TRANSFORM YOURSELF 2024 ANNUAL REPORT CONTENTS FY2024 Key Highlights 02 Chair Letter 04 Managing Director and CEO Letter 06 Corporate Sustainability 08 Financial Report 10 Shareholder information 79 Corporate Information 82 Shaver Shop Group Limited In addition, the Company took significant steps to further improve its competitive position by securing a number of exclusive supply arrangements with global manufacturers, developing its first private brand offering (to launch in H1 FY2025), and rolling out its latest store design across several stores. These activities, together with our specialty retail focus and providing unparalleled customer service in our core categories, are designed to ensure Shaver Shop remains uniquely positioned to be the leading house of brands for men’s and women’s personal care and grooming needs across Australia and New Zealand. Shaver Shop delivered another solid financial result in FY2024 generating net profit of $15.1 million, and returning $12.8 million to shareholders through fully franked dividends. ABOUT US 123 (at 30 June 2024) 87% (in Australia) 756 Stores across ANZ Brand awareness Team members Annual Report 2024 01 FY2024 KEY HIGHLIGHTS 23% of total sales Online sales 44.4% (down 10 basis points) Gross profit margins $15.1m Net profit after tax Sales $219m Shaver Shop Group Limited 02 Shaver Shop Group Limited $34.1m (up $1.1 million) Operating cash flow $13.3m (at 30 June 24) Net cash 10.2¢ per share (100% franked) Dividends 89 (out of 100) Net promoter score Annual Report 2024 03 CHAIR LETTER Management continues to implement strategies to maximise profitability by maintaining gross profit margins and closely managing our cost base leading to a 10.1% drop in net profit after tax in FY2024. This is a credible result having regard to the high fixed cost nature of our business. In addition to having tight control over the operating levers of the business, Management also made significant progress in driving forward Shaver Shop’s strategic priorities. Strategic priorities After successfully navigating the impact of the pandemic earlier this decade, Management and the Board have been investigating various opportunities to drive incremental growth for the business. We considered international expansion, a number of potential bolt-on acquisitions as well as organic growth options. Each of these paths have different elements of risk that must be carefully considered, and at this stage, Shaver Shop’s Board is of the view that the best near term opportunities lie in growing the business organically using three core initiatives: • Strategic category management – extending our leading and high differentiated market position in our core categories by securing exclusive access to brands and products as well as launching our private brand (Transform U™); • Range expansion – selectively expanding into adjacent categories that make sense; and • Store network optimisation – maximising our network profitability through new stores, store refits and relocations, as well as evolving our store design to ensure we offer the best shopping experience possible for our customers. Our business delivered a solid performance in the 2024 financial year, particularly in Australia, where our unprompted brand recognition has reached 87% reflecting our position as the leading specialty retailer for men’s and women’s personal care and grooming solutions. The less discretionary nature of many of the categories we sell, as well as the strength of Shaver Shop’s brand, helped partially mitigate the impact of continuing high interest rates and cost of living pressures caused by persistent high inflation with sales declining 2.3% for the year. Dear shareholder, I am pleased, on behalf of our Board of Directors, to update you on Shaver Shop’s strategic progress and performance over the last 12 months. 87% cementing our leadership in personal care and grooming in Australia Our brand recognition hit 04 Shaver Shop Group Limited Balance sheet and capital management Pleasingly, our balance sheet remains conservatively positioned with net cash of $13.3 million at the end of the financial year. This provides Shaver Shop with optionality to invest in our strategic growth priorities as well as to continue returning significant amounts of capital to our shareholders by way of fully franked dividends. We maintained our dividend payout in 2024 at 10.2 cents per share which meant our payout ratio was slightly higher than our target range of 60 to 80% of cash NPAT. The Board will continue to be conscious of the need to maintain a disciplined approach to capital management that seeks to optimise the medium to long term returns for shareholders. We believe it remains prudent to maintain a strong and conservative balance sheet given geopolitical uncertainties, ongoing elevated inflation levels and while the outlook for the retail sector remains difficult to predict. Board and governance Having strong governance and business processes is core to Shaver Shop’s long term success and being an attractive place to work. Our team members have always been, and will continue to be, our most important asset so their safety and wellbeing continues to be paramount. We are also conscious of our upcoming sustainability reporting requirements with the expectation of first reporting in the 2027 financial year on climate related risks. We will continue to take steps to ensure we understand and minimise our impact on the environment as well as acting in a socially responsible manner. Lastly, it would be improper of me not to recognise the contribution of Brian Singer to Shaver Shop’s Board following his retirement at the end of the 2024 financial year. Brian was a member of the Nomination and Remuneration Committee and throughout his 13 years as a director provided invaluable insights around marketing, brand and general business advice. We thank Brian for his invaluable contribution to Shaver Shop and wish him well during his well-deserved retirement. Outlook We look forward to 2025 and beyond knowing Shaver Shop is well placed to continue performing strongly. Our brand awareness is at all time highs in Australia and continues to improve in New Zealand. We expect the sector to continue its growth trajectory over the medium to long term, particularly in men’s grooming, which continues to be increasingly accepted in society. Our speciality focus on personal care and grooming means we offer our customers a unique shopping experience accentuated by a high percentage of our range being exclusive to Shaver Shop. Finally, we also ensure our frontline staff are product and sales experts that deliver exceptional customer service. Over the coming 12 to 24 months, we look forward to ongoing updates regarding the progress of our three strategic priorities which we expect will continue to extend our market leading position in our core categories. In conclusion, I would like to thank Shaver Shop’s team for their hard work and dedication as well as to our customers and shareholders for your ongoing support. Sincerely Brodie Arnhold Independent Chair Annual Report 2024 05 MANAGING DIRECTOR AND CEO LETTER We made significant progress towards further extending our leadership position in our core grooming and hair removal categories. FY2024 Financial Results The effects of the inflationary environment, high interest rates and increased costs of living were pronounced over the last 12 months. This was most noticeable in terms of shopping centre foot traffic which, according to our tracking systems, declined 13% on average compared to the prior year. To counteract this significant headwind, we focussed on increasing our average transaction values (both online and in-store), maintaining high levels of sales conversion as well as maximising gross profit dollars. The end result from these initiatives was that sales decreased 2.3% to $219.4 million, while gross profit margins remained relatively flat at 44.4% (down 10 basis points on FY2023). In our view, this was a very solid outcome given subdued consumer demand across the retail sector as well as category mix changes towards some of our lower margin categories. Maintaining tight control over our operating expenses was also a key focus for Shaver Shop last year. Operating expenses only increased $0.4 million in absolute terms (or 0.7%) despite CPI measures and minimum wage levels rising much more quickly. This led to Shaver Shop generating net profit of $15.1 million last year, down 10.1%. Our financial outcomes are highly influenced by our customer service and operational metrics. Pleasingly these were also very strong with our net promoter score averaging 89 across the year (out of 100) with our customer experience score of 9.7 (out of 10). These inputs are critical for the medium to long term performance of the business as they drive customer loyalty, repeat purchase and word of mouth referrals. Progress against strategic priorities Shaver Shop has built a unique and difficult to replicate business model by working with suppliers to curate products and brands that are exclusively sold at Shaver Shop. Having a differentiated range that offers customers strong value for money ensures we remain highly relevant and are seen as the destination of choice for men’s and women’s personal grooming solutions. Exclusive 5 year licence for Skull Shaver In FY2024, we took significant steps to improve our competitive position by securing the exclusive rights to a number of brands, including by acquiring the 5 year exclusive brand and distribution licence for the Skull Shaver suite of products across Australia and New Zealand. Skull Shaver is a growing global brand that has developed a cult following in many markets and that Shaver Shop has ranged for approximately five years. Dear shareholders, Thank you for your ongoing support of Shaver Shop. Despite the headwinds of the current macroeconomic environment, the Company posted solid results for FY2024. 06 Shaver Shop Group Limited The acquisition of the exclusive licence for Skull Shaver across ANZ is a highly accretive opportunity for Shaver Shop that will allow us to derive 100% the benefit from our marketing and advertising activities that have helped build awareness and acceptance of these products in the region. In addition to the returns we expect from this deal, given we have the leading market share in our core hair removal categories, we expect this arrangement will showcase Shaver Shop’s ability to provide a turnkey solution for innovative global manufacturers that want to access the ANZ market and build their brand in a simple, relatively low risk and highly effective manner. Transform U™ launch Shaver Shop has also been developing its first private brand offering called Transform U™ which leverages our specialist knowledge of local customer needs and wants with products that fill a gap in our offering. This is an exciting step for our business and our customers, but we remain conscious that our global supplier partners will always be the most important driver of sales for our business. Expanding our “house of brands” In addition to the Skull Shaver and Transform U™ initiatives, Shaver Shop has worked to secure a number of new brands on an exclusive basis including: Epilady – a novel laser based, long term hair removal solution that works on almost all skin types and hair colours; oclean – a highly innovative range of power oral care products including toothbrushes and oral irrigators; and, Silk’n – a new, FDA approved IPL technology that can also be used on various skin and hair types. These are all important additions to our line-up that will continue to mean Shaver Shop is the destination of choice for men’s and women’s personal grooming solutions. Our activities to further differentiate our brand and product offerings (as outlined above) will lead to incremental working capital investments in the coming year in order to meet minimum order quantities and have appropriate stock levels when we launch in our stores. We currently expect this investment will be in the order of $2 million to $3 million in FY2025 and offers a strong return for the commensurate risk. Store design evolution As we continue to build out our product and brand offering, we need to ensure our stores are designed to best showcase our “house of brands” and provide customers with a relaxing, informative and enjoyable shopping experience. Our latest store designs reflect a contemporary look and feel, provide a highly tactile shopping experience and allow our customers to browse and shop without feeling overwhelmed or intimidated. As our range continues to evolve, it is likely that our average store size will need to increase slightly and provide the opportunity to present hero brands with appropriate merchandising. This will mean refitting and relocating our existing stores so that they reflect our latest brand and merchandising standards as well as opening new stores where we see attractive commercial returns. Looking ahead As we look forward to 2025, in addition to making sure we deliver exceptional customer service underpinned by unparalleled product and category knowledge, our priorities are clear. We must: • realise the expected growth and return on investment from the Skull Shaver licence so that we prove Shaver Shop’s ability to leverage our retail capability and be seen as an attractive option for global brands wanting to access the ANZ marketplace; • successfully launch the Transform U™ private brand as well as the other brands and products that we have curated over the last 12 months; • continue to update and evolve the look and feel of our stores and website so that customers are attracted to the brands we sell and fully engaged in the shopping experience; and • ensure we maximise the returns from key promotional events such as Black Friday, Christmas, and Boxing Day given customer shopping activity has been increasingly concentrated around these times. In conclusion, I would like to thank all of our team members, customers, suppliers and shareholders for their ongoing support. We are at an exciting time in Shaver Shop’s business with a number of new and important initiatives coming to fruition in the coming months. With our solid financial position and all the leading global brands in our core categories, we remain extremely well positioned to deliver attractive returns and value for shareholders over the medium to long term. Sincerely Cameron Fox Managing Director and CEO Annual Report 2024 07 CORPORATE SUSTAINABILITY That is why we are committed to ensuring Shaver Shop is recognised as a great place to work so that we retain and attract the highest quality people that are aligned with our culture and values. Our core value include: • Customer focus; • Accountability; • Adaptability; and • Drive for results. These values are uniformly shared throughout the business and are a foundational element in promoting our desired culture. Our Team In terms of size, our team remained relatively flat year over year at approximately 750. Over 54% of our team members are women, up approximately 3% on last year, with 50% of executive leadership team members being women. We continue to train and invest in our team members through face to face and online training including completing an HR Governance training program for all store managers in July 2024. Shaver Shop has also established a culture of connection through quarterly check-ins with team members to ensure we create an awareness of mental health and wellbeing and promoting positive practices to address mental health concerns. An employee assistance program is available for all team members should they require additional support. Through its various policies and practices, Shaver Shop endorses diversity and takes a zero-tolerance approach to discrimination, harassment (including sexual harassment) and bullying in the workplace. The health and safety of our team members remains a critical focus for our business. Shaver Shop carries out workplace inspections to identify and address hazards immediately. Pleasingly the number of reported injuries declined by 34% to 19 in FY2024 (FY2023 – 29). We remain committed to minimising occupational health and safety risks across Shaver Shop. Shaver Shop’s success as a business relies, in large part, on the talent and capability of our team members and ensuring we operate our business in a sustainable and socially responsible manner. 08 Shaver Shop Group Limited Our Community Shaver Shop is committed to being a good corporate citizen with programs to support employees with paid leave for those who wish to give back to the community in volunteer and charitable roles. Shaver Shop sources its products from manufacturers and distributors from around the world. We are committed to socially responsible sourcing of these products and work with our supply chain partners to minimise risks of modern slavery, human rights violations and negative impacts on the environment. When onboarding new suppliers, we request these suppliers to acknowledge compliance with our Supplier Charter which outlines Shaver Shop’s minimum expectation for suppliers that wish to work with us. As we launch our new private brand range (named Transform U™), Shaver Shop is working to manage these new direct sourcing risks by engaging external third-party auditors who review the operations and policies of each business prior to Shaver Shop engaging with them. We will continue to evolve our approach so that these risks are minimised to the greatest extent possible. Our Environment Shaver Shop is cognisant of the need to minimise its impact on the environment. We continue to take active steps to minimise waste, reduce power consumption and minimise greenhouse gas emissions in our business. We are also working with our supplier partners to seek to minimise environment impacts throughout our supply chain. We recognise that the changes in our climate are presenting new operational and strategic risks for our business as well as potential opportunities. As a result, we are seeking to broaden and deepen our understanding of climate related risk. For our Transform U™ brand, we have sought to maximise use of recyclable materials to the extent possible. As this range expands, we will continue seek to use packaging materials that minimise environmental impacts. In FY2024, we undertook an audit of all lighting used in our stores to identify where opportunities exist to reduce energy usage through efficient lighting alternatives. All new stores and all store refits use the latest low emission LED technology. Shaver Shop is committed to learning, monitoring and adapting our activities so that we improve each day and build a sustainable business that generates more value for our shareholders over the long term. 756 Team members 54% of team members are female Annual Report 2024 09 Contents Directors’ Report 11 Auditor’s Independence Declaration 35 Consolidated Statement of Profit or Loss and Other Comprehensive Income 36 Consolidated Balance Sheet 37 Consolidated Statement of Changes in Equity 38 Consolidated Statement of Cash Flows 39 Notes to the Consolidated Financial Statements 40 Consolidated Entity Disclosure Statement 71 Directors’ Declaration 72 Independent Auditor’s Report 73 Shareholder information 79 Corporate Information 82 10 Shaver Shop Group Limited Your directors present their report on the consolidated entity consisting of Shaver Shop Group Limited and the entities it controlled at the end of, or during, the year ended 30 June 2024. Throughout the report, the consolidated entity is referred to as the “Group”, the “Company” or “Shaver Shop”. Principal activities The principal activities of the Group during the financial year was the retailing of specialist personal care and grooming products both through Shaver Shop’s corporate owned stores as well as online through its websites and the online marketplaces it partners with. No significant change in the nature of these activities occurred during the year. Directors The following persons were directors of Shaver Shop Group Limited during the whole of the financial year: Broderick Arnhold Cameron Fox Craig Mathieson Trent Peterson Brian Singer Debra Singh Brian Singer resigned from the Board of Directors effective 30 June 2024. Company Secretary Lawrence Hamson held the position of Company Secretary during the whole of the financial year and up to the date of this report. Directors and directors’ interests The following information is current as at the date of this report: Broderick Arnhold Independent Chair, Non-Executive Director Expertise and Experience Brodie has over 15 years domestic and international experience in private equity, investment banking and corporate finance. He is currently an active investor and independent director for a number of private and public companies. Prior to his previous role as Chairman of iSelect Limited, he was the CEO of iSelect Limited and prior to that the CEO of Melbourne Racing Club for four years. Brodie worked for Investec Bank from 2010-2013 where he was responsible for building a high-net-worth private client business. Prior to this, Brodie worked for Westpac Banking Corporation where he grew the institutional bank’s presence in Victoria, South Australia and Western Australia, and from 2006-2010 held the role of Investment Director at Westpac’s private equity fund. Other Current Listed Directorships Non-Executive Director, Bailador Technology Investments Limited Former Listed Directorships in last 3 years Chairman, iSelect Limited Special Responsibilities Chair of the Board Member of the Audit and Risk Committee Member of the Nomination and Remuneration Committee Interests in Shares Ordinary Shares – Shaver Shop Group Limited 1,250,000 Directors’ Report 30 June 2024 11 Annual Report 2024 Directors’ Report continued Cameron Fox Chief Executive Officer and Managing Director Expertise and Experience Cameron has over 25 years’ experience working across the personal care and grooming industry. Cameron joined Shaver Shop as General Manager in 2006 before being appointed to the position of Chief Executive Officer in July 2008. Cameron previously worked for Gillette Australia for a period of approximately 10 years. During his time at Gillette Australia, Cameron held various roles, including Associate Product Manager, Business Analyst, National Account Manager and National Sales Manager. Other Current Listed Directorships None Former Listed Directorships in last 3 years None Special Responsibilities Managing Director Chief Executive Officer Interests in Shares Ordinary Shares – Shaver Shop Group Limited Unvested LTI Shares Unvested LTI Performance Share Rights Total 3,625,603 700,000 840,000 5,165,603 Craig Mathieson Non-Executive Director Expertise and Experience Craig became a director of Shaver Shop Pty Ltd in June 2011. Craig is the Chief Executive Officer of the Mathieson Group which has diverse business interests from company investment to property development. From 2001 to 2007 Craig was the Managing Director of DMS Glass Pty Ltd which was the largest privately-owned glass manufacturer in Australia. Other Current Listed Directorships None Former Listed Directorships in last 3 years None Special Responsibilities Chair of the Audit and Risk Committee Interests in Shares Ordinary Shares – Shaver Shop Group Limited 4,900,004 Trent Peterson Non-Executive Director Expertise and Experience Trent is a managing director and partner at Catalyst Investment Managers and has over 15 years’ experience as a company director and private equity investor. He is currently a Director of Adairs Limited, dusk Group Limited and Universal Store Limited. He was a former director of Just Group, Global Television, EziBuy, Max Fashions, Power Farming, Metro GlassTech, Moraitis Group, Taverner Hotel Group, SkyBus and Australian Discount Retail. Trent is also a Non-Executive director of the Ascham Foundation and Gathermycrew.org. Other Current Listed Directorships Adairs Limited dusk Group Limited Universal Store Holdings Limited Former Listed Directorships in last 3 Years None Special Responsibilities Chair of the Nomination and Remuneration Committee Member of the Audit and Risk Committee Interests in Shares Ordinary Shares – Shaver Shop Group Limited 547,619 12 Shaver Shop Group Limited Directors’ Report continued Debra Singh Non-Executive Director Expertise and Experience Debra Singh has a wealth of retail experience gained while working within the Woolworth’s group across supermarkets, operations and consumer electronics. Debra has also held key leadership roles as CEO of Fantastic Furniture and Group CEO at Fantastic Holdings Limited as well as Group CEO of Household Goods at Greenlit Brands. Debra is currently Chair of ASX listed G8 Education and is also a Director on The Kids Cancer Project Board. Other Current Listed Directorships G8 Education Limited Former Listed Directorships in last 3 years None Special Responsibilities Member of the Audit and Risk Committee Member of the Nomination and Remuneration Committee Interests in Shares Ordinary Shares – Shaver Shop Group Limited 100,000 Lawrence Hamson Chief Financial Officer and Company Secretary Expertise and Experience Lawrence joined Shaver Shop in April 2016 immediately prior to the Company’s listing on the ASX. Lawrence is a Chartered Accountant (Canada) and Chartered Financial Analyst with more than 20 years experience in both public practice and within industry. For the nine years prior to joining Shaver Shop, Lawrence acted as Chief Financial Officer for both private and public companies, most recently with Dun & Bradstreet as its CFO for the Asia Pacific region. He has experience across venture capital with Rothschild as well as corporate communications having been Mayne Group Limited’s General Manager Corporate Relations through its demerger into two ASX listed entities – Symbion Healthcare Limited and Mayne Pharma Limited. Interests in Shares Ordinary Shares – Shaver Shop Group Limited Unvested LTI Shares Unvested Performance Share Rights Total 1,018,128 350,000 420,000 1,788,128 Meetings of Directors During the financial year, 10 meetings of directors were held, six meetings of the Audit and Risk Committee were held and three meetings of the Nomination and Remuneration Committee were held. Attendances by each director who was a member of the Board and relevant subcommittee during the year were as follows: Board of Directors Meetings Audit and Risk Committee Meetings Nom and Rem Committee Meetings Number Eligible to Attend Number Attended Number Eligible to Attend Number Attended Number Eligible to Attend Number Attended Broderick Arnhold 10 10 6 6 3 3 Cameron Fox 10 10 – – – – Craig Mathieson 10 8 6 5 – – Trent Peterson 10 10 6 6 3 3 Brian Singer 10 9 – – 3 3 Debra Singh 10 10 6 6 3 3 13 Annual Report 2024 Directors’ Report continued Dividends paid or recommended The Directors have announced a 100% franked final dividend of 5.5 cents per share (or $7.2 million) to be paid on 19 September 2024 (FY2023: 5.5 cents per share 100% franked or $7.2 million). The Directors announced an interim dividend of 4.7 cents per share, 100% franked (or $6.2 million) in February 2024 (FY2023: 4.7 cents per share 100% franked or $6.2 million). The FY2024 interim dividend was paid on 21 March 2024. This brings total 100% franked dividends declared for FY2024 to 10.2 cents per share (flat compared to the FY2023 dividends of 10.2 cents per share 100% franked). The combined interim and final dividend payments for FY2024 represent the payout of approximately 88% of the Company’s FY2024 reported net profit after tax. 2024 Operating and Financial Review Non-IFRS measures The Directors’ Report includes references to non-IFRS financial measures. The Directors believe the presentation of non-IFRS financial measures are useful for the users of this financial report as they provide additional and relevant information that reflect the underlying financial performance of the business. Non-IFRS financial measures contained within this report are not subject to audit or review. Group results Reported 2024 $000 Reported 2023 $000 Increase (Decrease) % Sales 219,374 224,524 –2.3% Gross profit 97,453 99,933 –2.5% Gross margin % 44.4% 44.5% –0.2% Operating expenses (59,304) (58,897) +0.7% Operating expenses % of sales (costs of doing business) 27.0% 26.2% +3.1% Earnings before interest, tax, depreciation & amortization (EBITDA) 38,150 41,036 –7.0% EBITDA margin 17.4% 18.3% –4.9%% Depreciation & amortization (16,212) (15,266) +6.2% Earnings before interest & tax (EBIT) 21,938 25,770 –14.9% EBIT margin 10.0% 11.5% –12.9% Interest expense (521) (1,243) –58.1% Income tax expense (6,294) (7,707) –18.3% Net profit after tax (NPAT) attributable to owners 15,123 16,819 –10.1% Earnings per share (EPS) – basic (cents) 11.7 13.1 –10.7% Cash earnings per share (Cash EPS) – basic (cents) 12.5 13.9 –10.2% Dividends per share (cents)* 10.2 10.2 0.0% * Reflects the period from which the dividends were declared – not the financial period in which they were declared and paid – accordingly the FY2024 final dividend has been included in the table above. The FY2024 final dividend is to be paid in September 2024. 14 Shaver Shop Group Limited Directors’ Report continued In FY2024, the Company’s consolidated revenue declined by 2.3% to $219.4 million (FY2023: $224.5 million). The sales decline was driven primarily by: • Lower in-store foot traffic in-stores and the associated reduction in transaction volumes as consumers became increasingly budget conscious due to the rise in interest rates and costs of living over the prior 24 months; and • Online sales declined 0.2% or $0.1 million to $50.9 million (FY2023: $51.0 million). Shaver Shop did not open any new stores in FY2024, however two new stores are planned to open in H1 FY2025 at Busselton, WA and Port Macquarie, NSW. Shaver Shop also remains intent on opening four to five additional stores in New Zealand (currently eight stores operating in NZ). Shaver Shop’s flagship Chadstone store re-opened in mid-December 2023, however the centre remains under development with foot traffic significantly reduced. The redevelopment is due to be completed by March 2025 more than 12 months later than originally planned. As a result, Shaver Shop continues to operate from a temporary location within the centre where foot traffic is less impacted as well as from the permanent location. Gross profit margins were to 44.4% in FY2024 relatively consistent with the prior year (FY2023: 44.5%). Shaver Shop continues to seek to balance sales and volume growth with maximising gross profit, and through these initiatives has been able to largely offset category mix changes towards lower margin long-term hair reduction and hair styling categories. Shaver Shop’s total operating expenses increased 0.7% to $59.3 million (FY2023: $58.9 million), primarily due to: • The increase in the minimum wage by 5.75% effective 1 July 2023 and the corresponding impact on store salaries and wages; and • Higher occupancy costs given Shaver Shop did not recognise any COVID-19 related rent abatements in FY2024 (FY2023: approximately $0.3 million). These increases in operating expenses were partially offset by the following operating expense reductions in FY2024: • Lower Operational Expenses primarily related to reduced postage costs in-line with the reduced level of online sales volumes in FY2024; • Lower marketing and advertising expenditure; and • Lower short-term incentive payments accrued for managers and senior executives in FY2024. Overall, Shaver Shop’s costs of doing business as a percentage of total sales increased to 27.0% in FY2024, up approximately 80 basis points (FY2023: 26.2%). Shaver Shop generated net profit after tax (NPAT) of $15.1 million in FY2024 (FY2023: $16.8 million), a decrease of $1.7 million or 10.1%. Taxation of franchise licence terminations on franchise buybacks Shaver Shop receives a tax deduction over five years for the cost of franchise right terminations that occurred through its franchise buy-back program. This leads to income tax payable being lower than income tax expense for the five year tax period that followed each buy-back. The reduction in cash tax payable for FY2024 and FY2025 (the final year of the tax deductions) as a result of the franchise buy-back tax deduction, is set out in the table below. (At 30 June 2024) FY2024 $000 FY2025 $000 Reduction in income tax payable 955 795 After adjusting for the tax benefit associated with franchise buy-backs, Shaver Shop’s Cash EPS was 12.5 cents per share, (FY2023: 13.9 cents), a decrease of 10.2% over the prior corresponding year. Liquidity and capital management As at 30 June 2024, Shaver Shop had net cash of $13.3 million (FY2023: $13.5 million) and undrawn debt facilities amounting to $29.5 million in aggregate. These facilities comprised a $19.5 million term debt facility, together with a $10.0 million trade finance facility which expired on 31 July 2024. All banking covenants were well within threshholds for FY2024. 15 Annual Report 2024 Directors’ Report continued Prior to the above noted expiry, Shaver Shop renegotiated these facilities which now have a three year term ending 31 July 2027 and comprise: • a $20.0 million term debt facility; and • a $10.0 million trade finance facility (assessable annually). The Company’s debt facility has three key covenants: the leverage ratio (Gross Debt/EBITDA); the fixed coverage ratio ((Occupancy Costs + EBITDA)/(Occupancy Costs + Interest expense)); and the net worth ratio ((Total assets – Total liabilities)/Total assets). Shaver Shop generated $34.1 million in operating cash flow in FY2024 (FY2023: $32.3 million). This operating cash flow was used to fund the payment of the two dividends that were paid in FY2024 amounting to approximately $12.8 million. In June 2024, in-line with its strategy to be the destination of choice for men’s and women’s personal grooming solutions across ANZ, Shaver Shop negotiated exclusive access to the Skull Shaver range of products across ANZ. In return for the initial five year exclusive licence, Shaver Shop paid $US2.25 million ($A3.4 million) to Skull Shaver in late June 2024. Strategy and key drivers of growth Shaver Shop offers customers a wide range of quality brands, at competitive prices, supported by excellent staff product knowledge and customer service. Shaver Shop seeks to identify consumer trends and works closely with major manufacturers and suppliers of personal care and beauty goods to source products that cater for these changing personal grooming and beauty trends. With more than 35 years of dedicated experience in its core hair removal product categories, Shaver Shop believes it is the only significant pure-play specialty retailer in these categories in Australia and New Zealand. Shaver Shop invests heavily in staff training to ensure that its store managers and customer facing staff are equipped to recommend the best product that meets the customer’s needs. This strong expertise, segment focus and customer experience has enabled Shaver Shop to negotiate exclusive supply arrangements for a significant proportion of its top 50 products by sales. Shaver Shop believes its service focussed ethos and differentiated product range provides a unique customer experience that distinguishes its business from other retailers that sell personal grooming products in the market. Organic growth both online and in-store (omnichannel retail growth) Shaver Shop will continue to implement a strategic marketing plan and other initiatives to attract new customers to the business and encourage repeat business. Important components of this aspect of the Company’s strategy include ongoing investments in its omni-retail capabilities, (across both online channels and in-store), which continue to improve, as well as establishing a customer experience program to attract and support returning customers. Shaver Shop is also undertaking a deliberate store refit strategy to refresh the look and feel of several of its key stores. Continued product innovation and range expansion Shaver Shop benefits as consumer beauty and grooming trends evolve and require new and changing tools to help customers achieve their desired look. Shaver Shop seeks to work with manufacturers and suppliers to source products that cater to the emerging demands of consumers within the hair removal and personal care categories. Shaver Shop may also choose to source products under its own private label brands where customer needs are not currently being met by its global supplier partners. Securing exclusive sales and distribution rights Shaver Shop seeks and obtains exclusive rights to sell new and innovative personal grooming and beauty products in the Australian and New Zealand markets, which assists with product and range differentiation. Given Shaver Shop’s market share and brand loyalty in the sector, Shaver Shop is often able to negotiate exclusive rights without having to pay any additional consideration. In situations where Shaver Shop sees a competitive and commercial benefit from doing so, Shaver Shop may choose to pay for the exclusive rights to distribute and sell a product across Australia and New Zealand given this further differentiates Shaver Shop’s range and improves its relevance to customers 16 Shaver Shop Group Limited Directors’ Report continued Store rollout Shaver Shop aims to grow total store network numbers across Australia and New Zealand to approximately 130-135 within the next three years. Shaver Shop continues to apply prudence to new store openings given the variability in foot traffic at shopping centres experienced over the last 24 to 36 months, as well as consumer trends to continue purchasing through online channels. Subject to the forecast financial returns meeting appropriate hurdle rates, the Company expects to open these additional stores in Australia and New Zealand. NZ business growth Shaver Shop opened its first three New Zealand stores in mid-2014. Since that time the New Zealand network has grown to eight locations across both the north and south islands. With recent in-store and online improvements, together with increased brand awareness and recognition in New Zealand, the business has now reached sufficient critical mass to drive economies of scale and profitability. Shaver Shop expects to drive further growth in New Zealand through the opening of additional stores as well as ongoing improvements in its omni-retail offering. Private label expansion (Transform U™) Shaver Shop has identified what it considers to be gaps in its current product range that are not currently being satisfied by its current supplier partners. The Company intends to fill these gaps with high quality, cost competitive products that it sources and imports directly and markets through its retail stores and online channels under the Transform U™ brand. It is expected that, over time, these brands will become a core part of Shaver Shop’s range, and will deliver both sales growth and gross margin expansion for the business. Market growth in personal care and grooming solutions Shaver Shop operates in the personal care, beauty and grooming solutions market. This market has been growing for many years as new and innovative do-it-yourself (DIY) products enable consumers to perform their daily beauty regime in the comfort of their home rather than going to a salon. In addition, over the last 10-20 years, the prevalence and acceptance of men having a beauty regime has increased. This has resulted in men buying and using more grooming and beauty tools. Management expects that these trends will continue over the long-term. Key business risks There are a number of factors that could have an effect on the financial performance of Shaver Shop Group Limited. These include: Retail environment and general economic conditions may deteriorate Shaver Shop’s performance is sensitive to the current state of and future changes in the retail environment and general economic conditions in Australia and New Zealand. Australian and New Zealand economic conditions may worsen due to higher cost of living pressures and interest rates rising. These and other factors may lead to the economy entering into a recession or another cause of a reduction in consumer spending. This could cause the retail environment to deteriorate as consumers reduce their level of consumption of discretionary items. Competition may increase Shaver Shop faces competition from specialty retailers, department stores, discount department stores, grocery chains as well as online only retailers and professional salons. Shaver Shop’s competitive position may deteriorate as a result of actions by existing competitors, the entry of new competitors, (including manufacturers and suppliers of products who decide to sell directly to end consumers), or a failure by Shaver Shop to successfully respond to changes in the market. Cyber & information security Shaver Shop, like most retailers, relies heavily on technology for the operation of both its’ stores as well as its’ online sales channels. The rapid changes in technology and data management creates challenges for all companies to maintain a robust and resilient technology network as well as a strong cyber security program. Shaver Shop has implemented strategies and systems with the aim of protecting against deliberate exploitation of computer systems, data and networks by internal and external parties. Cyber security is constantly evolving and is a significant risk to all retailers and Shaver Shop will need to maintain vigilance and adopt appropriate responses to protect its information assets. Should Shaver Shop’s systems, and/or the systems that Shaver Shop relies on from suppliers be breached, and customer data become unprotected, this could have significant reputational, financial and regulatory implications for the Group. 17 Annual Report 2024 Directors’ Report continued Product sourcing may be disrupted Shaver Shop’s products are sourced from third party suppliers of major hair removal, hair care, personal care and other shaving brands. In FY2024, approximately 92% (FY2023: 91%) of Shaver Shop’s total network sales came from products sourced from its top ten suppliers. Shaver Shop’s largest supplier constitutes approximately 36.1% (FY2023: 28.0%) of all sales, with the next two largest suppliers contributing approximately 19.2% (FY2023: 22.1%) and 13.0% (FY2023: 18.4%) of total sales. Whilst Shaver Shop has a diversified supplier base, Shaver Shop is exposed to potential increases in the cost of materials and the cost of manufacturing and foreign exchange rates applicable to its products. There may also be delays in delivery or failure by a supplier to deliver goods. Such increases, delays and failure to supply, could significantly increase Shaver Shop’s cost of operations or lead to a reduction in the available range of products, which may affect Shaver Shop’s operating and financial performance. Private label product sourcing Shaver Shop is embarking on a new private label strategy for the business which involves sourcing products directly from manufacturers overseas, importing the products and marketing them in Australia and New Zealand. As a result, the success of this initiative is uncertain and exposes Shaver Shop to new risks including, but not limited to: product liability risk (including potential for recall of one or more of its private label products with the associated brand and potential reputational impacts); potential for Shaver Shop to overestimate the demand for these products which may require the Company to discount the products (perhaps below cost) in order to sell them; increased foreign exchange risk; increased exposure to product sourcing and supply chain risks including production and shipping delays, compliance with local electrical standards, and Human Rights and Modern Slavery Act regulations. Due to minimum order quantities for private label products from Shaver Shop’s suppliers, the Company also expects it will need to increase its investment in working capital (inventory) to support these new products and their launch. Should any of these risks materialise, they could lead to lower revenues, increased costs, lower profits and the potential for damage to Shaver Shop’s brand and reputation. Reputational risk Shaver Shop’s brand and reputation is important for building and maintaining strong relationships with customers and suppliers which in turn has an influence on the sales and profitability of the Company. A significant issue or event could attract criticism of Shaver Shop and negatively impact the Company’s brand and reputation as well as Shaver Shop’s share price. Shaver Shop has a range of policies and initiatives to mitigate brand risk, including our Code of Conduct, a Whistleblower Policy, a Modern Slavery Policy, a Supplier Charter, as well as ongoing environmental and corporate social responsibility initiatives. Changes in international pricing or supply may change local demand for Shaver Shop products Many of the products which Shaver Shop sells are available in many overseas markets. With the increasing propensity for consumers in Australia and overseas to purchase products over the internet, should the comparative price of Shaver Shop’s products be significantly lower in overseas markets, this could have an influence on local demand for Shaver Shop’s products. Conversely, if the price for Shaver Shop’s products is significantly lower than the comparable price for the same product overseas, this could increase demand and sales of Shaver Shop products. Should suppliers increase (decrease) prices to create global wholesale price parity, this could materially decrease (increase) local demand for Shaver Shop’s products. This is particularly true in relation to any bulk sales of products to customers in Australia. Supplier relationships, supplier input costs and the ability to source products exclusively The Company’s relationships with suppliers are often governed by individual purchase orders and invoices. Under those arrangements, suppliers may seek to alter the terms on which products are supplied as well as the range of products available for supply. This, together with potential changes in input costs of suppliers, may result in changes of pricing levels and a reduction in the range of products made available to Shaver Shop, both of which could adversely impact the Company’s ability to successfully provide customers with a wide range of products at competitive prices. This could reduce Shaver Shop’s overall profitability and adversely impact its financial performance. In addition, Shaver Shop receives income from suppliers in the form of purchase rebates and supplier contributions to specific marketing and advertising campaigns. Supplier rebates and contributions are negotiated on a periodic basis. 18 Shaver Shop Group Limited Directors’ Report continued Shaver Shop has a limited number of fixed contracts in place with suppliers relating to rebates and contribution income. Most suppliers who provide Shaver Shop with rebates or marketing contributions may elect to cease such payments at any point in time. Any such action could adversely impact Shaver Shop’s income which would reduce Shaver Shop’s overall profitability and impact its financial performance. Finally, through good relationships with some suppliers, Shaver Shop has been able to secure arrangements with third party distributors and brands for the supply of products to Shaver Shop on an exclusive basis. These arrangements are for specific products and for varying time periods. There is a risk that Shaver Shop may not be able to renew exclusive distribution agreements with these suppliers or that suppliers may enter into exclusive distribution arrangements with Shaver Shop’s competitors. If this occurs, it may have a material adverse impact on the Company’s business and reputation, operational performance as well as its financial results. Seasonality of trading patterns Shaver Shop’s sales are subject to seasonal patterns. In FY2024, the contribution of sales for the first half to total sales for the full year was approximately 57.9% (FY2023: 58.8%). The seasonality of Shaver Shop’s sales towards the first half of the financial year is largely due to the pre Christmas and Boxing Day trading periods and Father’s Day, (being the first Sunday in September in Australia and New Zealand). An unexpected decrease in sales over traditionally high volume trading periods for Shaver Shop could have a materially adverse effect on the overall profitability and financial performance of Shaver Shop. In addition, an unexpected decrease in sales over traditionally high-volume trading periods could also result in abnormally large amounts of surplus inventory, which Shaver Shop may seek to sell through abnormally high and broad based price discounting to minimise the risk of the product becoming aged or obsolete. If Shaver Shop were to sell a significant volume of its products at deep discounts, this would likely reduce the business’ revenue and would have an adverse impact on the Company’s financial performance. Customer buying habits/trends may change Any adverse change in personal grooming trends and/or a failure of Shaver Shop to correctly judge the change in consumer preferences or poor quantification of purchases for related product may have an adverse impact in the demand for Shaver Shop’s products or the gross margins achieved on these products. Product innovation and exclusivity arrangements Product innovation by suppliers has been a key driver in Shaver Shop’s sales growth. Shaver Shop relies on its suppliers to continue to drive R&D and product innovation in its product categories. A material reduction in the frequency or appeal of new product innovations by suppliers may have an adverse impact on sales, rebates received and gross margin levels achieved. In addition, a key driver in Shaver Shop’s sales growth has been the ability to secure new innovative products on an exclusive basis. If Shaver Shop is unable to secure new product innovations on an exclusive basis, or if the appeal of an existing product sold by Shaver Shop on an exclusive basis is weakened by a new innovative product made widely available to retailers or on an exclusive basis to one of Shaver Shop’s competitors, Shaver Shop’s sales and gross margin levels may be adversely affected. Breach of industrial practices Shaver Shop, like all retailers, is exposed to industrial relations risk that can impact the reputation and financial performance of its business. The Company has governance programs in place to mitigate this risk including remuneration oversight, training and policies and procedures. Significant changes in state of affairs Except as otherwise described in this report, there have been no significant changes in the state of affairs of the entities in the Group during the year. 19 Annual Report 2024 Directors’ Report continued Matters or circumstances arising after the end of the year Subsequent to year end, the Directors declared a 100% franked final dividend of 5.5 cents per share to shareholders of record on 5 September 2024. The dividend payment date is 19 September 2024. No other matters or circumstances have arisen since the end of the financial year which significantly affected or could materially affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years. Future developments and outlook Total sales for the period from 1 July 24 to 22 August 24 (year to date or “YTD”) versus the prior comparative period are set out in the table below: Sales Growth (%) – 1 July 24 to 22 August 24 YTD vs FY2024 Total sales –0.8% Like for like sales –0.8% Sales in August 2024 month to date have returned to growth in our core categories following a period of softer sales in July when Shaver Shop was off promotion (consistent with prior years). Shaver Shop is maintaining its discipline of balancing sales and volume growth with maximising gross profit dollars leading to gross profit margins broadly in line with FY2024 YTD. Shaver Shop expects to launch a significant number of new brands in H1 FY25 including a new private label brand, Transform U™, as well as Epilady, Silk’n, Jericho and will require c. $2.0 million to $3.0 million incremental working capital investment in FY2025. Over the next three years, Shaver Shop intends to extend its leadership position across its core grooming categories by: • driving strategic category management through range leadership, product differentiation and Transform U™; • expanding its range by sourcing new innovation and identifying category creep opportunities; and, • evolving its store format to best showcase our “house of brands” across our core categories. Consistent with prior years, having regard to the importance of the Black Friday, Christmas and Boxing Day trading results to Shaver Shop’s FY2025 financial performance, it is not appropriate to provide sales or profit guidance at this time. Environmental issues The Group’s operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a State or Territory of Australia. 20 Shaver Shop Group Limited Directors’ Report continued Non-audit services The Board of Directors, in accordance with advice from the audit committee, are satisfied that the provision of non-audit services during the year are compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons: • all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and • nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board. Details of the amounts paid to PricewaterhouseCoopers for audit and non-audit services during the year are set out in Note 25 to the audited financial statements. Auditor’s independence declaration The lead auditor’s independence declaration for the year ended 30 June 2024 has been received and can be found on page 35 of the consolidated financial report. Shares under option There have been no unissued shares or interests under option in the Company or a controlled entity during or since reporting date. Indemnification and insurance of officers and auditors During the financial year, the Company paid an insurance premium to insure the directors and senior management of the Company and its subsidiaries. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else to cause detriment to the Company. The terms of the insurance policies prohibit disclosure of the details of the premium paid. Proceedings on behalf of company No person has applied for leave of court under Section 237 of the Corporations Act 2001 to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. 21 Annual Report 2024 Directors’ Report continued Remuneration Report (Audited) The Board of Directors of Shaver Shop Group Limited present the Remuneration Report for the Company for the reporting period of 1 July 2023 to 30 June 2024. This Remuneration Report forms part of the Directors’ Report and has been audited in accordance with the Corporations Act 2001. Shaver Shop’s remuneration report for the 2023 financial year received positive shareholder support at the 2023 Annual General Meeting (AGM), with 98.15% of votes in favour of adoption. (a) Summary Group financial and operational performance Shaver Shop again delivered solid financial results for shareholders in FY2024 evidenced by: • Sales of $219.4 million down 2.3% on the prior year. In-store sales declined 2.9% (or $5.1 million) as the impact of interest rate increases and the rising cost of living resulted in significantly lower foot traffic and demand in shopping centres. Online sales were effectively flat vs FY2023, declining 0.2% or $0.1 million and represented approximately 23.2% of total sales for the year (FY2023: 22.7%); • Gross profit margins were effectively flat year on year at approximately 44.4% (down 10 basis points on FY2023) despite mix changes towards lower margin long-term hair reduction and hair styling appliances; • Despite the broader impact of cost inflation, expenditures were well controlled with total operating expenses increasing 0.7% versus FY2023 and representing 27.0% of total sales (FY2023: 26.2%); • Net profit declined 10.1% to $15.1 million (FY2023: $16.8 million); • Operating cash flow increased 5.8% to $34.1 million which was aided by a $3.8 million payment to a supplier for stock purchases being due on 1 July 2024 (after year end). This led to net cash of $13.3 million at 30 June 2024 (30 June 2023: $13.5 million); and • Continuing strong customer service metrics with an average net promoter score (NPS) of 88.8 (out of 100). Short-term incentive (STI) The Company did not achieve its internal NPAT targets in FY2024. As a result, no STI award for FY2024 was granted to executive Key Management Personnel, (KMP or Senior Executives), by Shaver Shop’s Board of Directors. Consistent with FY2023, the STI targets for FY2024 were based on the underlying NPAT of the Company. Long-term incentive (LTI) As outlined in Shaver Shop’s prior FY2022 and FY2023 Remuneration Reports, the Company undertook a review (in conjunction with advice from external remuneration and tax consultants) of its incentive structures which included the benchmarking of its program against comparable retailers listed on the ASX. As a result of this review, Shaver Shop’s Board of Directors decided from FY2023 to change its LTI structure to be based on Performance Share Rights rather than continuing with the pre-existing loan share plan. Share rights are a more generally accepted and common structure for executive leadership incentive plans for listed entities and are considered less complex to administer and easier for participants to understand. Details regarding the new LTI plan including specifics of the vesting conditions associated with the Performance Share Rights were included in Shaver Shop’s 2022 Notice of Annual General Meeting (AGM) dated 7 October 2022. Shareholders adopted the Shaver Shop Executive Long-Term Incentive Plan at the Company’s 2022 AGM held on 10 November 2022 with 97.6% of the votes cast in favour of the resolution. The loan share plan will stay in place until the previously issued awards either vest or expire in accordance with the terms of that plan. Tranche 3 of the FY2021 LTI grant reached the end of its three-year performance period on 30 June 2023. The related service condition for the shares ended on 30 June 2024. The Company’s earnings per share (EPS) CAGR over the performance period was 15.4%, which was below maximum threshold for vesting and accordingly 75.7% of the FY2021 Tranche 3 EPS Shares (105,977 shares) vested on 30 June 2024 when the related Service Condition was met. The TSR CAGR for Tranche 3 of the FY2021 LTI grant was 10.5% and accordingly, following the tenure requirement being met (30 June 2024) 22.8% (or 74,611 shares) of the granted Tranche 3 TSR shares (326,668 shares) vested with Senior Executives. 22 Shaver Shop Group Limited Directors’ Report continued The FY2022 LTI grant has one, three-year performance period that concludes on 30 June 2024 for the EPS Performance Condition and concludes five days after the release of the FY2024 financial results for the TSR Performance Condition. Accordingly, the TSR calculation for the FY2022 grant will be known until that time. As noted earlier, in FY2023 Shaver Shop’s Board decided to move from a loan share-based LTI plan for Senior Executives, to a Performance Share Rights plan known as the Shaver Shop Executive Long-Term Incentive Plan. The new plan has been determined to be easier to understand for senior executives and should therefore provide a better motivational outcome that is aligned with shareholders’ interests. In accordance with the invitations to senior executives in FY2023 and FY2024, the rights have a three-year term with vesting subject to EPS growth performance conditions as well as service conditions. (b) Key Management Personnel covered in this report This report sets out the remuneration arrangements for Shaver Shop’s key management personnel, (KMP) (listed in the table below), who have been KMP during the reporting period. For the remainder of this Remuneration Report, the KMP are referred to as either Non-Executive Directors or Senior Executives. All Non-Executive Directors and Senior Executives have held their positions for the duration of the reporting period unless indicated otherwise. Non-Executive Directors Position Broderick Arnhold Independent, Non-Executive Chairman Craig Mathieson Independent, Non-Executive Director Trent Peterson Independent, Non-Executive Director Brian Singer Independent, Non-Executive Director Debra Singh Independent, Non-Executive Director Senior Executives Cameron Fox Chief Executive Officer (CEO) and Managing Director Lawrence Hamson Chief Financial Officer (CFO) and Company Secretary Philip Tine Retail Director Brian Singer retired from Shaver Shop’s Board of Directors on 30 June 2024. (c) Remuneration overview The Board recognises that the performance of the Group depends, to a large extent, on the quality and motivation of the Shaver Shop team, including the Senior Executives and our approximately 750 team members employed by the Group across Australia and New Zealand. Shaver Shop’s remuneration strategy therefore seeks to appropriately attract, reward and retain team members at all levels in the organisation, but in particular aligning and motivating key Senior Executives to create shareholder wealth. By aligning various remuneration mechanisms, the Board seeks to have a structure that incentivises sustainable growth, risk management, as well as driving a positive culture across the business. In FY2024, the primary performance mechanism for determining whether Senior Executives were rewarded the Short-Term Incentive Plan (STIP), was the Company’s Net Profit After Tax (NPAT), having regard to pre-set growth objectives relative to Shaver Shop’s internal NPAT targets for FY2024. Shaver Shop generated $15.1 million NPAT in FY2024 which was below Shaver Shop’s internal target. Accordingly, no STI award for senior executives was granted for FY2024. The Board believes the STI outcomes were fair and appropriate and reflect the alignment between shareholders’ interests and the Company’s remuneration practices and policies. In terms of Shaver Shop’s Executive Long-Term Incentive Plan (ELTIP), in FY2024 Shaver Shop granted 1,350,000 performance share rights to participants in the ELTIP. The performance rights allocations are subject to Service and EPS vesting conditions over a three-year performance period which is outlined in further detail below. Due to the resignation of one participant during the year, 120,000 of the FY2024 performance rights allocation lapsed during FY2024. The Nomination and Remuneration Committee will continue to review the remuneration arrangements for Non-Executive Directors and Senior Executives to ensure that they are relevant, competitive and appropriate for a listed company. 23 Annual Report 2024 Directors’ Report continued (d) Relationship between remuneration policy and company performance The performance criteria and targets for Executives to realise benefits under both the Company’s STIP and LTIP are aligned to company performance and enhancing shareholder value. Shaver Shop’s Nomination and Remuneration Committee considers both the statutory and normalised results (where appropriate) for the business, in evaluating performance against key metrics. The following table provides a summary of the Company’s statutory financial performance from FY2020 to FY2024. Statutory FY2024 Result $000 Statutory FY2023 Result $000 Statutory FY2022 Result $000 Statutory FY2021 Result $000 Statutory FY2020 Result $000 Revenue 219,374 224,524 222,745 213,667 194,924 EBITDA 38,150 41,036 40,284 40,424 30,337 Net Profit After Tax (NPAT) 15,123 16,819 16,692 17,473 10,382 Basic earnings per share (cents) 11.7 13.1 13.2 14.2 8.5 Dividends declared 12,836 12,788 11,794 7,261 5,659 Dividends per share declared (cents) 10.2 10.2 9.5 5.9 4.6 Year-end share price ($) $1.17 $0.945 $0.975 $1.00 $0.70 For the financial year ended 30 June 2024, the Company’s NPAT decreased by 10.1% to $15.1 million. % of maximum STI awarded vs Normalised NPAT The graph below illustrates the percentage of the maximum available STI that was awarded to Senior Executives for each financial year (since listing on the ASX) versus the normalised NPAT for the Company. Shaver Shop’s FY2024 NPAT result of $15.1 million is 45.7% higher than the result achieved in FY2020 and represents a compound average growth rate of 9.8% over the period. 0 2 4 6 8 10 12 14 16 18 20 FY24 FY23 FY22 FY21 FY20 0 10 20 30 40 50 60 70 80 90 100 $A millions % of Max STI Awarded 10.4 17.5 16.7 16.8 15.1 Normalised NPAT ($m) % of Max STI Award 24 Shaver Shop Group Limited Directors’ Report continued Long-Term Incentive Plan outcomes for FY2024 Loan plan shares issued up to FY2022 Up until FY2022, under the terms of the LTIP, loan plan shares were issued to participants that had three tranches. The tranches had one-year, two-year and three-year performance periods. For each tranche, 70% of the shares issued were subject to TSR performance hurdles and 30% were subject to EPS performance hurdles. The base share price used for calculating the TSR performance hurdle was equivalent to the five day VWAP immediately prior to the Grant Date. The ending share price for the TSR performance hurdle is calculated using the five day volume weighted average share price (VWAP) of Shaver Shop’s shares following the release of the Company’s results for the relevant performance period. In FY2022, after consulting with shareholders, the structure of the LTI Plan was changed slightly for the FY2022 LTI share grant such that there was only one tranche with one, three-year performance period. Consistent with the prior structure, 70% of the shares issued are subject to TSR performance hurdles and 30% are subject to EPS performance hurdles. The base share price used for calculating the TSR performance hurdle is equivalent to the five day VWAP after the release of Shaver Shop’s FY2022 financial results. The ending share price for the TSR performance hurdle is calculated using the five day VWAP of Shaver Shop’s shares following the release of the Company’s results for FY2024. The issue price of the shares is based on the five day VWAP of the Company’s shares immediately prior to the date of Grant. Vesting percentages are only shown in the table below where both the performance conditions and service conditions related to a tranche have been achieved. EPS CAGR (30% of tranche shares) TSR CAGR (70% of shares) Performance Period Starting Performance Period Ending Service Condition LTI Shares Granted to KMP Perfor mance Outcome Vested Forfeited Perfor mance Outcome Vested Forfeited FY2021 FY2023 30 Jun 24 466,668 15.4% 76% 24% 10.5% 23% 77% FY2022 FY2024 10 Nov 24 1,400,000 The following LTI share tranche has not yet met the full performance thresholds or service conditions as at the date of this report. Performance Period Starting Performance Period Ending Tranche Service Condition EPS Shares Granted EPS Shares to Vest TSR Shares Granted TSR Shares to Vest FY2022 FY2024 Tranche 1 10 Nov 2024 420,000 0 980,000 At the time of writing this report, it is uncertain whether the FY2022 TSR shares will meet their vesting conditions. Performance share rights issued in FY2023 and FY2024 The following performance share rights have been issued to KMP under the ELTIP. EPS Growth (100% of shares) Performance Period Starting Performance Period Ending Service Condition Performance Rights Granted to KMP Performance Outcome Vested Forfeited FY2023 FY2025 30 Jun 25 840,000 N/A 0% 0% FY2024 FY2026 30 Jun 26 840,000 N/A 0% 0% 25 Annual Report 2024 Directors’ Report continued (e) Remuneration objectives One of Shaver Shop’s core beliefs is that the success of the business is driven in large part by the skills, motivation and the performance of all of its team members – from Senior Executives to Store Managers to retail assistants on the shop floor. Creating an environment that fosters a high performance culture and aligns the team behind a common set of values and behaviours is core to the Company’s continuing success. Shaver Shop believes that the knowledge and expertise of its sales staff is a critical differentiating factor for the business and an important factor in its success. As a result, the Company takes pride in training team members in Shaver Shop’s values and approach to business, as well as in promoting high performing staff through the business from the retail shop floor through to national office positions. In addition to building the appropriate culture, Shaver Shop’s philosophy is to provide competitive remuneration arrangements that reward team members for the underlying performance of the company as well as building shareholder value over the short and long-term. As such, remuneration for team members can include fixed pay, superannuation, short-term incentives, long-term incentives, as well as support for training and education, relocation assistance and dues and membership fees that are aligned with Shaver Shop’s needs and objectives. The components of total remuneration for a team member will vary depending on the role, his or her seniority, the team member’s experience, as well as their performance. The Remuneration Committee also considers the importance of equity ownership for Senior Executives when setting remuneration packages. Shaver Shop’s key principles underpinning its remuneration plans are set out below: (a) Simplicity: We seek to ensure remuneration arrangements are simple and can be easily understood by both Senior Executives and other key stakeholders. (b) Alignment: We seek to ensure material components of the Senior Executive’s remuneration arrangements (including their shareholding as appropriate) contribute to alignment of the interests of the Senior Executives with those of the shareholders. (c) Best Practice: We seek to ensure the material aspects of an employee’s remuneration arrangements are sustainable and could withstand tests of precedent and transparency within the organisation and market place. (d) Competitive: We seek to ensure our Senior Executives are remunerated such that (when taken as a whole and having regard to their particular circumstances, including any risks and opportunities) their individual remuneration arrangements are competitive with relevant comparable positions. (e) Risk Conscious: In considering remuneration arrangements, the Company seeks to manage certain key risk exposures, including the risk of loss of an individual, retention of intellectual property and skills, issues associated with replacement of the individuals, risk of poaching and the presence and quality of our succession planning. (f) Company First: The Company develops systems, policies, processes and team depth to manage its reliance on any given individual within its leadership team. This extends to remuneration, where we seek to ensure the remuneration architecture and individual arrangements are orderly and deliberate in line with our Core Competencies. (g) Rewards tied to outcome and performance: We back ourselves to identify the outcomes that drive sustainable value creation (or value protection) and seek to reward executives who influence those outcomes most significantly and directly to business strategy. 26 Shaver Shop Group Limited Directors’ Report continued (f) Role of the Nomination and Remuneration Committee The primary objective of the Nomination and Remuneration Committee is to assist the Board to fulfil its corporate governance and oversight responsibilities in relation to the Company’s people strategy including remuneration components, performance measurements and accountability frameworks, recruitment, engagement, retention, talent management and succession planning. The Committee also works with the CEO in considering the specific situations pertaining to employment terms for individuals or groups of individuals as needed. The Committee undertakes an annual review of the Company’s remuneration strategy and remuneration policy to facilitate understanding of the overall approach to remuneration and to confirm alignment with the Company’s business strategy, high standards of governance and compliance with regulatory standards. The Committee reviews and recommends to the Board for approval, remuneration arrangements for the CEO and other Senior Executives, having regard to external remuneration practices, market expectations and regulatory standards. The Committee also establishes the policy for the remuneration arrangements for Non-Executive Directors. Where appropriate, the Nomination and Remuneration Committee will seek the advice of independent external remuneration consultants. (g) Senior Executive Remuneration structure The remuneration framework for Senior Executives is based on a structure that includes: 1. Fixed remuneration – salary and superannuation and non-monetary benefits; 2. Short-Term Incentives – tied to in-year performance against metrics; and 3. Long-Term Incentives – tied to multi-year performance against value creation metrics. The proportion of remuneration between fixed and variable (i.e. at risk) for a Senior Executive is determined after consideration of the seniority of the role, the responsibilities of the role for driving business performance and responsibilities for developing and implementing business strategy. Element Purpose Metrics Potential Value Fixed Remuneration Provide competitive market salary including super NIL Based on market competitive rates STI (Cash bonus) Reward superior performance in-year Specific NPAT target(s) set at or around the beginning of the financial year $610,000 LTI (Loan Share Plan) Reward superior long-term value creation EPS growth – 100% Dependent on NPAT result and capital structure The mix of fixed and at risk components of each of the Senior Executives as a percentage of total target remuneration for FY2024 was as follows: Senior Executive Fixed Remuneration At Risk STI Maximum Opportunity At Risk LTI Maximum Opportunity Cameron Fox 52% 23% 25% Lawrence Hamson 61% 19% 20% Philip Tine 57% 21% 22% 27 Annual Report 2024 Directors’ Report continued Fixed Remuneration Senior Executive base salaries include a fixed component of base salary together with employer superannuation contributions that are in line with statutory obligations. The fixed remuneration component also includes car allowances and other benefits. The fixed remuneration component for Senior Executives is based on market data for comparative companies of the same size and complexity as well as having regard to the experience and expertise of the Senior Executive. Fixed remuneration for executives is reviewed annually to provide competitiveness with the market, whilst also taking into account capability, experience value to the organisation and performance of the individual. There is no guaranteed salary increase in any Senior Executive service contract. Short-Term Incentives (STI) Senior Executive Target STI ($) Actual STI Awarded ($) Awarded STI as % of Maximum STI % of Maximum STI Award Forfeited Cameron Fox $300,000 $0 0% 100% Lawrence Hamson $150,000 $0 0% 100% Philip Tine $160,000 $0 0% 100% The Board of Directors may decide to pay Senior Executives discretionary bonuses depending on individual and Company performance. The Remuneration Committee and Board of Directors chose an NPAT target as the performance measure because the Company believes this is one of the key business drivers that is understood by stakeholders and is a balanced indicator of the relative performance of the business. For FY2025, consistent with prior years, the Nomination and Remuneration Committee has set a full year NPAT target for the purpose of determining FY2025 STI rewards. Long-Term Incentives (LTI) Shaver Shop established an LTIP to assist in the motivation, retention and reward of Shaver Shop executives. The LTIP is designed to align the interests of executives more closely with the interests of shareholders by providing an opportunity for eligible executives to acquire Plan Shares subject to the conditions of the LTIP (Plan Shares). Each Plan Share is issued as a fully paid ordinary share in the Company subject to certain vesting conditions. The holder of a Plan Share must not dispose of the Plan Share until the Plan Share vests and any Loan relating to that Plan Share has been repaid. Unless as determined otherwise by the Board of Shaver Shop, the performance and service conditions specified for each tranche must be met in order for the relevant Plan Shares to vest. In FY2023, following an external review of its LTI program, Shaver Shop changed its LTI structure to be based on Performance Share Rights. This structure is more common for public companies of Shaver Shop’s size and nature. Similar to the loan share plan, rights issued to participants have a three-year performance period with vesting subject to an EPS performance condition as well as a service condition. 28 Shaver Shop Group Limited Directors’ Report continued The table below summarises the key terms of each LTI share grant over the last four financial years. FY2024 LTI Grant FY2023 LTI Grant FY2022 LTI Grant FY2021 LTI Grant Total LTI securities granted 1,350,000 1,280,000 2,200,000 2,350,000 LTI security type Performance Rights Performance Rights Loan Shares Loan Shares LTI securities granted to KMP 840,000 840,000 1,400,000 1,400,000 Grant Date 9 Nov 2023 28 Nov 2022 10 Nov 2021 28 Oct 2020 Issue price N/A N/A $1.0252 $1.0651 Starting price for TSR N/A N/A $1.0773 $1.0651 % of grant with TSR hurdle 0% 0% 70% 70% % of grant with EPS hurdle 100% 100% 30% 30% Tranche 1 performance period 1 Jul 23 – 30 Jun 26 1 Jul 22 – 30 Jun 25 1 Jul 21 – 30 Jun 24 1 Jul 20 – 30 Jun 21 Tranche 2 performance period N/A N/A N/A 1 Jul 20 – 30 Jun 22 Tranche 3 performance period N/A N/A N/A 1 Jul 20 – 30 Jun 23 TSR Vesting CAGR (%) Hurdle applicable to each performance period N/A N/A Under 6% – NIL 6-15% – pro-rata vesting from 20% to 100% Above 15% – 100% Under 10% – NIL 10-25% – pro-rata vesting from 20% to 100% Above 25% – 100% EPS Vesting hurdle applicable to each performance period FY26 EPS under $0.14 – NIL FY26 EPS from $0.14 to $0.16 – pro-rata vesting from 30% to 100% FY26 EPS above $0.16 – 100% FY25 EPS under $0.14 – NIL FY25 EPS from $0.14 to $0.16 – pro-rata vesting from 30% to 100% FY25 EPS above $0.16 – 100% Under 3% – NIL 3-13% – pro-rata vesting from 20% to 100% Above 13% – 100% Under 5% – NIL 5-20% – pro-rata vesting from 20% to 100% Above 20% – 100% Trance 1 & 2 (if applicable) Service Condition 30 Jun 26 30 Jun 25 10 Nov 24 30 Jun 23 Tranche 3 Service Condition N/A N/A N/A 30 Jun 24 Expiry date 15 years from Grant Date unless otherwise determined by the Board 15 years from Grant Date unless otherwise determined by the Board None, however the latest loan repayment date is seven years after the grant date None, however the latest loan repayment date is seven years after the grant date 29 Annual Report 2024 Directors’ Report continued EPS performance conditions The EPS hurdle for the Performance Share Rights issued in FY2024 and FY2023 is based on achieving discrete EPS targets in FY2026 as outlined in the table above. For the LTI Shares issued in the years prior to FY2023, the EPS performance hurdle is a measure of the compound annual growth rate in the Company’s EPS measure over the relevant performance period. The EPS CAGR will be determined by the Board and is the compound annual growth rate (expressed as a percentage) of the Company’s EPS which is measured by reference to the Group’s underlying NPAT for the performance period divided by the weighted average number of shares on issue across the relevant performance period. The Board may from time to time adjust the EPS CAGR to exclude the effects of material business acquisitions or divestments and for certain one-off costs. TSR performance conditions The TSR performance hurdle for the FY2021 and FY2022 grants is structured as an absolute TSR growth target and will be determined by the Board. TSR is a measure of the performance of the Company’s shares over a period of time. It combines share appreciation and dividends paid to show the total return to shareholders expressed as an annualised percentage. It is the rate of return of all cash flows to an investor during the holding period of an investment. For the FY2021 LTI grants, the starting point for the TSR performance hurdle is the five day volume weighted average price (VWAP) per share immediately prior to the grant date. For the FY2022 Grant, the starting point for the TSR hurdle was the five day VWAP per share immediately after the release of the Company’s FY2021 financial results, which was $1.0773. The TSR performance period concludes based on the five day VWAP of the Company’s shares following the relevant performance period’s full year results announcement. Service condition In addition to the performance conditions, each tranche of Plan Shares is subject to specific service conditions, meaning that if a participant in the LTIP ends their employment with Shaver Shop before the specified service periods, the Plan Shares issued to the participant will not vest, regardless of whether the performance conditions have been met. The table below sets out the number of Performance Share Rights (FY2024 and FY2023) and Plan Shares (prior to FY2023) offered to the relevant Senior Executives, including details of the number of Rights or Plan Shares per tranche for each Senior Executive for grants between FY2021 and FY2024. For the FY2022 through FY2024 grants, these had one, three-year Performance Period. In relation to the FY2021 grant, this had three Tranches with one-year, two-year and three-year Performance Periods respectively. KMP FY2024 LTI Grant (# rights) FY2023 LTI Grant (# rights) FY2022 LTI Grant (# shares) FY2021 LTI Grant (# shares) Cameron Fox Tranche 1 420,000 420,000 700,000 233,333 Tranche 2 – – – 233,333 Tranche 3 – – – 233,334 TOTAL 420,000 420,000 700,000 700,000 Lawrence Hamson Tranche 1 210,000 210,000 350,000 116,666 Tranche 2 – – – 116,667 Tranche 3 – – – 116,667 TOTAL 210,000 210,000 350,000 350,000 Philip Tine Tranche 1 210,000 210,000 350,000 116,666 Tranche 2 – – – 116,667 Tranche 3 – – – 116,667 TOTAL 210,000 210,000 350,000 350,000 30 Shaver Shop Group Limited Directors’ Report continued Shaver Shop obtains an independent valuation of the Performance Share Rights and LTIP Shares at the date of grant. The following table summarises the valuation of each Performance Share Right that was issued to participants in the ELTIP in FY2024 and FY2023: Performance Condition FY2024 LTI Grant FY2023 LTI Grant EPS (100% of allocation) $0.79 $0.89 The following table summarises the valuation of each LTIP share for each tranche in each year of grant: Performance Condition FY2022 LTI Grant FY2021 LTI Grant TSR (70% of securities) Tranche 1 $0.360 $0.260 Tranche 2 N/A $0.270 Tranche 3 N/A $0.290 EPS (30% of allocation) Tranche 1 $0.440 $0.440 Tranche 2 N/A $0.440 Tranche 3 N/A $0.460 LTI Granted in Relation to FY2021 to FY2024 LTIP Allocation Senior Executives LTI Grant Year LTI Securities Granted % Paid/ Vested in Period # LTIP Securities Vested in Period % Forfeited in Period # LTIP Securities Forfeited in Period Value Expensed in FY2024 $ Cameron Fox FY2024 420,000 0% – 0% – 76,343 FY2023 420,000 0% – 0% – 137,085 FY2022 700,000 0% – 0% – 89,764 FY2021 700,000 12.9% 90,300 20.4% 143,034 20,555 Lawrence Hamson FY2024 210,000 0% – 0% – 38,172 FY2023 210,000 0% – 0% – 68,542 FY2022 350,000 0% – 0% – 44,882 FY2021 350,000 12.9% 45,150 20.4% 71,517 10,277 Philip Tine FY2024 210,000 0% – 0% – 38,172 FY2023 210,000 0% – 0% – 68,542 FY2022 350,000 0% – 0% – 44,882 FY2021 350,000 12.9% 45,150 20.4% 71,517 10,277 The shares noted as forfeited in the above table did not meet their required Performance Conditions and were compulsorily divested by the Company in FY2024. 31 Annual Report 2024 Directors’ Report continued (h) Non-Executive Director remuneration Under the Constitution, the Board may decide the remuneration for the Company to which each Non-Executive Director is entitled to for their services as a Director. However, the total amount of fees paid to all Non-Executive Directors for their services as Directors must not exceed in aggregate in any financial year the amount fixed by the Company in the annual general meeting. As disclosed in the Company’s prospectus, the pre-IPO Shareholders approved $440,000 per annum. For FY2024, the annual base Non-Executive Director fees currently agreed to be paid by the Company were $140,000 (FY2023: $140,000) to the Chairman of the Board, Broderick Arnhold, $80,000 (FY2023: $80,000) to each of Craig Mathieson (Chair of the Audit and Risk Committee) and Trent Peterson (Chair of the Nomination and Remuneration Committee), and $70,000 (FY2023: $70,000) to Brian Singer and Debra Singh. These amounts comprise fees paid in cash. In subsequent years, these figures may vary. The director’s fees for Trent Peterson were paid to Catalyst Direct Capital Management Pty Ltd. The director’s fees for Debra Singh were paid to PD Singh Enterprises Pty Limited. Directors may also be reimbursed for travel and other expenses incurred in attending to the Company’s affairs. Directors may be paid additional or special remuneration where a Director performs services outside the ordinary duties of a Non-Executive Director. (i) Statutory remuneration details and other statutory disclosures The following tables in respect to the FY2024 and FY2023 financial years detail the components of remuneration for each Non-Executive Director and Senior Executive of the Group. FY2024 table of benefits and payments Cash Salary/ Director’s Fees $ STI/Bonus $ Annual Leave/Long Service Leave $ Post- Employment Benefits $ Share-Based Payments3 $ Total $ Non-Executive Directors Broderick Arnhold 140,000 – – – – 140,000 Trent Peterson1 80,000 – – – – 80,000 Craig Mathieson 80,000 – – – – 80,000 Brian Singer 70,000 – – – – 70,000 Debra Singh2 70,000 – – – – 70,000 Senior Executives Cameron Fox 607,116 – 22,914 30,000 323,747 983,777 Lawrence Hamson 447,483 – 9,368 27,399 161,873 646,123 Philip Tine 386,538 – 8,357 27,399 161,873 584,168 TOTAL 1,881,137 – 40,639 84,798 647,493 2,654,067 1. The directors fees paid to Trent Peterson are paid to Catalyst Direct Capital Management Pty Ltd. 2. The directors fees paid to Debra Singh are paid to PD Singh Enterprises Pty Ltd. 3. Share-based payments refer to LTI Shares and Performance Share Rights only. 32 Shaver Shop Group Limited Directors’ Report continued FY2023 table of benefits and payments Cash Salary/ Director’s Fees $ STI/Bonus $ Annual Leave/Long Service Leave $ Post- Employment Benefits $ Share-Based Payments3 $ Total $ Non-Executive Directors Broderick Arnhold 140,000 – – – – 140,000 Trent Peterson1 80,000 – – – – 80,000 Craig Mathieson 80,000 – – – – 80,000 Brian Singer 70,000 – – – – 70,000 Debra Singh2 70,000 – – – – 70,000 Senior Executives Cameron Fox 591,779 145,000 37,286 30,000 246,549 1,050,614 Lawrence Hamson 432,254 67,500 7,782 25,860 123,596 656,992 Philip Tine 368,077 75,000 20,167 25,293 123,596 612,133 TOTAL 1,832,110 287,500 65,235 81,153 493,741 2,759,739 1. The directors fees paid to Trent Peterson are paid to Catalyst Direct Capital Management Pty Ltd. 2. The directors fees paid to Debra Singh are paid to PD Singh Enterprises Pty Ltd. 3. Share-based payments refer to LTI Shares and Performance Share Rights only. (j) Additional statutory information The Board may decide to pay Senior Executives discretionary bonus amounts in addition to their maximum STI amount under the STIP outlined above. The Board rarely exercises this discretion and only does so in exceptional circumstances. (k) KMP shareholdings The number of ordinary shares (excluding unvested LTIP shares) in Shaver Shop Group Limited held by each KMP of the Group during the financial year is as follows: 30 June 2024 Balance at Beginning of Year On Market Sale of Shares On Market Purchase of Shares Shares Vested as Remuneration Balance at End of Year Directors Broderick Arnhold 1,500,000 (250,000) – – 1,250,000 Cameron Fox 3,535,303 – – 90,300 3,625,603 Craig Mathieson 4,900,004 – – – 4,900,004 Brian Singer 3,258,004 (1,729,133) – – 1,528,871 Trent Peterson 547,619 – – – 547,619 Debra Singh 100,000 – – – 100,000 Senior Executives Lawrence Hamson 1,040,183 (67,205) – 45,150 1,018,128 Philip Tine* 539,926 (20,000) – 45,150 565,076 TOTAL 15,291,039 (2,066,338) – 180,600 13,450,301 * Please note that in the 2022 and 2023 Annual Reports, Mr Tine’s shareholding at the end of each of those financial years was understated by 50,000 shares. Similarly, Mr Mathieson’s ending share balance was understated by 80,000 shares in the 2020 through 2023 annual reports. 33 Annual Report 2024 Directors’ Report continued LTIP holdings of KMP The following table details the LTIP holding and the movements in the LTIP shares for KMP during FY2024: Senior Executives LTI Security Type Unvested Balance at 30 June 2022 LTI Securities Granted as Remuneration Vested/ Exercisable Forfeited Unvested Balance at 30 June 2023 Cameron Fox Shares 933,334 – (90,300) (143,034) 700,000 Rights 420,000 420,000 – – 840,000 Lawrence Hamson Shares 466,667 – (45,150) (71,517) 350,000 Rights 210,000 210,000 – – 420,000 Philip Tine Shares 466,667 – (45,150) (71,517) 350,000 Rights 210,000 210,000 – – 420,000 (l) Contractual arrangements with Senior Executives The remuneration and other terms of employment for the CEO and Senior Executives are set out in formal service agreements as summarised below. In FY2024 the CEO was entitled to fixed remuneration of $640,000 (FY2023: $625,000) whilst the fixed remuneration for other Senior Executives was in the range of $417,398 to $477,398. All service agreements are for an unlimited duration. The Chief Executive Officer’s contract may be terminated by giving six months’ notice (except in the case of serious or wilful misconduct). The Chief Financial Officer’s contract may be terminated by giving eight weeks’ notice. No contracted retirement benefits are in place with any of the Company’s Senior Executives. (m) Loans made to KMP The following information relates to KMP loans made, guaranteed, or secured during the reporting period on an aggregate basis. Balance at Beginning of the Year $ Balance at the End of the Year $ Provision for Bad Debts Expense $ Employee Share Plan Loans 56,189 56,189 – Loans to KMP arise as a result of the early Shaver Shop long-term incentive plans. The above KMP loans related to incentive plans established prior to the Company’s IPO and are repayable after a maximum period of six years or upon disposal of the shares. (n) Transactions with KMP (excluding loans) There were no other material transactions or contracts with KMP except as disclosed elsewhere in the remuneration report. Signed in accordance with a resolution of the Board of Directors: Broderick Arnhold Director Melbourne 26 August 2024 34 Shaver Shop Group Limited PricewaterhouseCoopers, ABN 52 780 433 757 2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration As lead auditor for the audit of Shaver Shop Group Limited for the year ended 30 June 2024, I declare that to the best of my knowledge and belief, there have been: (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Shaver Shop Group Limited and the entities it controlled during the period. Brad Peake Melbourne Partner PricewaterhouseCoopers 26 August 2024 Auditor’s Independence Declaration 35 Annual Report 2024 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2024 Consolidated Note 2024 $ 2023 $ Revenue Revenue from continuing operations 3 219,374,178 224,523,767 Cost of goods sold (121,921,002) (124,590,985) Gross profit from corporate owned retail stores 97,453,176 99,932,782 Expenses Employee benefits expense (37,423,483) (35,821,579) Marketing and advertising expense (6,384,331) (7,238,685) Depreciation and amortisation expense 4 (16,211,978) (15,265,884) Occupancy expenses (3,552,109) (3,261,716) Operational expenses (9,028,576) (9,376,725) Other expenses (2,915,722) (3,198,548) Finance costs 4 (520,767) (1,243,179) Profit before income tax 21,416,210 24,526,466 Income tax 5 (6,293,681) (7,707,174) Profit after income tax for the year attributable to the owners of Shaver Shop Group Limited 21 15,122,529 16,819,292 Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations (35,788) 21,408 Other comprehensive income for the year, net of tax (35,788) 21,408 Total comprehensive income for the year attributable to the owners of Shaver Shop Group Limited 15,086,741 16,840,700 Cents Cents Earnings per share for profit attributable to the owners of Shaver Shop Group Limited Basic earnings per share (weighted average shares) 20 11.7 13.1 Diluted earnings per share (weighted average shares) 20 11.5 12.8 The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 36 Shaver Shop Group Limited Consolidated Balance Sheet As at 30 June 2024 Consolidated Note 2024 $ 2023 $ Assets Current assets Cash and cash equivalents 7 13,314,704 13,471,437 Trade receivables and current assets 8 2,906,770 2,131,793 Inventories 9 23,135,682 21,959,590 Total current assets 39,357,156 37,562,820 Non-current assets Property, plant and equipment 11 11,244,540 10,839,362 Right-of-use assets 10 15,736,462 17,635,700 Deferred tax assets 24 3,070,992 4,382,792 Intangible assets 12 58,145,311 54,233,038 Total non-current assets 88,197,305 87,090,891 Total assets 127,554,461 124,653,712 Liabilities Current liabilities Trade and other payables 13 17,971,503 14,601,192 Lease liabilities 10 8,371,005 10,620,151 Current tax liabilities 24 13,611 1,059,380 Employee benefits 15 2,856,288 2,785,066 Other liabilities 16 30,883 30,139 Total current liabilities 29,243,290 29,095,928 Non-current liabilities Lease liabilities 10 10,627,506 11,083,885 Other liabilities 16 134,654 177,145 Total non-current liabilities 10,762,160 11,261,030 Total liabilities 40,005,450 40,356,958 Net assets 87,549,011 84,296,754 Equity Issued capital 17 50,275,510 50,275,510 Reserves 19 3,366,388 2,400,932 Retained earnings 21 33,907,113 31,620,312 Total equity 87,549,011 84,296,754 The above consolidated balance sheet should be read in conjunction with the accompanying notes. 37 Annual Report 2024 Consolidated Statement of Changes in Equity For the year ended 30 June 2024 Consolidated Ordinary Shares $ Reserves $ Retained Earnings $ Total Equity $ Balance at 1 July 2023 50,275,510 2,400,932 31,620,312 84,296,754 Profit after income tax for the year – – 15,122,529 15,122,529 Other comprehensive income for the year, net of tax – (35,788) – (35,788) Total comprehensive income for the year – (35,788) 15,122,529 15,086,741 Transactions with owners in their capacity as owners: On–market sale of unvested LTI shares – – – – Share–based payments (Note 19) – 1,001,244 – 1,001,244 Dividends paid (Note 18) – – (12,835,728) (12,835,728) Balance at 30 June 2024 50,275,510 3,366,388 33,907,113 87,549,011 Consolidated Ordinary Shares $ Reserves $ Retained Earnings $ Total Equity $ Balance at 1 July 2022 49,492,703 1,551,477 27,589,330 78,633,510 Profit after income tax for the year – – 16,819,292 16,819,292 Other comprehensive income for the year, net of tax – 21,408 – 21,408 Total comprehensive income for the year – 21,408 16,819,292 16,840,700 Transactions with owners in their capacity as owners: On–market sale of unvested LTI shares 782,807 – – 782,807 Share–based payments (Note 19) – 828,047 – 828,047 Dividends paid (Note 18) – – (12,788,310) (12,788,310) Balance at 30 June 2023 50,275,510 2,400,932 31,620,312 84,296,754 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 38 Shaver Shop Group Limited Consolidated Statement of Cash Flows For the year ended 30 June 2024 Consolidated Note 2024 $ 2023 $ Cash flows from operating activities Receipts from customers (inclusive of GST) 241,054,798 248,471,085 Payments to suppliers and employees (inclusive of GST) (200,435,068) (208,175,913) 40,619,730 40,295,172 Interest received 652,753 166,512 Interest paid – borrowings (224,864) (274,617) Interest paid – leases (988,461) (1,220,349) Income taxes paid (5,938,880) (6,708,204) Net cash from operating activities 30 34,120,278 32,258,515 Cash flows from investing activities Payments for property, plant and equipment 11 (2,289,886) (2,369,640) Payments for software 12 (675,239) (65,997) Purchase of other intangibles 12 (3,386,346) – Contributions for new premises fitouts 593,970 1,046,153 Net cash used in investing activities (5,757,501) (1,389,484) Cash flows from financing activities Principal elements of lease repayments (15,683,782) (14,788,001) Proceeds on sale of unvested LTI shares – 782,807 Dividends paid 18 (12,835,728) (12,788,310) Net cash used in financing activities (28,519,509) (26,793,504) Net increase/(decrease) in cash and cash equivalents (156,733) 4,075,527 Cash and cash equivalents at the beginning of the financial year 13,471,437 9,395,910 Cash and cash equivalents at the end of the financial year 7 13,314,704 13,471,437 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 39 Annual Report 2024 Notes to the Consolidated Financial Statements 30 June 2024 1. Basis of preparation The consolidated financial report covers Shaver Shop Group Limited and its’ controlled entities (‘the Group’). Shaver Shop Group Limited is a for-profit Company, limited by shares, incorporated and domiciled in Australia. These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Where necessary, and as a result of a change in the classification of certain expenses during the current year, comparative amounts in the statement of profit and loss and balance sheet have been reclassified for consistency with current year presentation. Compliance with IFRS These financial statements and associated notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. Each of the entities within the Group prepare their financial statements based on the currency of the primary economic environment in which the entity operates (functional currency). The consolidated financial statements are presented in Australian dollars, which is the parent entity’s functional and presentation currency. The financial report was authorised for issue by the Directors on 26 August 2024. Comparatives are consistent with prior years, unless otherwise stated. Basis of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Shaver Shop Group Limited (‘Company’ or ‘Parent entity’) as at 30 June 2024 and the results of all subsidiaries for the period then ended. Shaver Shop Group Limited and its subsidiaries together are referred to in these financial statements as the ‘Group’ or the consolidated entity. Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. A list of controlled entities is contained in Note 26 to the financial statements. 2. Critical accounting estimates and judgements The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving significant estimates or judgements are estimates of goodwill impairment, refer to Note 12 and net realisable value of inventory, refer to Note 9. 40 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued 3. Revenue and other income Revenue from continuing operations Consolidated 2024 $ 2023 $ Sales revenue Retail sales 219,374,178 224,523,767 Total revenue 219,374,178 224,523,767 Accounting policy for revenue and other income Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are presented net of returns, trade allowances, discounts, rebates and amounts collected on behalf of third parties. Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods and services. This is generally in-store when the customer purchases the goods or services, or on delivery in the case of online sales. Revenue is recognised for the major business activities using the methods outlined below: Sale of goods The Group operates a chain of retail stores and associated websites selling personal care and grooming products. Revenue from the sale of goods is recognised at a point in time when a Group entity sells a product to the customer. Payment of the transaction price is due immediately when the customer purchases the product and takes delivery in store. It is the Group’s policy to sell its products to the end customer with a right of return within 21 days. Therefore, a refund liability (included in trade and other payables) and a right to the returned goods (included in other current assets) are recognised for the products that could be returned. Accumulated experience is used to estimate such returns at the time of sale at a portfolio level (expected value method). As the number of products returned has been relatively steady for a number of years, it is not considered probable that a significant reversal in the cumulative revenue recognised will occur. The validity of this assumption and the estimated amount of returns are reassessed at each reporting date. Interest income Interest is recognised using the effective interest method, which, for floating rate financial assets, is the rate inherent in the financial instrument. 41 Annual Report 2024 Notes to the Consolidated Financial Statements continued 4. Expenses Consolidated 2024 $ 2023 $ Profit before income tax includes the following specific expenses: Finance costs Interest and finance charges – borrowings 224,864 189,342 Interest and finance charges – leases 988,461 1,220,349 Interest income (692,558) (166,512) Total finance costs 520,767 1,243,179 Depreciation and amortisation Intangible assets 148,625 139,009 Property, plant & equipment 1,834,991 1,759,451 Right-of-use assets 14,228,362 13,367,424 Total depreciation and amortisation expense 16,211,978 15,265,884 5. Income tax The major components of tax expense comprise: Consolidated 2024 $ 2023 $ Current tax expense Current tax on profits for the year 4,981,881 6,484,884 Deferred tax expense Movements in deferred tax assets and liabilities 1,311,800 1,222,290 Income tax expense relating to continuing operations 6,293,681 7,707,174 Reconciliation of income tax to accounting profit Consolidated 2024 $ 2023 $ Profit before income tax 21,416,210 24,526,466 Tax at the statutory tax rate of 30% 6,424,863 7,357,940 Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Other items (131,182) 349,234 Income tax 6,293,681 7,707,174 42 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued Franchise buy-backs Shaver Shop has received a private ruling from the Australian Tax Office in respect of deductions for the amount relating to the termination of the franchise licence forming part of the purchase consideration paid for the buy-back of franchise stores. The tax ruling confirms that this amount is to be deducted in equal portions over a five-year period following the date of purchase. For each franchise store, a portion of the purchase consideration equal to the total tax benefit to be received over five years, is recognised as a deferred tax asset and included in the calculation of goodwill. The deferred tax asset is then released over five years in accordance with the deduction schedule for each acquired franchise store with the effect of reducing income tax payable for each period. Accounting policy for income tax The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. However, deferred tax liabilities are recognised in respect of any adjustments to goodwill subsequent to the initial recognition. On that basis, deferred tax liabilities have been recognised in the year for additions to goodwill in respect of franchise buy-back activities (if any) to the extent that they are deductible in calculating the current tax expense in the year. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount of tax bases of investments in foreign operations where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax is recognised in profit and loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. 43 Annual Report 2024 Notes to the Consolidated Financial Statements continued 6. Operating segments The Group operates within one operating segment, being retail sales of specialist personal grooming products through their corporate and online stores. The chief operating decision maker for the Company is the Managing Director and Chief Executive Officer. Total revenue disclosed in the consolidated statement of comprehensive profit and loss all relates to this one operating segment. The Group is not reliant on any one single customer. At 30 June 2024, the Group operated 115 Corporate Stores in Australia (FY2023: 115) and eight Corporate Stores in New Zealand (FY2023: 8). Accounting policy for operating segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Group operates within one operating segment, being retail store sales of a variety of specialist personal grooming products. 7. Cash and cash equivalents Consolidated 2024 $ 2023 $ Cash at bank and on hand 13,314,704 13,471,437 Accounting policy for cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three-months or less, which are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value and bank overdrafts. Bank overdrafts (if applicable) are shown within borrowings in current liabilities in the balance sheet. 8. Trade receivables and other current assets Consolidated 2024 $ 2023 $ Current assets Trade and other receivables 1,908,089 1,227,902 Prepayments 917,304 822,514 Related party receivables 81,377 81,377 Total trade receivables and other current assets 2,906,770 2,131,793 The carrying value of trade and other receivables is considered a reasonable approximation of fair value due to the short-term nature of the balances. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial statements. Accounting policy for credit losses on trade and other receivables The Group has elected to apply the simplified approach to measuring expected credit losses, using the lifetime expected loss allowance for all trade and other receivables. To measure the expected credit losses, trade and other receivables have been grouped based on shared credit risk characteristics and the days past due. A provision matrix is then determined based on the historic credit loss rate for each group, adjusted for any material expected changes to the future credit risk for that group. 44 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued 9. Inventories Consolidated 2024 $ 2023 $ Current assets Finished goods 23,135,682 21,959,590 Amounts recognised in profit and loss Inventories recognised as an expense in costs of goods sold during the year ended 30 June 2024 amounted to $121,921,002 (FY2023 $124,590,985). Amounts recognised in expenses relating to write-downs and write-offs of stock in FY2024 amounted to $1,286,842 (FY2023: $983,179). Critical accounting estimates – realisable value of inventory Inventories are stated at the lower of cost and net realisable value. Net realisable value represents the estimated selling price less all estimated costs necessary to make the sale. Determining the net realisable value of inventories relies on key assumptions that require the use of management judgement. These key assumptions are the variables affecting the expected selling price and are reviewed at least annually. Any reassessment of the selling price in a particular year will effect the cost of goods sold. Accounting policy for inventories Inventories are stated at the lower of cost and net realisable value. Cost comprises of cost of purchases and direct shipping costs to bring the inventories into their current location. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. 10. Leases Consolidated 2024 $ 2023 $ Lease liabilities Lease liabilities – current 8,371,005 10,620,151 Lease liabilities – non-current 10,627,506 11,083,885 18,998,511 21,704,036 The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. 45 Annual Report 2024 Notes to the Consolidated Financial Statements continued Consolidated 2024 $ 2023 $ Right-of-use assets Right-of-use assets – at cost 42,963,883 46,474,610 Less: accumulated depreciation (27,227,421) (28,838,910) 15,736,462 17,635,700 Accounting policy for leases The Group leases retail sites for its corporate store locations across Australia and New Zealand. Rental contracts are typically made for fixed periods of two to seven years and in very limited situations contain an option to renew at the end of the initial term. Lease terms are negotiated on an individual basis. Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period, so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • fixed payments (including in-substance fixed payments) less any lease incentives receivable; • variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date; • amounts expected to be payable by the group under residual value guarantees; • the exercise price of a purchase option if the group is reasonably certain to exercise that option; and • payments of penalties for terminating the lease, if the lease term reflects the group exercising that option. As a practical expedient, AASB 16 permits a lessee not to separate non-lease components and instead account for any lease and associated non-lease components as a single arrangement. The Group has elected to apply this practical expedient. In line with accounting standard guidance where leases have a fixed escalation rate, the fixed rate has been applied when accounting for the lease payments. No rate has been applied to leases that increase at the rate of CPI or leases that have a variable escalation rate. Right-of-use assets are measured at cost comprising the initial measurement of the lease liability and other components as required under AASB16. Payments associated with leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Low-value assets comprise IT equipment and small office related items. 46 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued 11. Property, plant and equipment Movements in carrying amounts of property, plant and equipment Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Consolidated Leasehold Improvements in Progress $ Plant and Equipment $ Computer Equipment $ Improvements $ Total $ Year ended 30 June 2024 Balance at the beginning of the year 361,887 9,932,104 515,803 29,568 10,839,362 Additions 17,271 1,680,208 592,407 – 2,289,886 Disposals and write-downs – (41,467) – – (41,467) Transfers (327,187) 327,187 – – – Depreciation expense – (1,610,508) (217,693) (6,790) (1,834,991) Foreign exchange movements – (8,178) (72) – (8,250) Balance at the end of the year 51,971 10,279,346 890,445 22,778 11,244,540 Consolidated Leasehold Improvements in Progress $ Plant and Equipment $ Computer Equipment $ Improvements $ Total $ Year ended 30 June 2023 Balance at the beginning of the year 492,528 9,679,223 169,210 46,978 10,387,939 Additions – 1,886,456 483,184 – 2,369,640 Disposals and write-downs – (171,245) – – (171,245) Transfers (130,641) 130,641 – – – Depreciation expense – (1,605,202) (136,839) (17,411) (1,759,452) Foreign exchange movements – 12,232 248 – 12,480 Balance at the end of the year 361,887 9,932,104 515,803 29,568 10,839,362 Accounting policy for property, plant and equipment Property, plant and equipment is stated at historical cost minus depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Plant and Equipment 2-12 years Computer Equipment 1-7 years Leasehold Improvements 10 years 47 Annual Report 2024 Notes to the Consolidated Financial Statements continued The asset’s residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period. An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying value is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying value. These are included in profit or loss. 12. Intangible assets Movements in carrying amounts of intangible assets Consolidated License $ Software $ Brand Names $ Goodwill $ Total $ Year ended 30 June 2024 Opening net book value – 320,474 602,987 53,309,577 54,233,038 Additions 3,386,346 675,239 – – 4,061,585 Amortisation – (76,107) (72,518) – (148,625) Foreign exchange movements – – (687) – (687) Balance at the end of the year 3,386,346 919,606 529,782 53,309,577 58,145,311 Consolidated Software $ Brand Names $ Goodwill $ Total $ Year ended 30 June 2023 Opening net book value 321,039 673,944 53,309,577 54,304,560 Additions 65,997 – – 65,997 Amortisation (66,562) (72,447) – (139,009) Foreign exchange movements – 1,490 – 1,490 Balance at the end of the year 320,474 602,987 53,309,577 54,233,038 License additions represents the acquisition of an exclusive distribution agreement across Australia and New Zealand for the Skull Shaver range of products for a five year term commencing 1 July 2024. Software is generally amortised over a period of three to seven years depending on the expected useful life. For the purpose of impairment testing, goodwill is monitored as one cash-generating unit. Significant estimate: key assumptions used for value-in-use calculations The Group performed its annual impairment testing as at 30 June 2024. The Group considers the relationship between its market capitalisation and its carrying value, among other factors, when reviewing for indicators of impairment. The recoverable amount of the relevant CGU has been determined based on the value-in-use calculation using cash flow projections from budgets approved by senior management and presented to the Board of Directors covering a five-year period. Cash flows beyond the five-year period are extrapolated using estimated growth rates of 2.5% (FY2023: 2.5%). The pre-tax discount rate applied to cash flow projected is 13.8% (FY2023: 14.2%). The value-in-use calculation is most sensitive to the following key assumptions: gross margin, growth rate and discount rate. 48 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued Gross margin: Gross margin is based on average values achieved in the past. Margins are not increased over the forecast timeline. The gross margin used in the forecast period is 45.8% (FY2023: 44.6%) based on recent gross margins achieved, together with expectations of the future. Growth rate: Sales growth rates are based on management’s best estimates of anticipated growth (based on industry and company considerations) in the short to medium-term and consider the historical average like for like sales growth achieved in the past. The growth rate in the terminal year is 2.5% (FY2023: 2.5%) and the same store sales growth rate used for the five-year forecast period varies from 1% to 3% (FY2023: 1% to 3%). Discount rate: The discount rate is specific to the Group’s circumstances and is derived from its weighted average cost of capital (WACC). The WACC takes into account the cost of both debt and equity. The cost of equity is determined by the expected return on investment by the Group’s shareholders. The cost of debt is based on the risk-free interest rate as well as a margin that takes into consideration both industry and company specific risk factors. Sensitivity analysis: Management recognises that the recoverable amount of goodwill is sensitive to the assumptions used in the model. Using the assumption outlined above, the surplus of the recoverable amount over the carrying value of goodwill at 30 June 2024 is approximately $171.7 million. In Management’s view, there are no reasonably possible changes in any of the key assumptions at this time that would result in an impairment to the value of goodwill. The Group believes the assumptions adopted in the value-in-use calculations reflect an appropriate balance between the Group’s experience to date and ongoing macroeconomic risks and uncertainties. Accounting policy for intangible assets Goodwill Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Licences Acquired licences generally have a finite term and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of the licence over its associated term. Brand names Brand names have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of the brand names over their useful life of 20 years. Costs incurred in configuring and customising cloud-based software Costs incurred in configuring or customising cloud software and Software as a Service (SaaS) arrangements can only be recognised as intangible assets if the implementation activities create an intangible asset that the entity controls and the intangible asset meets the recognition criteria. Those costs that do not result in intangible assets are expensed as incurred, unless they are paid to the suppliers of the SaaS arrangements to significantly customise the cloud-based software for the Group, in which case the costs are recorded as a prepayment for services and amortised over the expected renewable term of the arrangement. 49 Annual Report 2024 Notes to the Consolidated Financial Statements continued 13. Trade and other payables Consolidated 2024 $ 2023 $ Current liabilities Trade payables 13,760,977 10,430,136 GST payable 1,053,697 1,077,791 Payroll related accruals 1,545,586 1,758,548 Other creditors and accruals 1,611,243 1,334,717 17,971,503 14,601,192 All amounts are short-term and the carrying values are considered to be a reasonable approximation of fair value. Accounting policy for trade and other payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 60 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. 14. Borrowings There were no drawn borrowings at 30 June 2024 (30 June 2023: no drawn borrowings). The carrying amounts of current and non-current assets pledged as collateral for liabilities are: 2024 $ 2023 $ Fixed and floating charge: Cash and cash equivalents 13,314,704 13,471,437 Trade and other receivables 1,908,089 1,227,902 Inventories 23,135,682 21,959,590 Property, plant and equipment 11,244,540 10,839,362 Intangible assets 58,145,311 54,233,038 Under the terms of the major borrowing facilities, as at 30 June 2024, the Group was required to comply with the following primary financial covenants: (a) Leverage Ratio: the ratio of debt to EBITDA must be less than or equal to 2.0; (b) Fixed Charge Cover Ratio: the ratio of a) EBITDA plus occupancy costs; to b) Interest expense plus right of use asset amortisation plus occupancy costs must be great than 1.5; and (c) Net Worth Ratio: the ratio of total assets less total liabilities to total assets must be greater than 0.45. During the current and prior year, there were no defaults on borrowings or breaches of debt covenants. 50 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued Accounting policy for borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. 15. Employee benefits Consolidated 2024 $ 2023 $ Current liabilities Provision for employee benefits 2,856,288 2,785,066 The provision for employee benefits includes accrued annual leave and long service leave. For long service leave it covers all unconditional entitlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount of the provision is presented as current, since the Group does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Group does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months. The following amounts reflect leave that is not expected to be taken within the next 12 months: Consolidated 2024 $ 2023 $ Leave obligations expected to be settled after 12 months 1,223,245 1,058,244 Accounting policy for employee benefits Short-term obligations Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months after the end of the reporting period in which the employees render the related service, are recognised in respect of employee’s services up to the end of the reporting period. These are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables. Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled. Other long-term employee benefit obligations The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the reporting period in which the employees render the related services are 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 end of the reporting period using the projected unit credit method. 51 Annual Report 2024 Notes to the Consolidated Financial Statements continued Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on high-quality corporate bond rates with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. The obligations are presented as current liabilities in the consolidated statement of financial position if the entity does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur. 16. Other liabilities Consolidated 2024 $ 2023 $ Current liabilities Other liabilities 30,883 30,139 Non-current liabilities Other liabilities 134,654 177,145 Total other liabilities 165,537 207,284 17. Issued capital Consolidated 2024 $ 2023 $ 131,012,494 (FY2023: 131,012,494) Ordinary shares 50,275,510 50,275,510 Shaver Shop has issued and unvested shares (LTI Plan Shares) under its Long-Term Incentive Plan (LTI Plan) of 2,100,000 at 30 June 2024 (FY2023: 2,783,336). The LTI Plan Shares have vesting criteria and are therefore only included, if appropriate, in diluted share calculations and are not included in the calculation of basic weighted average shares outstanding. In addition, in FY2023 and FY2024 Shaver Shop has issued 2,610,000 rights to acquire Shaver Shop shares under its Executive Long Term Incentive Plan (ELTIP). At 30 2024 June 2,460,000 of these rights remain outstanding and are subject to both performance conditions for vesting as well as service conditions. Movements in share capital Consolidated 2024 $ 2023 $ At the beginning of the reporting period 50,275,510 49,492,703 Sale of unvested long-term incentive shares – 782,807 At the end of the reporting period 50,275,510 50,275,510 52 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued Number of shares outstanding 2024 No. 2023 No. At the beginning of the reporting period 131,012,494 131,012,494 At the end of the reporting period 131,012,494 131,012,494 Calculation of weighted average number of diluted shares 2024 No. 2023 No. Weighted average number of ordinary shares used for calculating basic earnings per share 128,912,494 128,229,158 Adjustment for weighted average number of LTI Plan Shares issued (unvested shares) 2,100,000 2,783,336 Weighted average number of ordinary shares and potential ordinary shares used in calculating diluted earnings per share 131,012,494 131,012,494 The LTI Plan Shares are included in the calculation of the weighted average number of fully diluted shares outstanding when the average market price of the Company’s shares is above the exercise price of the LTI Plan Shares for the year ended 30 June 2024 or there is an expectation the shares will become traded on the ASX. The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company. On a show of hands at meetings of the Company, each holder of ordinary shares has one vote in person or by proxy and upon a poll, each share is entitled to one vote. Performance share rights issued under the ELTIP are considered contingently issuable shares because their issue is contingent upon satisfying specified conditions in addition to the passage of time. Contingently issuable shares are treated as outstanding and included in the calculation of diluted earnings per share only if the conditions are satisfied. If the conditions are not satisfied, the number of contingently issuable shares included in the calculation of diluted earnings per share is based on the number of shares that would be issuable if the end of the period were the end of the contingency period. The Company does not have authorised capital or par value in respect of its shares. Capital risk management Capital of the Group is managed in order to safeguard the ability of the Group to continue as a going concern, to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure. The Group monitors capital through the gearing ratio which is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is defined as equity per the consolidated statement of financial position plus net debt. There are no externally imposed capital requirements. Accounting policy for issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. 53 Annual Report 2024 Notes to the Consolidated Financial Statements continued 18. Dividends Dividends The following dividends were declared and paid: Consolidated 2024 $ 2023 $ Franked 100% FY2023 final dividend of 5.5 cents per share (FY2022: 5.5 cents per share, franked 100%) 6,910,285 6,847,739 Franked 100% FY2024 interim dividend of 4.7 cents per share (FY2023: 4.7 cents per share, franked 100%) 5,925,443 5,940,571 12,835,728 12,788,310 Consolidated 2024 2023 Total dividends declared per share 0.102 0.102 Franking account Consolidated 2024 $ 2023 $ Franking credits available for subsequent financial years based on a tax rate of 30% 3,107,389 3,612,342 The above available balance is based on the dividend franking account at year-end adjusted for: • franking credits that will arise from the payment/(receipt) of the current tax liabilities/(receivable); • franking debits that will arise from the payment of dividends recognised as a liability at the year-end; and • franking credits that will arise from the receipt of dividends recognised as receivables at the end of the year. The ability to use the franking credits is dependent upon the Company’s future ability to declare dividends. Accounting policy for dividends Dividends are recognised when declared during the financial year and no longer at the discretion of the Company. 54 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued 19. Reserves Consolidated 2024 $ 2023 $ Foreign currency translation reserve Opening balance (11,906) (33,314) Currency translation differences arising during the year (35,788) 21,408 Closing balance (47,694) (11,906) Share-based payments reserve Opening balance 2,412,838 1,584,791 Transfers in – Share-based payments 1,001,244 828,047 Closing balance 3,414,082 2,412,838 Balance at the end of the year 3,366,388 2,400,932 Foreign currency translation reserve Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income – foreign currency translation reserve. The cumulative amount is reclassified to profit or loss when the net investment is disposed of. Share-based payments reserve This reserve records the cumulative value of employee service received for the issue of share options. When the option is exercised, the amount in the share option reserve is transferred to share capital. 20. Earnings per share Consolidated 2024 $ 2023 $ Profit from continuing operations 15,122,529 16,819,292 Earnings used to calculate basic EPS from continuing operations 15,122,529 16,819,292 Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS and diluted EPS: 2024 No. 2023 No. Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS 128,912,494 128,229,158 Weighted average number of ordinary shares outstanding during the year used in calculating fully diluted EPS 131,012,494 131,012,494 Cents Cents Basic earnings per share 11.7 13.1 Diluted earnings per share 11.5 12.8 55 Annual Report 2024 Notes to the Consolidated Financial Statements continued Information concerning classification of securities LTI Plan shares and rights granted to participants in Shaver Shop’s long-term incentive plans are considered to be potential ordinary shares. They have been included in the determination of diluted earnings per share if the required TSR and EPS hurdle would have been met based on the company’s performance up to the reporting date or if the company expects the potential shares to become ordinary issued shares, and to the extent to which they are dilutive. Accounting policy for earnings per share Basic earnings per share Basic earnings per share is determined by dividing net profit after income tax attributable to members of the Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during the period. Diluted earnings per share Diluted earnings per share adjusts the figure used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. 21 Retained earnings Consolidated 2024 $ 2023 $ Retained earnings at beginning of the financial year 31,620,312 27,589,330 Net profit for the year 15,122,529 16,819,292 Dividends declared (12,835,728) (12,788,310) Retained earnings at the end of the financial year 33,907,113 31,620,312 22. Commitments Bank guarantees The Company has bank guarantees in place as security for rental payments on several of its locations. As at 30 June 2024 $62,620 (FY2023: $114,800) was drawn under the Company’s bank guarantee facility. This facility has a capacity limit of $0.5 million. The Group is exposed to a variety of financial risks through its use of financial instruments. The Group‘s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of financial markets. The Group does not speculate in derivative financial instruments. The most significant financial risks to which the Group is exposed to are described below: Risk Exposure Arising From Liquidity risk Borrowings, bank overdrafts and other liabilities Credit risk Cash at bank and trade and other receivables Market risk – currency risk Recognised assets and liabilities not denominated in Australian dollars Market risk – interest rate risk Borrowings at variable rates 56 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued Objectives, policies and processes Risk management is carried out by the Group’s senior management and the Board of Directors. The Chief Financial Officer has primary responsibility for the development of relevant policies and procedures to mitigate the risk exposure of the Group. These policies and procedures are then approved by the Risk Management Committee and tabled at the Board meeting following their approval. Reports are presented to the Board regarding the implementation of these policies and any risk exposure which the Risk Management Committee believes the Board should be aware of. Specific information regarding the mitigation of each financial risk to which the Group is exposed is provided below. Liquidity risk Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities, as and when they fall due. The Group maintains cash to meet its liquidity requirements for up to 30-day periods. Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell long-term financial assets. The Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term financial liabilities, as well as cash-outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling six-week projection. Long-term liquidity needs for a 180-day and a 360-day period are identified monthly. 23. Financial risk management Financing arrangements The Group had access to the following undrawn borrowing facilities at the end of the reporting period: Consolidated 2024 $ 2023 $ Term debt facility 19,500,000 19,500,000 Trade finance facility 10,000,000 10,000,000 Bank guarantee facility 437,380 385,200 29,948,398 29,885,200 At 30 June 2024, Shaver Shop had the above noted available bank facilities. These facilities expired on 31 July 2024. Shaver Shop renegotiated its bank facilities in July 2024 and now has access to a $20.0 million term debt facility, a $10.0 million trade finance facility and a $0.1 million bank guarantee facility. The new term debt and trade finance facilities have a maturity date of 31 July 2027. 57 Annual Report 2024 Notes to the Consolidated Financial Statements continued Maturities of financial liabilities Not Later Than 1 Month Not Later Than 1 Month 1 Month to 1 Year 1 Month to 1 Year 1 to 2 Years 1 to 2 Years 2024 $ 2023 $ 2024 $ 2023 $ 2024 $ 2023 $ Bank loans – – – – – – Trade and other payables 16,209,745 13,810,860 1,761,758 790,332 – – Lease liabilities 971,446 995,014 7,399,559 9,625,138 10,627,506 6,629,907 17,181,191 14,805,874 9,161,317 10,415,470 10,627,506 6,629,907 The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management’s expectations that banking facilities will be rolled forward. The amounts disclosed in the table are the undiscounted contracted cash flows and therefore the balances in the table may not equal the balances in the consolidated statement of financial position due to the effect of discounting. The timing of expected outflows is not expected to be materially different from contracted cash flows. Credit risk Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposure to certain customers and suppliers, including outstanding receivables and committed transactions. The Group has adopted a policy of only dealing with creditworthy counter parties as a means of mitigating the risk of financial loss from defaults. In addition, sales to retail customers are required to be settled in cash or through the use of major credit cards, reducing credit risk associated with sales. Trade and other receivables consist mainly of supplier rebates owing to the Group. Ongoing credit evaluation is performed on the financial condition of accounts receivable. No material impairment exists within trade and other receivables at year end. Credit quality The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. Consolidated 2024 $ 2023 $ Cash at bank AA– (Standard & Poors) 13,314,704 13,471,437 Accounts receivable Counter-parties with no external credit rating Group 1* 1,655,743 944,009 * Group 1: Existing counter‑parties (more than 12 months) with no defaults in the past. 58 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued Market risk Foreign currency risk Most of the Group’s transactions are carried out in Australian Dollars. Exposures to currency exchange rates arise from the Group’s New Zealand operations, which are denominated in New Zealand Dollars. Whilst the Group’s exposure to foreign currency is not considered to be material, the Group’s exposure to non-Australian Dollar cash flows is monitored in accordance with the Group’s risk management policies. Shaver Shop Pty Ltd has an inter-company receivable of $0.1 million at 30 June 2024 (30 June 2023: $0.5 million). Interest rate risk The Group is exposed to interest rate risk arising from both short-term and long-term variable rate borrowings. The Group does not hedge against interest rate movements and monitors the exposure to interest rate risk in accordance with the Group’s risk management policy. All of the Group’s borrowings are denominated in Australian Dollars. As at the end of the reporting period, the Group had the following variable rate borrowings outstanding: Weighted Average Interest Rate % 2024 $ Weighted Average Interest Rate % 2023 $ Floating rate instruments Bank loans 1.15% – 1.15% – Total – – – – Shaver Shop did not draw-down on any of its loan facilities in FY2024. Accordingly, the weighted average interest rate represents the line fee payable on the $19.5 million term debt facility. There is no line fee on the trade finance facility. Management considers that interest rates could reasonably increase by 1.0% or decrease by 1.0% (FY2023: increase by 1.0% or decrease by 1.0%). As these movements would not have a material impact on either the net result for the year or equity, no sensitivity analysis has been performed. 24. Tax assets and liabilities Current tax assets and liabilities Consolidated 2024 $ 2023 $ Income tax payable 13,611 1,059,380 Recognised deferred tax assets and liabilities Consolidated 2024 $ 2023 $ Deferred tax assets 8,117,548 9,929,582 Deferred tax liabilities (5,046,556) (5,546,790) Net deferred tax assets 3,070,992 4,382,792 59 Annual Report 2024 Notes to the Consolidated Financial Statements continued Opening Balance $ Charged to Income $ Closing Balance $ Deferred tax assets (liabilities) Provisions – employee benefits 901,688 26,588 928,276 Accruals 264,510 (136,847) 127,663 Leased liabilities 6,327,454 (651,791) 5,675,663 Cancellation of franchise licence on acquisition 1,750,403 (955,302) 795,101 Software intangibles 415,090 (206,952) 208,138 Other deferred tax assets 414,696 (31,989) 382,707 Right-of-use assets (5,303,532) 595,518 (4,708,014) Other deferred tax liabilities (387,515) 48,973 (338,542) Balance at 30 June 2024 4,382,792 (1,311,800) 3,070,992 Opening Balance $ Charged to Income $ Closing Balance $ Deferred tax assets (liabilities) Provisions – employee benefits 827,648 74,040 901,688 Accruals 421,325 (156,815) 264,510 Leased liabilities 7,578,028 (1,250,574) 6,327,454 Cancellation of franchise licence on acquisition 2,738,704 (988,301) 1,750,403 IPO costs 50,694 (50,694) – Software intangibles 657,193 (242,103) 415,090 Other deferred tax assets 465,106 (50,410) 414,696 Right-of-use assets (6,290,851) 987,319 (5,303,532) Other deferred tax liabilities (411,528) 24,013 (387,515) Balance at 30 June 2023 6,036,319 (1,653,527) 4,382,792 60 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued 25. Auditors’ remuneration During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms: Consolidated 2024 $ 2023 $ PricewaterhouseCoopers Australia (i) Audit and other assurance services Audit of financial statements (Australia) 263,000 245,000 Audit of financial statements (New Zealand) 80,000 – Total remuneration for audit and other assurance services 343,000 245,000 (ii) Taxation services Tax services 40,462 26,250 Total remuneration for taxation services 40,462 26,250 (iii) Other services Other consulting services 1,894 2,450 Total remuneration for other services 1,894 2,450 Total remuneration of PricewaterhouseCoopers Australia 385,356 273,700 26. Interests in subsidiaries The Group’s subsidiaries as at 30 June 2024 are set out below: Ownership Interest Name Principal Place of Business/Country of Incorporation 2024 % 2023 % Lavomer Riah Pty Ltd Australia 100% 100% Shaver Shop Pty Ltd Australia 100% 100% Shaver Shop (New Zealand) Limited New Zealand 100% 100% The percentage of ownership interest held is equivalent to the percentage of voting rights for all subsidiaries. 61 Annual Report 2024 Notes to the Consolidated Financial Statements continued 27. Deed of cross guarantee Shaver Shop Group Limited, Lavomer Riah Pty Ltd and Shaver Shop Pty Ltd are parties to a deed of cross guarantee under which each company guarantees the debts of the others. Under ASIC class order 98/1418 there is no requirement for these subsidiaries to prepare or lodge a consolidated financial report and directors’ report, as a result of entering into the deed. These companies represent a closed Group for the purposes of the class order. The consolidated statement of profit or loss and other comprehensive income and consolidated statement of financial position, comprising the closed group, after eliminating all transactions between parties to the deed of cross guarantee are shown below: 2024 $ 2023 $ Consolidated Statement of Comprehensive Income Revenue 209,010,570 214,506,750 Cost of Sales (115,927,456) (118,509,048) Gross Profit 93,083,114 95,997,702 Operating expenses (72,419,468) (71,288,153) Finance costs (471,555) (1,196,494) Profit before income tax 20,192,091 23,513,055 Income tax expense (6,515,603) (7,664,168) Profit after income tax 13,676,488 15,848,887 2024 $ 2023 $ Equity – retained profits Retained profits at the beginning of the financial year 29,959,064 26,807,217 Profit after income tax 13,676,488 15,848,887 Dividends paid (12,835,728) (12,697,040) Retained profits at the end of the financial year 30,799,824 29,959,064 62 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued 2024 $ 2023 $ Balance sheet Current assets Cash and cash equivalents 11,751,924 12,425,231 Trade and other receivables 2,910,877 2,177,737 Inventories 21,990,024 20,691,839 36,652,825 35,294,807 Non-current assets Property, plant and equipment 10,428,423 9,953,847 Right-of-use assets 14,784,697 16,030,609 Deferred tax assets 7,758,259 9,654,481 Intangible assets 58,083,257 54,164,583 91,054,636 89,803,520 Total assets 127,707,461 125,098,327 Current liabilities Trade and other payables 20,701,797 16,694,126 Lease liabilities 7,883,483 9,993,948 Current tax liabilities (67,812) 723,821 28,517,468 27,411,895 Non-current liabilities Lease liabilities 9,920,513 9,834,518 Deferred tax liabilities 4,780,062 5,204,502 14,700,575 15,039,020 Total liabilities 43,218,043 42,450,915 Net assets 84,489,418 82,647,412 Equity Issued capital 50,275,510 50,275,510 Reserves 3,414,084 2,412,838 Retained profits 30,799,824 29,959,064 Total equity 84,489,418 82,647,412 63 Annual Report 2024 Notes to the Consolidated Financial Statements continued 28. Contingent liabilities There are no contingent liabilities recognised by the Group. 29. Related parties Subsidiaries Interests in subsidiaries are set out in Note 26. Key management personnel Key management personnel remuneration (excluding Directors Fees) included within employee expenses for the year is shown below: Consolidated 2024 $ 2023 $ Short-term employee benefits 1,481,776 1,744,845 Post-employment benefits 84,798 81,153 Share-based payments 647,493 493,741 Total remuneration for the year 2,214,067 2,319,739 Detailed remuneration disclosures are provided in the Remuneration Report. Loans to/from related parties The following balances are outstanding at the end of the reporting period in relation to transactions with related parties: Consolidated 2024 $ 2023 $ Current receivables: Loans to KMP and related parties 81,377 81,377 The loans to KMP resulted from a share incentive scheme implemented prior to the Shaver Shop Employee Share Plan (refer Note 31). Interest is payable on the KMP loans based on the Australian Taxation Office benchmark rate from time to time. KMP loans are repayable after a maximum period of six years or upon disposal of the shares. 64 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued 30. Cash flow information Consolidated 2024 $ 2023 $ Profit after income tax for the year 15,122,529 16,819,292 Non-cash flows in profit: Depreciation and amortisation 16,211,978 15,265,884 Disposal/write-down of property, plant & equipment 41,467 171,245 Share-based payments 973,837 785,713 Net exchange differences 13,971 13,970 Change in operating assets and liabilities: (Increase) Decrease in trade, leases and other receivables (774,977) 944,090 (Increase) Decrease in inventories (1,176,091) 215,492 Decrease in deferred tax assets 1,311,800 1,653,528 Increase (Decrease) in trade and other payables 3,441,533 (2,832,317) Decrease in income taxes payable (1,045,769) (778,382) Net cash from operating activities 34,120,278 32,258,515 31. Share-based payments The Group’s Long-Term Incentive Plan (LTIP) is designed to align the interests of Senior Executives more closely with the interests of shareholders by providing an opportunity for eligible Shaver Shop managers and executives to acquire shares (Plan Shares) in the Company subject to the conditions of the LTIP. From FY2017 to FY2022, the Group granted shares to participants using a loan share plan structure. In this Plan, ordinary shares in the Company (Plan Shares) are granted to participants subject to various performance conditions. The Plan Shares may be funded by a limited recourse loan to the eligible participant from the Company or one of its subsidiaries. The Plan Shares rank pari passu in all respects with the ordinary shares of the Company. Under the terms of the loan share plan and relevant offer letters, vesting of the Plan Shares is subject to the achievement of performance conditions as well as service conditions. Vesting of 70% of the Plan Shares is subject to the achievement of a minimum Total Shareholder Return (TSR) and 30% of the Plan Shares is subject to the achievement of Earnings Per Share (EPS) conditions. If the minimum TSR and EPS performance conditions are achieved, then the relevant service condition attaching to the shares must also be met. In the event the participant leaves the Company prior to the vesting date, the Plan Shares will generally be compulsorily divested in accordance with the terms of the Plan. Details of the number of Plan Shares issued under the loan share plan from FY2021 to FY2022 is set out in the table below. The Plan Shares have been treated as equity-settled, share-based payment transactions in the Company’s financial accounts. In FY2023, following a review of the Company’s incentive plan structures and benchmarking against peer listed entities, shareholders approved a new performance rights LTIP structure at the Company’s 2022 Annual General Meeting. The new structure is considered to better align LTIP participants and shareholder objectives and is a more commonly used program. Similar to the loan share plan, the rights will only convert into ordinary shares in the Company if the performance conditions (EPS based) and service conditions attaching to the rights are met. 65 Annual Report 2024 Notes to the Consolidated Financial Statements continued Details of the number of rights and Plan Shares granted and the fair value of the Rights and Plan Shares on the relevant Grant Date is set out below. FY2024 FY2023 FY2022 FY2021 Grant Date 9 Nov 23 28 Nov 22 10 Nov 21 28 Oct 20 Security type Rights Rights Plan Shares Plan Shares Number of Securities Granted 1,350,000 1,280,000 2,200,000 2,350,000 Issue Price of Securities $0.0000 $0.0000 $1.0252 $1.0651 The number of securities outstanding and the relative exercise price of the LTIP shares is set out below. FY2024 LTIP (Shares) FY2023 LTIP (Shares) FY2022 LTIP (Shares) FY2021 LTIP (Shares) Outstanding at the beginning of the year – 1,260,000 2,100,000 683,336 Granted during the year 1,350,000 – – – Vested during the year – – – (258,000) Forfeited during the year (120,000) (30,000) (50,000) (425,336) Outstanding at the end of the year 1,230,000 1,230,000 2,050,000 – Average exercise price $0.0000 $0.0000 $1.0252 $1.0651 The fair value at grant date of the rights is independently determined using a Black-Scholes model. The fair value at grant date of the Plan Shares is independently determined using an adjusted form of Monte Carlo model for TSR LTIP Shares and a Black-Scholes model for EPS based shares. The model takes into account the vesting criteria, the current share price, the expected dividend yield, the risk-free interest rate, the expected volatility of the shares and the correlations and volatilities of peer group companies. The assessed fair value at grant date of rights granted during the year ended 30 June 2024 was $0.79 per right. FY2024 FY2023 FY2022 FY2021 Grant Date 9 Nov 23 28 Nov 22 10 Nov 21 28 Oct 20 Closing share price on Grant Date $1.01 $1.11 $1.06 $1.04 Exercise price $0.00 $0.00 $1.0252 $1.0651 Volatility n/a n/a 45% 50% Dividend yield (Nil for Loan Shares as used to pay off loan value) 9.0% 8.0% Nil Nil Risk-free rate 4.16% 3.20% 1.31% 0.27% Total expenses arising from share-based payment transactions recognised during the period as part of Employment Benefit Expenses were as follows: Consolidated 2024 $ 2023 $ Expense for Plan Shares issued under LTI Plan 973,837 785,713 66 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued Accounting policy for share-based payments Share-based compensation benefits are provided to employees via the Company’s Long-Term Incentive Plan (LTIP). Equity-settled transactions are awards of shares or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The fair value of shares granted under the Shaver Shop Group Limited’s LTIP is recognised as an employee benefit expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted: • including any market performance conditions (for example, the entity’s share price); • excluding the impact for any service and non-market performance vesting conditions (for example, sales growth targets, profitability and an employee remaining an employee of the entity over a specified time period); and • including the impact of non-vesting conditions (for example, the requirement for employees to hold shares for a specified period of time). The total expense is recognised over the vesting period, which is the period over which all of the specific vesting conditions are to be satisfied. At the end of each period, the entity revises estimates of the number of shares that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. 32. Events occurring after the reporting date Subsequent to year end, the Directors declared a final dividend of 5.5 cents per share (100% franked) to shareholders of record on 5 September 2024. The dividend payment date is 19 September 2024. No other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 67 Annual Report 2024 Notes to the Consolidated Financial Statements continued 33. Parent entity information The following information has been extracted from the books and records of the parent, Shaver Shop Group Limited and has been prepared in accordance with Accounting Standards. Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of Shaver Shop Group Limited. Dividends received from associates are recognised in the parent entity’s profit or loss when its right to receive the dividend is established. The financial information for the parent entity, Shaver Shop Group Limited, has been prepared on the same basis as the consolidated financial statements. 2024 $ 2023 $ Assets Current assets 17,719,735 18,671,649 Non-current assets 28,714,799 28,714,799 Total assets 46,434,534 47,386,448 Liabilities Current liabilities (228,094) 723,821 Total liabilities (228,094) 723,821 Equity Contributed equity 50,275,510 50,275,510 Reserves 3,488,146 2,514,310 Retained losses (7,101,029) (6,127,192) Total equity 46,662,627 46,662,628 Profit for the period 11,861,891 12,002,598 Total comprehensive income 11,861,891 12,002,598 Opening retained losses (6,127,192) (5,341,480) Profit for the period 11,861,891 12,002,598 Dividends paid or provided for (12,835,728) (12,788,310) Closing retained losses (7,101,029) (6,127,192) Contingent liabilities The parent entity did not have any contingent liabilities as at 30 June 2024 or 30 June 2023. Contractual commitments The parent entity did not have any commitments as at 30 June 2024 or 30 June 2023. 68 Shaver Shop Group Limited Notes to the Consolidated Financial Statements continued 34. Summary of other material accounting policies Foreign currency transactions and balances Functional and presentation currency Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in Australian dollars, which is Shaver Shop Group Limited’s functional and presentation currency. Transactions and balances Foreign currency transactions are recorded at the spot rate on the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit and loss. They are deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. Impairment of assets Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. At the end of each reporting period the Group determines whether there is an evidence of an impairment indicator for non-financial assets. Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit. Borrowing costs Borrowing costs are recognised as an expense in the period in which they are incurred. Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. 69 Annual Report 2024 Notes to the Consolidated Financial Statements continued Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case, it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2024. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. 35. Company details The registered office of and principal place of business of the Company is: Shaver Shop Group Limited Level 1, Chadstone Tower One 1341 Dandenong Road Chadstone VIC 3148 70 Shaver Shop Group Limited Consolidated Entity Disclosure Statement 30 June 2024 As at 30 June 2024 Name of Entity Type of Entity Trustee, Partner or Participant in JV % of Share Capital Place of Business/ Country of Incorporation Australian Resident or Foreign Resident Foreign Jurisdiction(s) or Foreign Residents Shaver Shop Group Limited Body Corporate – 100 Australia Australian N/A Lavomer Riah Pty Limited Body Corporate – 100 Australia Australian N/A Shaver Shop (New Zealand) Limited Body Corporate – 100 New Zealand Australian N/A* Shaver Shop Pty Limited Body Corporate – 100 Australia Australian N/A * These entities are also a tax resident in their respective countries of incorporation. However, they are assessed as an Australian resident under the Income Tax Assessment Act 1997 and therefore not classified as a foreign resident under that Act. Basis of preparation This consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes information for each entity that was part of the consolidated entity as at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements. 71 Annual Report 2024 Directors’ Declaration 30 June 2024 The directors of the Company declare that: 1. The consolidated financial statements and notes for the year ended 30 June 2024 are in accordance with the Corporations Act 2001 and: a. comply with Accounting Standards, which, as stated in basis of preparation Note 1 to the consolidated financial statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and b. give a true and fair view of the financial position and performance of the consolidated Group. 2. In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 3. The consolidated entity disclosure statement is true and correct. 4. In the directors’ opinion, there are reasonable grounds to believe that the Company and its subsidiary which have entered into a Deed of Cross Guarantee 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. This declaration is made in accordance with a resolution of the Board of Directors. Broderick Arnhold Director Melbourne 26 August 2024 72 Shaver Shop Group Limited PricewaterhouseCoopers, ABN 52 780 433 757 2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999 Liability limited by a scheme approved under Professional Standards Legislation. Independent auditor’s report To the members of Shaver Shop Group Limited Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Shaver Shop Group Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group's financial position as at 30 June 2024 and of its financial performance for the year then ended (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group financial report comprises: the consolidated balance sheet as at 30 June 2024 the consolidated statement of changes in equity for the year then ended the consolidated statement of cash flows for the year then ended the consolidated statement of profit or loss and other comprehensive income for the year then ended the notes to the consolidated financial statements, which include material accounting policies and other explanatory information the consolidated entity disclosure statement as at 30 June 2024 the directors’ declaration. 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence 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 & 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. Independent Auditor’s Report to the Members of Shaver Shop Group Limited 73 Annual Report 2024 Independent Auditor’s Report continued Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. Audit Scope Key Audit Matters Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. Amongst other relevant topics, we communicated the following key audit matters to the Audit and Risk Committee: Carrying value of goodwill Net realisable value of inventory These are further described in the Key audit matters section of our report. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context. We communicated the key audit matters to the Audit and Risk Committee. 74 Shaver Shop Group Limited Independent Auditor’s Report continued Key audit matter How our audit addressed the key audit matter Carrying value of goodwill (Refer to Note 12 Intangible Assets) At 30 June 2024 the Group recognised $53.3 million of goodwill in the consolidated balance sheet. The Group assesses goodwill for impairment annually, irrespective of whether there are indicators of impairment. For the purpose of impairment testing, goodwill is monitored as one operating segment. The recoverable amount of the CGU has been determined based on a value-in- use calculation using cash flow projections from budgets approved by senior management and presented to the Board of Directors covering a five- year period. The carrying value of goodwill was a key audit matter due to: the financial significance of the goodwill balance; and the level of judgement involved in assessing the recoverable amount of the goodwill including key assumptions such as forecasting future cash flows and estimating the discount rate and terminal growth rate. We performed the following procedures, amongst others: Assessed the historical accuracy of the Group’s cash flow forecasts by comparing prior budgets approved by senior management to actual performance. Compared the forecast cash flows used in the Group’s impairment model to the latest budgets approved by senior management and business plans. Assessed the appropriateness, with consideration to relevant external indicators and historical Group performance, of selected significant assumptions used to estimate the future cash flows and terminal growth rate. Compared actual historical results to the Board approved budgeted figures to assess the level of the Group’s accuracy in forecasting cash flows. Tested the mathematical accuracy of selected significant data included in the impairment model. With the assistance of PwC valuation experts, assessed the appropriateness of the discount rate assumptions used in the models by comparing to market data, comparable companies and industry research. Evaluated the reasonableness of the disclosures made in note 12, against the requirements of Australian Accounting Standards. 75 Annual Report 2024 Independent Auditor’s Report continued Key audit matter How our audit addressed the key audit matter Net realisable value of inventory (Refer to Note 9 Inventories) At 30 June 2024 the Group recognised $23.1 million of inventory in the consolidated balance sheet. The inventory balance was valued at the lower of cost and net realisable value. Net realisable value represents the estimated selling price less all estimated costs necessary to make the sale. The net realisable value of inventory was a key audit matter due to: o the financial significance of the inventory balance; and o the level of judgement and estimation required in determining the net realisable value of inventory including key assumptions of expected future selling prices. We performed the following procedures, amongst others: Evaluated the appropriateness of significant assumptions used to develop the provision for net realisable value, by having regard to: o aggregate inventory sold below cost during the financial period; and o expected weeks cover based on historical sales data. Compared the current selling price (net realisable value) to the recorded cost for a sample of inventory items. Evaluated the appropriateness of the disclosures made in note 9, against the requirements of Australian Accounting Standards. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2024, but does not include the financial report and our auditor’s report thereon. Prior to the date of this auditor’s report, the other information we obtained included the Directors’ report. We expect the remaining other information to be made available to us after the date of this audtior’s report. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon through our opinion on the financial report. We have issued a separate opinion on the remuneration report. 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 that we 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. 76 Shaver Shop Group Limited Independent Auditor’s Report continued When we read the other information not yet received, if we conclude there is a material misstatement therein, we are required to communicate the matter to the Directors and use our professional judgement on the appropriate action to take. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report in accordance with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error . In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our auditor's report. Report on the remuneration report Our opinion on the remuneration report We have audited the remuneration report included in the directors’ report for the year ended 30 June 2024. In our opinion, the remuneration report of Shaver Shop Group Limited for the year ended 30 June 2024 complies with section 300A of the Corporations Act 2001. 77 Annual Report 2024 Independent Auditor’s Report continued Responsibilities The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. PricewaterhouseCoopers Brad Peake Melbourne Partner 26 August 2024 78 Shaver Shop Group Limited Shareholder information For the year ended 30 June 2024 The Shareholder information set out below is based on information in the Company’s share register as at 18 September 2024. Distribution of holdings of fully paid ordinary shares 18 Sep 2024 Range Securities % No. of holders % 100,001 and Over 83,488,285 63.73 141 3.57 10,001 to 100,000 37,809,741 28.86 1,182 29.93 5,001 to 10,000 5,787,638 4.42 696 17.62 1,001 to 5,000 3,453,573 2.64 1,169 29.60 1 to 1,000 473,257 0.36 761 19.27 Total 131,012,494 100.00 3,949 100.00 Unmarketable Parcels 25,525 0.02 150 3.80 As at 18 September 2024, there were 150 holders of an unmarketable parcel of shares. Substantial shareholders The following is a summary of the substantial shareholders in the Company pursuant to notices lodged with the ASX in accordance with Section 671B of the Corporations Act as at 18 September 2024. Name of Shareholder No. of Shares % of Issued Capital1 Alsop Pty Limited ATF the Johnston Trust 14,277,125 11.00% 1. % of issued capital specified in the relevant notice. 79 Annual Report 2024 Shareholder information continued Top 20 Shareholders Rank Name 18 Sep 2024 % of Issued Capital 1 ALSOP PTY LTD 14,277,125 10.90 2 CITICORP NOMINEES PTY LIMITED 7,528,793 5.75 3 PACIFIC CUSTODIANS PTY LIMITED 6,503,929 4.96 4 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 5,643,402 4.31 5 ZARA HOLDINGS PTY LTD 2,986,090 2.28 6 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 2,965,174 2.26 7 C N BOTTING & ASSOCIATES PTY LTD 2,699,990 2.06 8 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 1,937,912 1.48 9 MR CAMERON FOX 1,800,024 1.37 10 DOVALI PTY LTD 1,800,000 1.37 11 J & P CHICK PTY LIMITED 1,410,000 1.08 12 MR BRODIE ERNST ARNHOLD 1,250,000 0.95 13 MATHIESON DOWNS PTY LTD 1,173,914 0.90 14 NETWEALTH INVESTMENTS LIMITED 1,117,193 0.85 15 NEWECONOMY COM AU NOMINEES PTY LIMITED 1,027,448 0.78 16 PACIFIC CUSTODIANS PTY LIMITED 998,155 0.76 17 DR JEFFREY ERIC DALE CHICK & DR PAMELA HAZEL CHICK 820,000 0.63 18 BNP PARIBAS NOMINEES PTY LTD 819,490 0.63 19 NCH PTY LTD 762,123 0.58 20 ARKINDALE PTY LTD 638,404 0.49 Total 58,159,166 44.39 Balance of register 72,853,328 55.61 Grand total 131,012,494 100.00 Unquoted Equity Securities Employee performance share rights issues under the Company’s Executive Long Term Incentive Plan: Number of performance share rights on issue 2,460,000 Number of holders 6 Shaver Shop Website www.shavershop.com.au www.shavershop.co.nz 80 Shaver Shop Group Limited Shareholder information continued Corporate Governance Information Copies of the Company’s Policies and Charters, including its Corporate Governance Statement are available at the Corporate Governance section of Shaver Shop’s Investor Relations website: investors.shavershop.com.au. Voting Rights for Fully Paid Ordinary Shares The Constitution provides for votes to be cast at a meeting of members: 1. on a show of hands, each member has 1 vote; and 2. on a poll: (a) for each fully paid share held by a member, 1 vote; and (b) for each partly paid share, a fraction of a vote equivalent to the proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited). On-Market Buy-Back There is no current on-market buy-back of the Company’s Shares. Investor Relations Information Lawrence (Larry) Hamson CFO and Company Secretary +61 3 9840 5900 investors.shavershop.com.au 81 Annual Report 2024 Corporate Information Directors Broderick Arnhold Cameron Fox Craig Mathieson Trent Peterson Debra Singh Company Secretary Lawrence Hamson Registered office Level 1, Chadstone Tower One 1341 Dandenong Road Chadstone, Victoria 3148 Australia Principal place of business Level 1, Chadstone Tower One 1341 Dandenong Road Chadstone, Victoria 3148 Australia Phone: +61 (0) 3 9840 5900 Share registry Link Market Services Limited Level 10, Tower 4 727 Collins Street Melbourne, Victoria 3008 Australia Phone: 1300 554 474 Auditors PricewaterhouseCoopers Solicitors Norton Rose Fulbright Bankers Commonwealth Bank of Australia 82 Shaver Shop Group Limited colliercreative.com.au #SHS0023