ANNUAL REPORT
FOR THE 6-MONTH
PERIOD ENDED
30 JUNE 2021
Shriro continues its
global growth strategy
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2
4
6
8
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13
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29
34
66
75
Highlights
Our Brands
Chairman’s Report
Managing Director’s Report
Business Review
Board of Directors
Corporate Governance Statement
Directors’ Report
Financial Statements
Notes to the Financial Statements
Directors’ Declaration
Company Information
SHRIRO HOLDINGS LIMITED | ABN 29 605 279 329
SHRIRO HOLDINGS LIMITED 1
HIGHLIGHTS
REVENUE
$94.3m
up 20.0% PCP1
NET CASH
$17.3m
down 1.7%1
NETWORK
33
Countries traded in
EBITDA
$12.3m
uo 17.1% PCP
DIVIDENDS
6.0cps
Fully franked
EMPLOYEES
231
Full time equivalent
1. Prior corresponding period (“PCP”) refers to the six
months to 30 June 2020. Net cash has been compared
to 31 December 2020.
ANNUAL REPORT 30 JUNE 2021 2
OUR BRANDS
Shriro is a leading Kitchen Appliances and Consumer
Products marketing and distribution group operating out
of Australia and New Zealand, and expanding globally.
Shriro markets and distributes an extensive range of
products under company-owned brands (including Omega,
Robinhood, Everdure and Omega Altise), and third-party
brands (Casio, Blanco and Pioneer).
BLANCO
Since 1925 we’ve had only
one goal, and that’s to deliver
a premium experience by
approaching all that we create
with impeccable style and
intelligence.
OMEGA
At Omega, we’re driven by
balance. The perfect balance
between beautiful design and
brilliant capability. Our products
are designed to enhance your life
by transforming your kitchen into
a stylish and simple environment
to delight and satisfy.
EVERDURE BY HESTON BLUMENTHAL
Whether you love the convenience of cooking on gas, or
want to reconnect with the primal beauty of cooking on
charcoal – home, or away, Everdure by Heston Blumenthal
will help you unleash your creativity and bring out the best in
BBQ food.
G-SHOCK
Born from the
pursuit to create an
unbreakable watch,
G-SHOCK have been
providing Absolute
Toughness to men who
need the most from
their watches, for over
35 years!
EDIFICE
A dynamic and high
performing men’s
watch that is ever
evolving in design and
technology. Unchained
from restraints, Casio
Edifice is built so that
time knows no limits.
SHRIRO HOLDINGS LIMITED 3
CASIO CALCULATORS
OMEGA ALTISE
Casio produces a wide selection
of products ranging from school
calculators, desktop calculators,
printer calculators, and label
printers.
Bringing the ease and
convenience of comfortable
living into Australian homes
for over 25 years. Designed
to seamlessly satisfy
a range of decors and
requirements.
ROBINHOOD
Robinhood is a leading Australasian brand of kitchen and laundry
products. Range includes rangehoods, and ducting solutions;
laundry tubs and ironing centres; waste disposers and related
accessories.
BABY-G
25 years ago BABY-G became known for its ‘Pretty
Tough’ watches. Today they are as practical as it is pretty,
embracing all shapes, colours and sizes for all women and
lifestyles.
EVERDURE
KITCHENS
Cooking up great ideas since
1935. Proudly Australian
owned, Everdure Appliances
continues to combine clever
technology and functionality
with stylish design.
CASIO EMI
Casio dominates the digital
piano and portable keyboard
markets in Australia, with
innovative products such
as the Grand Hybrid Piano
range, a collaborative
effort between Casio and
European manufacturer,
C.Bechstein.
ANNUAL REPORT 30 JUNE 2021 4
CHAIRMAN’S REPORT
Dear Shareholders,
On behalf of the Board of Directors, it gives me great pleasure
to present the Shriro Holdings Limited Annual Report for the six
month period ending June 30, 2021.
It is important to note that the Company has changed its reporting
period from a December 31 year end to a June 30 year end.
The new 2022 year end reporting period commenced on July 1,
therefore this report covers the six month transition period
between the previous year end of December 31, 2020 and the start
of the new twelve month period that commenced on July 1, 2021.
I am pleased to report that the Group has had a strong six month
period ending 30 June 2021, delivering revenue growth of 20.0%
on the prior corresponding (‘pcp’) period to $94.3m and a record
NPAT of $6.8m, an increase of 44.7% (pcp) with earnings per share
increasing 42.0% to 7.1 cents per share.
The Company continued to experience increased demand through
the period on homewares and consumer related goods which
benefited all brands in Shriro’s portfolio. International sales of the
Everdure by Heston Blumenthal range of BBQs continued to grow
with revenue increasing by 134% (pcp) as the brand progressively
gains market share Europe and the USA.
Gross margin increased by 220 basis points to 41.0%, achieved
through reduced discounting and a stronger Australian dollar
which offset increased freight and supply chain costs. Improved
operating leverage achieved through the combination of cost
rationalisation and revenue growth has delivered NPBT of $9.8m
which was an increase of 50.8% (pcp).
Operating cashflows were $7.3m or 107% of NPAT, which resulted
in a cash position of $17.3m as at 30 June 2021, which leaves
the Group with a strong balance sheet and well placed to pursue
organic and non-organic strategic growth initiatives.
the business disruption, the Company has continued to keep all
staff employed and fully paid to date. Further, on the staff front,
the majority of the team have been working from home for an
extended period of time and on behalf of the Board I would like to
share my gratitude for their resilience and work ethic throughout
this difficult period. Hopefully they’ll all be able to return to the
office soon.
On July 12, I announced my intention to retire as a Director and
Chair of the Company and that I would assist in the search and
recruitment of a suitable successor. In recent weeks, the Company
has announced the appointment of two new Independent
non-executive Directors, Ms Cornelia Meyer and Mr Kim Slater.
Through their joint experience, Cornelia and Kim bring significant
depth of experience and skills in international trade, mergers
and acquisitions and capital markets which are highly regarded
and will add tremendous value to the Board in developing and
delivering strategic growth initiatives. Subsequent to their
appointments, I am pleased to advise that the Board has elected
Ms Meyer as Chair. She has outstanding international leadership
credentials and on behalf of the Board I wish her every success in
the role and accordingly I will retire as a Director of the Company
following lodgement of this Annual Report.
It has been a great pleasure to lead the Group as Chair and
I’d like to recognise the support and hard work of my fellow
independent Directors, Cheryl Hayman and Abigail Cheadle, the
Management team led by Tim Hargreaves, and our Company
Secretary, Lisa Jones. I am confident their success will continue
into the future.
On 31 August 2021, the Directors declared a final dividend of
6.0 cents per share fully franked with an ex-dividend date of 09
September 2021, record date of 10 September 2021 which was
paid on 30 September 2021.
STEPHEN HEATH
Chairman
Since the end of the period, continued government mandated
lockdowns have impacted the Company’s retail customers’
ability to open their stores on a consistent basis in many regions.
The continued lockdowns, as well as the previously reported cyber
incident, has caused some timing issues around customer orders
and their ability to receive goods into stores although the business
successfully recovered with minimal losses. Notwithstanding
SHRIRO HOLDINGS LIMITED
ANNUAL REPORT 30 JUNE 2021
5
The Company continued
to experience increased
demand through the period
on homewares and consumer
related goods which benefited
all brands in Shriro’s portfolio.
STEPHEN HEATH
Chairman
6
MANAGING DIRECTOR’S REPORT
Shriro intends increasing the number of brands in its portfolio and
has invested in its supply chain to ensure that any potential growth
opportunities can be evaluated and determined for suitability and then
integrated with appropriate operational support and infrastructure.
TIM HARGREAVES
Chief Executive Officer
I am very pleased to report on the past 6 months’
trading, with many of the financial results
representing record outcomes for Shriro.
The combination of our portfolio of world class
brands, the fact that consumers have been
spending more time at home and investing in
home related consumer goods, and a talented
and committed management team have all
contributed to record revenue and net profit
after tax (‘NPAT’) for the 6 month period to
30 June 2021.
Like a lot of Australian and NZ businesses, the
challenges that the Company has faced in the
past six months have tested Managements’
agility and the operational capability and drive
for excellence of the business. Not only during
the past 6 months, but the last 18 months,
Shriro has had to adapt quickly to the various
international and domestic government
decisions to move in and out of COVID-19
related lockdowns. Whether it was product
manufacturing and shipping delays, increased
pressure on supply chain costs or retail
store closures, the business was required to
be decisive and agile, moving swiftly while
continually ensuring the safety and wellbeing
of all staff.
Our revenue growth of 20% (prior year
comparative, ‘pcp’) and a record NPAT profit of
$6.8m is testament to Shriro’s hard working and
focussed employees, working closely as a team
to produce this strong 6 month result.
Investing in International Growth
with Company Owned Brands
International BBQ sales showed strong
revenue growth of 134% in the six months
to 30 June 2021. The focus on the European
market resulted in growth with Shriro’s overseas
product distributors reporting that retail outlets
sell through of BBQ’s was strong, resulting
in little stock remaining in the retail channel,
therefore setting up the opportunity for increased
retailer orders for the next European summer.
The USA sales focus is largely through strategic
e-commerce partners such as Amazon, which is
working well, with growth of 684% (albeit from
a low base) with sales upside still to be realised.
The addressable global BBQ market of
approximately six billion dollars per annum
continues to represent an opportunity for
Shriro. The Group has now added resources
to include a centralised marketing team
coupled with boosted investment in digital
and brand marketing while continuing its
product development improvements. Everdure
by Heston continues to deliver a high quality,
differentiated product supporting its reputation
as a premium brand.
SHRIRO HOLDINGS LIMITED 7
Distribution
Outlook
Shriro has a long-standing relationship with
Casio and has been its exclusive distributor for
40 years. It is a strong partnership which has
resulted in Shriro being a market leader in school
calculators, ruggedised watches and portable
keyboards. Shriro continues to work closely with
Casio, to facilitate their goals and align our brand
marketing, distribution and sales strategy.
Shriro has also been the Pioneer distributor
in New Zealand for more than 15 years which
has resulted in Shriro today holding the leading
market position in DJ equipment and car audio
products in New Zealand.
Portfolio expansion
Shriro continues to actively seek further brands
to distribute in Australia and New Zealand with
a focus on complementary product categories
which do not directly compete with our current
principal partner’s products. Shriro intends
increasing the number of brands in its portfolio
and has invested in its supply chain to ensure
that any potential growth opportunities can be
evaluated and determined for suitability and then
integrated with appropriate operational support
and infrastructure.
Operations
Leveraging from the lower cost base that was
reported in the prior financial year, the Group
has invested in some key senior roles in the
six months ended 30 June 2021 which include
supply chain, global logistics, human resources,
technology and marketing.
Shriro’s hybrid working environment was
successfully implemented and well received
by our responsive staff, however lock-downs
commenced, head office staff once again
successfully worked from home. Shriro has
remained committed to an Employee Assistance
Programme which assists staff who are working
from home but can be faced with challenges
which may be associated with physical and
social isolation.
Acquisition Strategy
Shriro has a strong balance sheet. In addition
to its organic growth, Shriro plans to leverage
its balance sheet to acquire relevant and
strategically appropriate businesses, the
objective being to enhance our current
distribution supply chain and benefit the
business and our shareholders.
Shriro expects market conditions to continue
to be favourable for its suite of products as
lock-downs end and consumers can again begin
shopping in bricks and mortar retail outlets,
where much of the Group’s products are sold.
As previously announced Blanco will be
departing from the Shriro stable from 1 May
2022. The intention is for the working capital
released be to reinvested in Group owned
brands, accelerating growth opportunities.
Shriro had a cyber-attack, which affected
operations for three weeks from early July 2021.
Shriro recovered all data from its ERP system
and has taken steps to mitigate re-occurrence.
Prior to the cyber-attack, the Group commenced
evaluating ERP providers and solutions, aiming
to implement a system which is modern, cloud
based and easily connectable to our retailers and
websites. The expense of this programme will
occur in the first half of FY2023.
Our head office staff in Australia and New
Zealand are continuing to work from home
during lockdown. Certain warehouse staff,
considered essential, have continued to work
on site during lockdown but in a capacity which
minimises their risk of contracting or spreading
Covid- 19. The majority of our staff have been
vaccinated, and it is the Group’s intention to
reintegrate staff back into working environments
outside of their home, subject to government
Covid-19 guidelines relevant to each jurisdiction
in which the staff work.
Board
Thanks to the Board for their continued support,
hard work and commitment during this past
period. I offer a warm welcome to Cornelia
Meyer and Kim Slater who joined the board
in October 2021. They both have extensive
experience that will aid in setting the future
direction of the organisation.
Finally, I would like to thank Stephen Heath
for his sound counsel, strong logic, energy,
governance and work ethic as Chairperson of
the Shriro Board. On behalf of Shriro, I wish him
continued success in his current and future
roles.
Tim Hargreaves
Chief Executive Officer and Managing Director
ANNUAL REPORT 30 JUNE 2021 8
BUSINESS REVIEW
Shriro’s customers
include most
retailers in Australia
and New Zealand
AUSTRALIA
NEW ZEALAND
• 6 months EBITDA improving to $8.7m
• 6 months EBITDA improving to $3.3M
– up 4.8% from the PCP
– up 50.0% PCP1
• Hybrid working model commenced
in April 2021
• Seasonal products produced revenue
growth, with BBQs 50.8% PCP
• Everdure Kitchen revenue growth was
10.8% with Blanco growing 14.0% PCP
• Growth in Robinhood appliances revenue
growth of 56.2% PCP with an expanded
retail customer retail base
• Appliance division’s revenue growth was
70.7% PCP overall with improved and
expanded products ranges being well
received by customers
• Auckland airport G-shock store continued
to be closed during the period
1. Prior corresponding period (“PCP”) refers to the six months to 30 June 2020. Net cash has been compared to 31 December 2020.
SHRIRO HOLDINGS LIMITED 9
REST OF WORLD
• EBITDA improving to $0.2 million,
resulting in the first positive EBITDA for
the geographical region
• Sales grew 135.9% on the PCP with the
USA and Europe leading the growth
• Strategic alignment with E-commerce
partner, such as Amazon, in the USA
establishes a strong foundation for
future growth
• International supply chain resources
added to assist ‘speed to market’ of
inventory
ANNUAL REPORT 30 JUNE 2021 10
BOARD OF DIRECTORS
STEPHEN HEATH
Chairman
Member of the Audit, Risk and Compliance Committee
Member of the Remuneration and Nomination Committee
Stephen Heath was appointed Chairman to the Board of Shriro Holdings Limited in
October 2019.
• Stephen is a specialist in consumer goods brand management with over 25 years’ of
consumer goods brand marketing and vertically integrated retail experience.
• Stephen’s Board experience includes the Chairmanship of Temple and Webster Limited &
Glasshouse Fragrances along with Non-Executive Directorship of Redhill Education Limited.
• He is also a member of the Investment Committee of a prominent Family Office overseeing
property and consumer brand assets both in Australia and the USA.
• Stephen’s executive career included being CEO of some of Australia’s best-known consumer
brands companies including Rebel Sport Limited, Godfrey’s and Fantastic Holdings Limited
with operations experience in Australia, New Zealand, and Asia.
• Prior he was a Franchisee and Steering Committee member of Harvey Norman Limited for
8 years.
• Mr Hargreaves was appointed CEO of Shriro Australia and Monaco Corporation
1 January 2018.
• Mr Hargreaves was appointed General Manager of Casio Division in June 2001 and
Divisional Manager of CASIO Office products for 8 years from 1990 – 1998, before leaving to
join Canon Australasia as head of retail operations.
• Mr Hargreaves rejoined Shriro as General Manager overseeing all CASIO divisions (Office
Products, Timepiece, Electronic Musical Instruments, Data Projectors, Electronic Cash
Registers and Digital Cameras).
TIM HARGREAVES
Chief Executive Officer
• With the acquisition of Robinhood brands in September 2013, Mr Hargreaves was appointed
General Manager of Robinhood, whilst retaining management of the CASIO division.
Chairman of the Audit, Risk and Compliance Committee
Member of the Remuneration and Nomination Committee
Abigail Cheadle was appointed to the Board of Shriro Holdings Limited in June 2020.
• Abigail is a chartered accountant with nearly 30 years’ experience working in Australia,
Singapore, Indonesia, Thailand, Vietnam, India, Malaysia, Jordan and Russia.
• Before embarking on a non-executive career Abigail was CEO of a technology platform and
grew practices for KROLL, KordaMenta, Deloitte and Ernst & Young working principally in
the areas of company restructuring, forensic accounting, data analytics, risk management
consulting, and professional services management.
• Abigail is currently a Non-Executive Director of LGI Limited and Gladstone Ports Corporation
Limited. Previously she was a Director of Qantm Intellectual Property Limited and Isentia
Group Limited and SurfStitch Group Limited which was privatised.
ABIGAIL CHEADLE
Non-Executive Director
SHRIRO HOLDINGS LIMITED 11
Member of the Audit, Risk and Compliance Committee
Chairman of the Remuneration and Nomination Committee
Cheryl Hayman was appointed to the Board of Shriro Holdings Limited in October 2019.
• Cheryl is a professional non-executive director and a marketing specialist. She has served on
ASX Listed, Public unlisted and NFP Boards. Having keen financial and people skills, Cheryl
has experience in Chairing Nomination and Remuneration committees. Cheryl’s skills are
able to adapt across a breadth of industry sectors, demonstrated over 13 years as a non-
executive director.
• Cheryl had a lengthy and successful global marketing career in multi-national organisations
Unilever (Aust and UK), Yum Restaurants (Australia and NZ), Time Warner and George
Weston Foods.
• Cheryl’s specialisation brings to a board a depth of expertise in building compelling brand
and consumer propositions, a passion for driving innovation, deep understanding of digital
communications and profitable strategy development.
• Cheryl is a Fellow of the Australian Institute of Company Directors.
• Cheryl is currently a Director of HGL Ltd, Chartered Accountants Australia and New Zealand,
Peer Support Australia, The Darlinghurst Theatre Company and was preciously a Director of
Clover Corporation Ltd.
• Kim Slater was appointed to the Board of Shriro Holdings Limited in October 2021.
• Kim has over 25 years’ experience as a senior executive in banking and finance roles and has
spent numerous years providing specialist advice on structured products as well as hybrid
and equity derivative products as an investment specialist. He has held senior blue chip roles
including at Country Natwest, Deutsche Bank and Salomon Smith Barney.
• Kim has had a lengthy association with Shriro, has a passion for the business and the
sectors it operates in, and has a deep expertise in developing and executing strategic
business growth.
Cornelia Meyer was appointed to the Board of Shriro Holdings Limited in September 2021.
• Cornelia is an independent board director, business consultant, economist and energy expert.
Cornelia is Chairman & CEO of MRL Corporation and Chairman and Chief Economist of LBV
Asset Management. Cornelia has advised governments and worked for some of the world’s
great companies.
• Cornelia has extensive international experience, including government advisory and senior
executive roles in energy, development & investment banking covering Asia, Russia, Eastern
Europe and the Middle East. Cornelia held non-executive board roles in asset management,
energy, food and the not for profit sectors. Cornelia has particular expertise in emerging
markets and is fluent in six European and Asian languages
CHERYL HAYMAN
Non-Executive Director
KIM SLATER
Non-Executive Director
CORNELIA MYER
Non-Executive Director
ANNUAL REPORT 30 JUNE 2021 12
CONTENTS
13
14
29
30
31
32
33
66
68
73
75
Corporate Governance Statement
Directors’ Report
Consolidated Statement of Profit or Loss
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Directors’ Declaration
Independent Auditor’s Report
ASX Information
Company Information
SHRIRO HOLDINGS LIMITED
13
CORPORATE GOVERNANCE STATEMENT
The Board and management of the Company are committed to effective corporate governance in order to ensure accountability and
transparency to shareholders and other stakeholders, including customers, employees, staff and regulatory bodies. The Company
has adopted, and has substantially complied with, the ASX Corporate Governance Principles and Recommendations (Fourth Edition)
(‘the Recommendations’) to the extent appropriate to the size and nature of the Group’s operations.
The Company has prepared a statement which sets out the corporate governance practices that were in operation through the financial
period for the Company (Corporate Governance Statement).
The Corporate Governance Statement approved by the Board will be lodged together with the Company’s Annual Report with the ASX
and can also be found on the Company’s website at https://www.shriro.com.au/investor/corporate_governance
ANNUAL REPORT 30 JUNE 2021 14
Shriro Holdings Limited
DIRECTORS’ REPORT
Directors’ Report
The Directors present their report in compliance with the provisions of the Corporations Act 2001 for Shriro Holdings Limited
and its subsidiaries (the “Group”) for the period ended 30 June 2021. Shriro Holdings Limited (“Shriro”) changed its year end
from 31 December to 30 June and these financial statements have been prepared for the transitional period 01 January 2021
to 30 June 2021.
DIRECTORS
Directors of Shriro Holdings Limited during the period ended 30 June 2021 were:
Stephen Heath – Independent Chairman
Cheryl Hayman – Independent non-executive Director
Abigail Cheadle – Independent non-executive Director
Vasco Fung – Non-independent non-executive Director (resigned 11 February 2021)
Tim Hargreaves – Non-independent Managing Director
COMPANY SECRETARY
Shane Booth held the position of Company Secretary from 14 April 2015 to 27 January 2021. He continues to serve as Chief
Financial Officer and resigned as Company Secretary on 27 January 2021, to allow him to focus on financial management,
business operations and strategy.
Lisa Jones was appointed as Company Secretary on 27 January 2021. Lisa is an experienced corporate lawyer and corporate
governance professional with more than 20 years’ experience in commercial law and corporate affairs. She was a senior
associate in the corporate and commercial practice of Allens and has held executive positions with private and public listed
companies in Australia and in Italy. Lisa is the principal of Jones Meredith Group which provides bespoke company secretarial
and corporate governance services to listed and unlisted companies.
PRINCIPAL ACTIVITIES
The Group is a leading kitchen appliances and consumer products marketing and distribution business operating in Australia
and New Zealand. The Group is also expanding internationally with BBQs and cooling products.
The Group markets and distributes an extensive range of company-owned brands (including Omega, Neil Perry Kitchen by
Omega, Everdure including Everdure by Heston Blumenthal, Robinhood and Omega Altise) and third party owned brands
(including Casio, Blanco and Pioneer).
Products marketed and distributed by the Group include calculators, watches, musical instruments, audio products, kitchen
appliances, sinks and taps, laundry products, consumer electronics, car audio, amplifiers, professional DJ, hi-fi speakers,
barbeques, and heaters and cooling products.
REVIEW OF OPERATIONS
Results summary
Revenue from ordinary activities
Gross Margin
Operating Expenses
EBITDA
Depreciation and amortisation
Interest
Profit Before Tax
Profit After Tax
6 months to
30 June 2021
$million
94.3
41.0%
6 months to
30 June 2020
$million1
78.6
38.8%
26.4
12.3
2.4
0.1
9.8
6.8
20.0
10.5
3.0
1.0
6.5
4.7
Change
%
12 months to
31 December 2020
$million
20.0%
2.2pp
32.0%
17.1%
(20.0%)
(90.0%)
50.8%
44.7%
191.3
39.6%
43.6
32.3
5.6
1.6
25.2
18.2
During the period there were minimal lock-down periods in Australia and New Zealand, however travel restrictions continued
in both countries, resulting in increased consumer spending on household items. In addition, the Group’s international
expansion of its Everdure by Heston Blumenthal products grew successfully in the six months to 30 June 2021 with export
1 Financial information for the six-month period to 30 June 2020 has been included as the prior corresponding comparative period. Movement percentages have been
calculated between the six months of 30 June 2021 and 30 June 2020. The 6 months to 30 June 2020 financial information is unaudited but has been subject to a
review.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 14
SHRIRO HOLDINGS LIMITED
15
Shriro Holdings Limited
revenue increasing by 135.9% on the six months to 30 June 2020 (“prior corresponding period”). These factors resulted in
strong revenue performance in the six months to 30 June 2021.
During the period, Shriro invested in infrastructure technology, marketing and human resources to support its strategic
initiatives. Operating expenses increased from the prior corresponding period by 32.0%, however the prior corresponding
period expenses were abnormally impacted as a result of the receipt of Government subsidies and reduced staff working hours
due to COVID-19 restrictions.
Statement of financial position and statement of cashflows
Operating cash flows for the six months to 30 June 2021 were $7.3 million (107% of NPAT), lower than the prior year, as the
Group purchased extra inventory given the global supply chain uncertainty. As a result of the Group’s focus on conserving
capital in the 12 months to 31 December 2020, the cash position was lower at 30 June 2021 being $17.3 million as compared
to the prior corresponding period of $19.7 million. The Group’s balance sheet continues to strengthen with $66.2 million of net
assets.
Outlook
The outlook for the business continues to be influenced by the uncertainty associated with COVID-19 as well as global trade,
geopolitical and economic factors and the manner in which developments in any of these areas may affect business and
investment confidence. The Group’s trading has been impacted in the first quarter of FY22 by further lock-downs and a cyber
incident which resulted in Shriro’s operations being closed for three weeks. However to date, this has had minimal impact on
the financial results, as the majority of the July sales orders were fulfilled in August.
Notwithstanding these external influences, the following factors are expected to have a bearing on FY22 outlook for the Group:
•
•
•
•
•
The COVID-19 lock-downs in Australia and New Zealand include measures which vary from previous lock-downs, as
a result it is difficult to predict the impact of the lock-downs on the Company’s results in FY22.
Should international borders remain closed, domestic consumer household products demand should remain high
which will benefit the Company’s performance.
The Company has mutually agreed to transfer its Blanco division to Blanco Australia Pty Ltd on 01 May 2022. Blanco
represented just over 10% of the Group’s revenue in CY21, consequently the Group will focus its future growth
strategy on company owned brands, Everdure kitchen, Robinhood and Omega in the Appliances market.
International BBQ revenue is expected to continue to grow with greater marketing investment to drive consumer
awareness and a focus on the retail expansion of the Everdure by Heston Blumenthal (EHB) brand.
The Group is focused on pursuing new high margin, non-competitive products for distribution in our existing markets
and seeking EBITDA accretive acquisitions which enhance our value.
Employees
During this financial year, the number of employees ranged between 223 and 245 and was 246 at year end (31 December
2020: 224).
Earnings per share
The basic and diluted earnings per share are calculated using the weighted average number of shares. The Group has basic
earnings per share of 7.1 cents (30 June 2020: 5.0 cents, 31 December 2021: 19.1 cents) and diluted earnings per share of
7.0 cents (30 June 2020: 4.9 cents, 31 December 2020: 18.9 cents).
DIVIDENDS
On 31 August 2021, the Directors declared a dividend relating to the period ending 30 June 2021 of 6.0 cents per share fully
franked with an ex-dividend date of 09 September 2021, record date of 10 September 2021. The dividend was paid on 30
September 2021.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 15
ANNUAL REPORT 30 JUNE 2021
16
Directors’ Report
Shriro Holdings Limited
DIRECTORS’ ATTENDANCE AT MEETINGS
Attendance at Meetings
The following table sets out the number of meetings held during the financial year whilst the individual was a director and the
number of meetings attended by each director.
Directors’
Meetings
Audit, Risk and
Compliance Committee
Meetings
Remuneration and
Nomination Committee
Meetings
Held
Attended
Held
Attended
Held
Attended
Stephen Heath
Cheryl Hayman
Abigail Cheadle
Tim Hargreaves
Vasco Fung1
7
7
7
7
0
BUSINESS STRATEGY AND RISK
Strategies
7
7
7
7
0
2
2
2
2
0
2
2
2
2
0
2
2
2
2
0
2
2
2
2
0
The Group’s investment in brands, supply chain and distribution capabilities has positioned the Group for potential growth.
The Group aims to continue to grow through:
•
continual product development and range extensions
•
geographic expansion
•
channel diversification
• mergers and acquisitions
Risks
The key risks for the business are:
•
•
•
•
•
•
•
•
•
•
•
change in consumer spending patterns throughout the year;
customer’s deranging products;
supply chain disruptions;
deterioration in economic conditions;
loss of brand distribution rights;
loss of key personnel
changing tax and tariff rates;
foreign exchange movements;
cyber incidents;
any further COVID-19 effects; and
reduced housing construction.
1 Vasco Fung resigned as a director on 11 February 2021, which was prior to the first meeting of the year
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 16
SHRIRO HOLDINGS LIMITED
17
Shriro Holdings Limited
INFORMATION ON DIRECTORS
Information on the Directors who held office during, or since the end of the financial period, is as follows:
Director
Qualifications, Experience and Special Responsibilities
Stephen Heath
Chairman
Appointed 24 October 2019
Background and experience:
Stephen is a specialist in consumer goods brand management with over 25 years
of manufacturing/wholesale distribution and retail experience. He spent 16 years
as CEO of some of Australia’s best known consumer brands including Rebel
Sport, Godfrey’s and Fantastic Holdings with operations experience in Australia,
New Zealand, and Asia.
Other roles:
Stephen is the Chair of Temple & Webster Limited Group (ASX: TPW), a Non-
Executive Director of Best & Less Group Holdings Ltd (ASX: BST), Redhill
Education Limited (ASX: RDH) and Glasshouse Fragrances.
Committee memberships:
•
Audit, Risk and Compliance Committee
• Remuneration and Nomination Committee
Independence status:
•
Independent
Relevant
Interest in
Shares
-
Tim Hargreaves
Managing Director
Appointed 14 February 2019
Background and experience:
Tim joined Shriro in 1990 as the Manager of Casio Australia. After eight years he
briefly left the Group to join Canon Australasia as Head of Retail Operations before
re-joining Shriro as General Manager Casio in June 2001. He was appointed Chief
Executive Officer of Shriro Holdings Limited on 01 January 2018.
278,312
Cheryl Hayman
Non-Executive Director
Appointed 24 October 2019
Abigail Cheadle
Non-Executive Director
Director since 9 June 2020
-
-
Independence status:
• Non-independent
Background and experience:
Cheryl had a successful global executive career in fast moving consumer goods
multi-national organisations Unilever, Yum Restaurants, Time Warner and
George Weston Foods prior to becoming a company director.
She brings a focus on brand building, communications and digital transformation
gained across manufacturing and supply chain consumer businesses in local and
global markets.
Other roles:
Cheryl is a Non-Executive Director of Beston Global Foods Limited (ASX: BFC)
and HGL Limited (ASX: HNG), a director of Chartered Accountants Australia and
New Zealand, Peer Support Australia and The Darlinghurst Theatre Company.
Cheryl is a member of the Department of the Prime Minister and Cabinet’s Digital
Experts Advisory Committee and an elected HCF Councillor. Previously she was
a director of Clover Corporation Ltd (ASX: CLV) (12 years, 5 months).
Committee memberships:
• Remuneration and Nomination Committee (Chair)
•
Independence status:
•
Independent
Audit, Risk and Compliance Committee
Background and experience:
Abigail is a Chartered Accountant with nearly 30 years’ experience working in
Australia, Asia, Jordan and Russia. Prior to her non-executive career, she was
Chief Executive Officer of a technology platform and grew practices for KROLL,
KordaMentha, Deloitte and Ernst & Young working in the areas of restructuring,
(most notably growing a listed Indonesian finance company from US$29m to
US$400m), forensic accounting, data analytics, and risk management consulting.
Other roles:
Abigail is Non-Executive Director of LGI Limited and Gladstone Ports Corporation
Limited. Previously she was a Non-Executive Director of Isentia Group Limited
(ASX:ISD) (2 years 4 months), Indue Limited (5 months), QANTM Intellectual
Property Limited (ASX:QIP) (4 years, 7 months) and Surfstitch Group Limited
(ASX:SRF) (1 year, 2 months).
Audit, Risk and Compliance Committee (Chair)
Committee memberships:
•
• Remuneration and Nomination Committee
Independence status:
•
Independent
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 17
ANNUAL REPORT 30 JUNE 2021
18
Directors’ Report
Shriro Holdings Limited
Director
Qualifications, Experience and Special Responsibilities
Vasco Fung
Non-Executive Director
Appointed 14 April 2015
(resigned 11 February 2021)
Background and experience:
Vasco was the Group Chief Executive Officer of Shriro Pacific Ltd, an
international investment group with distribution, manufacturing and retail
businesses in Asia Pacific, North America and Europe. Vasco is a member of
the Institute of Chartered Accountants in England and Wales and the Hong
Kong Institute of Certified Public Accountants.
Kim Slater
Non-Executive Director
Appointed 01 October 2021
Cornelia Meyer
Non-Executive Director
Appointed 13 September
2021
Background and experience:
Kim has over 25 years’ experience as a senior executive in banking and finance
roles and has spent numerous years providing specialist advice on structured
products as well as hybrid and equity derivative products as an investment
specialist. He has held senior blue-chip roles including at Country Natwest,
Deutsche Bank and Salomon Smith Barney.
Kim has had a lengthy association with Shriro, has a passion for the business
and the sectors it operates in, and has a deep expertise in developing and
executing strategic business growth.
Independence status:
•
Independent
Background and experience:
Cornelia has extensive international experience, including government advisory
and senior executive roles in energy, development and investment banking
covering Asia, Russia, Eastern Europe and the Middle East. She held non-
executive board roles in asset management, energy, food and the not for profit
sectors. Cornelia has particular expertise in emerging markets and is fluent in six
European and Asian languages.
Other roles:
Cornelia is Chair and CEO of MRL Corporation and Chair & Chief Economist of
LBV Asset Management.
Independence status:
Independent
Relevant
Interest in
Shares
3,321,9371
181,903
-
1 Vasco Fung resigned as a Director on 11 February 2021. Mr Fung’s disclosed share holding is as at date of resignation.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 18
SHRIRO HOLDINGS LIMITED
19
Shriro Holdings Limited
AUDITED REMUNERATION REPORT
This remuneration report, which forms part of the Directors’ report, details the remuneration of Key Management Personnel for
the Company, in accordance with the requirements of the Corporations Act 2001 (Cth).
1.
Principles used to determine the nature and amount of remuneration
The objective of the Company’s remuneration framework is to reward for performance whilst maintaining competitiveness with
the market and appropriateness for results delivered. The framework aligns executive reward with achievement of strategic
objectives and the creation of value for shareholders.
2. Remuneration Governance
The Board has overall responsibility for satisfying itself that the Group’s remuneration framework is aligned with the Group’s
purpose, values, strategic objectives and risk appetite. The Board also:
•
considers matters relating to remuneration of the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and
Executives reporting to them including reviewing performance targets and determining remuneration outcomes;
Approves the establishment of or amendment to employee incentive plans;
•
• Considers matters related to Executive succession planning.
To assist the Board in its oversight of the remuneration framework, a Remuneration and Nomination Committee has been
established as a standing committee of the Board. The primary responsibilities of this committee, in relation to remuneration,
include:
• Reviewing and recommending to the Board employment and remuneration arrangements for the CEO, CFO and senior
executive team;
• Reviewing Non-Executive Director fees;
• Regularly reviewing the remuneration framework to confirm that it encourages a culture aligned with the Group’s values,
supports the Group’s strategic objectives and long-term interests and is aligned with the Company’s risk management
framework and appetite.
The Remuneration and Nomination Committee, on behalf of the Board, may engage remuneration consultants to review the
remuneration framework to ensure it remains relevant and in accordance with industry norms.
Shriro did not receive any ‘remuneration recommendations’ as defined under the Corporations Act 2001 (Cth) in period to 30
June 2021.
3. Key Management Personnel
This report discloses the remuneration arrangements and outcomes for the people listed below, who are the individuals within
the Group who have been determined to be Key Management Personnel (‘KMP’) for the period ended 30 June 2021. KMP are
those people who have the authority and responsibility for planning, directing and controlling the Group’s activities, either
directly or indirectly.
Name
Executive
Tim Hargreaves
Shane Booth
Non-Executive Directors
Stephen Heath
Cheryl Hayman
Abigail Cheadle
Vasco Fung
Position
Term
Chief Executive Officer and Managing Director
Full period
Chief Financial Officer
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Full period
Full period
Full period
Full period
Until 11 February 2021
4. Non-Executive Director Remuneration
Non-Executive Directors are paid an annual fee which is reviewed annually by the Remuneration and Nomination Committee
and the Board. The Board uses the advice of independent remuneration consultants, as appropriate, to ensure non-executive
director fees are appropriate and in line with the market. Non-executive director fees include, where applicable, compulsory
superannuation contributions.
The Non-Executive Directors do not participate in the Company’s long term incentive plan.
Total aggregate remuneration for all non-executive Directors, in accordance with the Prospectus dated 27 May 2015, is not to
exceed $600,000. Non-Executive Directors’ base fees are presently $90,000 per annum. The Chairman’s fee is presently
$140,000 per annum.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 19
ANNUAL REPORT 30 JUNE 2021
20
Directors’ Report
Shriro Holdings Limited
Committee fees are outlined in the table below.
Role and committee
Chair of Audit, Risk and Compliance Committee
Chair of Remuneration and Nomination Committee
Member of Audit, Risk and Compliance Committee
Member of Remuneration and Nomination Committee
The Chairman does not receive Committee fees.
5.
Executive Remuneration
Fee per annum
10,000
5,000
5,000
3,000
The remuneration of the CEO and CFO comprise fixed base salary, at-risk variable short-term bonus (‘STI’) and participation
in the Company’s Long Term Incentive Plan (‘LTIP’). Details of each executive’s remuneration is set out below.
5.1. Chief Executive Officer and Chief Financial Officer
The CEO and CFO are remunerated on a salary package basis which is a component of a formal employment contract. In line
with best remuneration practice, the Board continues to ensure remuneration is competitive with comparable companies and
may undertake external evaluations, from time to time, to ensure market competitiveness with a view to ensuring it attracts and
retains the best people.
The salary package contains a fixed base salary and an STI component. The STI is determined by the Board annually, based
on performance against a range of targets. The CEO and CFO are also participants in the Company’s LTIP.
5.1.1. Short Term Incentive
An STI forms a component of the remuneration of executive Directors and key management personnel in addition to their fixed
base salary. The STI for the period ended 30 June 2021 was structured on the following basis:
•
•
Tim Hargreaves was entitled to an STI award equivalent to 60% of his total fixed annual employment cost ($180,000)
for target performance or up to 120% of his total fixed base salary ($360,000) for stretch performance, measured
against a combination of the period’s budgeted profit after tax and non-financial measures.
Shane Booth was entitled to an STI award equivalent to 40% of his total fixed annual employment cost ($78,000) for
target performance or up to 80% of his total fixed base salary employment cost ($156,000) for stretch performance,
measured against a combination of the period’s budgeted profit after tax and non-financial measures.
The STIs for the CEO and CFO are weighted 50:50 between the financial and non-financial measures. The CEO and CFO are
eligible for the bonus related to non-financial measures only when the financial measure has been met.
The STI performance measures were chosen as they reflect short-term performance as well as providing a framework for
delivering sustainable value to the Group, its shareholders and customers.
The financial measures and the proportion they make up of the total possible STI are set out below.
Profit after tax at least 95%
of the STI target
Profit after tax between STI
target and stretch target
30% fixed base salary
30% – 60% fixed base salary1
$90,000
20% fixed base salary
$90,000 – $180,000
20% – 40% fixed base salary1
$39,000
$39,000 – $78,000
Proportion of total possible
STI
Financial
Non-financial
50%
50%
50%
50%
Tim Hargreaves
Shane Booth
If the financial measures described above were met, Tim Hargreaves was entitled to an additional bonus of up to 60% of his
total fixed base salary and Shane Booth was entitled to an additional bonus of up to 40% of total fixed base salary. The non-
financial measures in the STI are:
Strategy
People and Culture
Technology
•
•
•
• Corporate Governance
• Compliance
• Risk Management Strategy
STI awards will be paid in cash following the Board’s approval of the Company’s consolidated financial statements for the
relevant period.
Subsequent to year end, the Director’s approved the payment of the STI awards for the CEO of $360,000 and for the CFO
$156,000.
1 Calculated on a straight-line basis
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 20
SHRIRO HOLDINGS LIMITED
21
Shriro Holdings Limited
5.1.2. Long Term Incentive
A Long-Term Incentive Plan (‘LTIP’) has been implemented in accordance with Shriro’s Equity Incentive Plan Rules. As it
stands at 30 June 2021, the LTIP allows participants to be issued with Performance Rights (‘Rights’) which have associated
performance hurdles that are tested at the end of the vesting period (three years for outstanding offers) from the effective issue
date to determine vesting.
Tim Hargreaves has not been issued with any Rights in respect of the period ended 30 June 2021 (2020: 359,281,
2019:415,225).
Shane Booth has not been issued with any Rights in respect of the period ended 30 June 2021 (2020: 175,150, 2019: 202,422).
Testing for achievement of the performance hurdle follows Board approval of the Company’s consolidated financial statements
three years after the Rights effective issue date. On exercise the Board, at its discretion, will decide whether to settle the
exercised Rights via the allocation of shares, or by a cash payment. Where shares are to be allocated, this will be achieved by
an on-market purchase of the relevant number of shares, or an issue of ordinary shares for the 2020 Rights and Shane Booth’s
2019 Rights. Tim Hargreaves 2019 Rights will be settled by an on-market purchase of shares, or by a cash payment and will
not be settled by way of an issue of new shares.
The performance hurdle relating to the Rights issued to both Tim Hargreaves and Shane Booth, is a compound annual growth
rate (‘CAGR’) target on the Group’s earnings per share (‘EPS’) over the vesting period.
An EPS CAGR of 5% over the three year vesting period will result in 50% of the Rights vesting (threshold performance) and
an EPS CAGR of 10% or higher will result in 100% of Rights vesting (target performance). An EPS CAGR between 5% and
10% will result in between 50% and 100% of Rights vesting on a pro-rated basis.
After vesting, each Right can be exercised and converted to an equivalent number of shares of the Company, or cash at the
Board’s discretion. The rights have been granted free of charge.
The participant must not sell, transfer, encumber, hedge or otherwise deal with performance rights. The participant will be free
to deal with any shares allocated on vesting of the performance rights, subject to the requirements of the Company’s policy for
dealing in securities.
5.2. Key Terms of Employment Contracts
5.2.1. Chief Executive Officer
The Company entered into an executive service agreement with Tim Hargreaves as Managing Director and CEO effective 01
January 2018. The fixed base salary component of the agreement is appropriate and is in line with relevant companies in
industry comparable.
The STI can range between 0% and 120% of the fixed base salary, based on performance measured against a profit after tax
target which is set annually by the Directors, as well as non-financial measures. The LTIP can range between 0% and 40% of
the fixed base salary based on performance measured against an EPS CAGR target, set by the Directors, over a three-year
period.
Term:
No fixed term
Annual salary1:
Total fixed base salary of $600,000, subject to annual adjustment
Notice period:
Twelve months’ notice by either party
5.2.2. Chief Financial Officer
The Company entered into an executive service agreement with Shane Booth as Company Secretary and CFO effective 23
June 2015. The fixed base salary component of the agreement is considered to be appropriate and in line with relevant industry
comparables. Shane Booth ceased to be Company Secretary on 27 January 2021 with the remainder of the executive service
agreement unchanged.
The STI can range between 0% and 80% of the fixed base salary, based on performance measured against a profit after tax
target, set annually by the Directors, as well as non-financial measures. LTIP can range between 0% and 30% of the fixed
base salary based on the achievement of performance conditions that are measured after three years, as determined by the
Board and included in the invitation to participate in the LTIP.
Term:
No fixed term
Annual salary1:
Total fixed base salary of $390,000, subject to annual adjustment
Notice period:
Six months’ notice by either party
1 Annual salary was pro-rated for the transition period ending 30 June 2021
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 21
ANNUAL REPORT 30 JUNE 2021
22
Directors’ Report
Shriro Holdings Limited
5.3. Relationship between Remuneration Policy and Group Performance
The remuneration of executive officers includes an STI. The total STI paid in a year is discretionary and is closely related to,
and determined mainly by, Group profit after tax targets but also includes a component related to non-financial targets.
5.4. Particulars of Key Management Personnel interests during the period ended 30 June 2021
Fully paid ordinary shares of Shriro Holdings Limited
31 December 2020
Received on
exercise of rights
during the six
months to 30 June
2021
Net other changes
during the six
months to 30 June
2021
30 June 2021
Number
Number
Number
Number
Non-executive Directors
Stephen Heath
Abigail Cheadle
Cheryl Hayman
Vasco Fung1
Total
Executive Officers
Tim Hargreaves
Shane Booth2
Total
-
-
-
3,321,937
3,321,937
278,312
2,303,125
2,581,437
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,321,937
3,321,937
278,312
2,303,125
2,581,437
1 Vasco Fung retired from the Board on 11 February 2021. Mr Fung’s shareholding details are provided up until the date of his retirement.
2 Shane Booth’s shares are held by an immediate family member
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 22
SHRIRO HOLDINGS LIMITED
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ANNUAL REPORT 30 JUNE 2021
24
Directors’ Report
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3
SHRIRO HOLDINGS LIMITED
25
Shriro Holdings Limited
No Director or member of the senior management appointed during the year received a payment as part of their remuneration
for agreeing to hold the position.
Non-Executive Directors have no entitlement to a cash bonus or non-monetary benefits.
5.6. Bonuses and share-based payments granted as compensation for the current period
Employee Long Term Incentive plan
The Company established the LTIP to assist in the motivation, retention and reward of senior management. The Plan is
designed to align the interests of employees and senior management with the interests of shareholders by providing an
opportunity for employees to receive an equity interest in the Company. From time to time the Board will approve invitations to
certain executives and employees to participate in the LTIP on conditions and performance hurdles determined by the Board.
The Executive Incentive Plan Rules govern the LTIP and provide flexibility for the Company to grant performance rights, options
and/or restricted shares, subject to the terms of the individual offers.
Rights have been granted to the CEO, CFO and other members of senior management of the Company in accordance with
the Executive Incentive Plan Rules. Invitations to participate in an LTIP were not extended to the CEO, CFO or members of
senior management in the period to 30 June 2021. It is expected that an invitation to apply for performance rights in respect of
the 2022 financial year will be approved by the Board.
Due to the change in year end and the need to align LTIP performance periods with the new financial year end date no Rights
were issued to Tim Hargreaves (2020: 359,281, 2019:415,225) or Shane Booth (2020: 175,150, 2019: 202,422) for the period
ended 30 June 2021.
Non-Executive Directors did not receive any shares in the current period, nor in previous years, and Non-Executive Directors
cannot participate in the LTIP.
Shriro Holdings Limited has not issued any options.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 25
ANNUAL REPORT 30 JUNE 2021
26
Directors’ Report
The key terms of the current award under the employee LTIP are summarised in the table below:
Performance
conditions,
performance period
and vesting
Rights attached to
performance rights
Restrictions on
dealing
Cessation of
employment
Rights will vest subject to the satisfaction of performance conditions.
The performance period for LTIP awards is 3 years. The grants have a performance period ending
on 31 December three years after the effective issue date.
The vesting of Rights is subject to the achievement of a target of 10% EPS CAGR over three years
from the effective date of the performance review (performance hurdle).
The percentage of Rights that vest, if any, will be determined by reference to the following vesting
schedule, subject to any adjustments for abnormal or unusual profit items considered appropriate
by the Board:
Target CAGR of the Group’s EPS over the three-year
period
Less than threshold performance (less than 5%)
Threshold performance (5%)
% of Rights that vest
Nil
50%
Between threshold and target performance (5%-10%)
50-100% on a straight-line pro-rated
basis
Target performance (10% or above)
Rights that have not met the vesting conditions at the end of the performance period will immediately
lapse.
100%
This LTIP structure has been adopted by the Board as it believes it provides an appropriate
management incentive, is within management’s achievable control, and is of a timespan relevant
to the Group’s industry.
Testing of the performance hurdle to determine the number of Rights which will vest, will occur
shortly after the end of the Performance Period and release of the Company’s audited consolidated
financial statements for the period relating to the Performance Period. Due to the change in the
Company’s year-end outstanding performance rights at 30 June 2021 will be tested against a
combination of audited financial statements and reviewed interim financial statements at the end of
the performance period.
The performance rights do not carry dividends or voting rights prior to vesting.
The participant must not sell, transfer, encumber, hedge or otherwise deal with performance
rights.
The participant will be free to deal with any shares allocated on vesting of the performance rights,
If the participant’s employment is terminated for cause or the participant resigns, unless the Board
subject to the requirements of the Company’s policy for dealing in securities.
determines otherwise, any unvested performance rights will automatically lapse.
Where the participant ceases employment in any other circumstances, unless the Board determines
otherwise:
•
•
a pro-rata portion of the performance rights (calculated by reference to the portion of the
performance period that has elapsed up to the date of cessation) will remain on foot and will
vest or lapse in due course, as though the participant had not ceased employment; and
the remaining portion of the performance rights will automatically lapse.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 26
SHRIRO HOLDINGS LIMITED
27
5.7. Outstanding Rights granted as compensation
KMP
Number of
Rights
granted
Financial
year
Commencement
date of
performance
measurement
period
Testing date
of vesting
conditions
Percentage
of grant
vested
%
Percentage
of grant
forfeited
%
Future
financial
years that
grant will be
payable
Fair value
at grant
date
$
Tim
Hargreaves20
Shane Booth
202,422
Tim Hargreaves
359,281
Shane Booth
175,150
Total
1,152,078
415,225
2019
01/01/2019
31/12/2021
2019
2020
2020
01/01/2019
31/12/2021
01/01/2020
31/12/2022
01/01/2020
31/12/2022
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
2022
2022
2023
2023
157,612
76,836
161,175
78,573
474,196
CHANGES IN STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the financial period. COVID-19 continued to cause
uncertainty due to localised outbreaks and “snap” lockdowns, although there were no significant lock downs in the six months
to 30 June 2021.
SUBSEQUENT EVENTS
In July 2021 Shriro was subject to a cyber security incident involving unauthorised access to its operating systems. The cyber
incident did not have any impact on the results for the period to 30 June 2021. The financial impact of the incident is not
expected to be material to the Group’s result for the 30 June 2022 financial year.
On 09 August 2021 Shriro entered into Heads of Agreement with Blanco APAC Pte Ltd to cease distributing Blanco branded
products in Australia and New Zealand. Shriro will continue to distribute Blanco products in Australia and New Zealand until
01 May 2022. The contribution Blanco product made to the Group’s revenue for the period ended 30 June 2021 was
$9,067,000.
There has not been any other matter or circumstance, occurring subsequent to the end of the financial period that has
significantly affected, or may significantly 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
Disclosure of other information regarding likely developments in the operations of the Group in future financial years and the
expected results of those operations is likely to result in unreasonable prejudice to the Group. Accordingly, this information
has not been disclosed in this report.
INDEMNIFICATION OF OFFICERS AND AUDITORS
The Directors and Officers of the Company are indemnified by the Company against losses or liabilities which they may sustain
or incur in their role or in the proper performance of their duties. During the financial year, the Company paid premiums in
respect of contracts to insure the Directors and the officers against a liability to the extent permitted by the Corporations Act
2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premiums. The Group
has not otherwise, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Group
against a liability incurred as the auditor.
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services in the current year are outlined in note 6.1 to the
financial statements.
In accordance with the recommendation from the audit, risk and compliance committee of the Company and the Directors are
satisfied that the provision of non-audit services by the auditor (or by another person or firm on the auditor’s behalf) during the
year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
Also in accordance with the recommendation from the audit, risk and compliance committee, the Directors are satisfied that
the nature and scope of each type of non-audit services provided means that the auditor independence was not compromised.
The auditors have also provided the audit, risk and compliance committee with a report confirming that, in their professional
judgment, they have maintained their independence in accordance with the firm’s requirements, the provisions of APES 110
Code of Ethics for Professional Accountants and applicable provisions of the Corporations Act 2001.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration (which forms part of the Directors’ report) has been received and is included on page
67 of the annual report.
20 If the performance conditions are satisfied and at the Board’s discretion, rights will either be settled in cash or by an on-market purchase of the relevant number of shares and
will not be by way of an issue of new shares
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 27
ANNUAL REPORT 30 JUNE 2021
28
Directors’ Report
ROUNDING OFF OF AMOUNTS
The Company has applied the relief available under ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument
2016/191. Accordingly, amounts in the Directors’ report and the financial statements are rounded off to the nearest thousand
dollars, unless otherwise indicated.
This Directors’ report (including the Remuneration report) is signed in accordance with a resolution of Directors made pursuant
to s298(2) of the Corporations Act 2001.
Stephen Heath
Chair
29 October 2021
Tim Hargreaves
Chief Executive Officer and Managing Director
29 October 2021
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 28
SHRIRO HOLDINGS LIMITED
29
Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE 6-MONTH PERIOD ENDED 30 JUNE 2021
for the 6-month period ended 30 June 2021
Revenue from ordinary activities
Raw materials and consumables used
Employee benefits expense1
Advertising and promotion expenses
Freight and delivery expenses
Depreciation and amortisation expenses
Net gain from lease exit
Occupancy costs
Foreign exchange (loss)/gain
Other expenses
Other gains
Finance costs
Profit before tax
Income tax expense
Profit for the period
Earnings per share
Basic (cents per share)
Diluted (cents per share)
Note
6 months to
30 June 2021
$’000
12 months to
31 December
2020
$’000
1.1
1.2
1.2
1.2
1.6
4.2
4.2
94,303
191,258
(55,653)
(115,457)
(13,165)
(21,712)
(3,310)
(4,148)
(2,391)
-
(395)
(186)
(5,193)
10
(121)
9,751
(2,983)
(4,034)
(8,477)
(5,583)
2,304
(926)
198
(10,576)
-
(1,636)
25,161
(6,965)
6,768
18,196
7.1
7.0
19.1
18.9
1 Employee benefits expense for the financial year ended 31 December 2020 was offset by the receipt of $3,679,000 of Australian and New Zealand
government subsidies
The consolidated statement of profit or loss should be read in conjunction with the notes to the financial statements.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 29
ANNUAL REPORT 30 JUNE 2021
30
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE 6-MONTH PERIOD ENDED 30 JUNE 2021
for the 6-month period ended 30 June 2021
6 months to
30 June 2021
$’000
12 months to
31 December
2020
$’000
Note
Profit for the period
6,768
18,196
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity
Exchange differences on translation of foreign operations
Other comprehensive income for the year, net of tax
Total comprehensive income for the period attributable to the
owners of Shriro Holdings Limited
1,810
(84)
1,726
(1,591)
(255)
(1,846)
8,494
16,350
The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the notes to
the financial statements.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 30
SHRIRO HOLDINGS LIMITED
31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2021
Consolidated Statement of Financial Position
At 30 June 2021
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Current tax receivable
Derivative receivable
Total current assets
Non-current assets
Right of use assets
Plant and equipment
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liability
Current tax liabilities
Provisions
Derivative payable
Total current liabilities
Non-current liabilities
Lease liability
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained earnings
Reserves
Total equity
Note
1.5
2.1
2.2
2.3
3.2
3.1
1.6
2.4
3.2
2.5
3.2
2.5
4.1
4.4
4.5
30 June
2021
$’000
31 December
2020
$’000
17,313
32,052
34,563
979
2,094
527
87,528
9,078
5,619
5,928
20,625
17,569
34,079
36,868
480
-
75
89,071
8,758
4,621
6,272
19,651
108,153
108,722
20,177
23,522
3,643
1,247
5,530
388
3,231
1,412
5,327
2,478
30,985
35,970
8,629
2,356
10,985
9,138
2,374
11,512
41,970
47,482
66,183
61,240
94,617
48,676
(77,110)
66,183
94,617
45,712
(79,089)
61,240
The consolidated statement of financial position should be read in conjunction with the notes to the financial statements.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 31
ANNUAL REPORT 30 JUNE 2021
32
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SHRIRO HOLDINGS LIMITED
33
Shriro Holdings Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2021
Consolidated Statement of Cash Flows
for the Financial Period Ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Finance costs paid
Income taxes paid
Note
6 months to
30 June 2021
$’000
12 months to
31 December
2020
$’000
108,139
(95,538)
(428)
(4,898)
202,107
(174,354)
(1,616)
(3,912)
Net cash provided by operating activities
1.5.2
7,275
22,225
Cash flows from investing activities
Proceeds from sale of plant and equipment
Payment for plant and equipment
Net cash inflow from sale of brand
Net cash used in investing activities
Cash flows from financing activities
Payments for the principal portion of lease liabilities
Dividends paid
Net cash used in financing activities
1.1
23
(2,037)
-
267
(2,039)
377
(2,014)
(1,395)
(1,720)
(3,804)
(3,499)
(5,705)
(5,524)
(9,204)
Net increase in cash and cash equivalents
(263)
11,626
Cash and cash equivalents at the beginning of the financial period
Effects of exchange rate changes on cash
17,569
7
5,970
(27)
Cash and cash equivalents at the end of the financial period
1.5.1
17,313
17,569
The consolidated statement of cash flows should be read in conjunction with the Notes to the financial statements.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 33
ANNUAL REPORT 30 JUNE 2021
34
NOTES TO THE FINANCIAL STATEMENTS
Basis of preparation
Statement of compliance
The consolidated financial statements were authorised for issue by the Directors on 29 October 2021 in accordance with a
resolution of the directors. Shriro Holdings Limited (the Company) is a for-profit company limited by shares incorporated in
Australia whose share are publicly traded on the Australian Securities Exchange (ASX). The nature of operations and
principal activities of the Group are to market and distribute kitchen appliances and consumer goods to Australian, New
Zealand and international customers.
The consolidated financial statements are general purpose financial statements which have been prepared in accordance
with the Corporations Act 2001, Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board (AASB) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB).
Basis of preparation
On 27 August 2020, the Directors notified the Australian Securities Exchange that the Company’s financial year end will be
changed from 31 December to 30 June. These financial statements have been prepared for the transitional period 01 January
2021 to 30 June 2021 and as the 31 December 2020 Statement of Profit or Loss relates to a twelve-month period, comparison
cannot be performed.
The consolidated financial statements have been prepared on the basis of historical cost, except for the measurement of
derivative financial instruments and share based payment transactions, which have been measured at fair value. The
financial statements are presented in Australian dollars with all values rounded to the nearest thousand dollars unless
otherwise stated in accordance with ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument 2016/191.
Basis of consolidation
The consolidated financial statements comprise the financial statements of Shriro Holdings Limited and its subsidiaries (the
Group) at, and for the period ended, 30 June 2021 (2020: 12 months ended 31 December 2020). Control is achieved when
the Group has power over the investee, is exposed, or has rights, to variable returns from its involvement with the investee,
and has the ability to use its power to affect those returns through its power over the investee.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over
the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the
Company gains control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the
non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
The financial information of the subsidiaries is prepared for the same reporting period as the parent, using consistent
accounting policies. The financial year end of Shriro’s subsidiaries were changed from 31 December to 30 June at, or around,
the same time the financial year of the parent entity was changed. Intra-group balances and transactions arising from intra-
group transactions are eliminated.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries
are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are
adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the
non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity
and attributed to owners of the Company.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 34
SHRIRO HOLDINGS LIMITED
35
1. Trading Operations
1.1 Revenue
Revenue from continuing operations consisted of the following items:
Sales of goods
Advertising and marketing contributions
Net gain on sale of brand1
6 months to
30 June 2021
$’000
12 months to
31 December
2020
$’000
94,045
189,874
258
-
1,007
377
94,303
191,258
1. Thing Thing is a clothing brand developed by the Group in New Zealand. It was sold on 1 October 2020. Proceeds of $465,000 were received.
The net assets sold were inventory $32,000 and plant and equipment of $4,000. Selling costs were $51,000, resulting in a profit on the sale of the
brand of $377,000.
Accounting policy
Sale of goods
Revenue is measured based on the consideration specified in a contract with a customer and is recognised when
performance obligations are satisfied.
The Group’s contracts generally include one performance obligation, and revenue from the sale of products is recognised at
the point in time when control over the product passes to a customer. Revenue is recognised in a manner which depicts
transfer of control to a customer at the amount that reflects consideration the business expects to be entitled to in exchange
for those goods. Sales to local (Australian or New Zealand) customers are usually recognised when goods are delivered and
sales to international customers are recognised based on the international commercial terms products are shipped under,
which tends to be when goods are dispatched.
Revenue is recognised net of discounts, rebates, customer returns and other similar allowances. Revenue is recognised net
of the amount of goods and services tax.
Key estimates and judgments
The Group provides volume rebates and other discounts to certain customers. Revenue is recorded based on the
consideration specified in the sales contracts or terms, net of the estimated discount or rebate at the time of sale. These
rebates and discounts are considered in determining the transaction price of a contract are considered variable consideration.
The Group estimates discounts and rebates to be the most likely amount a customer will claim based on the terms and
conditions in the contract. Historical data (last payment and sales history), forecast sales and customer experience is used
to estimate and provide for the discounts and rebates based on anticipated purchases.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 35
ANNUAL REPORT 30 JUNE 2021
36
Notes to the Financial Statements
1.2 Profit for the period
Profit before tax has been arrived at after charging the following expenses:
Depreciation of plant, equipment
Depreciation of right of use assets
(Decrease) in inventory obsolescence provision
Increase in warranty provision
Employee benefits expense:
LTIP share based payments
Termination benefits
Other employee benefits
Impairment / (write back) of trade receivables
Impairment of right-of-use asset
Finance costs
Interest on bank overdrafts and loans
Bank charges
Interest expense on lease liabilities
1.3 Segment information
Primary operating segments
1.3.1
6 months to
30 June 2021
$’000
12 months to
31 December
2020
$’000
949
1,442
(102)
284
253
298
2,565
3,018
(612)
221
16
293
12,614
21,403
(36)
-
64
60
(3)
3
172
198
126
1,312
Operating segments are reported in a manner which is consistent with the internal reporting provided to the chief operating
decision makers. The chief operating decision makers have been identified as the Board of Directors of the Company. The
internal reports reviewed by the Board, which are used to make strategic decisions, are separated into the Group’s primary
operating segments. Geographical operating segments are based on the location of the customer.
• Australia
Home appliances, watches, calculators, electronic musical instruments and barbeques
• New Zealand
Home appliances, watches, calculators, electronic musical instruments, barbeques and audio equipment
• Rest of the world
Heaters, fans, barbeques and accessories
No single customer represents greater than 10% of the Group’s revenue (2020: nil).
The information regarding these segments is presented below. The accounting policies of the reportable segments are the
same as the Group’s accounting policies.
6 months to 30 June 2021
Revenue from ordinary activities
Earnings before interest, tax, depreciation and amortisation
Depreciation and amortisation expense
Profit before interest and income tax
Australia
$’000
62,426
8,689
(1,853)
6,836
New
Zealand
$’000
22,681
Rest of the
world
$’000
9,196
3,332
(518)
2,814
242
(20)
222
Total
$’000
94,303
12,263
(2,391)
9,872
(121)
9,751
(2,983)
6,768
81,813
31,703
24,591
9,376
1,749
891
108,153
41,970
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 36
Interest expense
Profit before income tax
Income tax expense
Net profit after income tax
Segment assets
Segment liabilities
SHRIRO HOLDINGS LIMITED
37
Total
$’000
191,258
32,254
(5,583)
26,671
(1,510)
25,161
(6,965)
18,196
12 months to 31 December 2020
Revenue from ordinary activities
Australia
$’000
141,175
New
Zealand
$’000
44,455
Rest of the
world
$’000
5,628
Earnings before interest, tax, depreciation and amortisation
24,325
8,460
Depreciation and amortisation expense
Profit before interest and income tax
(4,431)
(1,101)
19,894
7,359
(531)
(51)
(582)
Interest expense
Profit before income tax
Income tax expense
Net profit after income tax
Segment assets
Segment liabilities
Accounting policy
Segment assets and liabilities
84,750
34,793
23,736
12,136
236
553
108,722
47,482
Segment assets and liabilities represent those working capital and non-current assets and liabilities which are located in the
respective segments. If items of revenue and expense are not allocated to operating segments, then any associated assets
and liabilities are not allocated to segments either.
Intersegment transactions
The price of an intersegment transaction is determined on an arm’s length basis. These transactions are eliminated on
consolidation and are not material to individual segments and have not been excluded from the segment revenue and profit
before income tax.
Corporate charges
Corporate charges are reported in the Australian segment. Net finance costs are not allocated to segments as the Group’s
financing function is centralised through its Group finance function.
1.4 COVID-19 impact on operations
The decreased COVID-19 cases in Australia and New Zealand in the six months to 30 June 2021, resulted in fewer, and
shorter, lockdowns and a return to more normal circumstances in both countries. In overseas markets, COVID-19 continued
to have varying impacts with the UK being in region-based lockdown for much of the period. Vaccination programs in both
the UK and USA have resulted in economies re-opening. There no was discernible impact on Shriro’s results for the period
as a result of the COVID-19 pandemic.
The group has evaluated its assets carrying value considering COVID-19 as an indicator of potential impairment, with no
impairment noted, however, the outcome of COVID-19 and the impact of any future wave on results is uncertain.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 37
ANNUAL REPORT 30 JUNE 2021
38
Notes to the Financial Statements
1.5 Notes to the Statement of Cash Flows
1.5.1
Cash and cash equivalents
Accounting policy
Cash and cash equivalents consist of cash on hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of three months or less. Bank overdrafts are considered to be financing activities as
they are used interchangeably to fund the operations and are not repayable on demand.
Cash and bank balances
30 June
2021
$’000
17,313
31 December
2020
$’000
17,569
Cash and cash equivalents at the end of the reporting period as shown in the consolidated statement of cash flows can be
reconciled to the related items in the consolidated statement of financial position as follows:
1.5.2
Reconciliation of profit for the period to net cash flows from operating activities
Profit for the period
Add non-cash and non-operating cash items:
Depreciation and amortisation
Impairment of right of use asset
Net (gain) / loss on disposal of assets
Net gain on exit of lease
LTIP rights share based payments expense
Other
Changes in assets and liabilities:
(Decrease) / Increase in trade and other payables
Increase / (decrease) in provisions
Decrease / (increase) in inventory
Decrease / (increase) in trade receivables
(Increase) / decrease in other current and financial assets
(Decrease) / Increase in tax assets / liabilities
6 months to
30 June 2021
$’000
6,768
2,391
-
(10)
-
253
(61)
(1,628)
185
2,305
2,027
(3,041)
(1,915)
12 months to
31 December
2020
$’000
18,196
5,583
172
732
(2,304)
16
-
5,229
(22)
(2,107)
(8,277)
1,953
3,054
Net cash provided by operating activities
7,274
22,225
Overdraft facilities and working capital facilities are considered to be financing activities as they are used interchangeably
to fund the operations and are not repayable on demand.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of investing and
financing activities, which are disclosed as operating cash flows.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 38
SHRIRO HOLDINGS LIMITED
39
1.6 Income tax
1.6.1
Income tax recognised in profit or loss
Income taxes relating to continuing operations:
Current tax
In respect of the current period
In respect of prior years
Deferred tax
In respect of the current period
In respect of prior years
Total deferred tax (gain)/expense
Total income tax expense recognised in the current period relating to
continuing operations
6 months to
30 June 2021
$’000
12 months to
31 December
2020
$’000
2,807
-
2,807
176
-
176
2,983
6,430
(449)
5,981
1,087
(103)
984
6,965
The total income tax expense as shown in the consolidated statement of profit or loss and other comprehensive income
differs from the prima facie income tax attributable to earnings.
The differences are reconciled to the accounting profit as follows:
Profit before tax from continuing operations
Prima facie income tax expense calculated at the Parent Entity’s tax rate of 30%
(2020:30%)
Tax effect of:
Non-deductible expenditure
Foreign tax rate adjustment due to differences in tax rates
Other
Total tax expense
Adjustments recognised in the current period in relation to the tax of prior years
Income tax attributable to profit
6 months to
30 June 2021
$’000
9,751
12 months to
31 December
2020
$’000
25,161
2,925
7,548
116
(55)
(3)
2,983
-
2,983
129
(144)
(16)
7,517
(552)
6,965
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 39
ANNUAL REPORT 30 JUNE 2021
40
Notes to the Financial Statements
Accounting policy
Current Tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit before tax as reported in
the consolidated statement of profit and loss and other comprehensive income because of items of income or expense that
are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is
calculated using rates that have been enacted by the end of the reporting period.
Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that future taxable
profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred
tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only
recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of
the temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability
is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the
end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.
Offsetting tax balances
Deferred tax liabilities and assets are offset only if a legally enforceable right exists to set off current tax assets against current
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
1.6.2
Deferred Tax Balances
The deferred tax expense above is itemised as follows:
30 June 2021
Deferred tax assets
Plant and equipment
Prepayments
Superannuation payable
Provisions
Credit loss allowance
Sub-total
Cash flow hedges1
Net deferred tax asset
Opening balance
$’000
Recognised in total
comprehensive
income
$’000
Closing balance
$’000
277
(11)
62
5,562
63
5,953
319
6,272
(364)
23
(5)
284
(11)
(73)
(271)
(344)
(87)
12
57
5,846
52
5,880
48
5,928
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 40
SHRIRO HOLDINGS LIMITED
41
31 December 2020
Deferred tax assets
Plant and equipment
Prepayments
Superannuation payable
Provisions
Credit loss allowance
Sub-total
Cash flow hedges1
Net deferred tax asset
Opening balance
$’000
Recognised in total
comprehensive
income
$’000
Closing balance
$’000
19
(13)
41
6,814
76
6,937
-
6,937
258
2
21
(1,252)
(13)
(984)
319
(665)
277
(11)
62
5,562
63
5,953
319
6,272
1 Australian cash flow hedges tax movement was recognised in other comprehensive income.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 41
ANNUAL REPORT 30 JUNE 2021
42
Notes to the Financial Statements
2. Working Capital
Working Capital: Total current assets versus total current liabilities
$90 M
$80 M
$70 M
$60 M
$50 M
$40 M
$30 M
$20 M
$10 M
$0 M
2017
2018
2019
2020
2021
Trade and other receivables
Inventories
Other current assets
Cash and cash equivalents
Total Group Facility
Working capital
*Working capital is calculated as total current assets less total current liabilities.
2.1 Trade and other receivables
Trade receivables (net of discounts and rebates)
Credit loss allowance
Other debtors
Trade receivables
GST receivable
Trade and other receivables
Age of receivables that are past due:
60-90 days
90+ days
Total
Movement in the allowance for credit loss
Balance at beginning of the period
Impairment loss reversed
Amounts written off during period as uncollectable
Amounts recovered during the period
Balance at the end of the period
30 June
2021
$’000
29,807
31 December
2020
$’000
34,035
(184)
29,623
51
29,674
2,378
32,052
55
113
168
(220)
33,815
264
34,079
-
34,079
54
182
236
30 June
2021
$’000
(220)
31 December
2020
$’000
(268)
36
-
-
-
39
9
(184)
(220)
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 42
SHRIRO HOLDINGS LIMITED
43
Accounting policy
Trade receivables are initially recognised at invoice value (fair value) and subsequently measure at amortised cost, less
allowance for expected credit losses. Trade receivables are reduced by a provision for rebates not yet paid to customers,
which forms part of the trade and other receivables balance. The rebate provision is reviewed at the end of each period
based on historical data and analysis.
The average credit period on sales of goods is 45 days. No interest is charged on trade receivables. The Group has applied
the expected credit loss model whereby expected lifetime losses are recognised from initial recognition of the receivables.
A provision matrix is calculated based on historic credit losses, adjusted for any material expected changes to the future
credit risk. The adjustment for expected changes in credit risk is determined based on management’s knowledge of the
Group’s customers and analysis of the market risk, specifically the ageing of debtors and history of losses.
The matrix used to calculate the allowance for credit loss at 30 June 2021 is as follows:
Current
0 - 30 days
31 - 60 days
61 - 90 days
90+ days
Total receivables
Receivables
$’000
1,781
13,672
10,638
2,779
804
29,674
Allowance based
on historic credit
losses
0.03%
Adjustment for
expected changes
in credit risk
0.67%
Credit loss
allowance
$’000
12
0.03%
0.07%
0.64%
4.13%
0.34%
0.34%
0.41%
1.42%
51
44
29
47
184
The matrix used to calculate the allowance for credit loss at 31 December 2020 is as follows:
Receivables
$’000
2,772
17,645
12,375
1,101
186
34,079
Allowance based
on historic credit
losses
0.10%
Adjustment for
expected changes
in credit risk
0.20%
Credit loss
allowance
$’000
6
0.10%
0.20%
1.60%
4.40%
0.20%
0.40%
4.00%
11.00%
47
67
66
34
220
Current
Sum of 0 - 30 days
Sum of 31 - 60 days
Sum of 61 - 90 days
Sum of 90+
Total receivables
2.2 Inventories
Finished goods
Stock in transit
Allowance for inventory obsolescence
Total inventories
30 June
2021
$’000
29,912
7,075
(2,424)
34,563
31 December
2020
$’000
25,443
13,951
(2,526)
36,868
The cost of inventories recognised as an expense during the period in respect of continuing operations was $55,653,000
(2020: $115,497,000).
Stock aged over 3 years amounts to 3.2% (2020: 2.6%) of the inventory balance.
Accounting policies
Inventory on hand is valued at the lower of cost and net realisable value using the weighted average cost method and includes
all costs associated with its acquisition. Inventory in transit is valued at the lower of cost and net realisable value.
Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs
necessary to make the sale.
Key estimates and judgments
Determining the net realisable value of inventory requires the Directors to make an estimate of a future sale price of inventory.
In making this estimate, judgements using recent sales experience, the aging of inventories and assessment of the salability
of products are made to estimate the value of the inventory.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 43
ANNUAL REPORT 30 JUNE 2021
44
Notes to the Financial Statements
2.3 Other assets
Prepayments
2.4 Trade and other payables
Trade payables
Accrued liabilities
Employee related payables
GST Payable
30 June
2021
$’000
979
31 December
2020
$’000
480
30 June
2021
$’000
13,912
31 December
2020
$’000
13,927
3,870
1,908
487
6,403
2,083
1,109
20,177
23,522
The majority of trade payables relate to purchases of inventory from Asia and Europe. The average credit period on
purchases from Asia is 45 days and for Europe, 90 days. The Group has financial risk management policies in place to
ensure that all payables are paid as and when they fall due.
Accounting policy
Trade and other payables, including accruals, are recorded when the Group is required to make future payments as a result
of purchases of goods or services. Trade and other payables are carried at amortised cost.
2.5 Provisions
Employee benefits
Other provisions
Current
Non-current
Other Provisions
Balance at 31 December 2020
Additional provision recognised
Foreign exchange movement
Closing balance
Accounting policies
30 June
2021
$’000
3,607
31 December
2020
$’000
3,812
4,279
7,886
5,530
2,356
7,886
Provision for
warranty
$’000
2,689
286
(2)
2,973
Make good
$’000
1,200
107
(1)
1,306
3,889
7,701
5,327
2,374
7,701
Total
$’000
3,889
393
(3)
4,279
Provisions are recognised for present obligations (legal, equitable or constructive) to make future payments (or other transfer
of value) to other entities due to past transactions or events. They are recognised only when it is probable the liability will
arise and when a reliable estimate can be made of the amount. If the effect of time value of money is material, provisions are
determined by discounting the expected future cash flows at a pre-tax risk-free rate plus, where appropriate, the risks specific
to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance
cost.
Employee benefits
A liability is recognised for benefits accruing to employees in respect of annual leave and long service leave when it is
probable that settlement will be required, and they are capable of being measured reliably.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 44
SHRIRO HOLDINGS LIMITED
45
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the estimated future
cash outflows to be made by the Group in respect of services provided by employees up to reporting date. The discount rate
adopted is the high-quality corporate bond rate.
Warranty
The provision for warranty claims represents the present value of the Directors’ best estimate of the future sacrifice of
economic benefits that will be required under the Group’s warranty program. The estimate has been made on the basis of
historical warranty trends and other events affecting product quality discounted to present value with the exclusion of net
margin on spares sold.
The Group sells goods or services to a client and provides a formal warranty or guarantee that any defects will be repaired
or rectified and provides assurance that the product complies with agreed-upon specifications. A provision is recorded for
the related liability to an amount of the expected costs to be incurred for repair and rectification.
The Group provides warranties ranging from two to five years.
Make good
The provision for make-good represents management’s best estimate of future cash outlays required to refit leased premises
in line with the requirements of each lease agreement.
Key estimates and judgments
Warranty provision
In determining the level of provision required for warranties, the Group has made judgments in respect of the products, the
number of customers who will make a warranty claim and how often, and the costs of fulfilling the conditions of the warranty.
The provision is based on estimates made from historical warranty data associated with similar products and services.
2.6 Financial risk management
The Group has four significant categories of financial instruments which are described below together with the accounting
policies and risk management processes which are utilised:
(a) Cash and cash equivalents
The Group deposits its cash and cash equivalents with Australian, New Zealand and US banks. Funds can be deposited in
cheque accounts and cash management accounts. On call cash accounts are the only allowable investment instruments
authorised for use.
(b) Trade and other receivables
The Group has a credit risk policy to protect against the risk of debtor default. The majority of the Group’s debtors are long
term customers and are large Australian corporations where credit risk is generally lower. New customers are assessed for
credit risk using credit references and reports from credit agencies.
The Group holds an active credit insurance policy which, at the reporting date, provided coverage for 90% of the balance for
insured debtors with a balance equal to or greater than $40,000 and above. The maximum exposure under this policy is 10%
of the irrecoverable amount.
(c) Bank guarantees and letters of credit
The Group uses bank guarantees to customers, and letters of credit to suppliers in lieu of cash retention.
(d) Trade and other payables
Trade and other payables are denominated in Australian, US and New Zealand dollars, Euro and Yen. Exposure to exchange
rate fluctuations are hedged through foreign currency forward contracts.
(e) Foreign currency forward contracts
The Group hedges its cash flows by using forward exchange contracts to minimise the impacts of currency movements.
Foreign currency forward contracts, which are used in the normal course of day-to-day business to hedge exposure to
fluctuations in foreign exchange fluctuations.
Foreign currency forward contracts are measured and recognised at fair value in accordance with level 2 of the fair value
measurement hierarchy.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 45
ANNUAL REPORT 30 JUNE 2021
46
Notes to the Financial Statements
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Forward exchange contracts receivable
Financial liabilities
Trade and other payables
Forward exchange contracts payable
30 June
2021
$’000
17,313
29,674
527
19,690
388
31 December
2020
$’000
17,569
34,079
75
17,569
75
The Directors consider the fair value of the financial assets and financials liabilities to approximate their carrying amounts.
Loans and receivables
Trade receivables, loans, and other receivables that are held within a business model whose objective is to hold financial
assets in order to collect contractual cash flows; and have contractual terms which give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding are classified as ‘loans and receivables’.
Loans and receivables are recognised and derecognised on a trade date basis.
All loans and receivables are measured subsequently in their entirety at amortised cost. The effective interest method is a
method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For
purchased or originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting
the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial
recognition.
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised
cost.
Financial risk management objectives
The Group’s exposure to market risk is mainly arising from interest rate risk, foreign currency risk, operating expenditure risk
and price risk (sales and margin).
Key sensitivities
Sales (+/- 1%)
Gross profit margin (+/- 1%)
Other operating costs (+/- 1%)
AUD/NZD (+/- 5%)
Foreign currency risk management
Impact on
NPAT
$’000
141
642
195
137
Impact on
NPAT
%
0.8%
3.6%
1.1%
0.8%
The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate
fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign
exchange contracts.
It is the policy of the Group to enter into forward foreign exchange contracts to manage the risk associated with anticipated
purchase transactions out to 9 months with 80% of the expected exposure hedged and to increase this to 100% where there
are specific foreign currency payments and receipts.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 46
SHRIRO HOLDINGS LIMITED
47
Forward foreign exchange contracts
The Group’s exposure through forward contract foreign currency hedges fair valued at the reporting date was as follows:
Outstanding contracts maturity profile
Buy Currency:
Less than 3 months
3 to 6 months
Greater than 6 months
Sell Currency:
Less than 3 months
3 to 6 months
6 to 9 months
Buy Currency:
AUD
EURO
JPY
USD
Sell Currency:
USD
NZD
30 June
2021
$’000
31 December
2020
$’000
22,010
16,168
13,056
804
-
1,944
1,812
13,101
18,776
17,546
804
1,944
4,447
9,646
32,504
79
-
1,944
2,285
9,262
6,626
28,425
79
1,944
Forward foreign exchange contract derivatives are carried on the balance sheet at fair value and are included in level two of
the fair value hierarchy (refer to note 6.3). There have been no transfers between the levels in the fair value hierarchy (2020:
none).
Liquidity risk management
The Group is exposed to liquidity risk primarily from its core operating activities and the subsequent ability to meet its
obligations to repay financial liabilities when they fall due. The Group’s objective is to maintain liquidity within the outputs of
core operations, without relying on external debt. The Group manages liquidity risk by continually monitoring cash balances,
and as well as and maintaining access uncommitted banking facilities.
The following table details the Group’s remaining contractual maturity of its non-derivative financial liabilities. The table
summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments and the
earliest date at which the Group can be required to pay and includes both interest and principal cash flows.
Weighted
average effective
interest rate
Less than
3 months
3 to 12
months
1 to 5
years
> 5 years
Total
$’000
$’000
$’000
$’000
$’000
2021
Trade payables
Lease liabilities
2020
Trade payables
Lease liabilities
0.0%
3.8%
0.0%
4.0%
17,682
1,015
2,008
3,050
-
-
19,690
8,712
443
13,220
22,413
-
-
-
22,413
794
2,759
9,053
1,072
13,678
Interest rate sensitivity analysis
The sensitivity analysis has been determined based on exposure to interest rates for cash and cash equivalents that were
subject to interest rate fluctuations at the reporting date. At reporting date, if interest rates had been 1% higher or lower and
all other variables were held constant, the Group’s profit or loss before tax would increase by $167,000 or decrease by nil
(2020: $18,000).
Capital Management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising
the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains
unchanged from 2017. The capital structure of the Group consists of net debt (borrowings as detailed in note 3.3 offset by
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 47
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48
Notes to the Financial Statements
cash and bank balances) and equity of the Group (comprising issued capital, reserves, retained earnings as detailed in notes
4.1, 4.4 and 4.5).
The Group is not subject to any externally imposed capital requirements.
Accounting policy
Financial assets and financial liabilities are recognised when a Group becomes a party to the contractual provisions of the
instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
2.6.1 Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established
by regulation or convention in the marketplace. All recognised financial assets are measured subsequently in their entirety
at amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
• the financial asset is held within a business model whose objective is to hold financial assets in order to collect
contractual cash flows; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive
income (FVTOCI):
• the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows
and selling the financial assets; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).
Loans and receivables
All loans and receivables are measured subsequently in their entirety at either amortised cost. The effective interest method
is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.
For purchased or originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by
discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on
initial recognition.
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised
cost. Trade receivables are regularly reviewed, and the Group applies the simplified expected credit loss model as per AASB
9.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at
amortised cost or at FVTOCI, lease receivables, trade receivables and contract assets, as well as on financial guarantee
contracts. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial
recognition of the respective financial instrument.
The Group always recognises lifetime expected credit losses (ECL) for trade receivables, contract assets and lease
receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group’s
historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an
assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of
money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit
risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial
recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a
financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default
events on a financial instrument that are possible within 12 months after the reporting date.
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude
of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default
is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for
financial assets, this is represented by the assets’ gross carrying amount at the reporting date; for financial guarantee
contracts, the exposure includes the amount drawn down at the reporting date, together with any additional amounts expected
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 48
SHRIRO HOLDINGS LIMITED
49
to be drawn down in the future by default date determined based on historical trend, the Group’s understanding of the specific
future financing needs of the debtors, and other relevant forward-looking information.
Derecognition of financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group
neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred
asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the
Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to
recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the
consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive
income and accumulated in equity is recognised in profit or loss.
2.6.2 Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.
Derivative financial instruments
The Group enters into a variety of derivative financial instruments to manage its exposure to foreign exchange rate risk,
including forward foreign exchange contracts.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately
unless the derivative is designated and effective as a hedging instrument, in which event, the timing of the recognition in
profit or loss depends on the nature of the hedge relationship.
Derivatives are classified as a non-current asset or a non-current liability if the remaining maturity of the hedge relationship
is more than 12 months after the reporting period and as a current asset or a current liability if the remaining maturity of the
hedge relationship is less than 12 months after the reporting period.
Hedge accounting
Hedges of foreign exchange risk on firm commitments are designated as cash flow hedges. At the inception of the hedge
relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its risk
management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the
hedge and on an ongoing basis, the Group documents whether the hedging instrument is effective in offsetting changes in
fair values or cash flows of the hedged item.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or
loss relating to the ineffective portion is recognised immediately in profit or loss as part of other expenses or other income.
Amounts recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods
when the hedged item is recognised in profit or loss in the same line of the income statement as the recognised hedge item.
However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial
liability, the gains and losses previously recognised in other comprehensive income and accumulated in equity are transferred
from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer
qualifies for hedge accounting. At that time, any cumulative gain or loss deferred in equity remains in equity and is recognised
when the forecast transaction is ultimately recognised in profit or loss. However, if all or a portion of a loss recognised directly
in equity is not expected to be recovered in one or more future periods, the amount that is not expected to be recovered is
recognised immediately in the profit and loss. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was deferred in equity is recognised immediately in profit or loss.
Hedge Strategy
Shriro reports internally on all outstanding foreign purchase orders already placed with suppliers. Shriro hedges all confirmed
purchase orders and will also cover up to 80% of the remaining outstanding forecast purchases not yet ordered for between
3 months to 9 months. Shriro also holds between 4 to 6 months stock which acts like a natural hedge. The hedging of currency
gives Shriro time to react should the Australian dollar depreciation against the USD, YEN, NZD or EUR.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 49
ANNUAL REPORT 30 JUNE 2021
50
Notes to the Financial Statements
3. Investment and Financing
3.1 Plant and equipment
Leasehold
improvement
$’000
Plant and
equipment
$’000
Fixtures and
fittings
$’000
Office
equipment
$’000
Motor
vehicles
$’000
Display
assets
$’000
Total
$’000
1,963
4,152
377
4,338
1,443
10,050
22,323
(934)
(2,723)
(288)
(3,876)
(907)
(8,274)
(17,002)
1,029
1,429
89
462
536
1,776
5,321
298
5,619
30 June 2021
Cost
Accumulated depreciation
and impairment
Plant and equipment
Capital work in progress
Movement cost:
At 31 December 2020
1,003
4,110
291
4,099
1,403
9,452
20,358
Additions
Disposals
Foreign exchange
movement
At 30 June 2021
962
-
(2)
44
-
(2)
131
(43)
(2)
242
(3)
78
(34)
(4)
747
(146)
(3)
2,204
(223)
(16)
1,963
4,152
377
4,338
1,443
10,050
22,323
Movement in accumulated depreciation:
At 31 December 2020
Additions
Disposals
Foreign exchange
movement
At 30 June 2021
Accounting policy
(861)
(75)
(2,527)
(197)
-
2
-
1
(240)
(14)
41
2
(3,769)
(817)
(8,061)
(16,275)
(110)
(118)
-
3
26
2
(435)
143
2
(949)
210
12
(934)
(2,723)
(211)
(3,876)
(907)
(8,351)
(17,002)
Each class of plant and equipment is initially recorded at cost and subsequently reduced by accumulated depreciation and
impairment losses.
Cost of plant and equipment includes the fair value of consideration paid, incidental costs directly attributable to bringing the
asset to the location and condition necessary for operation, and an estimate of the cost to dismantle the asset.
The residual values, useful lives and depreciation methods of plant and equipment are reviewed, and adjusted if appropriate,
at each financial year end.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property,
plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is
recognised in profit or loss.
Depreciation
Plant and equipment is depreciated on a straight-line basis over the estimated useful life of the asset, commencing from the
time the asset is held ready for use.
Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties under
construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives,
residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in
estimate accounted for on a prospective basis.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 50
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51
The following estimated useful lives are used in the calculation of depreciation:
Asset class
Useful life
Leasehold improvements
Over the lease period
Plant and equipment
2 - 14 years
Fixtures and fittings*
2 – 14 years
Office equipment
Motor vehicles
Display assets
2 - 13 years
5 - 8 years
3 years
*The Group holds a limited number of artworks which are depreciated over 100 years
Impairment
At the end of each reporting period, the Group reviews the carrying amounts of plant and equipment to determine whether
there an indication an asset is impaired. If an indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss. The recoverable amount is the higher of fair value less costs to sell and value
in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash
generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
At the end of each reporting period an assessment is made as to whether a previously recognised impairment may no longer
exit. When an impairment loss is subsequently reversed, the carrying amount of the asset is increased to the revised estimate
of its recoverable amount, to the extent that it does not exceed the carrying amount that would have been determined had
no impairment loss been recognised. A reversal of an impairment loss is recognised immediately in profit or loss.
3.2 Lease arrangements
The Group enters into leases for the use of warehouse and office space in Australia and New Zealand with lease terms of
between 1 and 10 years. No lease includes the option to purchase the leased land or buildings at the expiry of the lease
term. The Group does not have any short-term leases of less than 1 year.
The right of use assets and corresponding lease liabilities recognised by the Group are as follows:
Right of use asset
Accumulated depreciation
Movement in the cost of the right of use asset:
Opening balance
Additions
Disposals
Lease modification
Impairment
Foreign exchange movement
Closing balance
Movement in accumulated depreciation and impairment:
Opening balance
Additions
Disposals
Foreign exchange movement
Closing balance
30 June
2021
$’000
22,710
(13,632)
9,078
20,969
1,478
-
302
-
(39)
31 December
2020
$’000
20,969
(12,211)
8,758
31,112
290
(10,094)
-
(172)
(167)
22,710
20,969
(12,211)
(1,442)
-
21
(13,961)
(3,018)
4,681
87
(13,632)
(12,211)
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 51
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52
Notes to the Financial Statements
Payments related to leases recognised as expenses
Depreciation charge for right-of-use assets
Interest expense on lease liabilities
Lease commitments
Maturity profile of lease liability
Less than 1 year
1 - 2 years
2 - 5 years
5 – 10 years
Greater than 10 years
30 June
2021
$’000
1,442
31 December
2020
$’000
3,018
3
1,312
30 June
2021
$’000
3,643
31 December
2020
$’000
3,908
2,682
5,506
441
-
3,156
1,896
3,409
-
The Group’s strategy to rationalise lease costs resulted in the exit of the Kingsgrove, New South Wales head office lease,
and show room leases in Western Australia and Queensland during 2020. Disposal and revaluation costs resulting from
these exits are reflected in the comparative period above. No lease exits occurred in the period to 30 June 2021.
Accounting policy
When the Group enters into a new contract an assessment is undertaken to determine if the contract is, or contains, a lease.
The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which
it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low
value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis
over the term of the lease unless another systematic basis is more representative of the time pattern in which economic
benefits from the leased assets are consumed.
Where a lease includes the option to extend the lease term, the Group assumes that options will be exercised at the inception
of each lease based on the economic incentive of extending a lease as opposed to entering into a new lease. A number of
the Group’s leases have extension options.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the Group’s incremental borrowing rate for a similar asset over a similar term.
Lease payments included in the measurement of the Group’s lease liabilities compose:
•
•
Fixed lease payments less lease incentives
Variable lease payments
The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is
subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use assets)
whenever:
•
•
•
The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which
case the lease liabilities is remeasured by discounting the revised lease payments using a revised discount rate
The lease payments change due to changes in an index or rate or a change in expected payment under
guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised leased
payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used)
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case
the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The right-of-use assets comprise the initial measurement of the lease liability, lease payments made at or before the
commencement, initial direct costs and an estimate of the costs to return the asset to the condition as required by the lease
contract (make good costs). Where a lease includes make good costs a provision is also recognised and measured in
accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets.
Right of use assets are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Depreciation starts
at the commencement date of the lease.
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53
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
The Group applies AASB 136 Impairment of Assets to determine whether a right-of-use asset is impaired and accounts for
any identified impairment loss as described in the plant and equipment accounting policy.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-
of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers
those payments occurs and are included in the line occupancy costs in the statement of profit or loss.
The Group has elected not used the practical expedient included in AASB 16 Leases where a lessee may choose not to
separate non-lease components and to account for leases as a single arrangement.
3.3 Borrowings
During the financial period ended 30 June 2021, the Group had the following banking facilities:
(i)
(ii)
A non-cash guarantee facility of $11,000,000. Under the terms of this facility, financial institutions provide guarantees
to the Group’s suppliers and property owners in the form of Letters of Credit and Bank Guarantees. These Letters of
Credit and Bank Guarantees act like insurance and provide assurance to suppliers and property owners that payment
up to the amount of the guarantees will be made if certain documentary conditions are met. The Group has no
obligation to make any payments under this non-cash facility.
A trade finance facility available to meet working capital requirements which was cancelled on 25 June 2021. The
facility limit was $16,000,000 which increased to $21,000,000 between 01 September and 31 December to account
for seasonality in working capital requirements.
At 30 June 2021 the Group did not have a cash facility in place (2020: $21,000,000).
The Group’s facilities are denominated in Australian dollars and variable interest rates apply. All assets of the Group have
been pledged to secure the borrowings of the Group with ANZ.
The facilities have financial covenants relating to fixed charge cover ratio, borrowing base cover ratio and leverage ratio.
The Group is compliant with all financial covenants.
Borrowing facility
Overdraft facility (i)
Trade finance facility (i)
Total borrowing facility
Non-cash guarantees facility (ii)
Total Group facility
Utilisation of non-cash guarantees facility
Utilised – non-cash
Unutilised limit available for use
Total non-cash guarantees facility
Accounting policy
30 June
2021
$’000
-
31 December
2020
$’000
15,000
-
-
11,000
11,000
6,000
21,000
11,000
32,000
30 June
2021
$’000
31 December
2020
$’000
6,677
4,323
11,000
6,735
4,265
11,000
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing
costs are expensed in the period in which they occur unless they are directly attributable to the acquisition, construction or
production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale, they are
capitalised as part of the cost of the asset.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 53
ANNUAL REPORT 30 JUNE 2021
54
Notes to the Financial Statements
4. Shareholder Equity
4.1 Issued capital
95,087,500 fully paid ordinary shares (2020: 95,087,500)
Date
Details
1 January 2021
Opening balance
30 June 2021
Closing Balance
4.2 Earnings per share
Basic earnings per share
Diluted earnings per share
Reconciliation of input used to calculate earnings per share
Net profit ($’000)
Opening balance of shares for the financial period
Closing balance of shares for the financial period
Weighted average number of ordinary shares used in the calculation of
basic earnings per share
Shares deemed to be issued for no consideration in respect of:
30 June
2021
$’000
94,617
31 December
2020
$’000
94,617
Value of
Shares
$’000
94,617
Number of
Shares
95,087,500
94,617
95,087,500
6 months to
30 June 2021
Cents per
share
7.1
7.0
12 months to
31 December
2020
Cents per
share
19.10
18.98
6 months to
30 June 2021
6,768
12 months to
31 December
2020
18,196
95,087,500
95,087,500
95,087,500
95,087,500
95,087,500
95,087,500
Employee performance rights
1,352,905
1,352,905
Closing number of shares deemed to be issued for the financial period
96,440,405
96,440,405
1Tim Hargreaves performance rights for 2019 do not meet the definition of dilutive shares, as they are only able to be settled, at the Board’s
discretion, in cash or by an on-market purchase of the relevant number of shares and not by way of an issuance of new shares.
Accounting policy
Basic and diluted earnings per share are calculated on profit after taxation attributable to members of Shriro Holdings Limited
and the weighted average number of shares on issue during the period.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 54
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55
4.3 Dividends
On 31 August 2021 the Directors declared a final dividend of 6.0 cents per share fully franked with an ex-dividend date of 09
September 2021, record date of 10 September 2021 and payable on 30 September 2021.
Franking account balance
Shareholder returns
s
t
n
e
C
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
30 June
2021
$’000
5,896
31 December
2020
$’000
5,401
110%
90%
70%
50%
30%
10%
-10%
%
e
g
a
t
n
e
c
r
e
P
2017
2018
2019
2020
2021
Earnings per share
Fully franked dividends per share
Dividend payout ratio
Dividend payout ratio is calculated as dividend paid divided by basic earnings per share. The years 2017 to 2020 have been
calculated based on an earnings per share over a twelve-month period while the 2021 balances have been calculated on a
six month period due to Shriro’s change in financial year end.
4.4 Retained earnings
Balance at beginning of the financial period
Profit for the period
Dividends paid
Balance at end of financial period
4.5 Reserves
Cash flow hedging reserve
Foreign currency translation reserve
Equity settled employee benefits reserve
Group reorganisation reserve
Balance at end of financial period
2021
$’000
45,712
6,768
(3,804)
48,676
2020
$’000
33,221
18,196
(5,705)
45,712
30 June
2021
$’000
(148)
1,698
(75)
(78,585)
(77,110)
31 December
2020
$’000
(1,958)
1,782
(328)
(78,585)
(79,089)
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56
Notes to the Financial Statements
4.5.1 Cash flow hedging reserve
Balance at the beginning of the financial period
Forward exchange contracts
Balance at end of financial period
30 June
2021
$’000
(1,958)
1,810
(148)
31 December
2020
$’000
(367)
(1,591)
(1,958)
The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value
of financial instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the
hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be reclassified
to profit or loss only when the hedged transaction affects the profit or loss, or is included as a basis adjustment to the
nonfinancial hedged item, consistent with the relevant accounting policy.
4.5.2 Foreign currency translation reserve
Balance at the beginning of the financial period
Exchange differences arising on translation of foreign operations
Balance at end of financial period
30 June
2021
$’000
1,782
(84)
1,698
31 December
2020
$’000
2,035
(253)
1,782
Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from their
functional currencies to the Group’s presentation currency are recognised directly in other comprehensive income and
accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency
translation reserve (in respect of translating both the net assets of foreign operations and hedges of foreign operations) are
reclassified to profit or loss on the disposal of the foreign operation.
4.5.3 Equity settled employee benefits reserve
Balance at the beginning of the financial period
Arising on share-based payments
Balance at end of financial period
Accounting policy
30 June
2021
$’000
(328)
31 December
2020
$’000
(344)
253
(75)
16
(328)
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of
the equity instruments at the grant date. Fair value is measured by use of a binomial model. The expected life used in the
model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and
behavioral considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
over the vesting period, based on the Director’s estimate of equity instruments that will eventually vest with a corresponding
adjustment to reserves.
4.5.4 Group re-organisation reserve
Balance at beginning of financial period
Balance at end of financial period
30 June
2021
$’000
(78,585)
(78,585)
31 December
2020
$’000
(78,585)
(78,585)
The Group re-organisation reserve arose from re-organisation of the Group structure at the time of the Initial Public Offering.
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57
5. Group Structure and Key Management
5.1 Subsidiaries
The Group owns 100% of the equity holding in the following entities (2020:100%) whose principal activities are as
wholesalers of consumer goods and appliances. Along with the Company, they form the assets, liabilities and results of the
consolidated financial statements.
Country of incorporation and operation
Shriro Australia Pty Limited 1
Monaco Corporation Limited
Shriro USA,INC 1
Australia
New Zealand
USA
1This subsidiary is a member of the tax-consolidated group and has entered into a deed of cross guarantee with Shriro Holdings Limited pursuant to ASIC
Corporations (Wholly owned Companies) Instrument 2016/785 and are relieved from the requirement to prepare and lodge an audited financial report
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 57
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58
Notes to the Financial Statements
5.2 Deed of Cross Guarantee
Under the terms of ASIC Corporations (Wholly owned Companies) Instrument 2016/785, certain wholly owned controlled
entities have been granted relief from the requirement to prepare audited financial reports. It is a condition of the class order
that the Company and each of the relevant subsidiaries enter into a Deed of Cross Guarantee whereby each company
guarantees the debts of the companies party to the Deed. The member companies of the Deed of Cross Guarantee are
regarded as the ‘Closed Group’ and identified in note 5.1.
The consolidated statement of profit or loss and other comprehensive income, retained earnings reconciliation and a
consolidated statement of financial position, comprising the Company and those controlled entities which are a party to the
Deed of Cross Guarantee, after eliminating all transactions between parties to the Deed are set out below.
Statement of Profit or Loss and Other Comprehensive Income
Revenue from ordinary activities
Raw materials and consumables used
Employee benefits expense
Advertising and promotion expenses
Freight and delivery expenses
Depreciation and amortisation expenses
Net gain from lease exit
Occupancy costs
Foreign exchange (loss) / gain
Finance costs
Other expenses
Other gains
Profit before tax
Income tax expense
Profit for the period
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity
Exchange differences on translation of foreign operations
6 months to
30 June 2021
$’000
71,821
(41,913)
(10,378)
(2,886)
(3,106)
(1,874)
-
(160)
(186)
(40)
(4,344)
10
6,944
(2,185)
4,759
12 months to
31 December
2020
$’000
152,344
(87,737)
(16,851)
(3,278)
(6,398)
(4,441)
2,304
(504)
198
(1,404)
(9,049)
-
25,184
(5,350)
19,834
706
(14)
(742)
-
Other comprehensive income for the period, net of tax
692
(742)
Total comprehensive income for the period attributable to the owners of
Shriro Holdings Limited
5,451
19,092
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 58
SHRIRO HOLDINGS LIMITED
Consolidated Statement of Financial Position
Current assets
Cash and bank balances
Trade and other receivables
Inventories
Loan to related entities
Other current assets
Current tax receivable
Derivative receivable
Total current assets
Non-current assets
Right of use assets
Property, plant and equipment
Deferred tax assets
Investments
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Current tax payable
Provisions
Derivative payable
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
59
30 June
2021
$’000
31 December
2020
$’000
13,357
23,212
25,794
573
935
2,094
401
66,366
6,301
4,316
4,773
12,553
27,943
15,306
25,861
27,404
1,778
275
-
73
70,697
5,709
3,387
5,429
12,553
27,078
94,309
97,775
15,073
3,643
0
4,731
210
23,657
4,575
1,983
6,558
18,320
2,461
489
4,640
1,287
27,197
5,582
2,013
7,595
30,215
34,792
64,094
62,983
94,617
(78,712)
48,189
64,094
94,617
(79,731)
48,097
62,983
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 59
ANNUAL REPORT 30 JUNE 2021
60
Notes to the Financial Statements
5.3 Related party transactions
The ultimate parent entity is Shriro Holdings Limited which is domiciled and incorporated in Australia, and all subsidiaries of
the Company are disclosed in note 5.1.
Transactions between companies within the Group during the current and prior period included:
•
•
Purchases and sales of goods and services; and
Provision of accounting and administrative assistance.
Transactions with controlled entities are made on normal commercial terms and conditions and have been eliminated on
consolidation and not disclosed in this note.
Compensation and remuneration of key management personnel has been disclosed in note 5.4.
During the period a close family member of the Chief Executive Office was employed by Shriro Australia Pty Limited to
undertake administrative activities. The role did not report to, and the individual was not instructed by, the Chief Executive
Officer and salaries and wages paid were calculated in accordance with Australian minimum wages. The total wages paid in
the period totalled $3,197.
During the period the Group made sales to an entity wholly owned by a close family member of the Chief Executive Officer.
Total sales for the period were $8,956 (2020: $2,513) with a balance owning to the customer at period end of $433 (2020:
$689 owed to the Group). Customer terms and conditions are consistent with other customers of a similar size.
5.4 Parent entity information
The individual financial statements show the following aggregate amounts:
Financial Position
Current Assets
Total assets
Current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial Performance
Profit for the period
Total comprehensive income
Financial guarantees
30 June
2021
$’000
2,092
90,677
2,648
2,648
94,617
(75)
(6,513)
88,029
31 December
2020
$’000
-
88,481
533
533
94,617
(345)
(6,324)
87,948
6 months to
30 June 2021
$’000
3,615
3,615
12 months to
31 December
2020
$’000
5,705
5,705
Refer note 2.6 for financial guarantees to banks, financiers and other persons.
Capital commitments and contingent liabilities
There are no capital commitments or contingent liabilities recorded in the Company at 30 June 2021 (2020: nil).
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 60
SHRIRO HOLDINGS LIMITED
61
5.5 Directors and key management personnel compensation
The Board of Directors approves on an annual basis the amounts of compensation for Directors up to the shareholder
approved limit and key management personnel with reference to the Group’s performance and general compensation levels
in equivalent companies and industries.
Remuneration of Directors and Key Management Personnel
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Accounting policy
30 June
2021
$’000
1,192
88
28
1,308
31 December
2020
$’000
2,388
(167)
67
2,288
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the estimated future
cash outflows to be made by the Group in respect of services provided by employees up to reporting date. The discount rate
adopted at 30 June 2021 is the high quality corporate bond rate.
5.6 Share-based payments
5.6.1 LTI Plan
The Company established an equity incentive plan (LTI Plan) to assist in the motivation, retention and reward of senior
management. The Plan is designed to align the interests of employees and senior management with the interests of
Shareholders by providing an opportunity for employees to receive an equity interest in the Company. Long term incentives
are established under the Plan.
The Plan Rules provide flexibility for the Company to grant performance rights, options and/or restricted shares, subject to
the terms of individual offers.
Performance rights have been granted to the Chief Executive Officer, Chief Financial Officer and other senior management.
No non-executive director holds any performance rights over the shares in Shriro Holdings Limited.
Due to the change in Shriro’s financial year end, no LTIPs were issued in the period to 30 June 2021 as any future plans
issued will be aligned with the new year end. During the year ended 31 December 2020, Tim Hargreaves was issued with
359,281 performance rights, Shane Booth was granted 175,150 performance rights and other senior management were
issued with 283,835 of performance rights in accordance with LTIPs issued.
The amortised LTIP performance rights recognised in consolidated statement of profit or loss for the period ended 30 June
2021 was $253,000 (2020: $408,000).
No director received any shares under the employee gift offer in the current or previous years.
The following share-based payment arrangements were in existence during the current reporting periods:
Performance
rights series
Effective grant
date
Grant date fair
value
Number Granted
Expiry date
Vesting Testing
Series 1
Series 2
01/01/2019
01/01/2020
$360,551
$367,078
949,864
818,266
31/12/2021
31/12/2022
31/12/2021
31/12/2022
Accounting policy
Equity-settled share-based payments issued to employees and others providing similar services are measured at the fair
value of the equity instruments at the grant date. Fair value is measured by use of a binomial model. The expected life used
in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions,
and behavioral considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest, with a corresponding
increase in equity.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 61
ANNUAL REPORT 30 JUNE 2021
62
Notes to the Financial Statements
5.6.2 Fair value of performance rights granted
Where relevant, the expected life used in the model has been adjusted based on management’s best estimate for the effects
of non-transferability, performance hurdles (including the probability of meeting market conditions attached to the rights), and
behavioural considerations.
Performance rights
series
Series 1
Series 2
Grant date fair
value
Rights life
Dividend yield
Risk-free interest
rate
$0.48
$0.57
3 years
3 years
12.64%
11.97%
3.44%
3.44%
5.6.3 Performance rights outstanding at the end of the period
The performance rights outstanding at the end of the period had no exercise price and a weighted average remaining
contractual life of 1.0 years.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 62
SHRIRO HOLDINGS LIMITED
63
6. Other Notes
6.1 Remuneration of auditor
Amounts received or receivable by Deloitte Touche Tohmatsu for:
Audit and review of the Group’s financial statements
Non-audit services
Total auditor remuneration
6 months to
30 June 2021
$’000
12 months to
31 December
2020
$’000
150
-
150
219
50
269
The Group engages Deloitte when stringent independence requirements are satisfied to provide other non-audit services
where their expertise and experience best qualifies them to provide the appropriate service. In the period ended 30 June
2021, Deloitte was not engaged to undertake non-audit services during the period.
6.2 Events after the reporting date
In July 2021 Shriro was subject to a cyber security incident involving unauthorised access to its operating systems. The cyber
incident did not have any impact on the results for the period to 30 June 2021. The financial impact of the incident is not
expected to be material to the Group’s result for the 30 June 2022 financial year.
On 09 August 2021 Shriro entered into Heads of Agreement with Blanco APAC Pte Ltd to cease distributing Blanco branded
products in Australia and New Zealand. Shriro will continue to distribute Blanco products in Australia and New Zealand until
01 May 2022. The contribution Blanco product made to the Group’s revenue for the period ended 30 June 2021 was
$9,067,000.
There has not been any other matter or circumstance, occurring subsequent to the end of the financial period that has
significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial years.
6.3 Other accounting policies
Tax consolidation
The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 23
June 2015 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated group is
Shriro Holdings Limited. The members of the tax-consolidated group are Shriro Australia Pty Limited and Shriro USA inc.
Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of
the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group
using the ‘separate taxpayer within group’ approach by reference to the carrying amounts in the separate financial statements
of each entity and the tax values applying under tax.
Current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax credits of the
members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group).
Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing agreement with the
head entity. Under the terms of the tax funding arrangement, the Company and each of the entities in the tax-consolidated
group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax
asset of the entity.
Under the terms of the tax funding arrangement, amounts are recognised as payable to or receivable by the Company and
each member of the Group in relation to the tax contribution amounts paid or payable between the parent entity and the other
members of the tax-consolidated group in accordance with the arrangement.
The tax sharing agreement provides for the determination of the allocation of income tax liabilities between the entities should
the head entity default on its tax payment obligations or if an entity should leave the tax consolidated group. The effect of the
tax sharing agreement is that each member’s liability for tax payable by the tax-consolidated group is limited to the amount
payable to the head entity under the tax funding arrangement.
Fair value measurement
The Group measures financial instruments such as derivatives, at fair value at each balance sheet date. Transactions within
the scope of AASB 2 Share Based Payments are measured at fair value in accordance with the guidance in that standard.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 63
ANNUAL REPORT 30 JUNE 2021
64
Notes to the Financial Statements
market participants at the measurement date. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of
a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market
must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as
a whole:
•
•
•
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Foreign exchange
For the purpose of the financial statements, the results and financial position of the Group are expressed in Australian dollars,
which is the functional currency and the presentation currency for the consolidated financial statements.
In preparing the financial statements, transactions in currencies other than the Group’s functional currency (foreign
currencies) are recognised at the rates prevailing at the dates of the transactions. At the end of each reporting period,
monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items
carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the
fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
•
•
exchange differences on transactions entered into in order to hedge certain foreign currency risks (see note 2.6.2
for hedging accounting policies); and
exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is
neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are
recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the
monetary items.
For the purpose of presenting the consolidated financial statements, the assets and liabilities of foreign operations are
translated into Australian dollars using exchange rates prevailing at the end of the reporting period. Income and expense
items are translated at the average monthly exchange rates during the period, unless exchange rates fluctuated significantly
during that period, in which case the exchange rates at the dates of the transactions. Exchange differences arising, if any,
are recognised in other comprehensive income and accumulated in equity (attributed to non-controlling interests as
appropriate).
Government grants
Government grants are not recognised until there is reasonable assurance the Group will comply with the conditions attaching
to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over
the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which
they become receivable.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 64
SHRIRO HOLDINGS LIMITED
65
Changes in accounting policies and disclosures
In the current period, the Group has applied a number of new and revised AASBs issued by the Australian Accounting
Standards Board (AASB). These are:
AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework
The application of these new and revised standards has had no material effect on the Group's consolidated financial
statements.
Standards and interpretations in issue not yet effective
The Group is in the process of assessing the impact of these new and revised standards, and interpretations, and has not
yet reached a determination as to the impact on the accounting policies detailed below.
Standard / Interpretation
AASB 2021-3 Amendments to AASs –Covid-19-
Related Rent Concessions beyond 30 June 2021
AASB 2020-8 Amendments to Australian Accounting
Standards – Interest Rate Benchmark Reform –
Phase 2
AASB 2015-10 Amendments to Australian Accounting
Standards – Effective Date of Amendments to AASB
10 and AASB 128 and AASB 2017-5 Amendments to
Australian Accounting Standards – Effective Date of
Amendments to AASB 10 and AASB 128 and
Editorial Corrections
AASB 2020-1 Amendments to Australian Accounting
Standards – Classification of
Liabilities as Current or Non-Current and AASB 2020-
6 Amendments to Australian
Accounting Standards – Classification of Liabilities as
Current or Non-current –
Deferral of Effective Date
AASB 2020-3 Amendments to Australian Accounting
Standards – Annual Improvements 2018-2020 and
Other Amendments
AASB 2021-2 Amendments to AASs –Disclosure of
Accounting Policies and Definition of Accounting
Estimates:
•
Amendments to AASB 7, AASB 101, AASB
134 and AASB Practice Statement 2
Amendments to AASB 108
•
Effective for Annual
reporting periods beginning
on or after
Expected to be initially
applied in the financial year
ending
01 April 2021
30 June 2022
01 June 2021
30 June 2022
01 January 2022
30 June 2023
01 January 20221
30 June 2023
01 January 2022
30 June 2023
01 January 2023
30 June 2024
1AASB 2020-6, although itself effective for annual reporting periods beginning on or after 1 January 2022 (the original
effective date of AASB 2020-1), has the effect of deferring the mandatory application of those amendments to annual
reporting periods beginning on or after 1 January 2023.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 65
ANNUAL REPORT 30 JUNE 2021
66
DIRECTORS’ DECLARATION
Directors’ Declaration
The Directors declare that:
(a)
(b)
(c)
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;
in the Directors’ opinion the attached financial statements are in compliance with International Financial Reporting Standards,
as stated in the notes to the financial statements.
in the Directors’ opinion, the attached financial statements, and notes thereto, have been prepared in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position
and performance of the consolidated Group, and
(d)
the Directors have been given the declarations required by section 295A of the Corporations Act 2001.
At the date of this declaration, the company is within the class of companies affected by ASIC Corporations (Wholly owned
Companies) Instrument 2016/785. The nature of the deed of cross guarantee is such that each company which is party to the deed
guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee. In the Directors’ opinion,
there are reasonable grounds to believe that the company and the companies to which ASIC Corporations (Wholly owned
Companies) Instrument 2016/785 applies, as detailed in note 5.1 to the financial statements will, as a Group, be able to meet any
obligations or liabilities to which they are, or may become, subject because of the deed of cross guarantee.
Signed in accordance with a resolution of the Directors made pursuant to s295(5) of the Corporations Act 2001.
On behalf of the Directors
Stephen Heath
Chairman
Sydney, 29 October 2021
Tim Hargreaves
Chief Executive Officer and Managing Director
Sydney, 29 October 2021
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 66
SHRIRO HOLDINGS LIMITED
AUDITOR’S INDEPENDENCE DECLARATION
67
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Eclipse Tower
Level 19
60 Station Street
Parramatta NSW 2150
PO Box 38
Parramatta NSW 2124 Australia
Tel: +61 (0) 2 9840 7000
www.deloitte.com.au
29 October 2021
The Board of Directors
Shriro Holdings Limited
Level 7/67 Albert Avenue
Chatswood NSW 2067
Dear Board Members
Auditor’s Independence Declaration to Shriro Holdings Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Shriro Holdings Limited.
As lead audit partner for the audit of the financial report of Shriro Holdings Limited for the six-month
period ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
• The auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
• Any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Helen Hamilton-James
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific and the Deloitte Network
66
ANNUAL REPORT 30 JUNE 2021 68
INDEPENDENT AUDITOR’S REPORT
Deloitte Touche Tohmatsu
ABN: 74 490 121 060
Eclipse Tower
Level 19
60 Station Street
Parramatta NSW 2150
PO Box 38
Parramatta NSW 2124 Australia
Tel: +61 (0) 2 9840 7000
Fax: +61 (0) 2 9840 7001
www.deloitte.com.au
Independent Auditor’s Report to the members of Shriro
Holdings Limited
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
We have audited the financial report of Shriro Holdings Limited (the “Company”) and its subsidiaries (the “Group”)
which comprises the consolidated statement of financial position as at 30 June 2021,, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the six-months then ended, and notes to the financial statements,
including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
• Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance
for the six-month period then ended; and
• Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report for the current period. These 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.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
67
SHRIRO HOLDINGS LIMITED 69
KKeeyy AAuuddiitt MMaatttteerr
PPrroovviissiioonn ffoorr rreebbaatteess
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
As at 30 June 2021, the total value of the
Group’s
is
provision
$5.82 million and
in the
Trade Receivables balance in Note 2.1.
for
included
rebates
is
Shriro has rebate agreements with certain
customers in line with industry practice.
The provision for volume and stretch
rebates has a direct impact on revenue
recognition.
Accounting for stretch rebates is complex,
requiring an understanding of
the
contractual arrangements, complete and
the
accurate source data
arrangements
including
consideration of the timing of recognition
and the presentation thereof.
to which
apply,
PPrroovviissiioonn ffoorr wwaarrrraannttyy ccllaaiimmss
As at 30 June 2021 the provision for
warranty claims is $2.97 million as disclosed
in Note 2.5.
is
required
judgement
Significant
in
determining the appropriate level for the
warranty claims provision. This is estimated
key
by
assumptions:
management
following
•
•
•
•
Provision rate which is calculated
as the total warranty claims for
the last three financial years as a
percentage of sales for the last
three financial years;
The percentage of claims for each
is
year of warranty which
determined based on
claim
history;
The rate of claims in each month
of the warranty period and;
The discount rate.
Our procedures included, but were not limited to:
•
•
•
•
•
•
•
Inquiries of management and other company personnel to
understand the rebate structures in place and the manner
in which the system processes and accounts for the rebates;
Obtaining an understanding of controls relevant to the
recording of rebates;
Challenging the appropriateness of management’s rebate
policy to assess if they are in accordance with the relevant
accounting standards;
Comparing the rates relevant to volume and stretch rebates
within the computations to those included in sales contracts
and agreements with third parties (retail and wholesale
customers);
Inspecting a sample of rebate invoices received from
customers and credit notes issued during the year in order
to assess the accuracy of management’s estimate for
rebates;
Recalculating on a sample basis the rebate provision to test
the accuracy of the formula by reference to actual and
forecast sales volumes; and
Performing a retrospective review of the balance to assess
management’s methods and assumptions used in the
determination of the estimates.
We also assessed the appropriateness of the disclosures in Notes 1.1
and 2.1 to the financial statements.
Our procedures included, but were not limited to:
• Obtaining an understanding of controls relevant to the
•
•
•
•
•
•
recording of warranty claims;
Assessing whether the warranty claims provision was
consistent with the prior year, and if there were any
changes to statutory and/or contractual obligations;
Testing on a sample basis the inputs in the formula/model
used to calculate the warranty claims provision to assess the
accuracy of the computation;
Challenging management’s policy to assess if they are in
accordance with the relevant accounting standards,
statutory and/or contractual obligations;
Recalculated the provision utilising historic warranty claims
settled as a proportion of related sales;
Performing a sensitivity analysis by varying key inputs and
assumptions within the formula; and
Performing a retrospective review of the balance to assess
the historical accuracy of management’s estimation of the
warranty provision.
We also assessed the appropriateness of the disclosures in Note 2.5
to the financial statements.
68
ANNUAL REPORT 30 JUNE 2021 70
Independent Auditor’s Report
PPrroovviissiioonn ffoorr iinnvveennttoorryy oobbssoolleesscceennccee
As at 30 June 2021 the provision for
inventory obsolescence is $2.42 million as
disclosed in Note 2.2.
is
involved
judgement
Significant
in
determining the appropriate level for the
provision for inventory obsolescence and
slow-moving stock. This is estimated by
reference
inventory ageing and
consideration of historical inventory losses,
recent sales experience, and other factors
that affect inventory obsolescence.
to
Our procedures included, but were not limited to:
•
•
•
•
•
Obtaining an understanding and testing controls relevant to
the recording of the provision for inventory obsolescence;
Assessing the adequacy of the inventory obsolescence
provision as a proportion of stock on hand;
Challenging management’s methods, assumptions, and
judgements regarding the slow-moving inventory provision;
Assessing historical accuracy of inventory provisioning with
reference to inventory write-offs during the year; and
Assessing whether
recoverability
appropriately based on recent sales information.
concerns have been provided
specific
for
items with
inventory
We also assessed the appropriateness of the disclosures in Note 2.2
to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the Directors’ Report,
Highlights for the six months to 30 June 2021, Our Brands, Chairman’s Report, Managing Director’s Report,
Business review - Australia, and Business review – New Zealand and Business review – Rest of World, the Corporate
Governance Statement, the ASX Information and Company Information, which we obtained prior to the date of
this auditor’s report, and also includes the following information which will be included in the Group’s annual
report (but does not include the financial report and our auditor’s report thereon), being the Board of Directors’
information which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
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,
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.
When wereview the Board of Directors’ information, if we conclude that there is a material misstatement therein,
we are required to communicate the matter to the directors and use our professional judgement to determine
the appropriate action.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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 has no realistic
alternative but to do so.
69
SHRIRO HOLDINGS LIMITED 71
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 this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion..
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
70
ANNUAL REPORT 30 JUNE 2021 72
Independent Auditor’s Report
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 19 to 27 of the Directors’ Report for the six-month
period ended 30 June 2021.
In our opinion, the Remuneration Report of Shriro Holdings Limited, for the six-month period ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
HHeelleenn HHaammiillttoonn--JJaammeess
Partner
Chartered Accountants
PPaarrrraammaattttaa,, 2299 OOccttoobbeerr 22002211
71
SHRIRO HOLDINGS LIMITED HOLD AUDIT OPINION – page 5
ASX INFORMATION
ASX Information
73
Listing information
Shriro Holdings Limited’s shares are quoted on the Australian Securities Exchange (“ASX”) under the code SHM.
Number of holders of equity securities
There are 95,087,500 fully paid ordinary shares held by 2,043 individual shareholders, as at 08 October 2021.
Substantial Shareholders
The following organisations have a substantial shareholding in Shriro Holdings Limited based on substantial shareholder
notice on or before 08 October 2021.
D2A Pte Ltd
25 June 2021
18,915,987
Australian Ethical Investment
04 December 2019
13,558,788
Ariadne Australia Limited (and related entities)
23 August 2018
4,760,185
19.89
14.26
5.01
Notice Date
Shares held
Percentage
Twenty largest holders of quoted equity securities
Fully Paid Ordinary Shares
Shares held
Percentage
National Nominees Limited
Citicorp Nominees Pty Limited
Shriro Pacific
Portfolio Services Pty Ltd
HSBC Custody Nominees (Australia) Limited - A/C 2
Miss Amanda Bernadette De Angelis
Horrie Pty Ltd
J P Morgan Nominees Australia Pty Limited
NewEconomy Com Au Nominees Pty Limited
BNP Paribas Nominees Pty Ltd
Morgan Stanley Australia Securities (Nominee) Pty Limited
HSBC Custody Nominees (Australia) Limited
Mr Damien Heffron
Mast Financial Pty Ltd
Hillmorton Custodians Pty Ltd
BNP Paribas Noms Pty Ltd
Cs Third Nominees Pty Limited
Moat Investments Pty Ltd
Mr Dermot Francis McGarry & Mrs Christine McGarry
DMX Capital Partners Limited
Total top 20 shareholders
Balance of register
Total
17,768,788
15,230,901
5,695,547
4,587,779
3,758,101
2,303,125
1,410,000
1,080,599
1,034,007
994,622
866,422
667,981
658,000
650,000
633,000
619,218
600,566
600,000
500,000
500,000
60,606,714
34,480,786
95,087,500
18.69
16.02
5.99
4.82
3.95
2.42
1.48
1.14
1.09
1.03
0.91
0.70
0.69
0.68
0.67
0.65
0.63
0.63
0.53
0.53
63.74
36.26
100.00
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 73
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 72
ANNUAL REPORT 30 JUNE 2021
74
ASX Information
Category – Number of shares
Shares held
Percentage
1 - 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Voting rights
72,083,769
18,484,273
2,454,065
1,684,094
381,299
75.81
19.44
2.58
1.77
0.40
Number of
holders
Distribution of
shares
79
605
300
559
500
3.87
29.61
14.68
27.36
24.47
95,087,500
100.00
2,043
100.00
Holders of ordinary shares are entitled to vote as follows:
(a) Every shareholder may vote;
(b) On a show of hands every shareholder has one vote; and
(c) On a poll every shareholder has one vote for each fully paid share.
Unquoted Equity Securities
As at 08 October 2021 there were 1,767,519 performance rights over unissued ordinary shares, held by seven individuals.
There were no unquoted options over unissued ordinary shares.
Shareholders with less than a marketable parcel
As at 08 October 2021, there were 89 shareholders holding less than a marketable parcel of 500 ordinary shares in the
Company totalling 18,210 ordinary shares.
Dividend
On 31 August 2021, the Directors declared a dividend relating to the period ending 30 June 2021 of 6.0 cents per share fully
franked with an ex-dividend date of 09 September 2021, record date of 10 September 2021. The dividend was paid on 30
September 2021.
Corporate Governance Statement
A copy of the Corporate Governance Statement can be found on our website at
https://www.shriro.com.au/investor/corporate_governance.
SHRIRO HOLDINGS LIMITED ANNUAL REPORT 30 JUNE 2021 74
SHRIRO HOLDINGS LIMITED
75
COMPANY INFORMATION
ABN
Shriro Holdings Limited 29 605 279 329
Share registry
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Auditors
Deloitte Touche Tohmatsu
Level 19 Eclipse Tower, 60 Station Street
Parramatta NSW 2150
Bankers
Australia and New Zealand Banking Group Limited
Directors
Stephen Heath
Non-Executive Chairman
Tim Hargreaves
Chief Executive Officer and Managing Director
Abigail Cheadle
Independent Non-Executive Director
Cheryl Hayman
Independent Non-Executive Director
Cornelia Meyer
Independent Non-Executive Director
(appointed 13 September 2021)
Kim Slater
Independent Non-Executive Director
(appointed 01 October 2021)
Company Secretary
Lisa Jones
Registered office and principal place of business
Level 7, 67 Albert Avenue
Chatswood NSW 2067
Tel: +61 2 9415 5000
Website: shriro.com.au
ANNUAL REPORT 30 JUNE 2021