI plan. If vested, each performance right is an entitlement to a fully paid ordinary share
of the Company.
The Performance Rights are subject to the terms and conditions of the Company’s Rules.
In accordance with the Rules, disposal of Performance Shares is subject to restrictions
whereby Board approval is required to sell shares granted within 7 years. Mr. Murray will
not be entitled to any additional performance rights for the first four years of employment.
Notice Period
Either party may terminate the employment by providing 12 months’ notice.
Post-employment
restraint
Mr. Murray is subject to post-employment non-solicit and non-compete restraints for a
maximum of two years commencing from the end of his employment. The Company may
elect to pay Mr. Murray his base salary during some or all of this period.
28
Premier Investments Limited 28
DIRECTORS’ REPORT
(CONTINUED)
Directors’ Report continued
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. 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
Mr. Bryce
13 Dec
2016
Open
Annual
12 months
Termination benefits
Notice
period
required
from
employee
12 months
fixed rem.
including
notice
12 months
Premier
initiated
12 months
fixed rem.
including
notice
12 months
fixed rem.
including
notice
Ms. Meyer
4 Feb 2019 Open
Annual
12 months
Nil
12 months
8. NON-EXECUTIVE DIRECTOR REMUNERATION ARRANGEMENTS
Determination of fees and maximum aggregate Non-Executive Director Remuneration
The Board seeks to set Non-Executive Director fees at a level which provides the Group with the ability to attract and
retain Non-Executive Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
The Group’s constitution and the ASX listing rules specify that the Non-Executive Director maximum aggregate
remuneration shall be determined from time to time by a general meeting. The most recent determination of this kind
was at the 2016 Annual General Meeting held on 2 December 2016 when shareholders approved an aggregate
remuneration of an amount not exceeding $1,500,000 per year.
The Chairman of the Group, consistent with his past practice, has declined to accept any remuneration for his role as a
director or for his role on any committees.
Fee policy
Non-Executive Director’s fees consist of base fees and committee fees. The payment of committee fees recognises
the additional time commitment required by Non-Executive Directors who serve on Board committees.
Non-Executive Directors may be reimbursed for expenses reasonably incurred in attending to the Group’s affairs. Non-
Executive Directors do not participate in any incentive programs. Premier has not established any schemes for
retirement benefits for Non-Executive Directors (other than superannuation).
29
29
Annual Report 2021 %
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(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
1
3
10. ADDITIONAL DISCLOSURES RELATING TO RIGHTS AND SHARES OF KMP
a) Rights awarded, vested and lapsed during the year:
Rights vested and
lapsed during
2021
Rights
vested
Rights
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No.
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Remuneration
consisting of
rights for the year
%
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11.14%
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-
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The table below discloses the number of performance rights granted to KMP as remuneration for the financial
year ended 31 July 2021, as well as the number of rights vested and lapsed during the year:
Terms and conditions
Grant
Rights granted
Grant date Fair value per
Expiry and
year
during the year
right at grant
Exercise
No.
date
$
date
2021
Mr. M. McInnes
Mr. J.S. Bryce
-
2018
-
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-
19-Feb-18
-
-
-
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-
8,713
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b) Value of rights awarded, exercised and lapsed during the year:
Value of rights granted
Value of rights
Value of rights
during the year
exercised during
lapsed during the
2021
$
the year
$
year
$
Mr. M. McInnes
Mr. J.S. Bryce
-
-
-
189,682
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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:
2021
Mr. J.S. Bryce
Shares issued
Paid per share
Unpaid per share
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2021
Balance at
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31 July 2021
exercisable
At 31 July 2021
Mr. M. McInnes
Mr. J.S. Bryce
-
40,449
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(8,713)
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31,736
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Rights granted to key management personnel were made in accordance with the provisions of the Group’s
Performance Rights Plan.
32
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31
Annual Report 2021
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
10. 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 31 July 2021, 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
$
Expiry and
Exercise
date
2021
Rights vested and
lapsed during
2021
Rights
vested
Rights
lapsed
No.
No.
Mr. M. McInnes
Mr. J.S. Bryce
-
2018
-
-
-
19-Feb-18
-
-
-
-
-
8,713
-
-
b) Value of rights awarded, exercised and lapsed during the year:
Value of rights granted
during the year
2021
$
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
-
-
-
189,682
-
-
-
11.14%
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:
2021
Mr. J.S. Bryce
Shares issued
No
Paid per share
$
Unpaid per share
$
8,713
-
-
There were no alterations to the terms and conditions of rights awarded as remuneration since their award date.
d) Rights holdings of KMP:
2021
Balance at
25 July
2020
Granted as
remuneration
Rights
exercised
Rights
lapsed
Balance at
31 July 2021
Rights not
exercisable
At 31 July 2021
Mr. M. McInnes
Mr. J.S. Bryce
-
40,449
-
-
-
(8,713)
-
-
-
31,736
-
31,736
Rights granted to key management personnel were made in accordance with the provisions of the Group’s
Performance Rights Plan.
Premier Investments Limited 32
32
DIRECTORS’ REPORT
Directors’ Report continued
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
10. ADDITIONAL DISCLOSURES RELATING TO RIGHTS AND SHARES OF KMP (CONTINUED)
e) Number of Ordinary Shares held in Premier Investments Limited by KMP:
2021
NON-EXECUTIVE DIRECTORS
Balance at
25 July 2020
Shares acquired
under performance
rights plan
Balance at
31 July 2021
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
4,437,699
5,001
-
-
11,500
27,665
-
28,186
982,100
-
-
5,492,151
-
-
-
-
-
-
-
-
-
8,713
-
8,713
4,437,699
5,001
-
-
11,500
27,665
-
28,186
982,100
8,713
-
5,500,864
* 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 (2020: 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.
f) 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 $2,809,669 (2020: $2,396,209), including
Mr. Lanzer's Director fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the Group, with
$544,387 (2020: $713,866) 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 $42,158
(2020: $223,293) including GST was paid to Loch Awe Pty Ltd, with $177,852 outstanding rent payments at
year-end (2020: nil). The payments were at arm’s length and on normal commercial terms.
Mr. Lew is a director of Voyager Distributing Company Pty Ltd. During the year, purchases totalling
$22,990,422 (2020: $17,273,036) including GST have been made by Group companies from Voyager
Distributing Co. Pty Ltd, with $9,843,740 (2020: $4,058,067) 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 administrative 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 $561,000 (2020: $512,600) costs including GST incurred by Century Plaza
Trading Pty Ltd.
33
33
DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
10. ADDITIONAL DISCLOSURES RELATING TO TRANSACTIONS AND BALANCES WITH KMP
f) Details and terms and conditions of other transactions and balances with KMP and their related parties
(continued)
Amounts recognised in the financial report at the reporting date in relation to other transactions:
i)
Amounts included within Assets and Liabilities
Current Liabilities
Trade and other payables
ii)
Amounts included within Profit or Loss
Expenses
Purchases/ Cost of goods sold
Lease rental expense
Legal fees
Other expenses
Total expenses
2021
$’000
10,566
10,566
2021
$’000
21,161
200
2,554
561
24,476
34
Annual Report 2021 DIRECTORS’ REPORT
(CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
10. ADDITIONAL DISCLOSURES RELATING TO TRANSACTIONS AND BALANCES WITH KMP
f) Details and terms and conditions of other transactions and balances with KMP and their related parties
(continued)
Amounts recognised in the financial report at the reporting date in relation to other transactions:
i)
Amounts included within Assets and Liabilities
Current Liabilities
Trade and other payables
ii)
Amounts included within Profit or Loss
Expenses
Purchases/ Cost of goods sold
Lease rental expense
Legal fees
Other expenses
Total expenses
2021
$’000
10,566
10,566
2021
$’000
21,161
200
2,554
561
24,476
Premier Investments Limited 34
34
Auditor’s Independence Declaration
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
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Independent auditor’s report to the Members of Premier Investments
Limited
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Report on the audit of the financial report
Opinion
We have audited the financial report of Premier Investments Limited (the Company) and its
Auditor’s Independence Declaration to the Directors of Premier
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
Investments Limited
as at 31 July 2021, 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.
As lead auditor for the audit of the financial report of Premier Investments Limited for the financial
period ended 31 July 2021, I declare to the best of my knowledge and belief, there have been:
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
and of its consolidated financial performance for the year ended on that date; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
This declaration is in respect of Premier Investments Limited and the entities it controlled during the
financial period.
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
Ernst & Young
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (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 judgment, were of most significance in
Glenn Carmody
our audit of the financial report of the current year. These matters were addressed in the context of
Partner
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
1 October 2021
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
35
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
STATEMENT OF COMPREHENSIVE INCOME
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020
CONSOLIDATED
NOTES
2021
$’000
2020
$’000
1,443,174
1,422
1,444,596
14,063
1,458,659
(515,271)
(334,818)
7,544
(178,258)
(18,510)
(11,574)
(52,086)
23,897
379,583
(107,743)
271,840
12,568
802
(3,782)
(3,772)
5,816
28,820
(8,646)
Revenue from contracts with customers
Other revenue
Total revenue
Other income
Total revenue and other income
Changes in inventories
Employee expenses
Lease rental benefits (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 income (loss)
Items that may be reclassified subsequently to profit or loss
Net gain (loss) on cash flow hedges
Foreign currency translation
Net movement in other comprehensive loss of associates
Income tax on items of other comprehensive income (loss)
Other comprehensive income (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 gain (loss) on listed equity investment
Income tax on items of other comprehensive income (loss)
Other comprehensive income (loss) 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)
4
4
4
5
5
5
5
20
6
24
24
24
6
24
6
7
7
The accompanying notes form an integral part of this Statement of Comprehensive Income.
(1,102,973)
(1,071,459)
20,174
(20,124)
297,830
109,151
171.15
170.39
86.89
86.56
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
36
Annual Report 2021 STATEMENT OF COMPREHENSIVE INCOME
Statement of Comprehensive Income
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020
CONSOLIDATED
NOTES
2021
$’000
2020
$’000
Revenue from contracts with customers
Other revenue
Total revenue
Other income
Total revenue and other income
Changes in inventories
Employee expenses
Lease rental benefits (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 income (loss)
Items that may be reclassified subsequently to profit or loss
Net gain (loss) on cash flow hedges
Foreign currency translation
Net movement in other comprehensive loss of associates
Income tax on items of other comprehensive income (loss)
Other comprehensive income (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 gain (loss) on listed equity investment
Income tax on items of other comprehensive income (loss)
Other comprehensive income (loss) 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)
4
4
4
5
5
5
5
20
6
24
24
24
6
24
6
7
7
1,443,174
1,422
1,444,596
14,063
1,458,659
(515,271)
(334,818)
7,544
(178,258)
(18,510)
(11,574)
(52,086)
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)
(1,102,973)
(1,071,459)
23,897
379,583
(107,743)
271,840
12,568
802
(3,782)
(3,772)
5,816
28,820
(8,646)
17,696
195,199
(57,446)
137,753
(9,886)
(868)
(688)
2,964
(8,478)
(28,747)
8,623
20,174
(20,124)
297,830
109,151
171.15
170.39
86.89
86.56
The accompanying notes form an integral part of this Statement of Comprehensive Income.
Premier Investments Limited 36
36
STATEMENT OF FINANCIAL POSITION
Statement of Financial Position
STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2021 AND 25 JULY 2020
AS AT 31 JULY 2021 AND 25 JULY 2020
As at 31 July 2021 and 25 July 2020
STATEMENT OF CASH FLOWS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020
NOTES
NOTES
CONSOLIDATED
CONSOLIDATED
2021
2021
$’000
$’000
2020
2020
$’000
$’000
CONSOLIDATED
NOTES
2021
$’000
2020
$’000
ASSETS
ASSETS
Current assets
Current assets
Cash and cash equivalents
Cash and cash equivalents
Trade and other receivables
Trade and other receivables
Inventories
Inventories
Other financial instruments
Other financial instruments
Other current assets
Other current assets
Total current assets
Total current assets
Non-current assets
Non-current assets
Property, plant and equipment
Property, plant and equipment
Right-of-use assets
Right-of-use assets
Intangible assets
Intangible assets
Deferred tax assets
Deferred tax assets
Listed equity investment at fair value
Listed equity investment at fair value
Investment in associate
Investment in associate
Total non-current assets
Total non-current assets
TOTAL ASSETS
TOTAL ASSETS
LIABILITIES
LIABILITIES
Current liabilities
Current liabilities
Trade and other payables
Trade and other payables
Income tax payable
Income tax payable
Interest-bearing liabilities
Interest-bearing liabilities
Lease liabilities
Lease liabilities
Provisions
Provisions
Other financial instruments
Other financial instruments
Other current liabilities
Other current liabilities
Total current liabilities
Total current liabilities
Non-current liabilities
Non-current liabilities
Interest-bearing liabilities
Interest-bearing liabilities
Deferred tax liabilities
Deferred tax liabilities
Lease liabilities
Lease liabilities
Provisions
Provisions
Other financial instruments
Other financial instruments
Other non-current liabilities
Other non-current liabilities
Total non-current liabilities
Total non-current liabilities
TOTAL LIABILITIES
TOTAL LIABILITIES
NET ASSETS
NET ASSETS
EQUITY
EQUITY
Contributed equity
Contributed equity
Reserves
Reserves
Retained earnings
Retained earnings
TOTAL EQUITY
TOTAL EQUITY
21
21
9
9
10
10
25
25
11
11
17
17
12
12
18
18
6
6
19
19
20
20
13
13
22
22
14
14
15
15
25
25
16
16
22
22
6
6
14
14
15
15
25
25
16
16
23
23
24
24
523,356
523,356
9,490
9,490
208,760
208,760
7,073
7,073
10,326
10,326
759,005
759,005
137,798
137,798
167,087
167,087
827,004
827,004
55,494
55,494
63,462
63,462
271,372
271,372
1,522,217
1,522,217
2,281,222
2,281,222
164,269
164,269
58,218
58,218
69,000
69,000
159,050
159,050
45,610
45,610
815
815
15,120
15,120
512,082
512,082
77,834
77,834
68,319
68,319
78,435
78,435
11,421
11,421
-
-
226
226
236,235
236,235
748,317
748,317
1,532,905
1,532,905
608,615
608,615
(10,001)
(10,001)
934,291
934,291
1,532,905
1,532,905
The accompanying notes form an integral part of this Statement of Financial Position.
The accompanying notes form an integral part of this Statement of Financial Position.
37
448,832
448,832
30,320
30,320
156,590
156,590
-
-
10,531
10,531
646,273
646,273
155,134
155,134
231,790
231,790
826,888
826,888
66,924
66,924
18,132
18,132
257,391
257,391
1,556,259
1,556,259
2,202,532
2,202,532
208,979
208,979
66,172
66,172
-
-
189,221
189,221
38,297
38,297
4,008
4,008
8,588
8,588
515,265
515,265
146,659
146,659
65,427
65,427
114,668
114,668
10,603
10,603
2,316
2,316
146
146
339,819
339,819
855,084
855,084
1,347,448
1,347,448
608,615
608,615
(37,847)
(37,847)
776,680
776,680
1,347,448
1,347,448
37
37
NET CASH FLOWS FROM OPERATING ACTIVITIES
21(b)
383,520
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 (USED IN) FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividends paid
Payment of lease liabilities
Proceeds from borrowings
Repayment of borrowings
1,620,975
(1,115,786)
1,313
(4,632)
(6,676)
(111,674)
12,227
(116)
(16,510)
(2,917)
(7,316)
(165,171)
(137,180)
-
-
448,832
671
523,356
NET CASH FLOWS USED IN FINANCING ACTIVITIES
(302,351)
NET INCREASE IN CASH HELD
73,853
259,634
Cash at the beginning of the financial year
Net foreign exchange difference
CASH AT THE END OF THE FINANCIAL YEAR
21(a)
The accompanying notes form an integral part of this Statement of Cash Flows.
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)
190,255
(1,057)
448,832
38
Annual Report 2021 STATEMENT OF CASH FLOWS
Statement of Cash Flows
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020
CONSOLIDATED
NOTES
2021
$’000
2020
$’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
1,620,975
(1,115,786)
1,313
(4,632)
(6,676)
(111,674)
NET CASH FLOWS FROM OPERATING ACTIVITIES
21(b)
383,520
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 (USED IN) FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividends paid
Payment of lease liabilities
Proceeds from borrowings
Repayment of borrowings
12,227
(116)
(16,510)
(2,917)
(7,316)
(165,171)
(137,180)
-
-
NET CASH FLOWS USED IN FINANCING ACTIVITIES
(302,351)
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)
NET INCREASE IN CASH HELD
73,853
259,634
Cash at the beginning of the financial year
Net foreign exchange difference
CASH AT THE END OF THE FINANCIAL YEAR
21(a)
448,832
671
523,356
190,255
(1,057)
448,832
The accompanying notes form an integral part of this Statement of Cash Flows.
Premier Investments Limited 38
38
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020
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
53 weeks ended 31 July 2021. The financial report was authorised for issue by the Directors on 1 October 2021.
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 53 weeks from 26 July 2020 to 31 July 2021.
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 of 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).
39
40
Annual Report 2021
Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020
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
53 weeks ended 31 July 2021. The financial report was authorised for issue by the Directors on 1 October 2021.
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 53 weeks from 26 July 2020 to 31 July 2021.
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 of 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 40
40
Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)
(c) BASIS OF CONSOLIDATION
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, 26 July 2020 to 31 July 2021, represents 53 weeks and the comparative
reporting period is from 28 July 2019 to 25 July 2020 which 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.
The Group’s operations continued to be impacted during the 2021 financial year 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 2021
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 a
level 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 this global health crisis.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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.
dollars.
(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
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.
-
-
-
-
-
-
41
42
41
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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.
Premier Investments Limited 42
42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)
(j) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
Changes in accounting policies, disclosures, standards and interpretations (continued)
Where costs incurred to configure or customise do not result in the recognition of an intangible software
asset, then those costs that provide the Group with a distinct service (in addition to the SaaS access) are
recognised as expenses when the supplier provides the services. When such costs incurred do not provide
a distinct service, the costs are recognised as expenses over the duration of the SaaS contract.
This change in accounting policy in relation to configuration and customisation costs incurred in
implementing SaaS arrangements has not had a material impact on the Group.
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 31 July 2021. The Group does not anticipate
that the below amended standards and interpretations will have a material impact on the Group:
- Amendments to AASB 101: Classification of Liabilities as Current or Non-current;
- Reference to the Conceptual Framework – Amendments to AASB 3;
- Property, Plant and Equipment: Proceeds before Intended Use – Amendments to AASB 116; and
- Onerous Contracts – Costs of Fulfilling a Contract – Amendments to AASB 137
Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)
(i) GOODS AND SERVICES TAX (GST), INCLUDING OTHER VALUE-ADDED TAXES (continued)
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. These new and
amended Accounting Standards did not have a material impact on the consolidated financial report of the
Group.
Amendments to AASB 3: Definition of a Business
The amendment to AASB 3 Business Combinations clarifies that to be considered a business, an
integrated set of activities and assets must include, at a minimum, an input and a substantive process that,
together, significantly contribute to the ability to create output. Furthermore, it clarifies that a business can
exist without including all of the inputs and processes needed to create outputs.
Amendments to AASB 7, AASB 9 and AASB 139 Interest Rate Benchmark Reform
The amendments to AASB 9 and AASB 139 Financial Instruments: Recognition and Measurement provide
a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate
benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainty about the
timing and/or amount of benchmark-based cash flows of the hedged item or the hedging instrument.
Amendments to AASB 101 and AASB 108 Definition of Material
The amendments provide a new definition of material that states, “information is material if omitting,
misstating or obscuring it could reasonably be expected to influence decisions that the primary users of
general purpose financial statements make on the basis of those financial statements, which provide
financial information about a specific reporting entity.” The amendments clarify that materiality will depend
on the nature or magnitude of information, either individually or in combination with other information, in
the context of the financial statements. A misstatement of information is material if it could reasonably be
expected to influence decisions made by the primary users.
IFRIC agenda decision – Configuration or Customisation Costs in a Cloud Computing Arrangement
In April 2021, the IFRS Interpretations Committee (IFRIC) published an agenda decision for configuration
and customisation costs incurred related to a Software as a Service (SaaS) arrangement. SaaS
arrangements are arrangements in which the Group does not currently control the underlying software
used in the arrangement.
Where costs incurred to configure or customise SaaS arrangements result in the creation of a resource
which is identifiable, and where the Group has the power to obtain the future economic benefits flowing
from the underlying resource and to restrict the access of others to those benefits, such costs are
recognised as a separate intangible software asset and amortised over the useful life of the software on a
straight-line basis. The amortisation is reviewed at least at the end of each reporting period and any
changes are treated as changes in accounting estimates.
43
43
44
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
2 OTHER SIGNIFICANT GROUP ACCOUNTING POLICIES (CONTINUED)
(j) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
Changes in accounting policies, disclosures, standards and interpretations (continued)
Where costs incurred to configure or customise do not result in the recognition of an intangible software
asset, then those costs that provide the Group with a distinct service (in addition to the SaaS access) are
recognised as expenses when the supplier provides the services. When such costs incurred do not provide
a distinct service, the costs are recognised as expenses over the duration of the SaaS contract.
This change in accounting policy in relation to configuration and customisation costs incurred in
implementing SaaS arrangements has not had a material impact on the Group.
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 31 July 2021. The Group does not anticipate
that the below amended standards and interpretations will have a material impact on the Group:
- Amendments to AASB 101: Classification of Liabilities as Current or Non-current;
- Reference to the Conceptual Framework – Amendments to AASB 3;
- Property, Plant and Equipment: Proceeds before Intended Use – Amendments to AASB 116; and
- Onerous Contracts – Costs of Fulfilling a Contract – Amendments to AASB 137
Premier Investments Limited 44
44
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
GROUP PERFORMANCE
3 OPERATING SEGMENTS
Identification of operating segments
The Group determines and presents operating segments based on the information that is internally
provided and used by the chief operating decision maker in assessing the performance of the Group and
in determining the allocation of resources.
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. The operating segments are identified by management based on the
nature of the business conducted, and for which discrete financial information is available and reported to
the chief operating decision maker on at least a monthly basis.
Segment results that are reported to the chief operating decision maker include items directly attributable
to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise
mainly of corporate assets, head office expenses and income tax assets and liabilities.
Reportable Segments
Retail
The retail segment represents the financial performance of a number of speciality retail fashion chains.
Investment
The investment segment represents investments in securities for both long and short term gains, dividend
income and interest.
Accounting policies
The key accounting policies used by the Group in reporting segments internally are the same as those
contained in these financial statements.
Income tax expense
Income tax expense is calculated based on the segment operating net profit using the Group’s effective
income tax rate.
It is the Group’s policy that if items of revenue and expense are not allocated to operating segments then
any associated assets and liabilities are also not allocated to the segments. This is to avoid asymmetrical
allocations within segments which management believe would be inconsistent.
Segment capital expenditure
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and
equipment, and intangible assets other than goodwill.
The table on the following page presents revenue and profit information for operating segments for the
periods ended 31 July 2021 and 25 July 2020.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
GROUP PERFORMANCE
3 OPERATING SEGMENTS (CONTINUED)
(A) OPERATING SEGMENTS
RETAIL
INVESTMENT
ELIMINATION
CONSOLIDATED
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
REVENUE AND OTHER INCOME
Revenue from contracts
Interest revenue
Other revenue
Other income
Total revenue and other
with customers
1,443,174 1,216,316
-
-
- 1,443,174 1,216,316
392
240
159
147
756
2,131
1,148
2,290
165,034
53,027
(165,000)
(53,000)
274
174
4,946
14,296
9,117
15,886
14,063
30,182
income
1,448,752 1,230,918
174,907
71,044
(165,000)
(53,000) 1,458,659 1,248,962
Total revenue per the statement of comprehensive income
1,458,659 1,248,962
RESULTS
Depreciation and
amortisation
Impairment – property,
plant and equipment
Depreciation – right-of-
Impairment – right-of-
use asset
Interest expense
Share of profit of
associate
Profit before income
tax expense
Income tax expense
use asset
155,552
175,932
(3,251)
(3,251)
152,301
172,681
24,452
42,337
1,505
1,368
25,957
43,705
31,254
2,420
-
-
-
-
-
-
-
-
-
8,757
14,057
2,931
2,879
(114)
(220)
11,574
16,716
-
23,897
17,696
-
23,897
17,696
352,112
165,776
192,497
82,343
(165,026)
(52,920)
379,583
195,199
-
-
31,254
2,420
Net profit after tax per the statement of comprehensive income
(107,743)
(57,446)
271,840
137,753
-
-
-
-
-
-
-
-
-
-
-
-
RETAIL
INVESTMENT
ELIMINATION
CONSOLIDATED
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
ASSETS AND LIABILITIES
Segment assets
1,006,557
970,254
1,420,029 1,381,509
(145,364)
(149,231) 2,281,222 2,202,532
Segment liabilities
622,906
733,215
187,845
242,195
(62,434)
(120,326)
748,317
855,084
Capital expenditure
8,579
19,024
-
-
-
-
8,579
19,024
45
45
46
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
GROUP PERFORMANCE
3 OPERATING SEGMENTS (CONTINUED)
(A) OPERATING SEGMENTS
RETAIL
INVESTMENT
ELIMINATION
CONSOLIDATED
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
REVENUE AND OTHER INCOME
Revenue from contracts
with customers
1,443,174 1,216,316
-
-
Interest revenue
Other revenue
Other income
Total revenue and other
income
392
240
159
147
756
2,131
165,034
53,027
(165,000)
(53,000)
274
174
-
-
- 1,443,174 1,216,316
-
1,148
2,290
4,946
14,296
9,117
15,886
-
-
14,063
30,182
1,448,752 1,230,918
174,907
71,044
(165,000)
(53,000) 1,458,659 1,248,962
Total revenue per the statement of comprehensive income
1,458,659 1,248,962
RESULTS
Depreciation and
amortisation
Impairment – property,
plant and equipment
Depreciation – right-of-
Impairment – right-of-
use asset
Interest expense
Share of profit of
associate
Profit before income
tax expense
Income tax expense
use asset
155,552
175,932
24,452
42,337
1,505
1,368
-
31,254
-
2,420
-
-
-
-
25,957
43,705
-
31,254
(3,251)
(3,251)
152,301
172,681
-
-
-
2,420
-
-
-
-
-
-
8,757
14,057
2,931
2,879
(114)
(220)
11,574
16,716
-
-
23,897
17,696
-
-
23,897
17,696
352,112
165,776
192,497
82,343
(165,026)
(52,920)
379,583
195,199
Net profit after tax per the statement of comprehensive income
(107,743)
(57,446)
271,840
137,753
RETAIL
INVESTMENT
ELIMINATION
CONSOLIDATED
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
ASSETS AND LIABILITIES
Segment assets
1,006,557
970,254
1,420,029 1,381,509
(145,364)
(149,231) 2,281,222 2,202,532
Segment liabilities
622,906
733,215
187,845
242,195
(62,434)
(120,326)
748,317
855,084
Capital expenditure
8,579
19,024
-
-
-
-
8,579
19,024
Premier Investments Limited 46
46
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
GROUP PERFORMANCE
3 OPERATING SEGMENTS (CONTINUED)
(B) GEOGRAPHIC AREAS OF OPERATION
AUSTRALIA NEW ZEALAND
ASIA
EUROPE
ELIMINATION CONSOLIDATED
REVENUE
2021
$’000
2021
$’000
2021
$’000
2021
$’000
2021
$’000
2021
$’000
REVENUE AND OTHER INCOME
Revenue from contracts
with customers
1,171,833
160,179
34,152
77,010
-
1,443,174
Other revenue and income
18,170
3
3,962
4,622
(11,272)
15,485
Total revenue and other
income
1,190,003
160,182
38,114
81,632
(11,272)
1,458,659
Segment non-current assets
1,403,407
30,990
13,483
34,512
39,815
1,522,217
Capital expenditure
7,594
878
25
82
-
8,579
AUSTRALIA NEW ZEALAND
ASIA
EUROPE
ELIMINATION CONSOLIDATED
2020
$’000
2020
$’000
2020
$’000
2020
$’000
2020
$’000
2020
$’000
REVENUE AND OTHER INCOME
Revenue from contracts
with customers
929,747
126,507
Other revenue and income
49,250
6
Total revenue and other
61,709
14,594
98,353
-
1,216,316
296
(31,500)
32,646
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
31
-
19,024
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
Revenue from contracts with customers
1,443,174
1,216,316
(Disaggregated revenue from contracts with customers is
presented in note 3B, Operating Segments)
GROUP PERFORMANCE
4 REVENUE AND OTHER INCOME
OTHER REVENUE
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 share issue
United Kingdom COVID-19 lockdown grants
Other
TOTAL OTHER INCOME
TOTAL REVENUE AND OTHER INCOME
REVENUE RECOGNITION ACCOUNTING POLICY
CONSOLIDATED
2021
$’000
2020
$’000
1,444,596
1,218,780
274
1,148
1,422
-
9,117
4,622
324
14,063
1,458,659
174
2,290
2,464
13,207
15,886
-
1,089
30,182
1,248,962
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 recognises revenue when the customer
redeems the gift card, and the Group fulfils its performance obligation. The Group also recognises revenue on the
portion of unredeemed gift cards for which redemption is unlikely, known as gift card breakage. 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.
47
48
47
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
GROUP PERFORMANCE
4 REVENUE AND OTHER INCOME
REVENUE
CONSOLIDATED
2021
$’000
2020
$’000
Revenue from contracts with customers
1,443,174
1,216,316
(Disaggregated revenue from contracts with customers is
presented in note 3B, Operating Segments)
OTHER REVENUE
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 share issue
United Kingdom COVID-19 lockdown grants
Other
TOTAL OTHER INCOME
TOTAL REVENUE AND OTHER INCOME
REVENUE RECOGNITION ACCOUNTING POLICY
274
1,148
1,422
174
2,290
2,464
1,444,596
1,218,780
-
9,117
4,622
324
14,063
1,458,659
13,207
15,886
-
1,089
30,182
1,248,962
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 recognises revenue when the customer
redeems the gift card, and the Group fulfils its performance obligation. The Group also recognises revenue on the
portion of unredeemed gift cards for which redemption is unlikely, known as gift card breakage. 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 Limited 48
48
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
GROUP PERFORMANCE
GROUP PERFORMANCE
GROUP PERFORMANCE
5 EXPENSES (CONTINUED)
CONSOLIDATED
CONSOLIDATED
EMPLOYEE EXPENSES (CONTINUED)
NOTES
NOTES
2021
2021
$’000
$’000
2020
2020
$’000
$’000
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
5 EXPENSES
5 EXPENSES
LEASE RENTAL (BENEFITS) EXPENSES
LEASE RENTAL (BENEFITS) EXPENSES
Variable lease expenses
Variable lease expenses
Other lease expenses
Other lease expenses
COVID-19 related rent concessions
COVID-19 related rent concessions
Other Australia and New Zealand holdover rent concessions
Other Australia and New Zealand holdover rent concessions
Other
Other
NET LEASE RENTAL EXPENSES
NET LEASE RENTAL EXPENSES
DEPRECIATION, AMORTISATION AND IMPAIRMENT OF
DEPRECIATION, AMORTISATION AND IMPAIRMENT OF
NON-CURRENT ASSETS
NON-CURRENT ASSETS
Depreciation of property, plant and equipment
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Depreciation of right-of-use assets
Impairment of right-of-use assets
Impairment of right-of-use assets
Impairment of property, plant and equipment
Impairment of property, plant and equipment
Amortisation of leasehold premiums
Amortisation of leasehold premiums
TOTAL DEPRECIATION, AMORTISATION AND
TOTAL DEPRECIATION, AMORTISATION AND
IMPAIRMENT OF NON-CURRENT ASSETS
IMPAIRMENT OF NON-CURRENT ASSETS
17
17
12
12
12
12
17
17
18
18
FINANCE COSTS
FINANCE COSTS
Interest on lease liabilities
Interest on lease liabilities
Interest on bank loans and overdraft
Interest on bank loans and overdraft
TOTAL FINANCE COSTS
TOTAL FINANCE COSTS
OTHER EXPENSES INCLUDE:
OTHER EXPENSES INCLUDE:
7,501
7,501
15,986
15,986
(19,521)
(19,521)
(9,960)
(9,960)
(1,550)
(1,550)
(7,544)
(7,544)
25,957
25,957
152,301
152,301
-
-
-
-
-
-
4,135
4,135
28,410
28,410
(15,013)
(15,013)
-
-
-
-
17,532
17,532
43,682
43,682
172,681
172,681
2,420
2,420
31,254
31,254
23
23
178,258
178,258
250,060
250,060
6,676
6,676
4,898
4,898
11,574
11,574
11,080
11,080
5,636
5,636
16,716
16,716
Net loss on disposal of property, plant and equipment
Net loss on disposal of property, plant and equipment
5
5
982
982
EMPLOYEE EXPENSES
EMPLOYEE EXPENSES
Premier recognises that the Australian Federal Government’s JobKeeper initiative was fundamental to keeping
Premier recognises that the Australian Federal Government’s JobKeeper initiative was fundamental to keeping
employees and employers connected during the once in a century health crisis. On 3 May 2021, the Group
employees and employers connected during the once in a century health crisis. On 3 May 2021, the Group
announced that it will voluntarily return the $15.6 million FY21 net JobKeeper wage subsidy benefit that it received
announced that it will voluntarily return the $15.6 million FY21 net JobKeeper wage subsidy benefit that it received
under the scheme rules, to the Australian Taxation Office. As a result, the Group recorded no net JobKeeper benefit
under the scheme rules, to the Australian Taxation Office. As a result, the Group recorded no net JobKeeper benefit
in its FY21 statement of comprehensive income. The Group was not eligible for the second phase of the Australian
in its FY21 statement of comprehensive income. The Group was not eligible for the second phase of the Australian
Government JobKeeper scheme from 28 September 2020 onwards. The Group continued to pay its full and part
Government JobKeeper scheme from 28 September 2020 onwards. The Group continued to pay its full and part
time Australian team members their contracted hours whilst these teams were unable to work during various state
time Australian team members their contracted hours whilst these teams were unable to work during various state
government mandated temporary store closures from October 2020 through to July 2021, when the Federal
government mandated temporary store closures from October 2020 through to July 2021, when the Federal
Government made available its temporary COVID disaster payment scheme directly to impacted team members.
Government made available its temporary COVID disaster payment scheme directly to impacted team members.
For the 52 weeks ended 25 July 2020, the financial impact of COVID-19 was most severe for the period March 2020
For the 52 weeks ended 25 July 2020, the financial impact of COVID-19 was most severe for the period March 2020
to May 2020, when global sales were down approximately $131.1 million on the prior comparable period, with retail
to May 2020, when global sales were down approximately $131.1 million on the prior comparable period, with retail
store sales down 78.4%. As a result of this devastating impact on the Group’s FY20 global sales, the Group
store sales down 78.4%. As a result of this devastating impact on the Group’s FY20 global sales, the Group
became eligible for $68.7 million of global wage subsidies across seven countries.
became eligible for $68.7 million of global wage subsidies across seven countries.
49
49
49
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. The
Government wage subsidies have been recorded as a reduction in employee expenses in the statement of
comprehensive income.
CONSOLIDATED
2021
$’000
2020
$’000
106,275
475
68,047
(479)
6
INCOME TAX
The major components of income tax expense are:
(a)
INCOME TAX RECOGNISED IN PROFIT OR LOSS
CURRENT INCOME TAX
Current income tax charge
DEFERRED INCOME TAX
Adjustment in respect of current income tax of previous years
Relating to origination and reversal of temporary differences
993
(10,122)
INCOME TAX EXPENSE REPORTED IN THE STATEMENT
OF COMPREHENSIVE INCOME
107,743
57,446
(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
3,772
(2,964)
Net deferred income tax on unrealised gain (loss) on listed
equity investment at fair value
INCOME TAX EXPENSE (BENEFIT) REPORTED IN EQUITY
8,646
12,418
(8,623)
(11,587)
(c) RECONCILIATION BETWEEN TAX EXPENSE AND THE
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% (2020: 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
379,583
195,199
113,875
475
697
(1,345)
-
(5,791)
(168)
107,743
58,560
(479)
544
2,203
693
(4,175)
100
57,446
50
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
GROUP PERFORMANCE
5 EXPENSES (CONTINUED)
EMPLOYEE EXPENSES (CONTINUED)
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. The
Government wage subsidies have been recorded as a reduction in employee expenses in the statement of
comprehensive income.
6
INCOME TAX
The major components of income tax expense are:
(a)
INCOME TAX RECOGNISED IN PROFIT OR LOSS
CURRENT INCOME TAX
Current income tax charge
Adjustment in respect of current income tax of previous years
DEFERRED INCOME TAX
CONSOLIDATED
2021
$’000
2020
$’000
106,275
475
68,047
(479)
Relating to origination and reversal of temporary differences
993
(10,122)
INCOME TAX EXPENSE REPORTED IN THE STATEMENT
OF COMPREHENSIVE INCOME
107,743
57,446
(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
3,772
(2,964)
Net deferred income tax on unrealised gain (loss) on listed
equity investment at fair value
INCOME TAX EXPENSE (BENEFIT) REPORTED IN EQUITY
8,646
12,418
(8,623)
(11,587)
(c) RECONCILIATION BETWEEN TAX EXPENSE AND THE
ACCOUNTING PROFIT BEFORE TAX MULTIPLIED BY THE
GROUP’S APPLICABLE AUSTRALIAN INCOME TAX RATE
Accounting profit before income tax
379,583
195,199
At the Parent Entity’s statutory income tax rate of
30% (2020: 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
113,875
475
697
(1,345)
-
(5,791)
(168)
107,743
58,560
(479)
544
2,203
693
(4,175)
100
57,446
Premier Investments Limited 50
50
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
GROUP PERFORMANCE
CONSOLIDATED
2021
$’000
2020
$’000
6
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
Employee provisions
Other receivables and prepayments
Property, plant and equipment
Impairment of store plant and equipment
Other provisions
Other
192
(42,516)
(1,877)
1,748
8,153
9,400
-
3,546
-
2,769
5,760
NET DEFERRED TAX (LIABILITIES) ASSETS
(12,825)
REFLECTED IN THE STATEMENT OF FINANCIAL
POSITION AS FOLLOWS:
Deferred tax assets
Deferred tax liabilities
NET DEFERRED TAX (LIABILITIES) ASSETS
INCOME TAX ACCOUNTING POLICY
55,494
(68,319)
(12,825)
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
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 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
GROUP PERFORMANCE
6
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.
51
51
52
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
GROUP PERFORMANCE
6
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 Limited 52
52
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
GROUP PERFORMANCE
6
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
2021
$’000
2020
$’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
271,840
137,753
Weighted average number of ordinary shares used in
calculating:
- basic earnings per share
- diluted earnings per share
NUMBER OF
SHARES
‘000
NUMBER OF
SHARES
‘000
158,829
159,538
158,540
159,134
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 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
GROUP PERFORMANCE
8 A) DIVIDENDS
DIVIDENDS APPROVED AND/ OR PAID
Approved during the year:
Interim franked dividends:
2021 Approved and paid: 34 cents per share
2020 Approved: 34 cents per share (i)
Approved and paid during the year:
Final franked dividends for 2020:
36 cents per share (2019: 37 cents)
TOTAL FOR THE YEAR
CONSOLIDATED
2021
$’000
2020
$’000
54,014
-
-
53,966
57,191
111,205
58,636
112,602
CONSOLIDATED
2021
$’000
2020
$’000
231,271
196,701
56,181
59,205
(31,319)
256,133
(47,639)
208,267
(i) The 2020 interim dividend was paid on 30 September 2020.
DIVIDENDS APPROVED AND NOT RECOGNISED AS A
LIABILITY:
Final franked dividend for 2021:
46 cents per share (2020: 36 cents)
The Directors of Premier Investments Limited approved a final dividend in respect of the 2021 financial year.
The total amount of the dividend is $73,077,000 (2020: $57,191,000) which represents a fully franked dividend
of 46 cents per share (2020: 36 cents per share).
73,077
57,191
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% (2020: 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 be used on the payment of
dividends subsequent to the end of the financial year
TOTAL FRANKING CREDIT BALANCE
The tax rate at which paid dividends have been franked is 30% (2020: 30%). Dividends proposed will be
franked at the rate of 30% (2020: 30%).
53
53
54
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
GROUP PERFORMANCE
8 A) DIVIDENDS
DIVIDENDS APPROVED AND/ OR PAID
Approved during the year:
Interim franked dividends:
2021 Approved and paid: 34 cents per share
2020 Approved: 34 cents per share (i)
Approved and paid during the year:
Final franked dividends for 2020:
36 cents per share (2019: 37 cents)
TOTAL FOR THE YEAR
(i) The 2020 interim dividend was paid on 30 September 2020.
DIVIDENDS APPROVED AND NOT RECOGNISED AS A
LIABILITY:
Final franked dividend for 2021:
46 cents per share (2020: 36 cents)
CONSOLIDATED
2021
$’000
2020
$’000
54,014
-
-
53,966
57,191
111,205
58,636
112,602
73,077
57,191
The Directors of Premier Investments Limited approved a final dividend in respect of the 2021 financial year.
The total amount of the dividend is $73,077,000 (2020: $57,191,000) which represents a fully franked dividend
of 46 cents per share (2020: 36 cents per share).
B) FRANKING CREDIT BALANCE
The amount of franking credits available for the
subsequent financial year are:
franking account balance as at the end of the financial
year at 30% (2020: 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 be used on the payment of
dividends subsequent to the end of the financial year
TOTAL FRANKING CREDIT BALANCE
CONSOLIDATED
2021
$’000
2020
$’000
231,271
196,701
56,181
59,205
(31,319)
256,133
(47,639)
208,267
The tax rate at which paid dividends have been franked is 30% (2020: 30%). Dividends proposed will be
franked at the rate of 30% (2020: 30%).
Premier Investments Limited 54
54
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
OPERATING ASSETS AND LIABILITIES
CONSOLIDATED
2021
$’000
2020
$’000
9
TRADE AND OTHER RECEIVABLES (CURRENT)
Sundry debtors
TOTAL CURRENT TRADE AND OTHER RECEIVABLES
9,490
9,490
30,320
30,320
(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 31 July 2021 (2020: $nil). During the year, no material bad debt expense (2020: $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.
10
INVENTORIES
Finished goods
TOTAL INVENTORIES AT COST
INVENTORIES ACCOUNTING POLICY
CONSOLIDATED
2021
$’000
2020
$’000
208,760
208,760
156,590
156,590
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
OPERATING ASSETS AND LIABILITIES
11 OTHER ASSETS (CURRENT)
Deposits and prepayments
TOTAL OTHER CURRENT ASSETS
12 RIGHT-OF-USE ASSETS
Opening balance
Recognition of asset on initial application of AASB 16
Additions / Remeasurements
Depreciation expense
Impairment expense
Exchange differences
TOTAL RIGHT-OF-USE ASSETS
CONSOLIDATED
2021
$’000
2020
$’000
10,326
10,326
10,531
10,531
231,790
86,621
(152,301)
-
-
977
167,087
-
364,643
43,700
(172,681)
(2,420)
(1,452)
231,790
RIGHT-OF-USE ASSETS ACCOUNTING POLICY
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.
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.
No impairment loss was recognised in relation to the Group’s right-of-use assets during the current financial
year (2020: $2,420,000). The impairment loss recognised in 2020 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.
55
55
56
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
OPERATING ASSETS AND LIABILITIES
11 OTHER ASSETS (CURRENT)
Deposits and prepayments
TOTAL OTHER CURRENT ASSETS
12 RIGHT-OF-USE ASSETS
Opening balance
Recognition of asset on initial application of AASB 16
Additions / Remeasurements
Depreciation expense
Impairment expense
Exchange differences
TOTAL RIGHT-OF-USE ASSETS
CONSOLIDATED
2021
$’000
2020
$’000
10,326
10,326
10,531
10,531
231,790
-
86,621
(152,301)
-
977
167,087
-
364,643
43,700
(172,681)
(2,420)
(1,452)
231,790
RIGHT-OF-USE ASSETS ACCOUNTING POLICY
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.
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.
No impairment loss was recognised in relation to the Group’s right-of-use assets during the current financial
year (2020: $2,420,000). The impairment loss recognised in 2020 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 Limited 56
56
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (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
2021
$’000
2020
$’000
76,231
-
88,038
164,269
69,637
53,966
85,376
208,979
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.
14 LEASE LIABILITIES
Opening balance
Recognition of liability on initial application of AASB 16
Additions / Remeasurements
Interest expense
Payments
COVID-19 related rent concessions
Other Australia and New Zealand holdover rent concessions
Other
Exchange rate differences
TOTAL LEASE LIABILITIES
COMPRISING OF:
Current lease liability
Non-current lease liability
TOTAL LEASE LIABILITIES
CONSOLIDATED
2021
$’000
2020
$’000
303,889
-
87,569
6,676
(137,180)
(19,521)
(4,527)
(1,550)
2,129
237,485
159,050
78,435
237,485
-
410,193
50,315
11,080
(150,958)
(15,013)
-
-
(1,728)
303,889
189,221
114,668
303,889
LEASE LIABILITIES ACCOUNTING POLICY
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 in which the event or condition
that triggers the payment occurs.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
OPERATING ASSETS AND LIABILITIES
14 LEASE LIABILITIES (CONTINUED)
LEASE LIABILITIES ACCOUNTING POLICY (CONTINUED)
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.
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.
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.
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 31 July 2021 and 25 July 2020 as a variable amount as and when incurred.
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.
57
57
58
Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
OPERATING ASSETS AND LIABILITIES
14 LEASE LIABILITIES (CONTINUED)
LEASE LIABILITIES ACCOUNTING POLICY (CONTINUED)
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.
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.
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.
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 31 July 2021 and 25 July 2020 as a variable amount as and when incurred.
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.
Premier Investments Limited 58
58
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
OPERATING ASSETS AND LIABILITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
OPERATING ASSETS AND LIABILITIES
15 PROVISIONS (CONTINUED)
CONSOLIDATED
2021
$’000
2020
$’000
EMPLOYEE ENTITLEMENTS ACCOUNTING POLICIES (CONTINUED)
Long service leave and non-current annual leave
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)
16,359
10,363
12,490
2,088
4,310
45,610
2,469
4,595
4,357
11,421
17,855
-
(770)
17,085
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
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.
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.
16 OTHER LIABILITIES
CURRENT
Deferred income
TOTAL CURRENT
NON-CURRENT
Deferred income
TOTAL NON-CURRENT
DEFERRED INCOME ACCOUNTING POLICY
Unredeemed gift cards are expected to be largely redeemed within a year.
CONSOLIDATED
2021
$’000
2020
$’000
15,120
15,120
226
226
8,588
8,588
146
146
59
59
60
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
OPERATING ASSETS AND LIABILITIES
15 PROVISIONS (CONTINUED)
EMPLOYEE ENTITLEMENTS ACCOUNTING POLICIES (CONTINUED)
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.
16 OTHER LIABILITIES
CURRENT
Deferred income
TOTAL CURRENT
NON-CURRENT
Deferred income
TOTAL NON-CURRENT
DEFERRED INCOME ACCOUNTING POLICY
Unredeemed gift cards are expected to be largely redeemed within a year.
CONSOLIDATED
2021
$’000
2020
$’000
15,120
15,120
226
226
8,588
8,588
146
146
Premier Investments Limited 60
60
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
CAPITAL INVESTED
17 PROPERTY, PLANT AND EQUIPMENT
CONSOLIDATED
LAND
$’000
BUILDINGS
$’000
PLANT AND
EQUIPMENT
$’000
LEASED
PLANT AND
EQUIPMENT
$’000
CAPITAL
WORKS IN
PROGRESS
$’000
TOTAL
$’000
21,953
59,577
463,737
343
4,753
550,363
-
(7,370)
(404,852)
(343)
-
(412,565)
21,953
52,207
58,885
21,953
48,855
72,866
-
-
-
-
-
-
4,857
3,285
7,074
(1,505)
(24,452)
-
-
(5)
117
21,953
52,207
58,885
-
-
-
-
-
-
-
-
4,753
137,798
11,460
5,294
(11,931)
-
-
(70)
155,134
8,579
-
(25,957)
(5)
47
4,753
137,798
are accounted for as a change in accounting estimate, in accordance with AASB 108 Accounting Policies,
Changes in Accounting Estimates and Errors.
21,953
54,720
469,790
343
11,460
558,266
-
(5,865)
(396,924)
(343)
-
(403,132)
AT 31 JULY 2021
Cost
Accumulated depreciation and
impairment
NET CARRYING AMOUNT
RECONCILIATIONS:
Carrying amount at beginning of
the financial year
Additions
Transfers between classes
Depreciation
Disposals
Exchange differences
Carrying amount at end of the
financial year
AT 25 JULY 2020
Cost
Accumulated depreciation and
impairment
NET CARRYING AMOUNT
21,953
48,855
72,866
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
LAND AND BUILDINGS
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
210,855
3,328
(1,845)
-
-
-
-
19,024
-
(43,682)
(982)
(31,254)
1,173
11,460
155,134
The land and buildings with a combined carrying amount of $74,160,000 (2020: $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 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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
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. These value-
in-use calculations use cash flow projections based on financial estimates covering a period of up to five
years, discounting using a post-tax discount rate of 10.5%.
If an asset does not generate largely independent cash inflows, the recoverable amount is determined for the
CGU to which the asset belongs. The recoverable amount was estimated for certain items of plant and
equipment on an individual store basis, as this has been identified as the CGU of the Group’s retail segment.
No impairment loss was recognised during the current financial year (2020: $31,254,000).
During the 2020 financial year, the temporary global closures of stores and ongoing government
implementation of social distancing measures due to COVID-19 had significantly impacted customer shopping
behaviour. Customers increasingly chose to shop online in this highly uncertain macro-environment.
61
62
61
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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.
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. These value-
in-use calculations use cash flow projections based on financial estimates covering a period of up to five
years, discounting using a post-tax discount rate of 10.5%.
If an asset does not generate largely independent cash inflows, the recoverable amount is determined for the
CGU to which the asset belongs. The recoverable amount was estimated for certain items of plant and
equipment on an individual store basis, as this has been identified as the CGU of the Group’s retail segment.
No impairment loss was recognised during the current financial year (2020: $31,254,000).
During the 2020 financial year, the temporary global closures of stores and ongoing government
implementation of social distancing measures due to COVID-19 had significantly impacted customer shopping
behaviour. Customers increasingly chose to shop online in this highly uncertain macro-environment.
Premier Investments Limited 62
62
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (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%. These estimated cash flows considered 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 2020 financial year.
18
INTANGIBLES
RECONCILIATION OF CARRYING AMOUNTS AT THE BEGINNING AND END OF THE PERIOD
YEAR ENDED 31 JULY 2021
As at 26 July 2020 net of accumulated
amortisation and impairment
Trademark registrations
As at 31 July 2021 net of accumulated
amortisation and impairment
CONSOLIDATED
GOODWILL
$’000
BRAND
NAMES
$’000
TRADEMARKS
$’000
LEASEHOLD
PREMIUMS
$’000
TOTAL
$’000
477,085
-
346,179
-
3,624
116
477,085
346,179
3,740
-
-
-
826,888
116
827,004
AS AT 31 JULY 2021
Cost (gross carrying amount)
Accumulated amortisation and impairment
NET CARRYING AMOUNT
477,085
-
477,085
376,179
(30,000)
346,179
3,740
-
3,740
3,351
273
-
-
979
(979)
-
857,983
(30,979)
827,004
24
-
(23)
(1)
826,639
273
(23)
(1)
477,085
346,179
-
-
-
-
-
-
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
AS AT 25 JULY 2020
Cost (gross carrying amount)
Accumulated amortisation and impairment
NET CARRYING AMOUNT
477,085
346,179
3,624
-
826,888
life intangibles, impairment is tested annually and where an indicator of impairment exists.
477,085
-
477,085
376,179
(30,000)
346,179
3,624
-
3,624
979
(979)
-
857,867
(30,979)
826,888
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL INVESTED
18
INTANGIBLES (CONTINUED)
GOODWILL ACCOUNTING POLICY
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
Not amortised or revalued
Amortised over the term
of the lease
Acquired
Acquired
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
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
63
63
64
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL INVESTED
18
INTANGIBLES (CONTINUED)
GOODWILL ACCOUNTING POLICY
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
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 and 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.
Premier Investments Limited 64
64
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
CAPITAL INVESTED
18
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 Group’s operations. 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 2022 financial year (FY22) and are projected for a further four years (FY23 – FY26) 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 FY22 include a COVID-19 overlay, whereby the cash flow estimates have been
adjusted to reflect the possibility of a continued COVID-19 impact in FY22 on the Group’s Sales and Earnings
Before Interest, Tax, Depreciation and Amortisation (EBITDA). These financial estimates are projected for a
further four years based on average annual estimated growth rates for FY23 to FY26 of 0.875% (2020: 0.6% to
1.6%). Cash flow estimates beyond the five year period have been extrapolated using a growth rate ranging
from 2% to 2.5% (2020: 2% to 2.5%), which reflects the long-term growth expectations beyond the five year
period.
The post-tax discount rate applied to these cash flow projections is 9.4% (2020: 9.5%). 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 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 EBITDA 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:
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL INVESTED
18
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 Group’s operations. 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 2022 financial year (FY22) and are projected for a further four years (FY23 – FY26) based on estimated
growth rates.
The financial estimates for FY22 include a COVID-19 overlay, whereby the cash flow estimates have been
adjusted to reflect the possibility of a continued COVID-19 impact in FY22 in relation to sales. These financial
estimates are projected for a further four years based on average annual estimated growth rates for FY23 to
FY26. These extrapolated growth rate ranges at which cash flows have been estimated for the individual brands
within each of the CGU groups were 0.875% (2020: a range of 0.6% - 6.1%).
Cash flow estimates beyond the five year period have been extrapolated using a growth rate ranging from 2%
to 2.5% (2020: 2% to 2.5%), 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 8.3%
(2020: 8.5%). The discount rate has been determined using the weighted average cost of capital which
incorporates both the cost of debt and cost of capital 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% (2020: 3.5% and 8%).
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 estimated sales growth, net royalty rates and discount rates
applied. Based upon the reasonably possible adverse changes in key assumptions, no brands within a CGU
group indicated that its carrying value exceed its recoverable value.
-
-
-
Casual wear - $158,975
Women’s wear - $137,744
Non Apparel - $49,460
65
65
66
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL INVESTED
18
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 Group’s operations. 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 2022 financial year (FY22) and are projected for a further four years (FY23 – FY26) based on estimated
growth rates.
The financial estimates for FY22 include a COVID-19 overlay, whereby the cash flow estimates have been
adjusted to reflect the possibility of a continued COVID-19 impact in FY22 in relation to sales. These financial
estimates are projected for a further four years based on average annual estimated growth rates for FY23 to
FY26. These extrapolated growth rate ranges at which cash flows have been estimated for the individual brands
within each of the CGU groups were 0.875% (2020: a range of 0.6% - 6.1%).
Cash flow estimates beyond the five year period have been extrapolated using a growth rate ranging from 2%
to 2.5% (2020: 2% to 2.5%), 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 8.3%
(2020: 8.5%). The discount rate has been determined using the weighted average cost of capital which
incorporates both the cost of debt and cost of capital 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% (2020: 3.5% and 8%).
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 estimated sales growth, net royalty rates and discount rates
applied. Based upon the reasonably possible adverse changes in key assumptions, no brands within a CGU
group indicated that its carrying value exceed its recoverable value.
Premier Investments Limited 66
66
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
CAPITAL INVESTED
19 LISTED EQUITY INVESTMENT AT FAIR VALUE
INVESTMENT
Investment in listed securities at fair value
TOTAL INVESTMENTS
CONSOLIDATED
2021
$’000
2020
$’000
63,462
63,462
18,132
18,132
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’, without subsequent reclassification of
gains or losses nor impairment to profit or loss, as it is not held for trading, with only dividends recognised in 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.
20
INVESTMENT IN ASSOCIATE
Movements in carrying amounts
Carrying amount at the beginning of the financial year
Share of profit after income tax
Gain resulting from associate share issue
Share of other comprehensive income
Adjustment due to associate accounting policy change
Dividends received
TOTAL INVESTMENT IN ASSOCIATE
CONSOLIDATED
2021
$’000
2020
$’000
257,391
23,897
9,117
(3,782)
(3,024)
(12,227)
271,372
238,732
17,696
15,886
(688)
-
(14,235)
257,391
As at 31 July 2021, Premier Investments Limited holds 26.27% (2020: 26.73%) 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 $23,897,294 (2020: $17,695,527). As at 31 July 2021, the fair value of the Group’s interest in BRG
as determined based on the quoted market price was $1,173,460,147 (2020: $947,893,002).
During the 2021 financial year, BRG reconsidered its accounting treatment with regards to accounting for
capitalised costs incurred in configuring or customising a supplier’s application software in a cloud computing
arrangement. The change in accounting policy led to a decrease in BRG’s opening retained earnings. The
Group share of this retained earnings adjustment due to a change in accounting policy was $3,024,000.
67
67
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL INVESTED
20
INVESTMENT IN ASSOCIATE (CONTINUED)
During the period, a gain of $9,117,000 (25 July 2020: $15,886,000) was recorded in other income resulting
from an issue of shares by the associate, and the corresponding impact on the Group’s method of equity
accounting.
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 2021 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 2021
$’000
30 JUNE 2020
$’000
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
NET ASSETS
473,464
297,176
770,640
(219,085)
(45,070)
(264,155)
506,485
443,328
200,836
644,164
(181,517)
(36,247)
(217,764)
426,400
Group’s share of BRG net assets
133,054
113,977
EXTRACT OF BRG’S STATEMENT OF COMPREHENSIVE INCOME
Revenue
Profit after income tax
Other comprehensive income
30 JUNE 2021
$’000
1,187,659
90,968
(9,884)
30 JUNE 2020
$’000
952,244
66,201
62
Group’s share of BRG profit after income tax
23,897
17,696
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.
68
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL INVESTED
20
INVESTMENT IN ASSOCIATE (CONTINUED)
During the period, a gain of $9,117,000 (25 July 2020: $15,886,000) was recorded in other income resulting
from an issue of shares by the associate, and the corresponding impact on the Group’s method of equity
accounting.
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 2021 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 2021
$’000
30 JUNE 2020
$’000
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
NET ASSETS
473,464
297,176
770,640
(219,085)
(45,070)
(264,155)
506,485
443,328
200,836
644,164
(181,517)
(36,247)
(217,764)
426,400
Group’s share of BRG net assets
133,054
113,977
EXTRACT OF BRG’S STATEMENT OF COMPREHENSIVE INCOME
Revenue
Profit after income tax
Other comprehensive income
30 JUNE 2021
$’000
1,187,659
90,968
(9,884)
30 JUNE 2020
$’000
952,244
66,201
62
Group’s share of BRG profit after income tax
23,897
17,696
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.
Premier Investments Limited 68
68
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
CAPITAL STRUCTURE AND RISK MANAGEMENT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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 after tax
Adjustments for:
Amortisation
Depreciation
Impairment of non-current assets
Share of profit of associate
Gain on investment in associate resulting from share issue
Borrowing costs
Net loss on disposal of property, plant and equipment
Share-based payments expense
Movement in cash flow hedge reserve
Net exchange differences
Changes in assets and liabilities:
Decrease (increase) in trade and other receivables
Decrease in other current assets
(Increase) decrease in inventories
(Increase) decrease in other financial assets
Decrease (increase) in deferred tax assets
Increase in provisions
Increase in deferred tax liabilities
(Decrease) increase in trade and other payables
(Decrease) increase in other financial liabilities
Increase (decrease) increase in deferred income
(Decrease) increase in income tax payable
NET CASH FLOWS FROM OPERATING ACTIVITIES
CONSOLIDATED
2021
$’000
2020
$’000
385,815
137,541
523,356
305,960
142,872
448,832
271,840
137,753
-
178,258
-
(23,897)
(9,117)
174
5
1,856
8,796
132
20,830
205
(52,170)
(7,073)
2,784
8,901
2,892
(14,045)
(5,509)
6,612
(7,954)
383,520
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
21 NOTES TO THE STATEMENT OF CASH FLOWS
(CONTINUED)
(c) FINANCE FACILITIES
Working capital and bank overdraft facility
Used
Unused
Finance facility
Used
Unused
Used
Unused
Used
Unused
Used
Unused
TOTAL
Total facilities
Bank guarantee facility
Interchangeable facility
CONSOLIDATED
2021
$’000
2020
$’000
-
9,800
9,800
147,000
82,000
229,000
-
200
200
4,268
8,732
13,000
151,268
100,732
252,000
-
9,800
9,800
147,000
82,000
229,000
-
200
200
6,169
6,831
13,000
153,169
98,831
252,000
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.
69
69
70
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
21 NOTES TO THE STATEMENT OF CASH FLOWS
(CONTINUED)
(c) FINANCE FACILITIES
Working capital and bank overdraft facility
Used
Unused
Finance facility
Used
Unused
Bank guarantee facility
Used
Unused
Interchangeable facility
Used
Unused
Total facilities
Used
Unused
TOTAL
CONSOLIDATED
2021
$’000
2020
$’000
-
9,800
9,800
147,000
82,000
229,000
-
200
200
4,268
8,732
13,000
151,268
100,732
252,000
-
9,800
9,800
147,000
82,000
229,000
-
200
200
6,169
6,831
13,000
153,169
98,831
252,000
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.
Premier Investments Limited 70
70
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
CAPITAL STRUCTURE AND RISK MANAGEMENT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
22
INTEREST-BEARING LIABILITIES
CURRENT
Bank loans ** secured
TOTAL INTEREST-BEARING LIABILITIES
NON-CURRENT
Bank loans* unsecured
Bank loans ** secured
TOTAL INTEREST-BEARING LIABILITIES
CONSOLIDATED
2021
$’000
2020
$’000
69,000
69,000
77,834
-
77,834
-
-
77,659
69,000
146,659
* 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) CAPITAL MANAGEMENT
(b) Defaults and breaches
During the current and prior years, there were no defaults or breaches on any of the loans.
capital available to the Group.
(c) Changes in interest-bearing liabilities arising from financing activities
CONSOLIDATED
25 JULY 2020
$’000
CASH
FLOWS
$’000
OTHER
$’000
31 JULY 2021
$’000
Non-current interest-bearing liabilities
TOTAL INTEREST-BEARING LIABILITIES
146,659
146,659
-
-
175
175
146,834
146,834
‘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
(c) EXTERNALLY IMPOSED CAPITAL REQUIREMENTS
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.
71
71
72
CONSOLIDATED
2021
$’000
2020
$’000
NO. (‘000)
$‘000
158,724
140
158,864
158,430
294
158,724
608,615
608,615
608,615
-
-
608,615
23 CONTRIBUTED EQUITY
Ordinary share capital
608,615
608,615
(a) MOVEMENTS IN SHARES ON ISSUE
Ordinary shares on issue 26 July 2020
Ordinary shares issued during the year (i)
Ordinary shares on issue at 31 July 2021
Ordinary shares on issue 28 July 2019
Ordinary shares issued during the year (i)
Ordinary shares on issue at 25 July 2020
Fully paid ordinary shares carry one vote per share and carry the rights to dividends.
(i)
A total of 139,524 ordinary shares (2020: 294,579) were issued in relation to the performance rights plan.
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
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.
Just Group Ltd, a subsidiary of Premier Investments Limited, is subject to a number of financial undertakings
as part of its financing facility agreement. These undertakings have been satisfied during the period.
The Group is not subject to any capital requirements imposed by regulators or other prudential authorities.
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
23 CONTRIBUTED EQUITY
Ordinary share capital
608,615
608,615
CONSOLIDATED
2021
$’000
2020
$’000
(a) MOVEMENTS IN SHARES ON ISSUE
Ordinary shares on issue 26 July 2020
Ordinary shares issued during the year (i)
Ordinary shares on issue at 31 July 2021
Ordinary shares on issue 28 July 2019
Ordinary shares issued during the year (i)
Ordinary shares on issue at 25 July 2020
NO. (‘000)
$‘000
158,724
140
158,864
158,430
294
158,724
608,615
-
608,615
608,615
-
608,615
Fully paid ordinary shares carry one vote per share and carry the rights to dividends.
(i)
A total of 139,524 ordinary shares (2020: 294,579) 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.
(c) EXTERNALLY IMPOSED CAPITAL REQUIREMENTS
Just Group Ltd, a subsidiary of Premier Investments Limited, is subject to a number of financial undertakings
as part of its financing facility agreement. These undertakings have been satisfied during the period.
The Group is not subject to any capital requirements imposed by regulators or other prudential authorities.
72
Premier Investments Limited 72
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
CAPITAL STRUCTURE AND RISK MANAGEMENT
CONSOLIDATED
2021
$’000
2020
$’000
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
464
2,801
4,377
21,215
(38,858)
(10,001)
5,781
802
(3,782)
2,801
(4,419)
(3,258)
15,826
(3,772)
4,377
73
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)
73
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
24 RESERVES (CONTINUED)
(c) PERFORMANCE RIGHTS RESERVE
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
CONSOLIDATED
2021
$’000
2020
$’000
19,359
1,856
21,215
17,746
1,613
19,359
Reserve is used to record unrealised gains and losses on
fair value revaluation of listed equity investment at fair value.
- Movements in the reserve
Opening balance
Unrealised gain (loss) on revaluation of listed investment
at fair value
28,820
(28,747)
Net deferred income tax movement on listed equity
investment at fair value
CLOSING BALANCE
(8,646)
(38,858)
8,623
(59,032)
(59,032)
(38,908)
74
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
24 RESERVES (CONTINUED)
(c) PERFORMANCE RIGHTS RESERVE
Nature and purpose of reserve
Reserve is used to record the cumulative amortised value of
performance rights issued to key senior employees, net of
the value of performance shares acquired under the
performance rights plan.
- Movements in the reserve
Opening balance
Performance rights expense for the year
CLOSING BALANCE
(d) FAIR VALUE RESERVE
Nature and purpose of reserve
Reserve is used to record unrealised gains and losses on
fair value revaluation of listed equity investment at fair value.
- Movements in the reserve
Opening balance
Unrealised gain (loss) on revaluation of listed investment
at fair value
Net deferred income tax movement on listed equity
investment at fair value
CLOSING BALANCE
CONSOLIDATED
2021
$’000
2020
$’000
19,359
1,856
21,215
17,746
1,613
19,359
(59,032)
(38,908)
28,820
(28,747)
(8,646)
(38,858)
8,623
(59,032)
74
Premier Investments Limited 74
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (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
Interest rate swaps – 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
2021
$’000
2020
$’000
7,073
7,073
-
815
815
-
-
-
-
4,008
-
4,008
2,316
2,316
(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 31 July 2021 and the profit or loss
within cost of sales will be affected over the next year 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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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
2021
$’000
2020
$’000
2021
2020
NOTIONAL AMOUNTS $AUD
AVERAGE EXCHANGE RATE
133,430
27,016
128,198
114,909
0.7725
0.7403
0.6938
0.7049
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
22,990
0.7267
21,876
21,149
0.6479
0.6573
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
4,602
1.0365
-
-
-
-
Buy USD / Sell AUD
Maturity < 6 months
Maturity 6 – 12 months
Buy USD / Sell NZD
Maturity < 6 months
Maturity 6 – 12 months
Buy AUD / Sell NZD
Maturity < 6 months
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 hedged 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.
75
75
76
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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
2021
$’000
2020
$’000
2021
2020
NOTIONAL AMOUNTS $AUD
AVERAGE EXCHANGE RATE
133,430
27,016
128,198
114,909
0.7725
0.7403
0.6938
0.7049
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
22,990
-
21,876
21,149
0.7267
-
0.6479
0.6573
NOTIONAL AMOUNTS $NZD
AVERAGE EXCHANGE RATE
-
4,602
-
1.0365
Buy USD / Sell AUD
Maturity < 6 months
Maturity 6 – 12 months
Buy USD / Sell NZD
Maturity < 6 months
Maturity 6 – 12 months
Buy AUD / Sell NZD
Maturity < 6 months
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 hedged 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.
76
Premier Investments Limited 76
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
CAPITAL STRUCTURE AND RISK MANAGEMENT
CAPITAL STRUCTURE AND RISK MANAGEMENT
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
The Group’s principal financial instruments comprise cash and cash equivalents, derivative financial
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-
instruments, listed equity investments at fair value, receivables, payables, bank overdrafts and interest-
bearing liabilities.
bearing liabilities.
RISK EXPOSURES AND RESPONSES
RISK EXPOSURES AND RESPONSES
The Group manages its exposure to key financial risks in accordance with Board-approved policies which are
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
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
objective of the policy is to support the delivery of the Group’s financial targets whilst protecting future
financial security.
financial security.
The Group uses different methods to measure and manage different types of risks to which it is exposed.
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
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
market forecasts for interest rate and foreign exchange prices. Liquidity risk is monitored through
development of future cash flow forecast projections.
development of future cash flow forecast projections.
CREDIT RISK
CREDIT RISK
The overwhelming majority of the Group’s sales are on cash terms with settlement within 24 hours. As
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
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.
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
There are no significant concentrations of credit risk within the Group and financial instruments are spread
amongst a number of financial institutions.
amongst a number of financial institutions.
With respect to credit risk arising mainly from cash and cash equivalents and certain derivative instruments,
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
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
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.
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.
Credit risk for the Group also arises from financial guarantees that members of the Group act as guarantor.
At 31 July 2021, the maximum exposure to credit risk of the Group is the amount guaranteed as disclosed in
At 31 July 2021, the maximum exposure to credit risk of the Group is the amount guaranteed as disclosed in
note 34.
note 34.
INTEREST RATE RISK
INTEREST RATE RISK
The Group’s exposure to market interest rates relates primarily to its cash and cash equivalents that it holds
The Group’s exposure to market interest rates relates primarily to its cash and cash equivalents that it holds
and interest-bearing liabilities.
and interest-bearing liabilities.
At reporting date, the Group had the following mix of financial assets and liabilities exposed to variable
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:
interest rate risk that are not designated in cash flow hedges:
CONSOLIDATED
CONSOLIDATED
FOREIGN OPERATIONS
Financial Assets
Financial Assets
Cash and cash equivalents
Cash and cash equivalents
Financial Liabilities
Financial Liabilities
Bank loans AUD
Bank loans AUD
NET FINANCIAL ASSETS
NET FINANCIAL ASSETS
77
NOTES
NOTES
21
21
22
22
2021
2021
$’000
$’000
523,356
523,356
523,356
523,356
146,834
146,834
146,834
146,834
376,522
376,522
2020
2020
$’000
$’000
448,832
448,832
448,832
448,832
146,659
146,659
146,659
146,659
302,173
302,173
77
77
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
INTEREST RATE RISK (CONTINUED)
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group’s objective of managing interest rate risk is to
minimise the Group’s exposure to fluctuations in interest rates that might impact its interest revenue, interest
expense and cash flow. 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.
i)
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 (2020:100) 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:
2021
$000
3,117
(3,117)
2020
$000
3,035
(3,035)
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.
78
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
INTEREST RATE RISK (CONTINUED)
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group’s objective of managing interest rate risk is to
minimise the Group’s exposure to fluctuations in interest rates that might impact its interest revenue, interest
expense and cash flow. 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.
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 (2020:100) 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:
2021
$000
3,117
(3,117)
2020
$000
3,035
(3,035)
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.
78
Premier Investments Limited 78
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
CAPITAL STRUCTURE AND RISK MANAGEMENT
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
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.
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):
2021
CONSOLIDATED
FINANCIAL ASSETS
USD
NZD
SGD
GBP
HKD
$’000
$’000
$’000
$’000
$’000
MYR
$’000
EUR
$’000
Cash and cash equivalents
11,400
52,035
23,807
18,484
Trade and other receivables
Derivative financial assets
678
7,073
-
-
19
-
-
-
19,151
52,035
23,826
18,484
FINANCIAL LIABILITIES
Trade and other payables
51,287
7,539
339
4,490
Derivative financial liabilities
-
-
-
-
51,287
7,539
339
4,490
6
-
-
6
-
-
2,210
716
-
-
-
-
2,210
716
-
-
-
-
NET EXPOSURE
(32,136)
44,496
23,487
13,994
6
2,210
716
The Group has forward currency contracts designated as cash flow hedges that are subject to movements through
other comprehensive income and profit or loss respectively as foreign exchange rates move (refer to Note 24)
79
79
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
FOREIGN CURRENCY TRANSACTIONS (CONTINUED)
2020
CONSOLIDATED
FINANCIAL ASSETS
USD
NZD
SGD
GBP
HKD
MYR
EUR
$’000
$’000
$’000
$’000
$’000
$’000
$’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
-
48
-
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
-
257
-
-
-
-
-
NET EXPOSURE
(34,131)
21,601
14,644
9,372
1,545
5,124
904
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%
2021
$000
1,023
(4,111)
(1,085)
4,944
(573)
2,610
(341)
1,555
-
1
(54)
246
(17)
80
2020
$000
685
(3,192)
(527)
3,285
(357)
1,627
(229)
1,041
(50)
229
(125)
569
(22)
100
2021
$000
(4,603)
19,815
2020
$000
(5,015)
21,836
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
80
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
FOREIGN CURRENCY TRANSACTIONS (CONTINUED)
2020
CONSOLIDATED
FINANCIAL ASSETS
USD
NZD
SGD
GBP
HKD
MYR
EUR
$’000
$’000
$’000
$’000
$’000
$’000
$’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
-
-
-
48
-
-
-
-
-
-
-
-
-
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
-
257
-
-
-
-
-
-
NET EXPOSURE
(34,131)
21,601
14,644
9,372
1,545
5,124
904
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%
2021
$000
1,023
(4,111)
(1,085)
4,944
(573)
2,610
(341)
1,555
-
1
(54)
246
(17)
80
2020
$000
685
(3,192)
(527)
3,285
(357)
1,627
(229)
1,041
(50)
229
(125)
569
(22)
100
2021
$000
(4,603)
19,815
2020
$000
(5,015)
21,836
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
80
Premier Investments Limited 80
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
CAPITAL STRUCTURE AND RISK MANAGEMENT
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
FOREIGN CURRENCY RISK (CONTINUED)
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.
The Group has, at reporting date, $385.8 million (2020: $306.0 million) cash held in deposit with 11am at
call and the remaining $137.5 million (2020: $142.9 million) cash held in deposit with maturity terms ranging
from 30 to 180 days (2020: 30 to 90 days). Hence management believe there is no significant exposure to
liquidity risk at 31 July 2021 and 25 July 2020.
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:
2021
CONSOLIDATED
FINANCIAL LIABILITIES
Trade and other payables
Bank loans
Lease liabilities
Forward currency contracts
MATURITY 0 - 12
MONTHS
MATURITY > 12
MONTHS
$’000
$’000
164,269
69,000
159,050
189,492
581,811
-
77,834
78,435
-
156,269
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
LIQUIDITY RISK (CONTINUED)
2020
CONSOLIDATED
FINANCIAL LIABILITIES
Trade and other payables
Bank loans
Lease liabilities
Forward currency contracts
MATURITY 0 - 12
MATURITY > 12
MONTHS
MONTHS
$’000
$’000
208,979
-
189,221
283,742
681,942
146,659
114,668
-
-
261,327
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.
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.
81
81
82
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
CAPITAL STRUCTURE AND RISK MANAGEMENT
26 FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (CONTINUED)
LIQUIDITY RISK (CONTINUED)
2020
CONSOLIDATED
FINANCIAL LIABILITIES
Trade and other payables
Bank loans
Lease liabilities
Forward currency contracts
MATURITY 0 - 12
MONTHS
MATURITY > 12
MONTHS
$’000
$’000
208,979
-
189,221
283,742
681,942
-
146,659
114,668
-
261,327
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.
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.
82
Premier Investments Limited 82
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (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 (continued)
The following table provides the fair value measurement hierarchy of the Group’s financial assets and
liabilities:
FINANCIAL YEAR ENDED 31 JULY 2021
FINANCIAL YEAR ENDED 25 JULY 2020
CONSOLIDATED
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 1
LEVEL 2
LEVEL 3
$’000
$’000
$’000
$’000
$’000
$’000
FINANCIAL ASSETS
Listed equity investment at fair value
63,462
-
Foreign Exchange Contracts
-
7,073
63,462
7,073
FINANCIAL LIABILITIES
Interest Rate Swaps
Foreign Exchange Contracts
-
-
-
815
-
815
-
-
-
-
-
-
18,132
-
18,132
-
-
-
-
-
-
2,316
4,008
6,324
-
-
-
-
-
-
There have been no transfers between Level 1, Level 2 and Level 3 during the financial year.
At 31 July 2021 and 25 July 2020, 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.
83
83
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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)
COUNTRY OF INCORPORATION
2021 INTEREST
2020 INTEREST
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
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Hong Kong
Hong Kong
USA
USA
USA
UK
UK
UK
Ireland
Netherlands
New Zealand
New Zealand
Australia
Australia
Singapore
Singapore
Malaysia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
84
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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)
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
2021 INTEREST
100%
100%
100%
100%
100%
2020 INTEREST
100%
100%
100%
100%
100%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Hong Kong
Hong Kong
USA
USA
USA
UK
UK
UK
Ireland
Netherlands
New Zealand
New Zealand
Australia
Australia
Singapore
Singapore
Malaysia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Premier Investments Limited 84
84
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (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 for the period, net of tax
(b) Guarantees entered into by the parent entity
2021
$’000
2020
$’000
212,017
1,482,514
77,725
136,742
225,111
1,461,108
114,731
190,029
608,615
608,615
659
21,215
(157)
715,440
190,558
(3,492)
4,442
19,359
(449)
639,112
78,319
(628)
The parent entity has provided no financial guarantees in respect of bank overdrafts and loans of subsidiaries
(2020: $nil).
The parent entity has also given no unsecured guarantees in respect of finance leases of subsidiaries or
bank overdrafts of subsidiaries (2020: $nil).
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 31 July 2021 (2020: $nil).
length and on normal commercial terms.
(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 31 July 2021 or 25 July 2020.
85
85
86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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
(b) KEY MANAGEMENT PERSONNEL
The ultimate parent entity is Premier Investments Limited. Details of subsidiaries are provided in note 28.
COMPENSATION FOR KEY MANAGEMENT PERSONNEL
Short-term employee benefits
Post-employment benefits
Share-based payments
TOTAL
CONSOLIDATED
2021
$
2020
$
7,699,313
109,379
89,054
7,897,746
7,078,408
113,168
504,722
7,696,298
(c) RELATED PARTY TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
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 $2,809,669 (2020: $2,396,209), including Mr.
Lanzer's Director fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the Group, with
$544,387 (2020: $713,866) 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 $42,158 (2020:
$223,293 including GST was paid to Loch Awe Pty Ltd, with $177,852 outstanding rent payments at year-end
(2020: nil). The payments were at arm’s length and on normal commercial terms.
Mr. Lew is a director of Voyager Distributing Company Pty Ltd. During the year, purchases totalling $22,990,422
(2020: $17,273,036) including GST have been made by Group companies from Voyager Distributing Co. Pty
Ltd, with $9,843,740 (2020: $4,058,067) remaining outstanding at year-end. The purchases were all at arm’s
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 administrative
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 $561,000 (2020: $512,600) costs including GST incurred by
Century Plaza Trading Pty Ltd.
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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
2021
$
2020
$
7,699,313
109,379
89,054
7,897,746
7,078,408
113,168
504,722
7,696,298
(c) RELATED PARTY TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
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 $2,809,669 (2020: $2,396,209), including Mr.
Lanzer's Director fees, GST and disbursements were invoiced by Arnold Bloch Leibler to the Group, with
$544,387 (2020: $713,866) 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 $42,158 (2020:
$223,293 including GST was paid to Loch Awe Pty Ltd, with $177,852 outstanding rent payments at year-end
(2020: nil). The payments were at arm’s length and on normal commercial terms.
Mr. Lew is a director of Voyager Distributing Company Pty Ltd. During the year, purchases totalling $22,990,422
(2020: $17,273,036) including GST have been made by Group companies from Voyager Distributing Co. Pty
Ltd, with $9,843,740 (2020: $4,058,067) 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 administrative
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 $561,000 (2020: $512,600) costs including GST incurred by
Century Plaza Trading Pty Ltd.
Premier Investments Limited 86
86
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
OTHER DISCLOSURES
CONSOLIDATED
2021
$
2020
$
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
709,350
804,262
performance period, as well as the probability of not meeting the Total Shareholder Return (“TSR”) performance
39,287
11,613
760,250
38,696
29,144
872,102
230,940
991,190
225,209
1,097,311
CONSOLIDATED
2021
$’000
1,856
2020
$’000
1,613
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.
87
88
87
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
OTHER DISCLOSURES
32 SHARE-BASED PAYMENT PLANS (CONTINUED)
(b) TYPE OF SHARE-BASED PAYMENT PLANS (CONTINUED)
Performance rights (continued)
hurdles.
existence:
GRANT DATE
(DD/MM/YYYY)
26/04/2016
10/04/2017
19/02/2018
12/04/2019
01/05/2020
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
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
NUMBER OF
RIGHTS
GRANTED
1,000,000
120,124
148,237
124,472
544,809
SHARE ISSUE
PRICE
OPTION LIFE
DIVIDEND
YIELD
VOLATILITY
RISK-FREE
RATE
FAIR
VALUE
$9.88
$15.70
$12.91
$18.18
3-6 years
2.5 years
2.5 years
2.5 years
$13.21
2.5 – 4 years
5.5%
5%
3.4%
3.4%
3.5%
30%
30%
16%
30%
36%
2.06%
1.79%
2.14%
1.44%
0.40%
$9.96
$6.89
$7.85
$6.81
$8.33
(c) SUMMARY OF RIGHTS GRANTED UNDER PERFORMANCE RIGHTS PLANS
The following table illustrates the number (No.) and weighted average exercise prices (“WAEP”) of, and
movements in, performance rights issued during the year:
Balance at beginning of the year
Granted during the year
Exercised during the year (i)
(139,524)
Expired during the year
Balance at the end of the year
673,886
2021
No.
813,410
-
-
2021
WAEP
2020
No.
2020
WAEP
-
-
-
-
-
615,637
544,809
(294,579)
(52,457)
813,410
-
-
-
-
-
(i) The weighted average share price at the date of exercise of rights exercised during the year was $21.77 (2020: $15.86).
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.
Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (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)
26/04/2016
10/04/2017
19/02/2018
12/04/2019
01/05/2020
NUMBER OF
RIGHTS
GRANTED
1,000,000
120,124
148,237
124,472
544,809
SHARE ISSUE
PRICE
OPTION LIFE
DIVIDEND
YIELD
VOLATILITY
RISK-FREE
RATE
FAIR
VALUE
$9.88
$15.70
$12.91
$18.18
3-6 years
2.5 years
2.5 years
2.5 years
$13.21
2.5 – 4 years
5.5%
5%
3.4%
3.4%
3.5%
30%
30%
16%
30%
36%
2.06%
1.79%
2.14%
1.44%
0.40%
$9.96
$6.89
$7.85
$6.81
$8.33
(c) SUMMARY OF RIGHTS GRANTED UNDER PERFORMANCE RIGHTS PLANS
The following table illustrates the number (No.) and weighted average exercise prices (“WAEP”) of, and
movements in, performance rights issued during the year:
Balance at beginning of the year
Granted during the year
Exercised during the year (i)
Expired during the year
Balance at the end of the year
2021
No.
813,410
-
(139,524)
-
673,886
2021
WAEP
2020
No.
2020
WAEP
-
-
-
-
-
615,637
544,809
(294,579)
(52,457)
813,410
-
-
-
-
-
(i) The weighted average share price at the date of exercise of rights exercised during the year was $21.77 (2020: $15.86).
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.
Premier Investments Limited 88
88
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
FOR THE 53 WEEKS ENDED 31 JULY 2021 AND THE 52 WEEKS ENDED 25 JULY 2020 (CONTINUED)
For the 53 weeks ended 31 July 2021 and the 52 weeks ended 25 July 2020 (continued)
OTHER DISCLOSURES
OTHER DISCLOSURES
OTHER DISCLOSURES
32 SHARE-BASED PAYMENT PLANS (CONTINUED)
32 SHARE-BASED PAYMENT PLANS (CONTINUED)
32 SHARE-BASED PAYMENT PLANS (CONTINUED)
(d) WEIGHTED AVERAGE FAIR VALUE
(d) WEIGHTED AVERAGE FAIR VALUE
(d) WEIGHTED AVERAGE FAIR VALUE
The weighted average fair value of performance rights granted during the year was $nil (2020: $8.33).
The weighted average fair value of performance rights granted during the year was $nil (2020: $8.33).
The weighted average fair value of performance rights granted during the year was $nil (2020: $8.33).
SHARE-BASED PAYMENT ACCOUNTING POLICIES
SHARE-BASED PAYMENT ACCOUNTING POLICIES
SHARE-BASED PAYMENT ACCOUNTING POLICIES
The Group provides benefits to its employees in the form of share-based payments, whereby employees render
The Group provides benefits to its employees in the form of share-based payments, whereby employees render
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
services in exchange for rights over shares (equity-settled transactions). The plan in place to provide these
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”).
benefits is a long-term incentive plan known as the performance rights plan (“PRP”).
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
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
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.
equity instrument at the date at which they are granted.
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
The cost of equity-settled transactions is recognised in profit or loss, together with a corresponding increase in
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
equity, over the period in which the performance and/or service conditions are fulfilled (the vesting period), ending
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).
on the date on which the relevant employees become fully entitled to the award (the vesting date).
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
At each subsequent reporting date until vesting, the cumulative charge to profit or loss in the statement of
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
comprehensive income is the product of: the grant date fair value of the award, the extent to which the vesting
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.
period has expired, and the current best estimate of the number of awards that will vest as at the grant date.
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
The charge to profit or loss for the period is the cumulative amount as calculated above less the amounts already
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.
charged in previous periods. There is a corresponding entry to equity.
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
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions for which
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
vesting is conditional upon a market or non-vesting condition. These are treated as vested, irrespective of
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
whether or not the market or non-vesting condition is satisfied, provided that all other performance and service
whether or not the market or non-vesting condition is satisfied, provided that all other performance and service
conditions are met.
conditions are met.
conditions are met.
KEY ACCOUNTING ESTIMATES AND ASSUMPTIONS
KEY ACCOUNTING ESTIMATES AND ASSUMPTIONS
KEY ACCOUNTING ESTIMATES AND ASSUMPTIONS
The fair value of share-based payment transactions is determined at the grant date using an appropriate
The fair value of share-based payment transactions is determined at the grant date using an appropriate
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
valuation model, which takes into account the terms and conditions upon which the instruments were granted
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
to key executives. The terms and conditions require estimates to be made of the number of equity instruments
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
expected to vest, as well as the probabilities of meeting the relevant TSR performance hurdles. These
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
accounting estimates and assumptions would have no impact on the carrying amounts of assets or liabilities
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
within the next annual reporting period, but may impact the share-based payment expense and performance
within the next annual reporting period, but may impact the share-based payment expense and performance
rights reserve within equity.
rights reserve within equity.
rights reserve within equity.
33 EVENTS AFTER THE REPORTING DATE
33 EVENTS AFTER THE REPORTING DATE
33 EVENTS AFTER THE REPORTING DATE
The Directors of Premier Investments Limited approved a final dividend in respect of the 2021 financial year.
The Directors of Premier Investments Limited approved a final dividend in respect of the 2021 financial year.
The Directors of Premier Investments Limited approved a final dividend in respect of the 2021 financial year.
The total amount of the dividend is $73,077,000 (2020: $57,191,000) which represents a fully franked dividend
The total amount of the dividend is $73,077,000 (2020: $57,191,000) which represents a fully franked dividend
The total amount of the dividend is $73,077,000 (2020: $57,191,000) which represents a fully franked dividend
of 46 cents per share (2020: 36 cents per share). The dividend has not been provided for in the 2021 financial
of 46 cents per share (2020: 36 cents per share). The dividend has not been provided for in the 2021 financial
of 46 cents per share (2020: 36 cents per share). The dividend has not been provided for in the 2021 financial
statements.
statements.
statements.
Subsequent to 31 July 2021, the Group’s retail store network continues to be impacted by various Government
Subsequent to 31 July 2021, the Group’s retail store network continues to be impacted by various Government
Subsequent to 31 July 2021, the Group’s retail store network continues to be impacted by various Government
mandated retail store closures related to COVID-19. The Group has had 661 stores temporarily closed across
mandated retail store closures related to COVID-19. The Group has had 661 stores temporarily closed across
mandated retail store closures related to COVID-19. The Group has had 661 stores temporarily closed across
Australia and New Zealand through the majority of the month of August 2021, noting it has since progressively
Australia and New Zealand through the majority of the month of August 2021, noting it has since progressively
Australia and New Zealand through the majority of the month of August 2021, noting it has since progressively
been able to reopen over 170 of these stores in the past two weeks. During the temporary store closures, the
been able to reopen over 170 of these stores in the past two weeks. During the temporary store closures, the
been able to reopen over 170 of these stores in the past two weeks. During the temporary store closures, the
Group continues to operate through its online channel.
Group continues to operate through its online channel.
Group continues to operate through its online channel.
34 CONTINGENT LIABILITIES
34 CONTINGENT LIABILITIES
34 CONTINGENT LIABILITIES
The Group has bank guarantees and outstanding letters of credit totalling $4,267,668 (2020: $6,168,632).
The Group has bank guarantees and outstanding letters of credit totalling $4,267,668 (2020: $6,168,632).
The Group has bank guarantees and outstanding letters of credit totalling $4,267,668 (2020: $6,168,632).
89
89
89
89
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
31 July 2021 are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 31 July 2021
and of its performance for the financial year ended on that date, and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
(c)
in the opinion of the directors, as at the date of this declaration, there are reasonable grounds to
believe that the members of the Closed Group will be able to meet any obligations or liabilities to
which they are or may become subject, by virtue of the Deed of Cross Guarantee.
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 31 July 2021.
On behalf of the Board
Solomon Lew
Chairman
1 October 2021
90
Annual Report 2021
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
31 July 2021 are in accordance with the Corporations Act 2001, including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
giving a true and fair view of the consolidated entity’s financial position as at 31 July 2021
and of its performance for the financial 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 31 July 2021.
On behalf of the Board
Solomon Lew
Chairman
1 October 2021
90
Premier Investments Limited 90
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Independent Auditor’s Report
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Independent auditor’s report to the Members of Premier Investments
GPO Box 67 Melbourne VIC 3001
Limited
Independent auditor’s report to the Members of Premier Investments
Report on the audit of the financial report
Limited
Independent auditor’s report to the Members of Premier Investments
Opinion
Limited
Report on the audit of the financial report
We have audited the financial report of Premier Investments Limited (the Company) and its
Independent auditor’s report to the Members of Premier Investments
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
Report on the audit of the financial report
Opinion
Limited
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
Opinion
We have audited the financial report of Premier Investments Limited (the Company) and its
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
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
financial statements, including a summary of significant accounting policies, and the directors’
Report on the audit of the financial report
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
We have audited the financial report of Premier Investments Limited (the Company) and its
declaration.
as at 31 July 2021, 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
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
Opinion
financial statements, including a summary of significant accounting policies, and the directors’
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
We have audited the financial report of Premier Investments Limited (the Company) and its
Act 2001, including:
declaration.
financial statements, including a summary of significant accounting policies, and the directors’
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
declaration.
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
Act 2001, including:
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
financial statements, including a summary of significant accounting policies, and the directors’
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
Act 2001, including:
declaration.
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Independent auditor’s report to the Members of Premier Investments
Limited
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
and of its consolidated financial performance for the year ended on that date; and
Report on the audit of the financial report
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
and of its consolidated financial performance for the year ended on that date; and
and of its consolidated financial performance for the year ended on that date; and
Ernst & Young
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Ernst & Young
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Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
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Independent auditor’s report to the Members of Premier Investments
Limited
Why significant
Opinion
Carrying value of intangible assets
Report on the audit of the financial report
How our audit addressed the key audit matter
As at 31 July 2021, the Group held $827.0
We have audited the financial report of Premier Investments Limited (the Company) and its
Our audit procedures included the following:
million (or 36.4% of total assets) in goodwill and
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
► Assessed the application of the valuation
indefinite-life brand names recognised from
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
methodologies applied.
historical business combinations.
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’
As outlined in Note 18 of the financial report,
CGUs was in accordance with Australian
► Evaluated whether the determination of
declaration.
the goodwill and brand names are tested by the
Accounting Standards.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
► Agreed the cashflows within the impairment
Group for impairment annually.
The recoverable amount of these assets was
Act 2001, including:
determined based on a value in use model
model to forecast cashflows.
referencing discounted cash flows of the retail
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
► Considered the impact of COVID-19 on the
segment for goodwill, and the casual wear,
and of its consolidated financial performance for the year ended on that date; and
cash flow assumptions used in the
women’s wear and non-apparel cash generating
impairment model.
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
units (CGUs) for brand names. The model
► Considered the historical accuracy of the
contains estimates and significant judgements
Basis for opinion
regarding future cash flow projections which are
Group’s cash flow forecasting process.
► Compared the forecast cash flows used in the
critical to the assessment of impairment,
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
value in use model to the actual current year
particularly planned sales growth in the casual
those standards are further described in the Auditor’s responsibilities for the audit of the financial
financial performance of the underlying CGUs
wear and women’s wear CGUs and discount
report section of our report. We are independent of the Group in accordance with the auditor
for reasonability.
independence requirements of the Corporations Act 2001 and the ethical requirements of the
rates applied.
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
At 31 July 2021, the Group’s performance, and
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
relief from royalty rates and sales growth
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
rates adopted in the value in use model
the economy as a whole, continue to be
► Assessed key inputs being discount rates,
impacted by the restrictions and economic
including comparison to available market
the Code.
uncertainty resulting from the COVID-19
data for comparable businesses.
pandemic. Significant assumptions used in the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
► Performed sensitivity analysis on key inputs
impairment testing referred to above are
for our opinion.
inherently subjective and in times of economic
uncertainty the degree of subjectivity is higher
Key audit matters
than it might otherwise be. Changes in certain
and assumptions included in the forecast
cashflows and impairment models including
the discount rates, to assess the risk of the
Key audit matters are those matters that, in our professional judgment, were of most significance in
CGU carrying value exceeding the
assumptions can lead to significant changes in
our audit of the financial report of the current year. These matters were addressed in the context of
recoverable amount.
the recoverable amount of these assets.
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
► Compared earnings multiples derived from
Accordingly, given the significant judgements
a separate opinion on these matters. For each matter below, our description of how our audit
and estimates involved in assessing impairment
addressed the matter is provided in that context.
of intangible assets we considered this a key
the Group’s value in use model to those
observable from external market data of
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
audit matter. For the same reasons we consider
financial report section of our report, including in relation to these matters. Accordingly, our audit
► Assessed the adequacy of the disclosures
it important that attention is drawn to the
included the performance of procedures designed to respond to our assessment of the risks of
included in the financial report.
information in Note 18.
material misstatement of the financial report. The results of our audit procedures, including the
Our valuation specialists were involved in the
procedures performed to address the matters below, provide the basis for our audit opinion on the
conduct of these procedures where considered
comparable listed entities.
accompanying financial report.
relevant.
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
b. 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 of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
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 judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
and of its consolidated financial performance for the year ended on that date; and
and of its consolidated financial performance for the year ended on that date; and
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Basis for opinion
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Act 2001, including:
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
Basis for opinion
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
report section of our report. We are independent of the Group in accordance with the auditor
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Basis for opinion
those standards are further described in the Auditor’s responsibilities for the audit of the financial
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
report section of our report. We are independent of the Group in accordance with the auditor
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
those standards are further described in the Auditor’s responsibilities for the audit of the financial
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
Basis for opinion
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
report section of our report. We are independent of the Group in accordance with the auditor
the Code.
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
those standards are further described in the Auditor’s responsibilities for the audit of the financial
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
the Code.
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
report section of our report. We are independent of the Group in accordance with the auditor
for our opinion.
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
independence requirements of the Corporations Act 2001 and the ethical requirements of the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
the Code.
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Key audit matters
for our opinion.
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
Key audit matters are those matters that, in our professional judgment, were of most significance in
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
our audit of the financial report of the current year. These matters were addressed in the context of
Key audit matters
for our opinion.
the Code.
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
Key audit matters are those matters that, in our professional judgment, were of most significance in
a separate opinion on these matters. For each matter below, our description of how our audit
Key audit matters
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
our audit of the financial report of the current year. These matters were addressed in the context of
addressed the matter is provided in that context.
for our opinion.
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
Key audit matters are those matters that, in our professional judgment, were of most significance in
a separate opinion on these matters. For each matter below, our description of how our audit
our audit of the financial report of the current year. These matters were addressed in the context of
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
Key audit matters
addressed the matter is provided in that context.
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
financial report section of our report, including in relation to these matters. Accordingly, our audit
a separate opinion on these matters. For each matter below, our description of how our audit
Key audit matters are those matters that, in our professional judgment, were of most significance in
included the performance of procedures designed to respond to our assessment of the risks of
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
addressed the matter is provided in that context.
our audit of the financial report of the current year. These matters were addressed in the context of
material misstatement of the financial report. The results of our audit procedures, including the
financial report section of our report, including in relation to these matters. Accordingly, our audit
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
procedures performed to address the matters below, provide the basis for our audit opinion on the
included the performance of procedures designed to respond to our assessment of the risks of
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
a separate opinion on these matters. For each matter below, our description of how our audit
accompanying financial report.
material misstatement of the financial report. The results of our audit procedures, including the
financial report section of our report, including in relation to these matters. Accordingly, our audit
addressed the matter is provided in that context.
procedures performed to address the matters below, provide the basis for our audit opinion on the
included the performance of procedures designed to respond to our assessment of the risks of
accompanying financial report.
material misstatement of the financial report. The results of our audit procedures, including the
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
procedures performed to address the matters below, provide the basis for our audit opinion on the
A member firm of Ernst & Young Global Limited
financial report section of our report, including in relation to these matters. Accordingly, our audit
Liability limited by a scheme approved under Professional Standards Legislation
accompanying financial report.
included the performance of procedures designed to respond to our assessment of the risks of
91
material misstatement of the financial report. The results of our audit procedures, including the
A member firm of Ernst & Young Global Limited
procedures performed to address the matters below, provide the basis for our audit opinion on the
Liability limited by a scheme approved under Professional Standards Legislation
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report 2021 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
Carrying value of intangible assets
cash flow assumptions used in the
impairment model.
and of its consolidated financial performance for the year ended on that date; and
Why significant
How our audit addressed the key audit matter
As at 31 July 2021, the Group held $827.0
million (or 36.4% of total assets) in goodwill and
indefinite-life brand names recognised from
historical business combinations.
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 31 July 2021, 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.
► Evaluated whether the determination of
CGUs was in accordance with Australian
Accounting Standards.
As outlined in Note 18 of the financial report,
the goodwill and brand names are tested by the
Group for impairment annually.
Our audit procedures included the following:
► Assessed the application of the valuation
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
► Agreed the cashflows within the impairment
methodologies applied.
model to forecast cashflows.
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
► Considered the impact of COVID-19 on the
The recoverable amount of these assets was
determined based on a value in use model
referencing discounted cash flows of the retail
segment for goodwill, and the casual wear,
women’s wear and non-apparel cash generating
units (CGUs) for brand names. The model
contains estimates and significant judgements
regarding future cash flow projections which are
critical to the assessment of impairment,
particularly planned sales growth in the casual
wear and women’s wear CGUs and discount
rates applied.
► Considered the historical accuracy of the
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Group’s cash flow forecasting process.
Basis for opinion
► Compared the forecast cash flows used in the
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
value in use model to the actual current year
those standards are further described in the Auditor’s responsibilities for the audit of the financial
financial performance of the underlying CGUs
report section of our report. We are independent of the Group in accordance with the auditor
for reasonability.
independence requirements of the Corporations Act 2001 and the ethical requirements of the
► Assessed key inputs being discount rates,
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
relief from royalty rates and sales growth
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
rates adopted in the value in use model
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
including comparison to available market
the Code.
data for comparable businesses.
At 31 July 2021, the Group’s performance, and
the economy as a whole, continue to be
impacted by the restrictions and economic
uncertainty resulting from the COVID-19
pandemic. Significant assumptions used in the
impairment testing referred to above are
inherently subjective and in times of economic
uncertainty the degree of subjectivity is higher
than it might otherwise be. Changes in certain
assumptions can lead to significant changes in
the recoverable amount of these assets.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
► Performed sensitivity analysis on key inputs
for our opinion.
and assumptions included in the forecast
cashflows and impairment models including
the discount rates, to assess the risk of the
CGU carrying value exceeding the
recoverable amount.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
Accordingly, given the significant judgements
a separate opinion on these matters. For each matter below, our description of how our audit
and estimates involved in assessing impairment
addressed the matter is provided in that context.
of intangible assets we considered this a key
audit matter. For the same reasons we consider
it important that attention is drawn to the
information in Note 18.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
► Assessed the adequacy of the disclosures
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
Our valuation specialists were involved in the
procedures performed to address the matters below, provide the basis for our audit opinion on the
conduct of these procedures where considered
accompanying financial report.
relevant.
► Compared earnings multiples derived from
the Group’s value in use model to those
observable from external market data of
comparable listed entities.
included in the financial report.
A member firm of Ernst & Young Global Limited
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Premier Investments Limited 92
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Independent Auditor’s Report continued
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
Existence and valuation of inventory
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
Why significant
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’
As at 31 July 2021, the Group held $208.8
Our audit procedures included the following:
declaration.
million in inventories.
How our audit addressed the key audit matter
► Assessed the application of valuation
Inventories are held at several distribution
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
centres, as well as at over 1,200 retail stores.
Act 2001, including:
As detailed in Note 10 of the financial report,
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
inventories are valued at the lower of cost and
net realisable value.
controls over the determination of standard
costs
methodologies applied for compliance with
Australian Accounting Standards.
and of its consolidated financial performance for the year ended on that date; and
► Assessed the effectiveness of relevant
► Selected a sample of inventory lines and
recalculated standard costs based on
supporting supplier invoices and assessed the
allocation of costs absorbed from the
purchasing department, freight and
warehouse costs.
The cost of finished goods includes a proportion
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
of purchasing department costs, as well as
freight, handling, and warehouse costs incurred
Basis for opinion
to deliver the goods to the point of sale.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Provisions are recorded for matters such as
those standards are further described in the Auditor’s responsibilities for the audit of the financial
aged and slow moving inventory to ensure
report section of our report. We are independent of the Group in accordance with the auditor
► Attended store and distribution centre
inventory is recorded at the lower of cost and
independence requirements of the Corporations Act 2001 and the ethical requirements of the
inventory counts on a sample basis and
net realisable value. This requires a level of
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
assessed the stock counting process which
judgement with regard to changing consumer
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
addressed inventory quantity and condition.
demands and fashion trends. Such judgements
the Code.
include the Group’s expectations for future sales
► Assessed the basis for inventory provisions,
and inventory mark downs.
including the rationale for recording specific
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
provisions. In doing so we examined the
Accordingly, the existence and valuation of
for our opinion.
ageing profile of inventory, considered how
inventory was considered to be a key audit
the Group identified specific slow-moving
matter.
Key audit matters
inventories, assessed future selling prices
Key audit matters are those matters that, in our professional judgment, were of most significance in
and historical loss rates.
our audit of the financial report of the current year. These matters were addressed in the context of
► Tested the slow-moving inventory reports for
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.
accuracy and completeness.
► Considered the completeness of inventory
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.
provisions by identifying mark down sales at
or subsequent to year end.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
93
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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
AASB 16 Leases
Independent auditor’s report to the Members of Premier Investments
Limited
Why significant
AASB 16 Leases
How our audit addressed the key audit matter
The Group holds a significant volume of leases
Why significant
Carrying value of intangible assets
Report on the audit of the financial report
by number and value over retail sites as a
Why significant
The Group holds a significant volume of leases
lessee, which makes the impact of this standard
by number and value over retail sites as a
significant to the financial statements of the
Opinion
lessee, which makes the impact of this standard
As at 31 July 2021, the Group held $827.0
Group.
Our audit procedures included the following:
How our audit addressed the key audit matter
► Assessed the mathematical accuracy of the
Our audit procedures included the following:
How our audit addressed the key audit matter
Group’s AASB 16 lease calculation model.
► Assessed the mathematical accuracy of the
Group.
We have audited the financial report of Premier Investments Limited (the Company) and its
significant to the financial statements of the
million (or 36.4% of total assets) in goodwill and
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
The recognition and measurement of
► Assessed the application of the valuation
► For a sample of leases, agreed the Group’s
indefinite-life brand names recognised from
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
remeasured lease agreements executed during
model in relation to those leases, such as,
inputs in the AASB 16 lease calculation
The recognition and measurement of
historical business combinations.
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
the year in accordance with AASB 16 Leases
methodologies applied.
inputs in the AASB 16 lease calculation
key dates, fixed and variable rent payments,
► For a sample of leases, agreed the Group’s
Our audit procedures included the following:
Group’s AASB 16 lease calculation model.
financial statements, including a summary of significant accounting policies, and the directors’
(“AASB 16”) are dependent on a number of key
declaration.
remeasured lease agreements executed during
As outlined in Note 18 of the financial report,
the year in accordance with AASB 16 Leases
judgements and estimates. These include:
the goodwill and brand names are tested by the
(“AASB 16”) are dependent on a number of key
Group for impairment annually.
The treatment of the option to extend and
judgements and estimates. These include:
►
►
The recoverable amount of these assets was
The treatment of the option to extend and
Act 2001, including:
The impact of COVID-19 rental abatements
determined based on a value in use model
the lease term under holdover;
►
and backdated rent variations; and
model in relation to those leases, such as,
► Evaluated whether the determination of
renewal options and incentives, to the
key dates, fixed and variable rent payments,
CGUs was in accordance with Australian
relevant terms of the underlying signed lease
renewal options and incentives, to the
Accounting Standards.
agreements.
relevant terms of the underlying signed lease
model to forecast cashflows.
to renegotiated lease agreements during the
► Assessed the accounting treatment applied
► Considered the impact of COVID-19 on the
year, including the impact of abatements and
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
► Agreed the cashflows within the impairment
► Assessed the accounting treatment applied
the lease term under holdover;
agreements.
►
referencing discounted cash flows of the retail
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
to renegotiated lease agreements during the
The impact of COVID-19 rental abatements
segment for goodwill, and the casual wear,
and of its consolidated financial performance for the year ended on that date; and
year, including the impact of abatements and
The calculation of incremental borrowing
backdated rental savings on the lease
cash flow assumptions used in the
and backdated rent variations; and
►
balances recognised.
impairment model.
backdated rental savings on the lease
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Accordingly, given the significant judgements
units (CGUs) for brand names. The model
► Considered the historical accuracy of the
► Considered the Group’s assumptions in
balances recognised.
rates.
women’s wear and non-apparel cash generating
The calculation of incremental borrowing
►
rates.
and estimates involved in assessing the
contains estimates and significant judgements
Accordingly, given the significant judgements
treatment of lease remeasurements we
regarding future cash flow projections which are
Basis for opinion
and estimates involved in assessing the
considered this a key audit matter.
critical to the assessment of impairment,
relation to the treatment of the option to
Group’s cash flow forecasting process.
► Considered the Group’s assumptions in
extend and lease term under holdover.
► Compared the forecast cash flows used in the
relation to the treatment of the option to
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
value in use model to the actual current year
► Assessed the incremental borrowing rates
extend and lease term under holdover.
treatment of lease remeasurements we
particularly planned sales growth in the casual
those standards are further described in the Auditor’s responsibilities for the audit of the financial
used to discount future lease payments to
financial performance of the underlying CGUs
considered this a key audit matter.
wear and women’s wear CGUs and discount
report section of our report. We are independent of the Group in accordance with the auditor
present value.
► Assessed the incremental borrowing rates
for reasonability.
independence requirements of the Corporations Act 2001 and the ethical requirements of the
rates applied.
used to discount future lease payments to
► Assessed the adequacy of the disclosures
► Assessed key inputs being discount rates,
present value.
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
At 31 July 2021, the Group’s performance, and
included in the financial report.
relief from royalty rates and sales growth
the economy as a whole, continue to be
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
► Assessed the adequacy of the disclosures
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
included in the financial report.
► We assessed the Group’s calculations of the
rates adopted in the value in use model
impacted by the restrictions and economic
the Code.
uncertainty resulting from the COVID-19
pandemic. Significant assumptions used in the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
judgements made in respect of the Group’s
► Performed sensitivity analysis on key inputs
including comparison to available market
financial impact of the standard and the
► We assessed the Group’s calculations of the
data for comparable businesses.
accounting policies, estimates and
financial impact of the standard and the
accounting policies, estimates and
right of use assets and lease liabilities, as
and assumptions included in the forecast
judgements made in respect of the Group’s
well as related depreciation and interest
cashflows and impairment models including
right of use assets and lease liabilities, as
expense recognised through the
the discount rates, to assess the risk of the
well as related depreciation and interest
impairment testing referred to above are
for our opinion.
inherently subjective and in times of economic
uncertainty the degree of subjectivity is higher
Key audit matters
than it might otherwise be. Changes in certain
Key audit matters are those matters that, in our professional judgment, were of most significance in
CGU carrying value exceeding the
Consolidated Statement of Comprehensive
assumptions can lead to significant changes in
our audit of the financial report of the current year. These matters were addressed in the context of
recoverable amount.
expense recognised through the
Income.
Consolidated Statement of Comprehensive
the recoverable amount of these assets.
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
Accordingly, given the significant judgements
a separate opinion on these matters. For each matter below, our description of how our audit
► Compared earnings multiples derived from
Income.
and estimates involved in assessing impairment
addressed the matter is provided in that context.
Information other than the financial report and auditor’s report thereon
observable from external market data of
of intangible assets we considered this a key
The directors are responsible for the other information. The other information comprises the
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
Information other than the financial report and auditor’s report thereon
audit matter. For the same reasons we consider
information in Note 18.
it important that attention is drawn to the
information included in the Company’s 2021 annual report other than the financial report and our
financial report section of our report, including in relation to these matters. Accordingly, our audit
The directors are responsible for the other information. The other information comprises the
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
included the performance of procedures designed to respond to our assessment of the risks of
information included in the Company’s 2021 annual report other than the financial report and our
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
material misstatement of the financial report. The results of our audit procedures, including the
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
► Assessed the adequacy of the disclosures
Our valuation specialists were involved in the
included in the financial report.
procedures performed to address the matters below, provide the basis for our audit opinion on the
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
conduct of these procedures where considered
report after the date of this auditor’s report.
comparable listed entities.
the Group’s value in use model to those
accompanying financial report.
report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
relevant.
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
Our opinion on the financial report does not cover the other information and we do not and will not
and our related assurance opinion.
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
A member firm of Ernst & Young Global Limited
and our related assurance opinion.
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
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report 2021 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
AASB 16 Leases
Independent auditor’s report to the Members of Premier Investments
Limited
Why significant
AASB 16 Leases
How our audit addressed the key audit matter
and of its consolidated financial performance for the year ended on that date; and
Our audit procedures included the following:
The Group holds a significant volume of leases
How our audit addressed the key audit matter
Why significant
Report on the audit of the financial report
Carrying value of intangible assets
by number and value over retail sites as a
► Assessed the mathematical accuracy of the
Our audit procedures included the following:
The Group holds a significant volume of leases
lessee, which makes the impact of this standard
How our audit addressed the key audit matter
Why significant
Group’s AASB 16 lease calculation model.
by number and value over retail sites as a
Opinion
► Assessed the mathematical accuracy of the
significant to the financial statements of the
lessee, which makes the impact of this standard
► For a sample of leases, agreed the Group’s
As at 31 July 2021, the Group held $827.0
Our audit procedures included the following:
Group.
Group’s AASB 16 lease calculation model.
We have audited the financial report of Premier Investments Limited (the Company) and its
significant to the financial statements of the
inputs in the AASB 16 lease calculation
million (or 36.4% of total assets) in goodwill and
The recognition and measurement of
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
► Assessed the application of the valuation
► For a sample of leases, agreed the Group’s
Group.
model in relation to those leases, such as,
indefinite-life brand names recognised from
remeasured lease agreements executed during
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
methodologies applied.
inputs in the AASB 16 lease calculation
The recognition and measurement of
key dates, fixed and variable rent payments,
historical business combinations.
the year in accordance with AASB 16 Leases
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
model in relation to those leases, such as,
► Evaluated whether the determination of
remeasured lease agreements executed during
renewal options and incentives, to the
(“AASB 16”) are dependent on a number of key
financial statements, including a summary of significant accounting policies, and the directors’
As outlined in Note 18 of the financial report,
key dates, fixed and variable rent payments,
CGUs was in accordance with Australian
the year in accordance with AASB 16 Leases
relevant terms of the underlying signed lease
declaration.
judgements and estimates. These include:
the goodwill and brand names are tested by the
renewal options and incentives, to the
Accounting Standards.
(“AASB 16”) are dependent on a number of key
agreements.
The treatment of the option to extend and
Group for impairment annually.
relevant terms of the underlying signed lease
►
judgements and estimates. These include:
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
► Agreed the cashflows within the impairment
► Assessed the accounting treatment applied
the lease term under holdover;
agreements.
The recoverable amount of these assets was
The treatment of the option to extend and
Act 2001, including:
model to forecast cashflows.
►
to renegotiated lease agreements during the
The impact of COVID-19 rental abatements
►
determined based on a value in use model
► Assessed the accounting treatment applied
the lease term under holdover;
year, including the impact of abatements and
► Considered the impact of COVID-19 on the
and backdated rent variations; and
referencing discounted cash flows of the retail
to renegotiated lease agreements during the
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
The impact of COVID-19 rental abatements
backdated rental savings on the lease
►
cash flow assumptions used in the
The calculation of incremental borrowing
segment for goodwill, and the casual wear,
year, including the impact of abatements and
►
and backdated rent variations; and
balances recognised.
impairment model.
rates.
women’s wear and non-apparel cash generating
backdated rental savings on the lease
The calculation of incremental borrowing
►
► Considered the Group’s assumptions in
► Considered the historical accuracy of the
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Accordingly, given the significant judgements
units (CGUs) for brand names. The model
balances recognised.
rates.
relation to the treatment of the option to
and estimates involved in assessing the
Group’s cash flow forecasting process.
contains estimates and significant judgements
► Considered the Group’s assumptions in
Accordingly, given the significant judgements
extend and lease term under holdover.
treatment of lease remeasurements we
Basis for opinion
regarding future cash flow projections which are
► Compared the forecast cash flows used in the
relation to the treatment of the option to
and estimates involved in assessing the
considered this a key audit matter.
critical to the assessment of impairment,
► Assessed the incremental borrowing rates
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
value in use model to the actual current year
extend and lease term under holdover.
treatment of lease remeasurements we
particularly planned sales growth in the casual
used to discount future lease payments to
those standards are further described in the Auditor’s responsibilities for the audit of the financial
financial performance of the underlying CGUs
considered this a key audit matter.
► Assessed the incremental borrowing rates
wear and women’s wear CGUs and discount
report section of our report. We are independent of the Group in accordance with the auditor
present value.
for reasonability.
used to discount future lease payments to
rates applied.
independence requirements of the Corporations Act 2001 and the ethical requirements of the
► Assessed the adequacy of the disclosures
► Assessed key inputs being discount rates,
present value.
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
included in the financial report.
relief from royalty rates and sales growth
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
► Assessed the adequacy of the disclosures
rates adopted in the value in use model
► We assessed the Group’s calculations of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
included in the financial report.
including comparison to available market
financial impact of the standard and the
the Code.
► We assessed the Group’s calculations of the
data for comparable businesses.
accounting policies, estimates and
financial impact of the standard and the
judgements made in respect of the Group’s
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
► Performed sensitivity analysis on key inputs
accounting policies, estimates and
for our opinion.
right of use assets and lease liabilities, as
and assumptions included in the forecast
judgements made in respect of the Group’s
well as related depreciation and interest
cashflows and impairment models including
right of use assets and lease liabilities, as
Key audit matters
expense recognised through the
the discount rates, to assess the risk of the
well as related depreciation and interest
Consolidated Statement of Comprehensive
Key audit matters are those matters that, in our professional judgment, were of most significance in
CGU carrying value exceeding the
expense recognised through the
Income.
our audit of the financial report of the current year. These matters were addressed in the context of
recoverable amount.
Consolidated Statement of Comprehensive
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
► Compared earnings multiples derived from
Income.
Accordingly, given the significant judgements
a separate opinion on these matters. For each matter below, our description of how our audit
the Group’s value in use model to those
and estimates involved in assessing impairment
addressed the matter is provided in that context.
Information other than the financial report and auditor’s report thereon
observable from external market data of
of intangible assets we considered this a key
comparable listed entities.
The directors are responsible for the other information. The other information comprises the
Information other than the financial report and auditor’s report thereon
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
audit matter. For the same reasons we consider
information included in the Company’s 2021 annual report other than the financial report and our
► Assessed the adequacy of the disclosures
financial report section of our report, including in relation to these matters. Accordingly, our audit
it important that attention is drawn to the
The directors are responsible for the other information. The other information comprises the
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
included the performance of procedures designed to respond to our assessment of the risks of
information in Note 18.
information included in the Company’s 2021 annual report other than the financial report and our
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
material misstatement of the financial report. The results of our audit procedures, including the
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
Our valuation specialists were involved in the
report after the date of this auditor’s report.
procedures performed to address the matters below, provide the basis for our audit opinion on the
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
conduct of these procedures where considered
accompanying financial report.
report after the date of this auditor’s report.
relevant.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
Our opinion on the financial report does not cover the other information and we do not and will not
and our related assurance opinion.
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
A member firm of Ernst & Young Global Limited
and our related assurance opinion.
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
At 31 July 2021, the Group’s performance, and
the economy as a whole, continue to be
impacted by the restrictions and economic
uncertainty resulting from the COVID-19
pandemic. Significant assumptions used in the
impairment testing referred to above are
inherently subjective and in times of economic
uncertainty the degree of subjectivity is higher
than it might otherwise be. Changes in certain
assumptions can lead to significant changes in
the recoverable amount of these assets.
included in the financial report.
Premier Investments Limited 94
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Independent Auditor’s Report continued
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
and of its consolidated financial performance for the year ended on that date; and
Opinion
We have audited the financial report of Premier Investments Limited (the Company) and its
In connection with our audit of the financial report, our responsibility is to read the other information
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
and, in doing so, consider whether the other information is materially inconsistent with the financial
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
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’
If, based on the work we have performed on the other information obtained prior to the date of this
declaration.
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.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
Responsibilities of the directors for the financial report
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
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
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
Basis for opinion
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
those standards are further described in the Auditor’s responsibilities for the audit of the financial
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
report section of our report. We are independent of the Group in accordance with the auditor
operations, or have no realistic alternative but to do so.
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Auditor’s responsibilities for the audit of the financial report
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
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
the Code.
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
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
audit conducted in accordance with the Australian Auditing Standards will always detect a material
for our opinion.
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
Key audit matters
decisions of users taken on the basis of this financial report.
Key audit matters are those matters that, in our professional judgment, were of most significance in
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
our audit of the financial report of the current year. These matters were addressed in the context of
judgment and maintain professional scepticism throughout the audit. We also:
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
► Identify and assess the risks of material misstatement of the financial report, whether due to
addressed the matter is provided in that context.
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
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
detecting a material misstatement resulting from fraud is higher than for one resulting from
financial report section of our report, including in relation to these matters. Accordingly, our audit
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
included the performance of procedures designed to respond to our assessment of the risks of
override of internal control.
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
► Obtain an understanding of internal control relevant to the audit in order to design audit
accompanying financial report.
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.
A member firm of Ernst & Young Global Limited
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
Liability limited by a scheme approved under Professional Standards Legislation
estimates and related disclosures made by the directors.
95
► 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
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
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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
Ernst & Young
The directors of the Company are responsible for the preparation of the financial report that gives a
Melbourne VIC 3000 Australia
ey.com/au
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
GPO Box 67 Melbourne VIC 3001
and for such internal control as the directors determine is necessary to enable the preparation of the
8 Exhibition Street
financial report that gives a true and fair view and is free from material misstatement, whether due to
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
fraud or error.
Limited
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
Independent auditor’s report to the Members of Premier Investments
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Carrying value of intangible assets
Report on the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
Why significant
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
How our audit addressed the key audit matter
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
Opinion
As at 31 July 2021, the Group held $827.0
audit conducted in accordance with the Australian Auditing Standards will always detect a material
We have audited the financial report of Premier Investments Limited (the Company) and its
Our audit procedures included the following:
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
million (or 36.4% of total assets) in goodwill and
► Assessed the application of the valuation
if, individually or in the aggregate, they could reasonably be expected to influence the economic
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
indefinite-life brand names recognised from
decisions of users taken on the basis of this financial report.
historical business combinations.
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
methodologies applied.
financial statements, including a summary of significant accounting policies, and the directors’
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
CGUs was in accordance with Australian
As outlined in Note 18 of the financial report,
the goodwill and brand names are tested by the
judgment and maintain professional scepticism throughout the audit. We also:
Accounting Standards.
declaration.
► Evaluated whether the determination of
Group for impairment annually.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
► Agreed the cashflows within the impairment
► Identify and assess the risks of material misstatement of the financial report, whether due to
The recoverable amount of these assets was
Act 2001, including:
determined based on a value in use model
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
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
referencing discounted cash flows of the retail
► Considered the impact of COVID-19 on the
segment for goodwill, and the casual wear,
detecting a material misstatement resulting from fraud is higher than for one resulting from
and of its consolidated financial performance for the year ended on that date; and
cash flow assumptions used in the
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
impairment model.
women’s wear and non-apparel cash generating
override of internal control.
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
units (CGUs) for brand names. The model
► Considered the historical accuracy of the
model to forecast cashflows.
contains estimates and significant judgements
Group’s cash flow forecasting process.
Basis for opinion
► Obtain an understanding of internal control relevant to the audit in order to design audit
regarding future cash flow projections which are
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
► Compared the forecast cash flows used in the
critical to the assessment of impairment,
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
value in use model to the actual current year
opinion on the effectiveness of the Group’s internal control.
particularly planned sales growth in the casual
those standards are further described in the Auditor’s responsibilities for the audit of the financial
financial performance of the underlying CGUs
wear and women’s wear CGUs and discount
report section of our report. We are independent of the Group in accordance with the auditor
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
for reasonability.
independence requirements of the Corporations Act 2001 and the ethical requirements of the
estimates and related disclosures made by the directors.
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
► Assessed key inputs being discount rates,
rates applied.
At 31 July 2021, the Group’s performance, and
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
the economy as a whole, continue to be
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
and, based on the audit evidence obtained, whether a material uncertainty exists related to
impacted by the restrictions and economic
rates adopted in the value in use model
relief from royalty rates and sales growth
including comparison to available market
uncertainty resulting from the COVID-19
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
the Code.
data for comparable businesses.
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
pandemic. Significant assumptions used in the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
► Performed sensitivity analysis on key inputs
impairment testing referred to above are
for our opinion.
inherently subjective and in times of economic
A member firm of Ernst & Young Global Limited
uncertainty the degree of subjectivity is higher
Liability limited by a scheme approved under Professional Standards Legislation
Key audit matters
than it might otherwise be. Changes in certain
and assumptions included in the forecast
cashflows and impairment models including
the discount rates, to assess the risk of the
Key audit matters are those matters that, in our professional judgment, were of most significance in
CGU carrying value exceeding the
assumptions can lead to significant changes in
our audit of the financial report of the current year. These matters were addressed in the context of
recoverable amount.
the recoverable amount of these assets.
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
► Compared earnings multiples derived from
Accordingly, given the significant judgements
a separate opinion on these matters. For each matter below, our description of how our audit
and estimates involved in assessing impairment
addressed the matter is provided in that context.
of intangible assets we considered this a key
the Group’s value in use model to those
observable from external market data of
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
audit matter. For the same reasons we consider
financial report section of our report, including in relation to these matters. Accordingly, our audit
► Assessed the adequacy of the disclosures
it important that attention is drawn to the
included the performance of procedures designed to respond to our assessment of the risks of
included in the financial report.
information in Note 18.
material misstatement of the financial report. The results of our audit procedures, including the
Our valuation specialists were involved in the
procedures performed to address the matters below, provide the basis for our audit opinion on the
conduct of these procedures where considered
comparable listed entities.
accompanying financial report.
relevant.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report 2021 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.
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
Why significant
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
Independent auditor’s report to the Members of Premier Investments
operations, or have no realistic alternative but to do so.
Limited
Auditor’s responsibilities for the audit of the financial report
Report on the audit of the financial report
Carrying value of intangible assets
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
How our audit addressed the key audit matter
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
Opinion
audit conducted in accordance with the Australian Auditing Standards will always detect a material
We have audited the financial report of Premier Investments Limited (the Company) and its
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
► Assessed the application of the valuation
if, individually or in the aggregate, they could reasonably be expected to influence the economic
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
decisions of users taken on the basis of this financial report.
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
► Evaluated whether the determination of
financial statements, including a summary of significant accounting policies, and the directors’
CGUs was in accordance with Australian
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
declaration.
judgment and maintain professional scepticism throughout the audit. We also:
Accounting Standards.
As at 31 July 2021, the Group held $827.0
million (or 36.4% of total assets) in goodwill and
indefinite-life brand names recognised from
historical business combinations.
As outlined in Note 18 of the financial report,
the goodwill and brand names are tested by the
Group for impairment annually.
Our audit procedures included the following:
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
► Identify and assess the risks of material misstatement of the financial report, whether due to
Act 2001, including:
► Agreed the cashflows within the impairment
methodologies applied.
model to forecast cashflows.
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
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
detecting a material misstatement resulting from fraud is higher than for one resulting from
and of its consolidated financial performance for the year ended on that date; and
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
cash flow assumptions used in the
impairment model.
► Considered the historical accuracy of the
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Group’s cash flow forecasting process.
► Considered the impact of COVID-19 on the
The recoverable amount of these assets was
determined based on a value in use model
referencing discounted cash flows of the retail
segment for goodwill, and the casual wear,
women’s wear and non-apparel cash generating
units (CGUs) for brand names. The model
contains estimates and significant judgements
regarding future cash flow projections which are
critical to the assessment of impairment,
particularly planned sales growth in the casual
wear and women’s wear CGUs and discount
rates applied.
estimates and related disclosures made by the directors.
At 31 July 2021, the Group’s performance, and
the economy as a whole, continue to be
impacted by the restrictions and economic
uncertainty resulting from the COVID-19
pandemic. Significant assumptions used in the
impairment testing referred to above are
inherently subjective and in times of economic
uncertainty the degree of subjectivity is higher
than it might otherwise be. Changes in certain
assumptions can lead to significant changes in
the recoverable amount of these assets.
► Obtain an understanding of internal control relevant to the audit in order to design audit
Basis for opinion
► Compared the forecast cash flows used in the
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
value in use model to the actual current year
opinion on the effectiveness of the Group’s internal control.
those standards are further described in the Auditor’s responsibilities for the audit of the financial
financial performance of the underlying CGUs
report section of our report. We are independent of the Group in accordance with the auditor
for reasonability.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
independence requirements of the Corporations Act 2001 and the ethical requirements of the
► Assessed key inputs being discount rates,
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
relief from royalty rates and sales growth
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
rates adopted in the value in use model
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
and, based on the audit evidence obtained, whether a material uncertainty exists related to
including comparison to available market
the Code.
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
data for comparable businesses.
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
► Performed sensitivity analysis on key inputs
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
for our opinion.
and assumptions included in the forecast
A member firm of Ernst & Young Global Limited
cashflows and impairment models including
Liability limited by a scheme approved under Professional Standards Legislation
Key audit matters
the discount rates, to assess the risk of the
Key audit matters are those matters that, in our professional judgment, were of most significance in
CGU carrying value exceeding the
our audit of the financial report of the current year. These matters were addressed in the context of
recoverable amount.
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
Accordingly, given the significant judgements
a separate opinion on these matters. For each matter below, our description of how our audit
and estimates involved in assessing impairment
addressed the matter is provided in that context.
of intangible assets we considered this a key
audit matter. For the same reasons we consider
it important that attention is drawn to the
information in Note 18.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
► Assessed the adequacy of the disclosures
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
Our valuation specialists were involved in the
procedures performed to address the matters below, provide the basis for our audit opinion on the
conduct of these procedures where considered
accompanying financial report.
relevant.
► Compared earnings multiples derived from
the Group’s value in use model to those
observable from external market data of
comparable listed entities.
included in the financial report.
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Premier Investments Limited 96
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Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Independent Auditor’s Report continued
Independent auditor’s report to the Members of Premier Investments
Limited
Independent auditor’s report to the Members of Premier Investments
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Premier Investments Limited (the Company) and its
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
to the date of our auditor’s report. However, future events or conditions may cause the Group to
as at 31 July 2021, the consolidated statement of comprehensive income, consolidated statement of
cease to continue as a going concern.
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’
► Evaluate the overall presentation, structure and content of the financial report, including the
declaration.
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
► 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
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
responsible for the direction, supervision and performance of the Group audit. We remain solely
and of its consolidated financial performance for the year ended on that date; and
responsible for our audit opinion.
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
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
Basis for opinion
identify during our audit.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
We also provide the directors with a statement that we have complied with relevant ethical
report section of our report. We are independent of the Group in accordance with the auditor
requirements regarding independence, and to communicate with them all relationships and other
independence requirements of the Corporations Act 2001 and the ethical requirements of the
matters that may reasonably be thought to bear on our independence, and where applicable, actions
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
taken to eliminate threats or safeguards applied.
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
From the matters communicated to the directors, we determine those matters that were of most
the Code.
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
for our opinion.
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.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
Report on the audit of the Remuneration Report
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
Opinion on the Remuneration Report
a separate opinion on these matters. For each matter below, our description of how our audit
We have audited the Remuneration Report included in the directors’ report for the year ended 31 July
addressed the matter is provided in that context.
2021.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
In our opinion, the Remuneration Report of Premier Investments Limited for the year ended 31 July
financial report section of our report, including in relation to these matters. Accordingly, our audit
2021, complies with section 300A of the Corporations Act 2001.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
97
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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
Responsibilities
Report on the audit of the financial report
The directors of the Company are responsible for the preparation and presentation of the
Opinion
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
We have audited the financial report of Premier Investments Limited (the Company) and its
accordance with Australian Auditing Standards.
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 31 July 2021, 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’
Ernst & Young
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
declaration.
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
and of its consolidated financial performance for the year ended on that date; and
b. 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
Glenn Carmody
Partner
Melbourne
1 October 2021
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (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 judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Annual Report 2021 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
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Opinion
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
We have audited the financial report of Premier Investments Limited (the Company) and its
accordance with Australian Auditing Standards.
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 31 July 2021, 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.
Ernst & Young
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 31 July 2021
and of its consolidated financial performance for the year ended on that date; and
b. 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
Glenn Carmody
report section of our report. We are independent of the Group in accordance with the auditor
Partner
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Melbourne
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
1 October 2021
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 judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
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.
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Premier Investments Limited 98
A member firm of Ernst & Young Global Limited
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ASX ADDITIONAL SHAREHOLDER INFORMATION
ASX Additional Information
AS AT 12 OCTOBER 2021
as at 12 October 2021
TWENTY LARGEST SHAREHOLDERS
NAME
TOTAL
% IC
RANK
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3,544,881
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
NATIONAL NOMINEES LIMITED
LINFOX SHARE INVESTMENT PTY LTD
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
ARGO INVESTMENTS LIMITED
UBS NOMINEES PTY LTD
MILTON CORPORATION LIMITED
MR MARK MCINNES
MR CON ZEMPILAS
CITICORP NOMINEES PTY LIMITED
GEOMAR SUPERANNUATION PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
DAVID ALAN BULL
TOTAL FOR TOP 20:
SUBSTANTIAL SHAREHOLDERS
NAME
51,569,400
32.46%
25,482,238
16.04%
25,295,425
15.92%
11,091,107
8,235,331
4,437,699
3,764,500
2,577,014
2,379,568
1,426,423
1,250,000
711,181
590,321
582,100
470,000
259,261
250,000
247,899
201,472
6.98%
5.18%
2.79%
2.37%
2.23%
1.62%
1.50%
0.90%
0.79%
0.45%
0.37%
0.37%
0.30%
0.16%
0.16%
0.16%
0.13%
144,365,820
90.87%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
TOTAL UNITS
% IC
58,552,420
42.43%
14,120,975
8.89%
12,381,525
7.80%
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
Holders
1
TO
1,000
6,206
1,001
TO
5,000
2,168
5,001
TO
10,000
263
10,001
TO
100,000
174
100,001
TO
(MAX)
29
TOTAL
8,840
Ordinary Fully Paid Shares
2,191,965
4,778,273
1,940,680
4,176,147
145,776,894
158,863,959
The number of investors holding less than a marketable parcel of 17 securities ($29.91 on 12 October 2021) is
217 and they hold 627 securities.
VOTING RIGHTS
All ordinary shares carry one vote per share without restriction.
99
Annual Report 2021 Corporate 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 (resigned: 19 August 2021)
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