Updated Annual Report
RETAIL
IS OUR
WORLD.
ANNUAL
REPORT
2022
Briscoe Group Limited Annual Report 2022
2
Briscoe Group Limited Annual Report 2022
Contents
3
4 At a Glance
6 Board of Directors’
Review
12 Managing Director’s
Review of Operations
16 Financial Performance
18 Non-financial Highlights
20 Our World Class Team
22 Multi-Year Trident
Strategic Initiatives
24 Sustainability
28 Consolidated Financial
Statements
70 Independent Auditor’s
Report
74 Corporate Governance
Statement
89 General Disclosures
92 Top 20 Shareholders
93 Directory
Contents
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
4
Briscoe Group Limited Annual Report 2022
At a Glance
4
DISTRIBUTION CENTREREBEL SPORT STORESBRISCOES HOMEWARE STORES
1
Living &
Giving Store
47
Briscoes
Homeware
Stores
42
Rebel Sport
Stores
90
Stores
Nationwide
At a
Glance
RETAIL
IS OUR
WORLD.
We are a leading New Zealand retailer with a blend of bricks and mortar and
online shopping channels, offering our customers the best range of brands at
great prices.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
5
Briscoe Group Limited Annual Report 2022
At a Glance
5
More than
2,000 Team
Members
Over
500,000
units sold
per week
$868,000
raised for
Cure Kids
More than
90,000 product
choices available
Over 50 million
website visits
Customer
database now
over 1.5 million
Briscoe Group Limited Annual Report 2022
Board of Directors’ Review
6
Board of
Directors’
Review
It is no exaggeration to say that retail, in the current era,
has faced profound commercial and social developments
that bring both challenge and opportunity. Well before
the onset of Covid-19 there was accelerating change,
with shifting customer lifestyles and preferences, new
online trading platforms, evolution in the role of physical
stores, increasingly fractionalised media and the growth of
competitors with global reach. The pandemic has added
layers of complexity, disrupting manufacturing and supply
lines.
While these powerful forces rightly make the headlines,
they do not tell the whole story. There is also a layer of
personal and professional challenge that our store teams
deal with on a daily basis. With the pandemic has come
social tensions that can play out in-store – for example, in
disputes over protocols such as the scanning of QR codes
or the wearing of masks. There has also been a notable
increase in attempts at shoplifting, sometimes brazen in
execution and/or conducted by people working together.
Needless to say, the Group has taken steps to ensure the
safety and security of teams affected by such behaviours
and this will remain a very high priority.
For the second year in succession the pandemic had a
major impact on our ability to keep our stores open, with a
national lockdown being instituted in mid-August 2021. As
in previous lockdowns, we maintained employment in the
stores and continued to pay our people in full.
The lockdown also brought disruption to our leadership
and support teams, with many working from home and
others – for example, in online fulfilment and warehousing
– facing new work requirements to deal with logistical and
other impacts.
We place on record the Board’s appreciation for the
efforts of all team members in maintaining their diligence
and dedication in the face of the various challenges they
were met with during the year.
Briscoe Group’s ability to chart a course through historic change and
turbulence in the retail environment was tested yet again in the latest
year. As the results for the year attest, it has continued to perform
strongly in the short term while also setting the foundations for
continued growth.
“ Your board is confident
that the talent and focus
of our people, along with
the strength of our brands
and our integrated trading
platform, will enable the
Group to continue to
perform.
”
Briscoe Group Limited Annual Report 2022
Board of Directors’ Review
7
Investment in the store network continued, with three new
stores opened and one relocated. Notably, the development
at Silverdale, Auckland was completed successfully. There
was also a further investment in new fitouts, online platform
improvements and system upgrades.
The online platform continues to grow in importance, with
substantial increases in dollar sales and the online proportion
of the Group’s total business. We are continuing to invest
in online system development and process improvement,
with the net result being further capacity for growth and
new options to enhance the shopping experience of our
customers.
Looking to the medium and long terms, our programme of
strategic development has continued, with benefits across
the business and these are further explained as part of the
Managing Director’s Review of Operations Report.
Taken altogether, this is a highly significant strategic
programme to enhance the performance of the business
and ensure that it remains at the forefront of homeware and
sporting goods retailing in New Zealand.
It speaks volumes of our management team that it has been
able to move forward successfully on such a multi-faceted
programme while at the same time delivering exceptional
short-term results in a deeply challenging trading
environment. Their leadership and outstanding performance
are also greatly valued by the Board.
“ Briscoe Group is committed
to the highest standards
of governance and
management, based on
implementing best practice
structures and policies.
”
Briscoe Group Limited Annual Report 2022
Board of Directors’ Review
8
Dividend
The directors have resolved to pay a final dividend of 15.5
cents per share (cps). The dividend is fully imputed and,
when added to the interim dividend of 11.5cps, brings the
total dividend for the year to 27.0cps. The final dividend
was paid on 31 March 2022. The share register closed to
determine entitlements to the dividend at 5pm on 24
March 2022.
We were delighted to be able to reward our shareholders by
increasing both the interim and final dividends for the year.
The Board recently made its annual determination as to the
independence of directors. It was determined that all directors
other than the Managing Director continue to be independent.
As part of that determination, the tenure of the Chair was
considered carefully.
While the Board acknowledged that the tenure was significant,
it agreed unanimously that it did not compromise in any way
the Chair’s ability to bring an independent view, act in the best
interests of the issuer and represent the best interests of all
shareholders.
Equity-based Remuneration Scheme
The Board is of the view that all shareholders benefit from
the participation of key senior executives in long-term,
appropriately-priced, equity-based remuneration that
crystallises only on delivery of increased shareholder value.
As previously reported the Board approved, in March 2019,
the Senior Executive Incentive Plan designed to replace the
previous Executive Share Option Plan. Under this new plan,
selected senior employees can be granted Performance
Rights which, upon vesting, will reward the employees with
ordinary shares in the Company. Performance Rights vest
after three years subject to the Company’s achievement
against Total Shareholder Return and Earnings Per Share
growth targets.
We continue to be of the view that this is an appropriate
long-term incentive scheme, and to date four tranches of
Performance Rights have been issued under it. At the time
of writing this report, there are three tranches still to vest,
with a maximum of 308,838 performance rights able to
be converted to ordinary shares subject to the Company’s
performance.
Further details in relation to equity-based remuneration can
be found in Note 6.2 (page 66) of the financial statements
within this Annual Report.
Corporate Governance
Briscoe Group is committed to the highest standards of
governance and management, based on implementing best
practice structures and policies. It has always been a strong
feature of the Company that the Board and Executive teams
work effectively together and are aligned around the business
objectives.
The Board recognises that corporate governance
encompasses a broad spectrum of policies, processes and
practices, from how a company values its stakeholders through
to impact on the community and environment. As well as
the usual company policies available on our website, Briscoe
Group has a number of initiatives under way in relation to its
involvement in the community and its drive to ensure a positive
environmental impact. These are expanded further on pages
24 - 27 of this Annual Report.
Briscoe Group Limited Annual Report 2022
Board of Directors’ Review
9
On behalf of the Board:
Dame Rosanne Meo (
Chair)
Rod Duke
Andy Coupe
Tony Batterton
Mark Callaghan
From left: Tony Batterton, Andy Coupe, Rod Duke, Dame Rosanne Meo (Chair) and Mark Callaghan.
Conclusion
While the business has risen brilliantly to the issues and
challenges encountered in the latest year, the Board is fully
aware that these remain extant and there continues to be a
high level of uncertainty in the trading environment.
The incursion of the Omicron variant of Covid-19 is a further
major development in the pandemic from which we can
expect to see impacts on consumer demand,
whether that be in volume, timing or purchasing patterns.
The ability of our teams to maintain focus on both short-term
performance and strategic growth will remain central to
continued success.
Your Board is confident that the talent and focus of our
people, along with the strength of our brands and our
integrated trading platform, will enable the Group to continue
to perform.
Briscoe Group Limited Annual Report 2021
Winning Moving Forward
10
Briscoe Group Limited Annual Report 2022
Managing Director’s Review of Operations
12
We were thrilled to announce record sales and profit for Briscoe Group
in a year which, incredibly, proved just as tumultuous as the previous
one. As noted in the Board’s report, this is testament to the quality of our
leadership, in-store and support teams throughout the company. I add
my congratulations and thanks for all their efforts.
Managing
Director’s
Review of
Operations
Sales recovered strongly in the first half, albeit by comparison
with a previous corresponding period (pcp) that had been
curtailed by the national lockdown during the first wave of
Covid-19 in early 2020.
It was extremely pleasing to be able to consolidate the full year
with a solid second half performance. Our Auckland stores
(39% percent of our total store network by number) were shut
for 84 days during the second half (and all other stores for at
least 21 days). Also, the second half of the previous year had
included an additional week of trading, as well as a resurgence
in sales from the retail recovery after the first national
lockdown. On a similar 52-week basis, our total sales were up
by 7.97% on the latest year.
With previous experience to draw on, the Group was able to
move seamlessly to the required mode of operation when the
new national lockdown was announced in August 2021. There
is a long chain of actions involved in closing our store network
and readying our online platform for a surge in demand such
as experienced in 2020 and thus anticipated in the latest year.
With all areas outside Auckland moving from Level 4 to Level
3 early in September, it became possible for us to extend our
product range from essential items only to our full offering via
online trading, and also to offer Click-and-Collect service. Later,
a move to Level 2 enabled our stores to re-open responsibly,
following prescribed protocols in relation to social distancing
and PPE.
Our work to improve inventory involved optimising ordering,
allocation, flow into and through our stores and overall stock
levels. Inventories were $119.51 million at year-end, $28.04
million higher than at the end of the previous year, reflecting an
early decision to ensure the business had sufficient inventory
to satisfy demand. With the uncertainty around national
and international supply chains, and the likelihood of further
disruptions, we committed to a strategy of securing product
often months in advance of traditional timings.
While this approach resulted in a high level of inventory being
carried during the year – and we expect this to continue
throughout the current year – it has unquestionably delivered
in terms of sales and profit. This was particularly significant
during the fourth quarter, which contained the Black Friday
and Christmas promotional events, which produced very
pleasing results.
Store Network
Total capital investment was $19.90 million, of which $9.83
million was for development of properties owned by the
Group in Auckland and Silverdale. The balance, $10.07 million,
was invested in the fit-out of new and refurbished stores,
online platform improvements, security system upgrades and
enhancements to system software and hardware.
Briscoe Group Limited Annual Report 2022
Managing Director’s Review of Operations
13
The construction of a new concept Briscoes Homeware store
at 36 Taylors Road, Auckland was completed and the store
opened in early March. This allowed the introduction in April
of a new Rebel Sport store in the retail space on the ground
floor of the Support Office building at 1 Taylors Road.
The development at Silverdale was completed and new
Briscoes Homeware and Rebel Sport stores opened
in November. Trading results from both stores have
significantly exceeded expectations and feedback has been
overwhelmingly positive.
Our store development programme reflects the ongoing
re-examination of our retail footprint – stores, online platform
and distribution centre capacity – with a view to ensuring
we understand the optimal size and location mix to take the
business into the future.
We are extremely pleased with all the new stores opened
during the year and their success provides confidence for
further network growth opportunities.
Work has now started on upgrades to our Rebel Sport
stores in Te Rapa and Albany, which will incorporate many
of the ideas and concepts introduced in the new generation
Silverdale and Morningside stores. These upgrades will also
involve new signage and a modernised exterior profile as part
of the progressive Rebel Sport brand refresh.
Online
The Group’s online business grew significantly once again,
especially during the national lockdown starting in August and
the subsequent prolonged closures of our stores in Auckland,
Northland and Waikato. With the disruption of this new round
of closures, online sales represented 26.39% of total Group
sales for the second half, compared to 16.16% for the first.
Online sales for the full year accounted for 21.47% of total
Group sales, 21.01% in raw dollars above those for the previous
year.
While the mix was clearly influenced by the closures, we are
confident that the ‘normalised’ online portion of our business is
continuing to increase.
Our online platform was enhanced by a number of initiatives
implemented during the year. System developments in
regard to the way online orders are picked in-store brought
significant productivity and efficiency gains.
“ The continued excellent performance of our leadership team
inspires confidence that we have the ability to continue to
manage uncertainty successfully as we move forward.
”
From left: Nick Turner, Andrew Scott, Fiona Stewart, Aston Moss, Geoff Scowcroft, Fraser Collins, Rod Duke.
Absent: Isabel Campbell
Briscoe Group Limited Annual Report 2022
Managing Director’s Review of Operations
14
In addition to these back-end process improvements, we
enhanced the front-end experience for customers with
new functionality enabling them to find matching and
recommended products easily, and to receive relevant
communications via our new personalised email system. The
subsequent introduction of new search functionality and our
Find-In-Store stock availability feature further enhanced the
online customer experience.
As stated previously, our digital strategy also includes a
significant in-store dimension – the development of digital
tools for our store teams to free up time that is then available
to be invested in providing advice and service to our
customers.
Strategic Programme
We continue to focus on strategic change and development,
which we see as critical to the future of the business. The
programme of work focused on supply chain improvements
known as Project Trident progressed well and continues
to produce significant gains to margin. Other projects also
contributed:
• Stage one of our digital picking initiative significantly
improved the efficiency of in-store fulfilment.
• The introduction of the
Emarsys customer engagement
platform allowed us to communicate in a much more
personalised way with online customers.
• Our product range was extended by offering new online
products shipped direct from supplier to customer. We
are excited about the growth potential of this initiative,
which allows us to offer products not held in-store or as
part of our traditional range.
• We introduced
givex gift cards late in the year, replacing
our paper-based gift card system and providing greater
flexibility and control of our gift card offering, including
online redemption and e-voucher deployment.
• Easy-to-use in-store kiosks provided customers with an
online purchasing option for products that may be out of
stock in-store.
The Year Ahead - 2022/23
The pandemic continues to drive an uncertain outlook
for demand in the short term, and there is well-publicised
risk for all retailers in other factors such as supply chain
delays, labour shortages, interest rate hikes and currency
fluctuations.
Despite all of that, there are many reasons to be confident
about the Group’s prospects.
The high vaccination rates achieved in this country have
enabled retail stores to remain open since December
2021, albeit under health and safety protocols. To date
there has been a noticeable decline in foot traffic to stores,
especially shopping malls. However, our presence in the
large shopping malls is minimal, and also recent experience
suggests that any such effect on our store network will be
significantly offset by increased use of our online platform.
More than ever, our Homeware and Sporting Goods
categories are well-placed in a trading environment that
sees customers spending more time at home (working,
entertaining, traveling within New Zealand) and also drives
an increased appetite for well-being and healthy living
(exercising at home, working from home, staying fit and
healthy).
The continued excellent performance of our leadership
team inspires confidence that we have the ability and agility
to continue to manage uncertainty successfully as we move
forward.
Our strategic programme continues to unlock the potential
of the business, guided by a strong focus on the principles
of constantly improving our offering to customers and
making it easy and enjoyable for them to shop with us.
The Group has a strong core business, its strategic plan
initiatives are delivering ahead of expectations and the
Board and the leadership team are determined to protect
the gains made in the latest year as we go forward. We
realise that sustaining margins at the historically-high
rates achieved in the latest year will be difficult, but we are
confident that performance will remain very strong.
Rod Duke
Group Managing
Director
Briscoe Group Limited Annual Report 2022
15
Financial
Performance
Briscoe Group Limited Annual Report 2022
Financial Performance
16
Briscoe Group’s sales revenue grew by 6.08% to a record
$744.4 million for the year. Gross margin dollars increased
by 10.92% to $340.6 million, and gross margin percentage
from 43.76% to 45.76%. Both sales and gross profit set new
benchmarks for the Company’s performance.
Our online business again performed strongly on the back
of store closures, finishing the year at 21.5% of Group sales.
We have a full programme of developments planned for
2022/23 to further enhance the online experience.
To produce a substantial increase in Gross Margin for the
second successive year was a significant achievement and
a highlight of our performance. As previously reported,
the disruptions to trading resulting from the pandemic
had accelerated our plans in relation to optimising margin,
which included enhancing pre-season planning and buying
processes, using improved data analytics to maximise
seasonal trading events, improving inventory flow and
reducing the level of clearance product. Benefits from that
programme continued into the 2022 year.
Net profit after tax (NPAT) was up by 20.10% to
$87.91million – another remarkable result given the ongoing
uncertainty and disruption experienced throughout the year.
The Group’s balance sheet remains strong, with cash and
bank balances of $102.48 million as at 30 January 2022 and
no term debt.
Inventory is always a key area of focus and management’s
decision to secure adequate supply amidst widely reported
national and international supply chain issues was certainly
the right one – ensuring a healthy stock position for the
beginning of the new financial year.
Having sufficient inventory in the current retail environment
is a distinct competitive advantage, as is the strength of our
supplier relationships which have been of great assistance in
securing supply of product.
“ The combination of a dedicated team, process and
platform enhancements and a strong strategic focus
has produced continued improvement across most
of our key performance indicators,
despite another volatile year for retail.
”
- Geoff Scowcroft
Chief Financial Officer
Record net profit after tax (NPAT)
despite the challenges of Covid-19.
Briscoe Group Limited Annual Report 2022
Financial Performance
17
Growth of 6.1% includes online
growth of 21.0% and 2.6% for
bricks and mortar stores despite
imposed alert-level closures.
TOTAL REVENUE*
$M AND GROWTH %
202020212019201820172016
605.1
555.5
585.9
631.9
653.0
NET PROFIT AFTER TAX*
$M AND % SALES
202020212019201820172016
47.1
59.4
61.3
63.4
62.6
Online mix for 2nd half of the year
was 26.4% as a result of store
lockdown closures, compared to the
first half mix of 16.2%.
ONLINE MIX OF SALES
%
Continued margin improvement
through optimising inventory
ordering, allocation and its flow
into and through stores.
GROSS PROFIT MARGIN
%
21.7
27.2
27.8
28.7
28.2
32.9
39.5
Strong increase in earnings per
share on the back of record
earnings and profit.
EARNINGS PER SHARE*
CENTS
2020202120222019201820172016
75.0
55.5
49.0
60.3
81.1
76.6
FREE CASH FLOW
$M
Solid positive free cash flow (defined
as net cash from operating activities
less capital expenditure) helps to
maintain the Group’s strong balance
sheet.
202020212022201920182017
2016
202020212019201820172016
11.3%
10.0%
8.2%
6.1%
4.5%
18.8%
202020212019201820172016
40.1%
40.6%
40.0%
40.1%
39.4%
43.8%
701.8
744.4
9.2%
7.5%
5.5%
3.3%3.3%
4.4%
73.2
87.9
8.5%
10.1%10.1%
10.0%
10.4%
11.8%
9.6%
*NZ IFRS16 adopted from 2020
*NZ IFRS16 adopted from 2020
*2021 includes 53 weeks of trading
Key performance indicators (KPIs) are used by the Board and throughout the Group to monitor business performance
2022
6.1%
20222022
2022
21.5%
45.8%
26.7
Briscoe Group Limited Annual Report 2022
Non-financial Highlights
18
A proactive and
united response
to Covid-19
Increased customer
satisfaction (NPS)
across our brands
Over 2,600 tonnes
of mixed recycling
Emarsys customer
personalisation
platform launched
Trident Programme
delivering ahead of
expectations
4 new stores
opened
All team members paid in
full during lockdowns and
isolation periods
Bespoke leadership
programme launched for
retail management team
Non-financial
Highlights
Briscoe Group Limited Annual Report 2022
19
Our People
Our focus on providing certainty to our people as to how we
would respond to the challenges of the pandemic, and most
importantly, how we would maintain our stance in protecting
incomes has been beneficial. It meant we had highly engaged
team members through our peak trade, and complements the
many other actions taken to balance customer, team member
and other stakeholder needs and wants.
We know that team member goodwill is one of the most
important ingredients in customer service, and to see
improvement in our net promoter scores across the business,
despite the challenges we faced is a testament to our decisions
and the commitment of our team. Our core business has
performed exceptionally well at a time when significant
numbers of business improvement initiatives have been
implemented to the benefit of team members and customers.
The first cohorts of our bespoke Management and Leadership
programme commenced their professional and personal
development journey. It is exciting to see participants
implement their learning both in the management of our
business and the leadership of their teams. Our intense focus
on the coaching component of the programme is paying
dividends both directly with course participants in their roles
as well as indirectly with colleagues throughout the wider
business.
We are particularly proud of the work the team did to
pivot our approach to peak recruitment. The resurgence
of Covid-19 required a move to an entirely online process.
Finding and implementing tools to assist with this critical
activity was well executed and provided other benefits to
hiring managers and candidates, putting us in great shape
for peak seasonal trade. Not only did the approach secure us
people with the appropriate attitudes and skills that we were
seeking, it also enabled a more flexible and timely experience
for all involved in the process. Last year was another great
example of the business not just coping with events but
re-imagining our approaches and making step changes in
performance.
Similarly our wider recruitment and retention efforts has seen
our talent pool continue to expand. Our most recent talent
assessment within the business using gender as one lens on
diversity has identified that over 40% of those identified as
high impact or high potential are female. We have commenced
efforts to prepare ourselves to capture more information in this
area while ensuring any additional information retains integrity
and does not result in selection bias.
The wide range of business enhancement initiatives, many
of which have been developed by our own team members
have continued to be supported through a range of
communication and change management activities. Our
growing capabilities in these areas puts us in good stead,
not just to implement positive change but to ensure that the
benefits are realised and sustained.
Our health and safety journey continues with commitment
right throughout the organisation translating into coordinated
positive impact. This year saw the implementation of the
contractor management module within our core health and
safety reporting, recording and management system. This
represents another step forward in our holistic approach to
ensuring the health, safety and wellbeing of all visitors to our
sites, not only our own team members.
Our World
Class Team
“ Our core business has performed exceptionally
well at a time when significant numbers of business
improvment initiatives have been implemented to
the benefit of team members and
customers.
”
- Aston Moss
Group General Manager
Human Resources
Briscoe Group Limited Annual Report 2022
Our World Class Team
20
Scholarship and Study Support
Briscoe Group has been a proud First Foundation Partner
since 2013. With the generous support of the RA Duke
Trust, we help fulfil the First Foundation mission of providing
students access to higher education through the Briscoe
Group-First Foundation Scholarship. Each year, applications
are opened to Briscoe Group team members and immediate
family members currently enrolled at a NZ Secondary school
in year twelve or thirteen. Successful applicants receive a
three-year scholarship that includes significant financial
support, mentorship, and paid work experience. Although
we are proud to play a role in supporting the work of First
Foundation through awarding scholarships, we are even more
proud of the members of our team who receive them and use
them to grow their careers.
We are particularly excited about a number of other
contributions beyond financial support that we are working
on to support this valuable programme in 2022.
In 2021 we saw the first of our senior managers, Rebecca
Simpson, complete her MBA. We are extremely proud of
her and recognise the dedication it takes to combine study
with full time work. A number of other members of the team
have continued their tertiary studies and are making steady
progress towards attainment of their degrees.
Briscoe Group Limited Annual Report 2022
Our World Class Team
21
Rebecca Simpson completed her MBA
Briscoe Group Limited Annual Report 2022
Multi-Year Trident Strategic Initiatives
22
Multi-Year Trident
Strategic Initiatives
“ Despite the challenges and interruptions from Covid-19 good progress has been made
in all three areas of focus. Our strategic plan is delivering incremental profit ahead of our
expectations. The ability of the entire team to balance trading the business whilst delivering
a programme of transformational change endorses the depth of quality in the organization.
”
- Andrew Scott Chief Operating Officer
• Customer segmentation and personalised comms embedded
• In-store digital tools implemented
• Online parcel digital picking live
• Enhanced Product availability
• Hybrid Online fulfilment model live
• Further enhanced data analytics to improve buying and
promotional execution
• Drop ship 15 suppliers live - over 3000 new products
online
• Automated Email platform driving increased customer
lifetime value
2021
Future
Supply
Chain
New
Revenues
Attract
Grow
Retain
Customer
Opportunity
Assessment
Initiatives
Assessed
of 45 Design
Complete
Solution
Design
4535
• Accelerated new store concept refurbishment plan
• New product categories launched direct-to-customer
• Future supply chain network design
• Express online fulfilment & premium delivery options
• Increased North and South Island distribution capability
• Online UX (user experience) enhancements
• Enhanced data collection to step change Database growth
• In-store digital price and promotion labels
Attract
Grow
Retain
Customer
Future
Supply
Chain
2022 & 2023
New
Revenues
Briscoe Group Limited Annual Report 2022
Multi-Year Trident Strategic Initiatives
23
Strategic plan delivering incremental profit
Since the formulation of our strategic plan Trident late in
2019, we have focused on three key deliverables, improving
our customer experience, overhauling our supply chain and
growing new revenues. The onset of Covid-19 has validated
that our strategic plan is robust and will help to protect the
business during such turbulent times. The strategic priorities
are planned to continue until the end of 2023.
Most importantly the strategic projects are making it easier
for our team to drive sustained improvements in customer
service across all of our channels, online and in stores.
This has resulted in record levels of Net Promoter scores
(NPS) for both Briscoes homeware and Rebel Sport.
Through 2020 deep data analytics was created to highlight
the areas of opportunity and during 2021 these projects
have started to move through the design, testing and
implementation phase. Great progress has been made and
there are currently 35 projects being progressed.
Our supply chain network modelling is nearing completion.
The data driven statistical modelling will formulate the
network requirements for the next decade. The increased
capacity will provide the platform for future growth.
ImplementationMonitoring &
Sustainability
of 35
Live
Transitioned
to BAU
1813
Customers’ expectations are changing. They want to know whether
the organisations they spend their money with care about their
footprint on the planet and what they are doing for the community.
Creating more transparency on how we do business will benefit our
growth and success with New Zealanders, our team and the wider
business community by building trust.
Sustainability -
Steps to a better
tomorrow
Briscoe Group Limited Annual Report 2022
Sustainability
24
Our Sustainability Policy sets out our aspirations, commitments, and actions that Briscoe Group will undertake to
reduce negative impacts on our natural environment and the society in which we operate. We intend to update
this policy as we learn more and develop our strategic response in each of the following main impact areas.
Environmental Sustainability
• Reducing our impact and adapting to
Climate Change
• Reducing our waste to landfill and
improving recycling initiatives
• Working with our supplier and supply chain
partners to further minimise environmental
impacts
Supporting our people
• Ensuring the health, safety and wellbeing
of our people
• Investing in our people
Supporting our communities and customers
• Being a local employer of choice
• Supporting relevant charities
BRISCOE GROUP
SUSTAINABILITY POLICY
• Materiality impact
assessment completed
• Supplier ESG review
• Customer research
• Creating the
framework
2021 - 2022
Setting the Foundation
25
Briscoe Group Limited Annual Report 2022
Sustainability
“It is important for Briscoe Group that we
engage our stakeholders and leverage
our strengths together. We spoke to our
team, our customers and our suppliers
to understand their perspectives on
sustainability and what they care about
most. We have gathered good insights
and we recognise that this
is the time to define our
commitments within the ESG
framework as we look to the
future.”
- Rod Duke
Our Commitment is to:
• Regularly engage with our key stakeholders
and communities to understand their views and
ensure that we respond appropriately to their
interests.
• Establish, monitor and review appropriate
sustainability objectives, governance and
targets as well as identify opportunities where
we can improve.
• Comply with all relevant legislation, appropriate
industry guidelines, standards and practices.
• Provide suitable education, training and
encouragement to our workforce, suppliers
and business partners to understand their
responsibilities of this sustainability policy and
look for effective ways of collaboration.
• Regularly report on our sustainability
performance, challenges and opportunities.
• Delivering on our
commitments
to increase
positive impact
• Net zero focused
2025 - 2030
Step change in line with
Net Zero requirements
• Define targets
• Mobilise internal
teams
• Embed internal
governance
2022 - 2024
Building Policy, Capability,
Reporting and Compliance
Briscoe Group Limited Annual Report 2022
Sustainability
26
Sustainability
- Where are we today?
We have begun our sustainability journey, completing our materiality assessment. During this process we spoke to
and surveyed key stakeholders from customers, to team, through to suppliers. This allowed us to understand what
is important, what our partners and people cared about and also to gain insight into their own ESG journeys.
GOVERNANCE
SOCIALENVIRONMENTAL
• Energy efficiency
• Waste minimisation
• Environmental management
• Climate change
• Health & Safety
• Wellbeing
• Community
• Diversity & inclusion
• Internal education
• Build team capability
• TCFD compliance
preparation
• Waste & Resource
Management Acts
• Joining the Sustainable Business
Council, WBCSD
We will set up our working group and governance committee internally to deliver to the ESG framework:
NEXT STEPS & COMMITMENTS MOVING FORWARD
Cure Kids fundraising through
Briscoe Group amounted to $868k.
Pass it Forward fundraising through
Rebel Sport amounted to $409k,
which equated to 16,000 balls to 130
schools or 40,000 students.
Change to further roll out
of 39 stores to LED lighting
to reduce energy usage
6000 fewer receipt rolls
used due to a reduced
format. Further reductions
planned in FY23 as we
migrate to e-receipts
CONTINUED FOCUS ON IMPROVEMENTS
Implemented fully
electronic pick & pack
fulfillment process thereby
reducing paper waste
Over 2,600 tonnes
of mixed recycling
We have five environmental data points that we have tracked for the full FY21 and FY22 financial year:
greenhouse gas emissions across our logistics chain; energy usage and gas across our store and head office
network; and our two waste metrics: recycling and landfill. This data will form the basis of our reduction
commitments going forward.
*FY22 includes 3 new stores. Our greenhouse gas emissions for FY22 are unaudited.
ENVIRONMENTAL
WasteEmissions
GOOD PROGRESS MADE ON KEY ENVIRONMENTAL
MEASURES FY22 VS FY21
Total Electricity Usage
MWh
6,000
5,000
4,000
3,000
2,000
1,000
Q1Q2Q3Q4
FY21FY22
-
Total LPG Usage
MWh
-
Q1Q2Q3Q4
FY21FY22
40
20
60
80
100
120
140
Last 12 months Feb - Jan 22
9,6589,633
Last Year Feb - Jan 21
0.25%
Percentage Change
2,000
4,000
6,000
8,000
10,000
mt CO2e
FY21FY22
FebMarAprMayJunJulAugSepOctNovDecJan
Q1Q2Q3Q4
FY21FY22
27
Briscoe Group Limited Annual Report 2022
Sustainability
-
Q1Q2Q3Q4
Total Landfill Weight
FY21FY22
Tonnes
50
100
150
200
250
300
Q1Q2Q3Q4
-
Total Recycling Weight
FY21FY22
Tonnes
100
400
300
200
500
600
700
800
Greenhouse Gas Emissions
500
1,000
1,500
2,000
2,500
3,000
3,500
-
mt CO2e
GHG Cumulative
-
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
28
For the 52 week period ended 30 January 2022
Consolidated
Financial
Statements
For the period ended 30 January 2022
Introduction
These financial statements have been presented in a style which attempts to make them less complex and more relevant to
shareholders.
We have grouped the note disclosures into six sections:
1. Basis of Preparation
2. Performance
3. Operating Assets and Liabilities
4. Investments
5. Financing and Capital Structure
6. Other Notes
Each section sets out the accounting policies applied to the relevant notes.
The purpose of this format is to provide readers with a clearer understanding of the financial affairs of the Group.
Accounting policies have been shown in blue font for easier identification.
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
29
Table of Contents
Consolidated Financial Statements
Directors’ Approval of Consolidated Financial Statements31
Consolidated Income Statement32
Consolidated Statement of Comprehensive Income33
Consolidated Balance Sheet34
Consolidated Statement of Cash Flows35
Consolidated Statement of Changes in Equity37
Notes to the Consolidated Financial Statements:
1. Basis of Preparation
38
1.1 General Information
38
1.2 General Accounting Policies
38
2. Performance
40
2.1 Segment Information
40
2.2 Income and Expenses
42
2.3 Taxation
43
2.3.1 Taxation – Income statement
43
2.3.2 Taxation – Balance sheet
44
2.3.3 Imputation credits
45
2.4 Earnings Per Share
46
3. Operating Assets and Liabilities
47
3.1 Working Capital
47
3.1.1 Cash and cash equivalents
47
3.1.2 Trade and other receivables
47
3.1.3 Inventories
48
3.1.4 Trade and other payables
48
3.2 Property, Plant and Equipment
50
3.3 Intangible Assets
52
3.4 Leases
52
3.4.1 Right-of-use assets
53
3.4.2 Lease liabilities
53
3.4.3 Lease liabilities maturity analysis
54
3.4.4 Lease related expenses included in the income statement
54
3.4.5 Lease payments included in the cashflow statement
54
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
30
For the 52 week period ended 30 January 2022
4. Investments
55
4.1 Investment in Equity Securities
55
5. Financing and Capital Structure
56
5.1 Interest Bearing Liabilities
56
5.2 Financial Risk Management
56
5.2.1 Derivative financial instruments
56
5.2.2 Credit risk
57
5.2.3 Interest rate risk
57
5.2.4 Liquidity risk
57
5.2.5 Market risk
59
5.2.6 Sensitivity analysis
60
5.3 Equity
62
5.3.1 Capital risk management
62
5.3.2 Share capital
62
5.3.3 Dividends
63
5.3.4 Reserves and retained earnings
63
6. Other Notes
64
6.1 Related Party Transactions
64
6.1.1 Parent and ultimate controlling company
64
6.1.2 Key management personnel
64
6.1.3 Directors’ fees and dividends
65
6.2 Employee Equity-Based Remuneration
66
6.2.1 Equity-settled performance rights
66
6.2.2 Equity-based remuneration reserve
68
6.3 Contingent Liabilities
68
6.4 Covid-19
68
6.5 Events After Balance Date
69
6.6 New Accounting Standards
69
Table of Contents
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
31
For the 52 week period ended 30 January 2022
Authorisation for Issue
The Board of Directors authorised the issue of these Consolidated Financial Statements on 16 March 2022.
Approval by Directors
The Directors are pleased to present the Consolidated Financial Statements for Briscoe Group Limited for the 52
week period ended 30 January 2022. (Comparative period is for the 53 week period ended 31 January 2021).
16 March 2022
For and on behalf of the Board of Directors
Dame Rosanne Meo
CHAIRMAN
Rod Duke
GROUP MANAGING DIRECTOR
Directors’ Approval of Consolidated Financial Statements
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
32
For the 52 week period ended 30 January 2022
Notes
Period ended
30 January 2022
$000
Period ended
31 January 2021
$000
Sales revenue744,450701,797
Cost of goods sold
(403,808)(394,681)
Gross profit
340,642307,116
Other operating income2.23,571139
Store expenses (116,366)(110,845)
Administration expenses
(91,379)(80,524)
Earnings before interest and tax136,468115,886
Finance income 399 421
Finance costs
(14,495)(14,888)
Net finance cost5.1 (14,096) (14,467)
Profit before income tax 122,372 101,419
Income tax expense
2.3.1 (34,463) (28,220)
Net profit attributable to shareholders
87,90973,199
Earnings per share for profit attributable to shareholders:
Basic earnings per share (cents) 2.439.532.9
Diluted earnings per share (cents)2.439.432.8
The above consolidated income statement should be read in conjunction with the accompanying notes.
Consolidated Income Statement
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
33
For the 52 week period ended 30 January 2022
Notes
Period ended
30 January 2022
$000
Period ended
31 January 2021
$000
Net Profit attributable to shareholders87,90973,199
Other comprehensive income:
Items that will not be subsequently reclassified
to profit or loss:
Change in value of investment in equity securities4.1
2,880
(92,174)
Items that may be subsequently reclassified to
profit or loss:
Fair value loss/(gain) recycled to income statement from
cashflow hedge reserve
2,912(608)
Fair value gain/(loss) taken to the cashflow hedge reserve3,812(2,084)
Deferred tax on fair value (loss)/gain taken to income
statement from cashflow hedge reserve
2.3.2 (816) 170
Deferred tax on fair value (gain)/loss taken to cashflow
hedge reserve
2.3.2 (1,067)584
Total other comprehensive income/(loss)7,721(94,112)
Total comprehensive income/(loss) attributable
to shareholders
95,630(20,913)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Statement of Comprehensive Income
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
34
As at 30 January 2022
Notes
30 January 2022
$000
31 January 2021
$000
ASSETS
Current assets
Cash and cash equivalents3.1.1102,481100,417
Trade and other receivables3.1.25,0823,534
Inventories3.1.3119,51491,473
Derivative financial instruments5.2.53,13732
Total current assets
230,214195,456
Non-current assets
Property, plant and equipment3.2125,897117,397
Intangible assets3.32,5633,608
Right-of-use assets3.4.1250,789255,850
Deferred tax2.3.214,18414,750
Investment in equity securities4.164,81061,930
Total non-current assets
458,243453,535
TOTAL ASSETS688,457648,991
LIABILITIES
Current liabilities
Trade and other payables3.1.480,78580,952
Lease liabilities3.4.319,02519,277
Taxation payable2.3.218,26612,413
Derivative financial instruments5.2.5-3,378
Total current liabilities
118,076116,020
Non-current liabilities
Trade and other payables3.1.4875930
Lease liabilities
3.4.3270,193272,994
Total non-current liabilities271,068273,924
TOTAL LIABILITIES389,144389,944
NET ASSETS299,313259,047
EQUITY
Share capital5.3.261,99261,839
Cashflow hedge reserve5.2.52,384(2,457)
Equity-based remuneration reserve6.2.2566444
Other reserves5.3.4(23,043)(25,923)
Retained earnings
257,414225,144
TOTAL EQUITY299,313259,047
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Consolidated Balance Sheet
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
35
For the 52 week period ended 30 January 2022
Notes
Period ended
30 January 2022
$000
Period ended
31 January 2021
$000
OPERATING ACTIVITIES
Cash was provided from
Receipts from customers 744,320701,574
Rent received2515
Dividends received2,4073
Interest received 342450
Insurance recovery13522
747,229702,064
Cash was applied to
Payments to suppliers (487,274) (450,182)
Payments to employees(90,413)(80,006)
Interest paid(14,495)(14,889)
Net GST paid (28,683) (27,508)
Income tax paid (29,868) (22,913)
(650,733) (595,498)
Net cash inflows from operating activities 96,496 106,566
INVESTING ACTIVITIES
Cash was provided from
Proceeds from sale of property, plant and equipment
221,996
221,996
Cash was applied to
Purchase of property, plant and equipment3.2 (18,157) (25,540)
Purchase of intangible assets(1,740)(1,889)
Investment in equity securities
4.1--
(19,897) (27,429)
Net cash outflows from investing activities(19,875)(25,433)
FINANCING ACTIVITIES
Cash was provided from
Issue of new shares5.3.2-919
Net proceeds from borrowings
--
-919
Cash was applied to
Dividends paid5.3.3 (55,639) (33,370)
Lease liability payments
(19,159)(15,588)
(74,798)(48,958)
Net cash outflows from financing activities(74,798)(48,039)
Net increase in cash and cash equivalents 1,823 33,094
Cash and cash equivalents at beginning of period 100,417 67,414
Effect of exchange rate changes on cash and cash equivalents241(91)
Cash and cash equivalents at period end3.1.1102,481100,417
Consolidated Statement of Cash Flows
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
36
For the 52 week period ended 30 January 2022
Consolidated Statement of Cash Flows (continued)
RECONCILIATION OF NET CASH FLOWS FROM
OPERATING ACTIVITIES TO REPORTED NET PROFIT
Period ended
30 January 2022
$000
Period ended
31 January 2021
$000
Reported net profit attributable to shareholders87,90973,199
Items not involving cash flows
Depreciation and amortisation expense32,90431,845
Bad debts and movement in doubtful debts(69)(40)
Inventory adjustments4,8571,563
Amortisation of equity-based remuneration 217 183
(Gain)/loss on disposal/surrender of assets (768) 501
37,14134,052
Impact of changes in working capital items
Decrease (increase) in trade and other receivables(1,479)39
Decrease (increase) in inventories (32,898) (5,622)
Increase (decrease) in taxation payable5,8537,518
Increase (decrease) in trade payables(6,875) (9,974)
Increase (decrease) in other payables and accruals
6,8457,354
(28,554) (685)
Net cash inflow from operating activities96,496106,566
NET DEBT RECONCILIATION
Period ended
30 January 2022
$000
Period ended
31 January 2021
$000
Cash and cash equivalents
Cash and cash equivalents at beginning of period
100,41767,414
Net increase in cash and cash equivalents
1,82333,094
Effect of exchange rate changes
241(91)
Cash and cash equivalents at period end102,481100,417
Lease liabilities
Opening value
(292,271)(296,408)
Cash flows
19,15915,588
Lease acquisitions
(19,350)(13,126)
Lease surrenders
3,2441,675
Total lease liabilities at period end(289,218)(292,271)
Net debt reconciliation(186,737)(191,854)
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
37
For the 52 week period ended 30 January 2022
Notes
Share
Capital
$000
Cashflow
Hedge
Reserve
Equity-Based
Remuneration
Reserve
Other
Reserves
$000
Retained
Earnings
$000
Total
Equity
$000
$000$000
Balance at 26 January 202060,752(519)84166,251184,794312,119
Net profit attributable to shareholders for the period---- 73,199 73,199
Other comprehensive income:
Change in value of investment in equity
securities
4.1---(92,174)-(92,174)
Net fair value loss taken through cashflow
hedge reserve
- (1,938) --- (1,938)
Total comprehensive (loss)/income for the period- (1,938) -(92,174) 73,199(20,913)
Transactions with owners:
Dividends paid5.3.3----(33,370)(33,370)
Performance rights charged to income
statement
6.2.1-- 183-- 183
Share options exercised5.3.2/6.21,087-(168)--919
Transfer for share options lapsed and forfeited6.2.2-- (521)-521-
Deferred tax on equity-based remuneration2.3.2/6.2.2--109--109
Balance at 31 January 202161,839(2,457)444(25,923)225,144259,047
Net profit attributable to shareholders for the period----87,90987,909
Other comprehensive income:
Change in value of investment in equity
securities
4.1---2,880-2,880
Net fair value gain taken through cashflow
hedge reserve
- 4,841--- 4,841
Total comprehensive (loss)/income for the period- 4,841-2,88087,90995,630
Transactions with owners:
Dividends paid5.3.3---- (55,639)(55,639)
Performance rights charged to income
statement
6.2.1--217--217
Performance rights vested5.3.2/6.2153- (153)-- -
Deferred tax on equity-based remuneration2.3.2/6.2.2--58--58
Balance at 30 January 202261,9922,384566(23,043)257,414299,313
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
38
For the 52 week period ended 30 January 2022
1. Basis of Preparation
This section presents a summary of information considered relevant and material to assist the reader in understanding
the foundations on which the financial statements as a whole have been compiled. Accounting policies specific to
notes shown in other sections are included as part of that particular note.
1.1 General Information
Briscoe Group Limited (the Company) and its subsidiaries (together the Group) is a retailer of homeware and sporting goods. The
Company is a limited liability company incorporated and domiciled in New Zealand and is listed on the New Zealand Stock Exchange
(NZX). Briscoe Group Limited is registered under the Companies Act 1993 and is an FMC Reporting Entity under Part 7 of the Financial
Markets Conduct Act 2013. The address of its registered office is 1 Taylors Road, Morningside, Auckland. The Company is registered in
Australia as a foreign company under the name Briscoe Group Australasia Limited and is listed on the Australian Securities Exchange
as a foreign exempt entity. (NZX / ASX code: BGP).
The financial statements of the Group have been prepared in accordance with the requirements of Part 7 of the Financial Markets
Conduct Act 2013 and the NZX Main Board Listing Rules.
These audited consolidated financial statements have been approved for issue by the Board of Directors on 16 March 2022.
1.2 General Accounting Policies
These consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Practice (GAAP).
They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other applicable Financial
Reporting Standards, as appropriate for for-profit entities. The consolidated financial statements also comply with International
Financial Reporting Standards (IFRS).
The consolidated financial statements are presented in New Zealand dollars which is the Company’s functional currency and the
Group’s presentation currency. All financial information has been presented in thousands, unless otherwise stated.
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
Entities reporting
The consolidated financial statements reported are for the consolidated Group which is the economic entity comprising Briscoe
Group Limited and its subsidiaries. The Group is designated as a for-profit entity for the purposes of complying with GAAP.
Reporting period
These consolidated financial statements are in respect of the 52-week period 1 February 2021 to 30 January 2022 and provide a
balance sheet as at 30 January 2022. The comparative period is in respect of the 53-week period 27 January 2020 to 31 January
2021. The Group operates on a weekly trading and reporting cycle resulting in 52 weeks for most years with a 53-week period
occurring once every 5-6 years.
Principles of consolidation
Subsidiaries are all entities over which the Company has control. The Company controls an entity when the Company is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains or losses on transactions between Group companies are eliminated.
Accounting policies of subsidiaries are changed when necessary to ensure consistency with the policies adopted by the Company.
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
39
For the 52 week period ended 30 January 2022
Subsidiaries Activity2022 Interest2021 Interest
Briscoes (New Zealand) LimitedHomeware retail100%100%
The Sports Authority Limited (trading as Rebel Sport)Sporting goods retail100%100%
Rebel Sport LimitedName protection100%100%
Living and Giving LimitedName protection100%100%
All companies above are incorporated in New Zealand and have a balance date consistent with that of the Company as outlined in the
accounting policies.
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain assets as
identified in specific accounting policies detailed throughout these financial statements.
Critical accounting judgements and estimates
In the process of applying the Group’s accounting policies and the application of accounting standards, a number of estimates
and judgements have been made. The estimates and underlying assumptions are based on historical experience and adjusted for
current market conditions and other factors, including expectations of future events that are considered to be reasonable under the
circumstances. If outcomes within the next financial period are significantly different from assumptions, this could result in adjustments
to carrying amounts of the asset or liability affected. Further explanation as to estimates and assumptions made by the Group can be
found in the notes to the financial statements:
Areas of judgement and estimationNote
Inventories3.1.3
Leases3.4
Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement,
except when deferred in which case they are recognised in other comprehensive income as qualifying cash flow hedges.
1. Basis of Preparation
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
40
For the 52 week period ended 30 January 2022
2. Performance
This section reports on the results and performance of the Group, providing additional information about individual
items, including performance by operating segment, revenue, expenses, taxation and earnings per share.
2.1 Segment Information
An operating segment is a component of an entity that engages in business activities which earns revenue and incurs expenses and for
which the chief operating decision maker (CODM) reviews the operating results on a regular basis and makes decisions on resource
allocation. The Group has determined its CODM to be the group of executives comprising the Managing Director, Chief Operating
Officer and Chief Financial Officer.
The Group is organised into two reportable operating segments, namely homeware and sporting goods, reflecting the different retail
sectors within which the Group operates. The Company is considered not to be a reportable operating segment. Eliminations and
unallocated amounts as shown below are primarily attributable to the Company. There were no inter-segment sales in the period
(2021: Nil).
Information regarding the operations of each reportable operating segment is included below. Segment profit represents the profit
earned by each segment and is extracted from the income statements associated with the two trading subsidiary companies, Briscoes
(New Zealand) Limited and The Sports Authority Limited (trading as Rebel Sport). Earnings before interest and tax (EBIT) is a non-
GAAP measure and used by CODM to assess the performance of the operating segments. This measure should not be viewed in
isolation, nor considered as a substitute for measures reported in accordance with NZ IFRS. This non-GAAP financial measure may not
be comparable to similarly titled amounts reported by other companies.
For the period ended 30 January 2022
Homeware
Sporting
goods
Eliminations/
UnallocatedTotal Group
$000$000$000$000
INCOME STATEMENT
Total sales revenue 460,887 283,563- 744,450
Gross profit 208,440132,202-340,642
Earnings before interest and tax73,77157,6875,010136,468
Finance income9628122399
Finance costs(9,569)(4,804) (122)(14,495)
Net finance cost (9,473) (4,523) (100) (14,096)
Income tax expense (18,171) (14,889) (1,403) (34,463)
Net profit after tax 46,127 38,2753,507 87,909
BALANCE SHEET ITEMS:
Assets 385,205 246,51456,738
1.
688,457
Liabilities 266,122 141,074 (18,052) 389,144
OTHER SEGMENTAL ITEMS:
Acquisitions of property, plant and
equipment, intangibles and investments
15,019 4,878- 19,897
Depreciation and amortisation expense 21,170 11,734- 32,904
$000
1. Investment in equity securities67,593
Intercompany eliminations(27,524)
Other balances16,669
56,738
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
41
For the 52 week period ended 30 January 2022
2. Performance
For the period ended 31 January 2021
Homeware
Sporting
goods
Eliminations/
UnallocatedTotal Group
$000$000$000$000
INCOME STATEMENT
Total sales revenue439,234262,563-701,797
Gross profit192,293114,823-307,116
Earnings before interest and tax66,97946,4952,412115,886
Finance income7233316421
Finance costs(9,851)(4,925)(112)(14,888)
Net finance cost(9,779)(4,592)(96)(14,467)
Income tax expense(15,821)(11,736)(663)(28,220)
Net profit after tax41,37930,1671,65373,199
BALANCE SHEET ITEMS:
Assets363,231217,35868,402
1.
648,991
Liabilities254,506135,178260389,944
OTHER SEGMENTAL ITEMS:
Acquisitions of property, plant and
equipment, intangibles and investments
23,4973,931-27,428
Depreciation and amortisation expense20,33311,512-31,845
$000
1. Investment in equity securities61,930
Intercompany eliminations (2,193)
Other balances8,665
68,402
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
42
For the 52 week period ended 30 January 2022
2.2 Income and Expenses
Revenue recognition
Revenue comprises the fair value of consideration received or receivable for the sale of goods and services, net of Goods and Services
Tax (GST), and discounts and after eliminating sales within the Group. Revenue is recognised as follows:
Sales of goods - retail
For all sales, control is considered to pass to the customer at the point when the customer can use or otherwise benefit from the
goods and services. For in-store sales, control passes to the customer at point of sale. For online sales, the order along with delivery to
the customer are considered to comprise a single performance obligation, therefore control is considered to pass to the customer on
delivery of the goods. Retail sales are predominantly by credit card, debit card or in cash.
Rental income
Rental income (net of any incentives given to lessees) is recognised on a straightline basis over the period of the lease.
Interest income
Interest income is recognised on a time-proportionate basis using the effective interest method.
Dividend income
Dividend income is recognised when the right to receive the dividend is established.
Profit before income tax includes the following specific income and expenses:
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Income
Rental income2515
Dividends received2,4073
Insurance recovery13522
Gain on lease surrender1,00599
Expenses
Depreciation of property, plant and equipment 9,3988,400
Amortisation of software costs1,3341,745
Depreciation of right-of-use assets22,17221,700
Interest on leases14,21814,772
Operating lease rental expense12927
Wages, salaries and other short-term benefits93,06985,352
Equity-based remuneration (refer also Note 6.2)217183
Amounts paid to auditors:
Statutory Audit134108
Half year review3326
Other services--
2. Performance
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
43
For the 52 week period ended 30 January 2022
2.3 Taxation
Current and deferred income tax
The income tax expense for the period is the tax payable on the current period’s taxable income based on the income tax rate
adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in
New Zealand, being the country where the Group operates and generates taxable income. The Group periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when
the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset when the entity has a legal
enforceable right to offset and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Goods and Services Tax (GST)
The income statement, statement of comprehensive income and statement of cash flows have been prepared so that all components
are stated exclusive of GST. All items in the balance sheet are stated net of GST, with the exception of trade receivables and trade
payables, which include GST invoiced.
2.3.1 Taxation – Income statement
The total taxation charge in the income statement is analysed as follows:
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
(a) Income tax expense
Current tax expense:
Current tax 34,669 30,311
Adjustments for prior periods1,052120
35,721 30,431
Deferred tax expense:
Decrease in future tax benefit current period (205) (1,408)
Tax effect of disposal of buildings-(203)
Tax effect of legislative changes-(478)
Adjustments for prior periods (1,053)(122)
(1,258) (2,211)
Total income tax expense 34,463 28,220
2. Performance
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
44
For the 52 week period ended 30 January 2022
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
(b) Reconciliation of income tax expense to tax rate
applicable to profits
Profit before income tax expense122,372101,419
Tax at the corporate rate of 28% (2021: 28%)34,26428,397
Tax effect of amounts which are either non-deductible
or non-assessable in calculating taxable income
200506
Tax effect of disposal of buildings-(203)
Tax effect of legislative changes-(478)
Prior period adjustments (1)(2)
Total income tax expense34,46328,220
The Group has no tax losses (2021: Nil) and no unrecognised temporary differences (2021: Nil).
2.3.2 Taxation – Balance sheet
(a) Deferred Taxation
The following are the major deferred taxation liabilities and assets recognised by the Group and movements thereon during the current
and prior period:
DepreciationProvisions
Derivative
financial
instruments
Net lease
liabilityTotal
$000$000$000$000$000
At 26 January 2020(98)3,0582028,51411,676
Credited to the income statement188339-1,6842,211
Credited to equity-109--109
Net credited to other comprehensive income--754
1.
-754
At 31 January 2021903,50695610,19814,750
Credited to the income statement94602-5621,258
Credited to equity-58--58
Net credited to other comprehensive income-- (1,882)
1.
-(1,882)
At 30 January 2022 1844,166 (926)10,76014,184
1. Net credited to other comprehensive income comprises deferred tax on fair value loss taken to income statement of $815,392 (2021: deferred tax
on fair value gain of $170,211) and deferred tax on fair value gain taken to cash flow hedge reserve of $1,067,056 (2021: deferred tax on fair value loss
of $583,545).
2. Performance
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
45
For the 52 week period ended 30 January 2022
(b) Taxation payable
The following is the analysis of the movements in the taxation payable balance during the current and prior period:
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Movements:
Balance at beginning of period (12,413) (4,895)
Current tax (35,721) (30,431)
Tax paid 29,488 22,675
Foreign investor tax credit (FITC) 380 238
Balance at end of period (18,266) (12,413)
2.3.3 Imputation credits
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Imputation credits available for use in
subsequent accounting periods:
123,557 107,174
The above amounts represent the balance of the imputation account as at the end of the reporting period, adjusted for:
• Imputation credits that will arise from the payment of the provision for income tax,
• Imputation debits that will arise from the payment of dividends recognised as liabilities at the reporting date, and
• Imputation credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The consolidated amounts include imputation credits that would be available to the Company if subsidiaries paid dividends.
2. Performance
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
46
For the 52 week period ended 30 January 2022
2.4 Earnings per share
Earnings per share (EPS) is the amount of post-tax profit attributable to each share.
Basic EPS is computed by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares on
issue during the period.
Diluted EPS adjusts for any commitments the Group has to issue shares in the future that would decrease the Basic EPS. These
are in the form of performance rights. Diluted EPS is therefore computed by dividing the net profit attributable to shareholders by
the weighted average number of ordinary shares on issue during the period, adjusted to include the potentially dilutive effect if
performance rights to issue ordinary shares were exercised and converted into shares.
Period ended
30 January 2022
Period ended
31 January 2021
Net profit attributable to shareholders $000 87,909 73,199
Basic
Weighted average number of ordinary shares on issue (thousands) 222,549 222,340
Basic earnings per share 39.5 cents 32.9 cents
Diluted
Weighted average number of ordinary shares on issue adjusted for share options and
performance rights issued but not exercised (thousands)
222,837
223,142
Diluted earnings per share 39.4 cents 32.8 cents
2. Performance
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
47
For the 52 week period ended 30 January 2022
3. Operating Assets and Liabilities
This section reports the assets used to generate the Group’s trading performance and the liabilities incurred as a
result. Liabilities relating to the Group’s financing activities are addressed in note 5. Assets and liabilities in relation to
deferred taxation and taxation payable are shown in note 2.3. The carrying amounts of financial assets and liabilities
are equivalent to their fair value unless otherwise stated.
3.1 Working Capital
Working capital represents the assets and liabilities the Group generates through its trading activity. The Group
therefore defines working capital as cash, trade and other receivables, inventories and trade and other payables.
3.1.1 Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other short-term,
highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts
of cash and that are subject to an insignificant risk of changes in value.
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Cash at bank or on hand102,481100,417
As at 30 January 2022 the Group held foreign currency equivalent to NZ$2.541 million (2021: NZ$0.735 million) which is included in
the table above. The foreign currency in which the Group deals primarily is the US Dollar.
3.1.2 Trade and other receivables
Trade receivables arise from sales made to customers on credit or through the collection of purchasing rebates from
suppliers not otherwise deducted from suppliers’ payable accounts. Trade receivables are recognised initially at
the value of the invoice sent to the customer (fair value) and subsequently at the amounts considered recoverable
(amortised cost). Trade receivable balances are reviewed on an on-going basis.
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Trade receivables426431
Prepayments 2,520 1,937
Other receivables 2,136 1,166
Total trade and other receivables 5,082 3,534
No interest is charged on trade receivables.
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
48
For the 52 week period ended 30 January 2022
3. Operating Assets and Liabilities
3.1.3 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using a weighted average
method and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and
condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs
necessary to make the sale.
Following the publication of IFRS Interpretations Committee (IRFRIC) agenda decision on Costs Necessary to Sell
Inventories, in June 2021, the Group has reconsidered its accounting treatment in relation to which costs to include
when determining the net realisable value of inventory. The Group’s reconsideration of this accounting treatment has
not resulted in any adjustment to how it determines net realisable value.
The Group assesses the likely residual value of inventory. Stock provisions are recognised for inventory which is
expected to sell for less than cost and also for the value of inventory likely to have been lost to the business through
shrinkage between the date of the last applicable stocktake and balance date. In recognising the provision for inventory,
judgement has been applied by considering a range of factors including historical results, current trends and specific
product information from buyers.
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Finished goods 125,109 96,027
Inventory provisions and adjustments (5,595) (4,554)
Net inventories 119,514 91,473
During the period the group recognised $394.4 million (2021: $385.6 million) of inventory as an expense within cost of goods sold.
3.1.4 Trade and other payables
Trade and other payable amounts represent liabilities for goods and services provided to the Group prior to the end of a financial
period, which are unpaid.
Trade payables
Trade payables are recognised at the value of the invoice received from a supplier (fair value). The carrying value of trade payables is
considered to approximate fair value as the amounts are unsecured and are usually paid within 60 days of recognition.
Employee entitlements
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including nonmonetary benefits, annual leave and accumulating sick leave expected to be settled
within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date
and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are
recognised when the leave is taken and measured at the rates paid or payable. The liability for employee entitlements is carried at the
present value of the estimated future cash flows.
Bonus plans
A liability is recognised for bonuses payable to employees where a contractual obligation arises for an agreed level of payment
dependent on both company and individual performance criteria.
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
49
For the 52 week period ended 30 January 2022
3. Operating Assets and Liabilities
Long service leave
The liability for long service leave is recognised as a non-current liability and measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, history of employee departure rates and periods of service. Expected
future payments are discounted using market yields at the reporting date on government bonds with terms to maturity that match, as
closely as possible, the estimated future cash outflows.
Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions relate to returns in relation to sales of goods directly imported by the Group and are expected to be fully utilised within the
next twelve months. Provisions relating to inventory, receivables and employee benefits have been treated as part of those specific
balances. There are no other provisions relating to these financial statements.
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Trade payables 43,585 50,460
Employee entitlements 18,465 15,809
Other payables and accruals 19,458 15,516
Provisions 152 97
Total trade and other payables 81,660 81,882
Shown in balance sheet as:
Current liabilities 80,785 80,952
Non-current liabilities 875 930
Total trade and other payables 81,660 81,882
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
50
For the 52 week period ended 30 January 2022
3.2 Property, Plant and Equipment
All property, plant and equipment is stated at historical cost less depreciation and any impairment adjustments. Historical cost
includes expenditure that is directly attributable to the acquisition of property, plant and equipment.
Costs are included in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with an item will flow to the Group and the cost of an item can be measured reliably.
Assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
An asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals of assets are determined by comparing proceeds with carrying amounts. These gains and losses are
included in the income statement.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost, net of their
estimated residual values, over their estimated useful lives, as follows:
- Freehold buildings 33 years
- Plant and equipment 3 - 15 years
Property, plant and equipment is reviewed whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by which an asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell, or value in use.
The Group assesses whether there are indications, for example loss-making stores, for certain trigger events which may indicate that an
impairment in property, plant and equipment values exist at balance date.
3. Operating Assets and Liabilities
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
51
For the 52 week period ended 30 January 2022
Land and
buildings
Plant and
equipmentTotal
$000$000$000
At 26 January 2020
Cost 74,853 85,857 160,710
Accumulated depreciation (5,603) (57,842) (63,445)
Net book value 69,250 28,015 97,265
Period ended 31 January 2021
Opening net book value 69,250 28,015 97,265
Additions 18,504 7,036 25,540
Disposals (263) (155) (418)
Reclassified as held-for-sale asset3,410-3,410
Depreciation charge (1,842) (6,558) (8,400)
Closing net book value89,05928,338117,397
At 31 January 2021
Cost96,01089,175185,185
Accumulated depreciation (6,951) (60,837) (67,788)
Net book value 89,059 28,338 117,397
Period ended 30 January 2022
Opening net book value 89,059 28,338 117,397
Additions 9,658 8,499 18,157
Disposals- (259) (259)
Depreciation charge (2,324) (7,074) (9,398)
Closing net book value 96,393 29,504 125,897
At 30 January 2022
Cost 105,668 91,268 196,936
Accumulated depreciation (9,275) (61,764) (71,039)
Net book value 96,393 29,504 125,897
Capital commitments
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Capital commitments in relation to property, plant and equipment
at balance date not provided for in the financial statements
3,913 7,458
1.
1. $6.5 million relates to building contracts for the development and construction of new retail premises at 36 Taylors Road, Auckland and also at
Silverdale, North Auckland.
3. Operating Assets and Liabilities
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
52
For the 52 week period ended 30 January 2022
3.3 Intangible Assets
Intangible assets are non-physical assets used by the Group to operate the business. Software costs have a finite useful life. Software
costs are capitalised and amortised on a straight-line basis over the estimated useful economic life of 2 to 5 years.
Software as a service:
The Group previously capitalised costs incurred in configuring or customising certain suppliers application software in certain
computing arrangements as intangible assets as the Group considered that it would benefit from those costs over the expected term
of the computing arrangements.
Following the publication of IFRS Interpretations Committee (IFRIC) agenda decision on Configuration or Customisation Costs in a
Cloud Computing Arrangement in March 2021 (and ratified by the International Accounting Standards Board (IASB) in April 2021), the
Group has reconsidered its accounting treatment in relation to capitalising certain software and adopted the guidance set out in the
IFRIC agenda decision, which is to recognise those costs as intangible assets only if the activities create an intangible asset that the
Group controls and the intangible asset meets the recognition criteria. Costs that are not capitalised as intangible assets are expensed
as incurred unless they are paid to the supplier of the cloud-based software to significantly customise the cloud-based software in
which case the cost paid upfront is recorded as a prepayment for services and amortised over the expected term of the cloud com-
puting arrangements.
As a result of this change in accounting policy, the Group has determined that certain costs relating to the implementation or develop-
ment of certain software should be expensed when they were incurred as the amounts paid did not create separate intangible assets
controlled by the Group. The change in treatment has not been applied retrospectively and has not had a material effect on these
financial statements.
Software is the only intangible asset recorded in the financial statements. All software has been acquired externally.
3.4 Leases
Right-of-use assets and lease liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the remaining lease payments. Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liabilities.
Right-of-use assets are initially recognised on commencement of lease at cost, comprising the initial amount of the lease liabilities
less any lease incentives received. Right-of-use assets are subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term. In considering the lease term, the Group applies judgement in determining whether
it is reasonably certain that an extension or termination option will be exercised.
Both right-of-use assets and lease liabilities are discounted applying interest rate implicit in the lease, or if this cannot be determined,
the incremental borrowing rate at the commencement of the lease. To determine the incremental borrowing rate the Group have
applied a blended secured and unsecured borrowing rate. For the secured rate the Group have utilised third party financing options
and adjusted for an appropriate credit spread.
Extension options are included in a number of property leases across the Group. These are used to maximise operational flexibility in
terms of managing the assets used in the Group’s operation. Extension options held are exercisable only by the Group and not by the
respective lessor. During the period the Group recognised all extension options (2021: all recognised).
The following tables show the movements and analysis in relation to the right-of-use assets and lease liabilities, created on the
adoption of NZ IFRS 16:
3. Operating Assets and Liabilities
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
53
For the 52 week period ended 30 January 2022
3.4.1 Right-of-use assets:
Land and Buildings
$000
Period ended 31 January 2021
Opening carrying amount266,001
Additions13,126
Surrender(1,577)
Depreciation for the period(21,700)
Closing carrying amount 255,850
At 31 January 2021
Cost296,491
Accumulated depreciation(40,641)
Carrying amount255,850
Period ended 30 January 2022
Opening carrying amount255,850
Additions19,350
Surrender(2,239)
Depreciation for the period(22,172)
Closing carrying amount250,789
At 30 January 2022
Cost313,602
Accumulated depreciation(62,813)
Carrying amount250,789
3.4.2 Lease liabilities:
As at
30 January 2022
As at
31 January 2021
$000$000
Opening value292,271296,408
Additions19,35013,126
Surrender(3,244)(1,675)
Interest for the period14,21814,772
Lease payments made(33,377)(30,360)
Total lease liabilities289,218292,271
3. Operating Assets and Liabilities
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
54
For the 52 week period ended 30 January 2022
3.4.3 Lease liabilities maturity analysis:
Minimum lease
paymentsInterest
Present
Value
$000$000$000
Within one year33,246(14,221)19,025
One to five years126,185(47,588)78,597
Beyond five years253,026(61,430)191,596
Total412,457(123,239)289,218
Current19,025
Non-current270,193
Total289,218
3.4.4 Lease related expenses included in the income statement:
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Depreciation22,17221,700
Short-term leases12927
Interest on leases14,21814,772
Total36,51936,499
3.4.5 Lease payments included in the cashflow statement:
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Total cash outflow in relation to leases33,37730,360
3. Operating Assets and Liabilities
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
55
For the 52 week period ended 30 January 2022
4. Investments
This section explains how the Group records investments made in listed securities.
4.1 Investment in Equity Securities
During 2015, 2018 and 2019 Briscoe Group Limited acquired a total of 48,007,465 shares in Kathmandu Holdings Limited (KMD) for a
cost of $87,853,048. This holding represented a 6.77% ownership in Kathmandu as at 30 January 2022.
These shares are equity investments, quoted in the active market, which the Group has elected to designate as a financial asset at fair
value through other comprehensive income (FVOCI). An adjustment was made at period end to reflect the fair value of these shares as
at 30 January 2022
1.
.
$000
At 26 January 2020154,104
Additions-
Change in fair value credited to other reserves(92,174)
At 31 January 202161,930
Additions-
Change in fair value credited to other reserves2,880
At 30 January 202264,810
1. Fair value determined to be $1.35 per share as per NZX closing price of Kathmandu Holdings Limited as at 28 January 2022 (2021: $1.29)
(Level 1 in the fair value hierarchy).
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
56
For the 52 week period ended 30 January 2022
5. Financing and Capital Structure
This section reports on the Group’s funding sources and capital structure, including its balance sheet liquidity and
access to capital markets.
5.1 Interest Bearing Liabilities
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income
statement over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless
the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
The Group has an unsecured facility with the Bank of New Zealand for $30 million. Any drawdowns are repayable in full on expiry date
of the facility being 20 September 2022. Interest is payable based on the BKBM rate plus applicable margin. The facility is sufficiently
flexible that the amounts can be drawn down and repaid to accommodate fluctuations in operating cash flows within overall limits,
without the need for prior approval of the bank. The facility was not drawn down during the period.
The covenants entered into by the Group require specified calculations of Group’s earnings before interest, tax, depreciation and
amortisation (EBITDA) plus lease rental costs to exceed total fixed charges (net interest expense and lease rental costs) at the end of
each half during the financial period. Similarly, EBITDA must be no less than a specified proportion of total net debt at the end of each
half. The Group was in compliance with the covenants throughout the period.
There were no amounts repayable under the facility as at 30 January 2022 (2021: Nil).
Net finance income / (costs)
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Interest income 399 421
Interest expense - leases (14,218) (14,772)
Interest expense – other(155)(4)
Other finance costs (122) (112)
Net finance cost (14,096) (14,467)
5.2 Financial Risk Management
The Group’s activities expose it to various financial risks including credit risk, liquidity risk and market risk (such as currency risk and
equity price risk). The Group’s overall risk management programme seeks to minimise potential adverse effects on the Group’s financial
performance. The Group uses certain derivative financial instruments to hedge certain risk exposures.
5.2.1 Derivative financial instruments
Derivatives are recognised initially at fair value on the date a derivative contract is entered into and are subsequently re-measured to
their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as hedges of highly probable
forecast transactions (cash flow hedges).
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
57
For the 52 week period ended 30 January 2022
5. Financing and Capital Structure
At the inception of a transaction the economic relationship between hedging instruments and hedged items, and the risk management
objective and strategy for undertaking various hedge transactions, are documented. An assessment is also documented, both at hedge
inception and on an on-going basis, of whether the derivatives that are used in hedging transactions have been and will continue to be
effective in offsetting changes in fair values or cash flows of hedged items.
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. The gain or loss relating to the ineffective portion is recognised immediately in the income statement
within cost of goods sold.
Amounts accumulated in other comprehensive income are recycled in the income statement in the periods when the hedged item
will affect profit or loss (for instance when the forecast purchase that is hedged takes place). However, when a forecast transaction
that is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, the gains and
losses previously deferred in other comprehensive income are transferred from other comprehensive income and included in the
measurement of the initial cost or carrying amount of the asset or liability.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive income and is recognised
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to the income
statement within cost of goods sold.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of these derivative instruments are
recognised immediately in the income statement within administration expenses.
5.2.2 Credit risk
Credit risk refers to the risk of a counterparty failing to discharge an obligation. In the normal course of its business, Briscoe Group
incurs credit risk from trade receivables and transactions with financial institutions. The Group places its cash, short-term investments
and derivative financial instruments with only high-credit-rated, Board-approved financial institutions. Sales to retail customers are
settled predominantly in cash or by using major credit cards. Less than 1% of reported sales give rise to trade receivables. The Group
holds no collateral over its trade receivables.
5.2.3 Interest rate risk
The Group has no long-term interest-bearing liabilities but does have interest rate risk exposure from periodic short-term drawdowns
of established funding facilities and placements of short-term deposits, as operating cash flows necessitate. The Group’s short to
medium term liquidity position is monitored daily and reported to the Board monthly.
5.2.4 Liquidity risk
Liquidity risk is the risk that an unforeseen event or miscalculation in the required liquidity level will result in the Group foregoing
investment opportunities or not being able to meet its obligations in a timely manner, and therefore gives rise to lower investment
income or to higher borrowing costs than otherwise. Prudent liquidity risk management includes maintaining sufficient cash, and
ensuring the availability of adequate amounts of funding from credit facilities.
The Group’s liquidity exposure is managed by ensuring sufficient levels of liquid assets and committed facilities are maintained based
on regular monitoring of a rolling 3-month daily cash requirement forecast. The Group’s liquidity position fluctuates throughout the
period, being strongest immediately after the end of the period. The months leading up to Christmas trading put the greatest strain on
Group cash flows due to the build-up of inventory as well as the interim dividend payment. The Group operates well within its available
funding facilities.
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
58
For the 52 week period ended 30 January 2022
The table below analyses the Group’s financial liabilities and gross-settled forward foreign exchange contracts into relevant maturity
groupings based on the remaining period from the balance sheet date to the contractual maturity date. The cash flow hedge ‘outflow’
amounts disclosed in the table are the contractual undiscounted cash flows liable for payment by the Group in relation to all forward
foreign exchange contracts in place at balance date. The cash flow hedge ‘inflow’ amounts represent the corresponding injection of
foreign currency back to the Group as a result of the gross settlement on those contracts, converted using the forward rate at balance
date. The carrying value shown is the net amount of derivative financial liabilities and assets as shown in the balance sheet. Changes in
the carrying value affect profit when the underlying inventory to which the derivatives relate, is sold.
Trade and other payables are shown at carrying value in the table. No discounting has been applied as the impact of discounting is not
significant.
An analysis detailing remaining contractual maturities for lease liabilities is shown in Note 3.4.3.
As at 30 January 2022
3 months
or less
3 – 6
months
6 – 9
months
9 – 12
monthsTotal
Carrying
Value
$000$000$000$000$000$000
Trade and other payables(60,085)---(60,085)(60,085)
Forward foreign exchange contracts
Cash flow hedges:
- outflow (16,564) (14,507) (9,165)(760) (40,996)
- inflow 17,85515,601 9,912 765 44,133
- Net 1,291 1,094 747 5 3,137 3,137
As at 31 January 2021
3 months
or less
3 – 6
months
6 – 9
months
9 - 12
monthsTotal
Carrying
Value
$000$000$000$000$000$000
Trade and other payables(63,195)---(63,195)(63,195)
Forward foreign exchange contracts
Cash flow hedges:
- outflow(22,359)(17,787)(19,481) (1,739)(61,366)
- inflow 20,971 16,777 18,524 1,748 58,020
- Net (1,388) (1,010) (957) 9 (3,346)(3,346)
The cash flow hedges inflow amounts use the forward rate at balance date.
5. Financing and Capital Structure
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
59
For the 52 week period ended 30 January 2022
5.2.5 Market risk
Equity price risk
The Group is exposed to equity price risk arising from the investment held in Kathmandu Holdings Limited, classified in the balance
sheet as investment in equity securities. (Refer note 4.1).
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposures primarily to the US dollar, in respect of purchases of
inventory directly from overseas suppliers.
The Group’s foreign exchange risk is managed in accordance with Board-approved Group Treasury Risk Management Policies. The
current policy requires hedging of both committed and forecasted foreign currency payment levels across the current and subsequent
three calendar quarters. The policy is to cover 100% of committed purchases and lower levels of forecasted purchases depending on
which quarter the forecasted exposure relates to. Hedging is reviewed regularly and reported to the Board monthly.
The Group uses forward foreign exchange contracts and maintains short-term holdings of foreign currencies in foreign denominated
currency bank accounts, with major financial institutions only, to hedge its foreign exchange risk in anticipation of future purchases.
The following table shows the fair value of forward foreign exchange contracts held by the Group as derivative financial instruments at
balance date:
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Current assets
Forward foreign exchange contracts3,13732
Total current derivative financial instrument assets3,13732
Current liabilities
Forward foreign exchange contracts-3,378
Total current derivative financial instrument liabilities-3,378
The contracts are subject to an enforceable master netting arrangement, which allows for net settlement of the relevant assets and
liabilities. For financial reporting purposes these are not offset.
Forward foreign exchange contracts – cash flow hedges
Where forward foreign exchange contracts have been designated and tested as an effective hedge the portion of the gain or loss on
the hedging instrument that is determined to be an effective hedge is recognised directly in other comprehensive income. These gains
or losses are released to the income statement at various dates over the subsequent financial period as the inventory for which the
hedge exists, is sold.
The fair value of these contracts is determined by using valuation techniques as they are not traded in an active market. The valuation
techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates.
The fair value is determined by mark-to-market valuations using forward exchange. These derivatives have been determined to be
within level 2 of the fair value hierarchy as all significant inputs required to ascertain their fair value are observable.
Forward foreign exchange contracts are used for hedging committed or highly probable forecast purchases of inventory for the
ensuing financial period. The contracts are timed to mature when major shipments of inventory are scheduled to be dispatched and
the liability settled. The cash flows are expected to occur at various dates within one year from balance date.
5. Financing and Capital Structure
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
60
For the 52 week period ended 30 January 2022
At balance date these contracts are represented by assets of $3,137,409 (2021: $32,361) and liabilities of $429 (2021: $3,378,483)
and together are included in equity as part of the cash flow hedge reserve, net of deferred tax, as a net gain of $2,258,626 (2021:
net loss $2,409,208). The cash flow hedge reserve also consists of gains and losses, net of deferred tax, from foreign currencies
used as hedges, as a net gain of $125,434 (2021: net loss of $47,826). The total of these net gains and losses amount to a net loss of
$2,384,060 (2021: net loss $2,457,034).
When forward foreign exchange contracts are not designated and tested as an effective hedge, the gain or loss on the forward foreign
exchange contract is recognised in the income statement.
At balance date there are no such contracts in place (2021: Nil).
5.2.6 Sensitivity analysis
Based on historical movements and volatilities and review of current economic commentary the following movements are considered
reasonably possible over the next 12 month period:
• A shift of -10% / +10% (2021: -10% / +10%) in the NZD against the USD, from the period-end rate of 0.6576 (2021: 0.7168),
• A shift of -0.25% / +1.25% (2021: -0.25% / +0.25%) in market interest rates from the period-end weighted average deposit rate of
1.13% (2021: 0.35%),
• A shift of -10% / +20% (2021: -10% / +20%) in the NZX share price of Kathmandu Holdings Ltd from the period-end closing share
price of $1.35 (2021: $1.29).
If these movements were to occur, the positive / (negative) impact on consolidated profit after tax and consolidated equity for each
category of financial instrument held at balance date is presented below:
As at 30 January 2022
Interest
rate
Foreign
exchange rate
Equity
price
Carrying-0.25%+1.25%-10%+10%-10%+20%
amountProfitEquityProfitEquityEquityEquityEquityEquity
$000$000$000$000$000$000$000$000$000
Financial Assets:
Cash and cash equivalents
1.
102,481(180)(180)899899203(166)--
Derivatives – designated as
cashflow hedges (Forward
foreign exchange contracts)
2.
3,137----3,486(2,842)--
Investment in equity securities
3.
64,810------(6,481)12,962
Financial Liabilities:
Derivatives – designated as
cashflow hedges (Forward
foreign exchange contracts)
2.
-----31(25)--
Total increase / (decrease)(180)(180)8998993,720(3,033)(6,481)12,962
Receivables and payables have not been included above as they are denominated in NZD and are non-interest bearing and
therefore not subject to market risk.
5. Financing and Capital Structure
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
61
For the 52 week period ended 30 January 2022
As at 31 January 2021
Interest
rate
Foreign
exchange rate
Equity
price
Carrying-0.25%+0.25%-10%+10%-10%+20%
amountProfitEquityProfitEquityEquityEquityEquityEquity
$000$000$000$000$000$000$000$000$000
Financial Assets:
Cash and cash equivalents
1.
100,417(179)(179)17917959(48)--
Derivatives – designated as
cashflow hedges (Forward
foreign exchange contracts)
2.
32
-
-
-
-
306
(254)
-
-
Investment in equity securities
3.
61,930------(6,193)12,386
Financial Liabilities:
Derivatives – designated as
cashflow hedges (Forward
foreign exchange contracts)
2.
3,378
-
-
-
-
4,296
(3,579)
-
-
Total increase / (decrease)(179)(179)1791794,661(3,881)(6,193)12,386
Receivables and payables have not been included above as they are denominated in NZD and are non-interest bearing and therefore
not subject to market risk.
1. Cash and cash equivalents include deposits at call which are at floating interest rates.
2. Derivatives designated as cashflow hedges are foreign exchange contracts used to hedge against the NZD:USD foreign exchange risk arising from
foreign denominated future purchases. There is no profit or loss sensitivity as the hedges are 100% effective.
3. Investment in equity securities represents shares held in Kathmandu Holdings Ltd. There is no profit or loss sensitivity as impacts from changes in
KMD’s share price are accounted for through equity.
5. Financing and Capital Structure
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
62
For the 52 week period ended 30 January 2022
5.3 Equity
5.3.1 Capital risk management
The Group’s capital comprises contributed equity, reserves and retained earnings.
The Group’s objective when managing capital is to achieve a balance between maximising shareholder wealth and ensuring the Group
is able to operate competitively with the flexibility to take advantage of growth opportunities as they arise. In order to meet these
objectives the Group may adjust the amount of dividend payments made to shareholders and/or seek to raise capital through debt
and/or equity. There are no specific banking or other arrangements which require the Group to maintain specified equity levels.
5.3.2 Share capital
Share capital comprises ordinary shares only. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
All shares on issue are fully paid. All ordinary shares rank equally with one vote attached to each fully paid ordinary share and have
equal dividend rights and no par value.
Contributed equity – ordinary shares
No. of authorised sharesShare capital
Period ended
30 January 2022
Period ended
31 January 2021
Period ended
30 January 2022
Period ended
31 January 2021
SharesShares$000$000
Opening ordinary shares 222,466,000 222,188,500 61,839 60,752
Issue of ordinary shares arising from the exercise of
options/vesting of performance rights
90,300
277,500
153
1.
1,087
1.
Balance at end of period 222,556,300 222,466,000 61,992 61,839
1. When options are exercised or when performance rights vest, the amount in the equity-based remuneration reserve relating to those options
exercised or performance rights vested, together with the exercise price paid by the employee, is transferred to share capital. The amounts
transferred for the 90,300 shares issued during the period ended 30 January 2022 were $nil and $153,376 respectively (2021: $168,415 and
$918,525 respectively for the 277,500 shares issued).
5. Financing and Capital Structure
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
63
For the 52 week period ended 30 January 2022
5.3.3 Dividends
Provision is made for the amount of any dividend declared on or before the balance date but not distributed at balance date.
Period ended
30 January 2022
Cents per share
Period ended
31 January 2021
Cents per share
Period ended
30 January 2022
$000
Period ended
31 January 2021
$000
Interim dividend for the period ended
30 January 2022
11.50- 25,594 -
Final dividend for the period ended
31 January 2021
13.50- 30,045 -
Special dividend for the period ended
31 January 2021
-6.00-13,348
Interim dividend for the period ended
31 January 2021
- 9.00- 20,022
Final dividend for the period ended
26 January 2020
1.
----
25.00 15.00 55,639 33,370
1. The final dividend of 12.50 cps for year ended 26 January 2020 announced on 16 March 2020 was cancelled on 23 March 2020 as a result of
potential impact of Covid-19.
All dividends paid were fully imputed (refer also to Note 2.3.3 for imputation credits available for use in subsequent periods).
Supplementary dividends of $380,308 (2021: $238,416) were provided to shareholders not tax resident in New Zealand, for
which the Group received a Foreign Investor Tax Credit entitlement.
On 16 March 2022 the Directors resolved to provide for a final dividend to be paid in respect of the period ended 30 January
2022. The dividend will be paid at a rate of 15.50 cents per share for all shares on issue as at 24 March 2022, with full imputation
credits attached.
5.3.4 Reserves and retained earnings
Cashflow hedge reserve
The hedging reserve is used to record gains and losses on a hedging instrument in a cash flow hedge that are recognised
directly in other comprehensive income, as described in the accounting policy in section 5.2. The amounts are recognised as
profit or loss when the associated hedged transaction affects profit or loss. (Refer also to the consolidated statement of changes
in equity).
Equity-based remuneration reserve
The equity-based remuneration reserve is used to recognise the fair value of performance rights granted but not exercised,
lapsed or forfeited. Amounts are transferred to share capital when vested performance rights are exercised. (Refer also to the
consolidated statement of changes in equity and note 6.2).
Other reserves
Other reserves represents the adjustment made at balance date to reflect the fair value of the investment in Kathmandu
Holdings Limited. (Refer also to the consolidated statement of changes in equity and note 4.1).
5. Financing and Capital Structure
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
64
For the 52 week period ended 30 January 2022
6. Other Notes
6.1 Related Party Transactions
6.1.1 Parent and ultimate controlling party
Briscoe Group Limited is the immediate parent, ultimate parent and controlling party for all companies in the Group.
During the period the Company advanced and repaid loans to its subsidiaries by way of internal current accounts. In presenting the
financial statements of the Group, the effect of transactions and balances between fellow subsidiaries and those with the Company
have been eliminated. No interest is charged on internal current accounts. All transactions with related parties were in the normal
course of business and were provided on normal commercial terms.
The Group undertook transactions with the following related parties as detailed below:
• The RA Duke Trust, of which RA Duke is a trustee, as owner of the Rebel Sport premises at Panmure, Auckland, received rental
payments (net of rental relief) of $597,226 (2021: $613,663) from the Group, under an agreement to lease premises to The Sports
Authority Limited (trading as Rebel Sport). The remaining non-cancellable term of this lease is 1.2 years (2021: 2.2 years) with a
payment commitment of $787,365 (2021: $1,462,249).
• Kein Geld (NZ) Limited, an entity associated with RA Duke, received rental payments (net of rental relief) of $501,999 (2021:
$520,001) as owner of the Briscoes Homeware premises at Wairau Park, Auckland, under an agreement to lease premises to
Briscoes (NZ) Limited. The remaining non-cancellable term of this lease is 0.1 years (2021: 1.1 years) with a payment commitment of
$47,273 (2021: $614,547).
• The RA Duke Trust (including RA Duke Limited) received dividends of $42,891,596 (2021: $25,714,289).
• P Duke, spouse of RA Duke, received payments of $65,000 (2021: $65,000) in relation to her employment as an overseas
buying specialist with Briscoe Group Limited, and rental payments (net of rental relief) of $816,254 (2021: $918,570) as owner
of the Briscoes Homeware premises at Panmure, Auckland under an agreement to lease premises to Briscoes (NZ) Limited. The
remaining non-cancellable term of this lease is 9.3 years (2021: 10.3 years) with a payment commitment of $9,237,756 (2021:
$10,160,148).
6.1.2 Key management personnel
Key management includes the Directors of the Company and those employees who the Company has deemed to have disclosure
obligations under subpart 6 of the Financial Markets Conduct Act 2013, namely the Chief Financial Officer, the Chief Operating Officer
and the General Manager Human Resources.
Key management compensation was as follows:
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Salaries and other short-term employee benefits 4,199 2,854
Equity-based remuneration128100
Directors’ fees391293
Total benefits 4,718 3,247
Key management did not receive any termination benefits during the period (2021: Nil).
Key management did not receive and are not entitled to receive any post-employment or long-term benefits (2021: Nil).
Executives (excluding Directors) included in key management received dividends of $250,195 (2021: $143,151) in relation to
Briscoe Group shares held.
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
65
For the 52 week period ended 30 January 2022
6.1.3 Directors’ fees and dividends
Directors received directors’ fees and dividends in relation to their personally held shares as detailed below:
Period ended
30 January 2022
Period ended
31 January 2021
Directors’ feesDividendsDirectors’ feesDividends
$000$000$000$000
Executive Director
RA Duke----
Non-Executive Directors
RPO’L Meo148-132-
AD Batterton82-78-
RAB Coupe853772
HJM Callaghan
1.
76-6-
39132932
The following Directors received dividends in relation to their non-beneficially held shares as detailed below:
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Executive Director
RA Duke42,89225,714
Non-Executive Directors
RPO’L Meo2515
AD Batterton53
RAB Coupe--
HJM Callaghan
1.
--
1. Mark Callaghan was appointed by the Board as a Director effective from 1 January 2021.
6. Other Notes
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
66
For the 52 week period ended 30 January 2022
6.2 Employee Equity-Based Remuneration
6.2.1 Equity settled performance rights
The Senior Executive Incentive Plan grants Group employees performance rights subject to performance hurdles being met. The fair
value of rights granted is recognised as an employee expense in the income statement with a corresponding increase in the employee
share-based payment reserve. The fair value is measured at grant date and amortised over the vesting periods. When performance
rights vest, the amount in the share-based payments reserve relating to those rights is transferred to share capital. There is no exercise
price for these performance rights and there is no right to dividends during the vesting periods.
On 26 March 2019 the Board approved the Briscoe Group Senior Executive Incentive Plan to grant performance rights to key
senior management personnel as a long-term incentive programme. The third tranche of performance rights were issued under this
programme during the period.
Performance rights granted are summarised below:
TrancheGrant Date
Balance at
start of period
(number)
Granted during
the period
(number)
Vested during
the period
(number)
Lapsed during
the period
(number)
Balance at the
end of period
(number)
115 Apr 201990,300-(90,300)--
226 Jun 201989,286---89,286
330 Jul 2020136,218---136,218
415 Jun 2021-83,334--83,334
315,80483,334(90,300)-308,838
In each tranche the performance rights are subject to a combination of an absolute Total Shareholder Return (TSR) growth hurdle and/
or an EPS growth hurdle. EPS growth hurdle is considered a non-market condition. The relative hurdle weighting for unvested tranches
is shown in the table below:
TrancheGrant DateTSR WeightingEPS Weighting
126 Jun 201950%50%
230 Jul 202050%50%
315 Jun 202150%50%
The proportion of performance rights subject to the absolute TSR growth hurdle which may vest is dependent on Briscoe Group
Limited’s TSR compound annual growth rate (CAGR) across a 3-year measurement period. For each tranche that vests the rights
are awarded on a straight-line basis dependent on the TSR CAGR achieved. The percentage of TSR related performance rights vest
according to the following performance criteria for each unvested tranche:
% VestingTranche 2Tranche 3Tranche 4
0%< 10.1% CAGR< 12.4% CAGR< 5.0% CAGR
50%= 10.1% CAGR= 12.4% CAGR= 5.0% CAGR
51% - 99% (Straight-line prorata)> 10.1%, < 13.0% CAGR> 12.4%, < 16.0% CAGR> 5.0%, < 5.5% CAGR
100%=> 13.0% CAGR=> 16.0% CAGR=> 5.5% CAGR
6. Other Notes
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
67
For the 52 week period ended 30 January 2022
The TSR performance is calculated across the following periods:
TranchePerformance Period
2Announcement date of FY 2018/19 Result to announcement date of FY 2021/22 Result
3Announcement date of FY 2019/20 Result to announcement date of FY 2022/23 Result
4Announcement date of FY 2020/21 Result to announcement date of FY 2023/24 Result
The fair value of the TSR performance rights have been valued under a variant of the dividend adjusted Binomial Options Pricing
Model (BOPM). The fair value of TSR performance rights, along with the assumptions used to simulate the future share prices are
shown below:
Tranche 2Tranche 3Tranche 4
Fair value of TSR performance rights$22,813$47,200$97,501
Current price at grant date$3.30$3.37$5.75
Risk free interest rate1.71%0.30%0.60%
Expected life (years)2.752.632.75
Expected share volatility
1.
16%
1.
24%
2.
24%
3.
1. Volatility represents the volatility of the Briscoe Group (BGP) NZD share price over the two-year period to February 2019.
2. Volatility represents the volatility of the Briscoe Group (BGP) NZD share price over a five-year period to July 2020.
3. Volatility represents the volatility of the Briscoe Group (BGP) NZD share price based on the average 90 day volatility for the past 3 years
(measured on a daily basis).
The estimated fair value for each tranche of performance rights issued is amortised over the vesting period from the grant date.
The proportion of performance rights subject to the EPS growth hurdle which may vest is dependent on Briscoe Group Limited’s EPS
compound annual growth rate (CAGR) across a 3-year measurement period. For each tranche that vests the rights are awarded on a
straight-line basis dependent on the EPS CAGR achieved. The percentage of EPS related performance rights vest according to the
following performance criteria:
% VestingTranche 2Tranche 3Tranche 4
0%< 0.8% CAGR< 1.8% CAGR< 2.5% CAGR
50%= 0.8% CAGR= 1.8% CAGR= 2.5% CAGR
51% - 99% (Straight-line prorata)> 0.8%, < 2.6% CAGR> 1.8%, < 4.6% CAGR> 2.5%, < 4.6% CAGR
100%=> 2.6% CAGR=> 4.6% CAGR=> 4.6% CAGR
The EPS performance is calculated across the following periods:
TranchePerformance Period
2FY 2021/22 EPS relative to FY 2018/19 EPS
3FY 2022/23 EPS relative to FY 2019/20 EPS
4FY 2023/24 EPS relative to FY 2020/21 EPS
The fair value of the EPS performance rights have been assessed as the Briscoe Group Limited’s share price as at grant date less the
present value of the dividends forecast to be paid prior to each vesting date. The fair value of each EPS unvested performance right
has been calculated to be $2.79, $2.76 and $5.75 for tranche 2, tranche 3 and tranche 4, respectively.
The estimated fair value for each tranche of performance rights issued is amortised over the vesting period from grant date.
Vesting of performance rights also requires the employee to remain in employment with the Company during the performance period.
The Company has expensed in the income statement $217,148 (2021: $182,969) in relation to performance rights.
6. Other Notes
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
68
For the 52 week period ended 30 January 2022
6.2.2 Equity-based remuneration reserve
Period ended
30 January 2022
Period ended
31 January 2021
$000$000
Balance at beginning of period444841
Current period amortisation217183
Options forfeited and lapsed transferred to retained earnings-(521)
Options exercised transferred to share capital-(168)
Performance rights vested transferred to share capital(153)-
Deferred tax on performance rights58109
Balance at end of period566444
6.3 Contingent Liabilities
There were no contingent liabilities as at 30 January 2022 (2021: Nil).
6.4 Covid-19
Covid-19 has brought disruptions and uncertainties to businesses and economies globally. These disruptions have impacted on the
operations of Briscoe Group through-out the last two financial years.
Firstly, during the first half of the February 2020 – January 2021 year when Level 4 and 3 lockdowns saw all bricks and mortar stores
cease trading for 50 days. Then during the most recent financial year from 18 August 2021 when the NZ Government announced a
further nationwide Level 4 lockdown. Most disruption was felt throughout our Auckland store network with those stores shut for a
period of 84 days before reopening on 10 November 2021. All other stores were also impacted at varying times through this period.
As was the same for previous lockdown disruptions, the Group’s online operation performed significantly well assisting to mitigate
some of the negative impact from store closures.
Recent developments in relation to the Omicron variant highlight the uncertainty of Covid-19 impacts into the future and the Board
and management continue to monitor the situation closely.
The Board note the high level of business uncertainty that continues to exist in relation to the impacts of the Covid-19 pandemic
including the possibility of supply chain disruption, erosion of consumer spending and further government-imposed lockdowns. Other
than minor immaterial inventory adjustments for a few impacted categories, there are no other provisions in these statements for the
period ended 30 January 2022 for financial impacts of Covid-19.
6. Other Notes
Briscoe Group Limited Annual Report 2022
Consolidated Financial Statements
69
For the 52 week period ended 30 January 2022
6.5 Events After Balance Date
On 16 March 2022 the Directors resolved to provide for a final dividend to be paid in respect of the period ended 30 January 2022.
The dividend will be paid at a rate of 15.50 cents per share for all shares on issue as at 24 March 2022, with full imputation credits
attached (Note 5.3.3).
6.6 New Accounting Standards
There were no new standards applied during the period.
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not
mandatory for the 30 January 2022 reporting period and have not been early adopted by the Group. These standards, amendments
or interpretations are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable
future transactions.
6. Other Notes
Briscoe Group Limited Annual Report 2022
Independent Auditor’s Report
70
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
To the shareholders of Briscoe Group Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of Briscoe Group Limited (the
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial
position of the Group as at 30 January 2022, its financial performance and its cash flows for the period
then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
What we have audited
The Group's consolidated financial statements comprise:
the consolidated balance sheet as at 30 January 2022;
the consolidated income statement for the period then ended;
the consolidated statement of comprehensive income for the period then ended;
the consolidated statement of changes in equity for the period then ended;
the consolidated statement of cash flows for the period then ended; and
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the
s responsibilities for the audit of the consolidated financial statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
Board and the International Code of Ethics for Professional Accountants (including International
Independence Standards)issued by the International Ethics Standards Board for Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Other than in our capacity as auditor we have no relationship with, or interests in, the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
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Description of the key audit matterHow our audit addressed the key audit matter
Inventory existence and valuation
At
January 202, the Group held
inventories of $119.5 million. Given the
value of inventories relative to the total
assets of the Group, and the judgements
applied in provisioning against inventory
shrinkage, slow moving and obsolete
inventory, this has been considered a key
audit matter.
As described in note 3.1.3 to the
consolidated financial statements,
inventories are stated at the lower of cost
and net realisable value.
The Group has sophisticated inventory
systems in place to accurately record and
report inventory movements and the value
of inventory on hand.
Cyclical counts of inventories are
performed at various times throughout the
period which includes an assessment of
slow moving and obsolete stock. The
cyclical counts provide management with
evidence over quantity and quality of
inventory on hand.
Management applies judgement in
determining inventory valuation, in
particular the level of provisions for
inventory which is expected to sell for less
than cost due to obsolescence or damage,
adjustments for unearned rebate income
and inventory shrinkage since the last
stock count.
Our audit procedures included:
gaining an understanding of inventory processes
and assessing the design and implementation of
certain inventory controls, particularly controls over
the cyclical counting process.
selected locations throughout the period and
undertaking our own test counts. For those
locations not visited, on a sample basis, inspecting
the results of stock counts and confirming stock
count variances were appropriately adjusted.
on a sample basis, testing the cost of inventory to
supplier invoices and contracts providing evidence
to support the accuracy of inventory costing.
we corroborated our understanding of the
inventory provisioning process with merchandising
personnel outside of the finance function.
testing that period-end inventory is carried at lower
of cost and net realisable value by testing a
sample of inventory items to the most recent retail
price less costs to sell.
on a sample basis, testing unearned rebate
income to supplier contracts.
assessing the shrinkage provision by testing the
shrinkage rate used to calculate the provision
since the last store stock counts. This includes
comparing the rate used to the actual shrinkage
rates previously observed and reviewing the level
of actual inventory shrinkage recorded during the
current period.
performing substantive analytical procedures over
all material inventory provisions to assess
adequacy.
From the procedures performed we have no matters to
report.
Briscoe Group Limited Annual Report 2022
Independent Auditor’s Report
72
PwC
Our audit approach
Overview
Overall group materiality: $6,100,000, which represents approximately 5% of
profit before tax.
We chose profit before tax as the benchmark because, in our view, it is the
benchmark against which the performance of the Group is most commonly
measured by users, and is a generally accepted benchmark.
We performed a full scope audit over the consolidated financial
information of the Group.
As reported above, we have one key audit matter, being:
Inventory existence and valuation
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the Group operates.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual report but does not include the consolidated financial statements
and our auditor's report thereon. The Annual report is expected to be made available to us after the
date of this auditor's report.
Our opinion on the consolidated financial statements does not cover the other information and we will
not express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
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Briscoe Group Limited Annual Report 2022
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When we read the other information not yet received, 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 to take.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
but is not a guarantee that an audit conducted in accordance with ISAs (NZ) and ISAs 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 these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
Who we report to
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in t
Senaratne (Indy Sena).
For and on behalf of:
Chartered AccountantsAuckland
16 March 2022
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
74
Corporate
Governance
Statement
Corporate Governance
Briscoe Group is committed to maintaining the highest standards of governance by implementing best practice structures and
policies. This Corporate Governance Statement sets out the corporate governance policies, practices, and processes adopted or
followed by Briscoe Group (including the guiding principles, authority, responsibilities, membership and operation of the Board
of Directors) and has been approved by the Board.
The best practice principles (and underlying recommendations) which Briscoe Group has had regard to in determining its
governance approach, are the principles set out in the NZX Corporate Governance Code (‘NZX Code’). The Board’s view is that
Briscoe Group’s corporate governance policies, practices and processes generally follow the recommendations set by the NZX
Code. This Corporate Governance Statement includes disclosure of the extent to which Briscoe Group has followed each of
the recommendations in the NZX Code (or, if applicable, an explanation of why a recommendation was not followed and any
alternative practices followed in lieu of the recommendation).
Briscoe Group Limited is a company incorporated in New Zealand and is also registered in Australia as a foreign company
under the name Briscoe Group Australasia Limited. It is listed on the NZX and also, as a foreign exempt entity, on the Australian
Securities Exchange (ASX). As such Briscoe Group is exempt from complying with most of the ASX’s Listing Rules and must
undertake to comply with the listing rules of its home exchange (NZX). Briscoe Group also supports the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations.
Further information about Briscoe Group’s corporate governance framework (including the Board and Board committee
charters, and codes and selected policies referred to in this section) is available to view at www.briscoegroup.co.nz.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
75
Principle 1 – Code of Ethical Behaviour
Directors should set high standards of ethical behaviour, model this behaviour and hold management
accountable for these standards being followed throughout the organisation.
Code of Values and Conduct and Related Policies
Recommendation 1.1: “The Board should document minimum standards of ethical behaviour to which the issuer’s Directors and
employees are expected to adhere (a code of ethics) and comply with the other requirements of Recommendation 1.1 of the
NZX Code.”
Briscoe Group requires its Directors, senior management and employees to maintain the highest standards of honesty, integrity
and ethical conduct in day-to-day behaviour and decision making. The Board has adopted a Code of Conduct which incorpo-
rates the requirements set out in Recommendation 1.1, forms part of the induction process for all new employees and is available
on Briscoe Group’s website. The Code of Conduct is reviewed annually and was last reviewed in March 2021. All Directors and
employees must provide acknowledgement that they have read and understood the content. To ensure that our expectations
are known and understood, both training and reinforcement are delivered via our online learning platform as part of initial and
ongoing training.
Trading in Company Securities Policy
Recommendation 1.2: “An issuer should have a financial product dealing policy which applies to employees and Directors.”
The Trading in Company Securities Policy sets out Briscoe Group’s requirements for all Directors and employees in relation to
trading Briscoe Group shares and is available on Briscoe Group’s website. In general, Directors and employees are allowed to
trade in Briscoe Group shares during two ‘trading windows’. Trading windows commence on the day after the half-year and full-
year results are announced to the market and run for a period of 60 days. Trading outside these windows is generally prohibited.
Proposed transactions by Directors and employees during the trading windows require approval. The policy also provides that
no Directors, employees or independent contractors can trade shares if they are in possession of price sensitive information that
is not publicly available.
Principle 2 – Board Composition and Performance
To ensure an effective Board, there should be a balance of independence, skills, knowledge, experience and
perspectives.
Board Charter
Recommendation 2.1: “The Board of an issuer should operate under a written charter which sets out the roles and responsibili-
ties of the Board. The Board charter should clearly distinguish and disclose the respective roles and responsibilities of the Board
and management.”
The Board has adopted a formal Board Charter which sets out the respective roles, responsibilities, composition and structure
of the Board and senior management, and this is available on Briscoe Group’s website. The Board is responsible for overseeing
the management of the Company and its subsidiaries and to direct performance by optimising the short-term and long-term
best interests of the Company and its Shareholders. This includes approving the Company’s objectives, reviewing the major
strategies for achieving them and monitoring the Company’s performance. The focus of the Board is the creation of company
and shareholder value and ensuring the Company is committed to best practice. Responsibility for the day-to-day management
of Briscoe Group has been delegated to the Managing Director and other senior management. Management are responsible
for implementing the objectives and strategies approved by the Board, within the ambit of risk set by the Board. The Company
Secretary provides company secretarial services to the Board and is accountable to the Board through the Chair.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
76
Nomination and Appointment of Directors
Recommendation 2.2 and 2.3: “Every issuer should have a procedure for the nomination and appointment of Directors to
the Board. An issuer should enter into written agreements with each newly appointed Director establishing the terms of their
appointment.”
The Board collectively considers the nomination of Directors. In doing this, the Board’s procedure involves careful
consideration of the composition of the Board in relation to the Company’s needs and operating environment to ensure
relevant skills and experience. This also applies to the consideration of additional or replacement Directors, subject to the
constitutional limitation of the number of Directors. In so doing, as noted above, the priority must be on ensuring the skills,
experience and diversity on the Board, and the skills that are necessary or desirable for the Board to fulfil its governance role
and to contribute to the long-term strategic direction of the company. The Board may engage consultants to assist in the
identification, recruitment and appointment of suitable candidates.
When appointing new Directors, the Board ensures that the constitutional requirements in respect of Directors will continue
to be satisfied. There must be at least three and no more than five Directors, at least two of whom are resident in New Zealand
and also at least two Directors must be determined by the Board to be independent (as defined in the NZX Listing Rules).
The Board also takes into consideration recommendation 2.8 - a majority of the Board should be independent Directors. The
current composition of directors meets these requirements.
The constitution provides that all Directors are elected by Shareholders. Directors may be appointed by the Board to fill
vacancies, but they are then subject to re-election at the next annual Shareholder meeting. In addition to Directors retiring
by rotation, and eligible for re-election, nominations may be made by Shareholders. All new Directors enter into a written
agreement with Briscoe Group setting out the terms of their appointment.
Directors
Recommendation 2.4: “Every issuer should disclose information about each Director in its Annual Report or on its website,
including a profile of experience, length of service, independence and ownership interests.”
The Board currently comprises five Directors; four independent and one Executive Director. The Board has considered which
of its Directors are deemed to be independent for the purposes of the NZX Listing Rules and has determined that as at 30
January 2022, four Directors are independent Directors, including the Chair and the Chair of the Audit and Risk Committee.
As at the date of this Annual Report, the Directors are:
Dame Rosanne MeoChair, IndependentAppointed in May 2001
Rod DukeExecutive DirectorAppointed in March 1992
Tony BattertonIndependentAppointed in June 2016
Andy CoupeIndependentAppointed in October 2016
Mark CallaghanIndependentAppointed in January 2021
DirectorNumber of shares in which a relevant interest is held
Dame Rosanne Meo100,000 shares
Rod Duke171,566,383 shares
Tony Batterton20,000 shares
Andy Coupe10,000 shares
A profile of experience for each Director is available on Briscoe Group’s website.
Directors disclosed the following relevant interests in shares as at 30 January 2022:
The directors (other than Dame Rosanne Meo) have carefully considered her tenure as a director and as Chair, and whether it
leads to any influence or perceived influence, in a material way, affecting her capacity to bring an independent view, to act in
the best interests of Briscoe Group, or to represent shareholders. They have observed the robust and critical approach that
she brings in challenging management and strategic priorities, while clearly facilitating open and constructive dialogue both
between members of the Board, and also between the management and the other members of the Board. As such, they have
determined that Dame Rosanne Meo continues to qualify as an independent director.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
77
Diversity
Recommendation 2.5: “An issuer should have a written Diversity Policy which includes requirements for the Board or a relevant
committee of the Board to set measurable objectives for achieving diversity (which, at a minimum, should address gender
diversity) and to assess annually both the objectives and the entity’s progress in achieving them. The issuer should disclose the
policy or a summary of it.”
We appreciate that our workforce, including potential employees, come from all walks of life. Every individual is unique, having
different skills and experiences including but not limited to educational opportunity and achievement. People come from many
cultures and backgrounds, along with a wide range of other personal attributes including gender, age, disability (mental, learning
or physical), economic background, language(s) spoken, marital/partnered status, physical appearance, race, religious beliefs
and gender identity or orientation. Briscoe Group has a commitment to attracting, selecting, developing and retaining the most
suitable employees from this diverse range of attributes. The Group’s Diversity and Inclusiveness Policy is available on Briscoe
Group’s website.
Historically, information gathered through our recruitment processes has been limited in terms of data that can be used to
assess diversity. We recognise that although it is critical to prevent bias in selection and hiring practices through presentation of
candidate information it is equally important to capture this data to ensure we monitor and champion practices and decisions
which enhance diversity. To that end, we have work underway to seek relevant information from candidates for use in reporting
but which is protected so as to avoid bias in appointment decisions. The work required spans a number of information platforms
and changes to internal processes and is planned to be completed by the end of the first half of the current financial year.
We have previously acknowledged the retail sector has had high representation of women in its operations and yet has seen
underrepresentation in senior management roles. Last year we noted that 37% of our high potential talent in our organisation
were female. We have seen a continued trend for changes in the gender mix of this critical pool of people with an increasing
proportion of leaders within our business being female. With immigration limited due to border restrictions there have been less
opportunities to recruit from the latter population, but we look forward to this changing in the year ahead.
Previously we had identified an inadequate focus on retail specific tertiary education along with a tendency for fewer career
retailers to engage in tertiary education. In 2021 we took great pleasure in celebrating the graduation of the first of our MBA
students. A further two team members joined other existing managers engaged in tertiary study. Briscoe Group recognises that
support for these studies is vital. We assist our managers with a combination of contributions to fees as well as paid time out of
the workplace for study and exam purposes.
The Board and management recognise that diversity without inclusiveness does not result in the balanced workforce desired
in the business. Briscoe Group has in place policies and procedures to encourage and support equitable treatment for all
employees and includes consideration of internal applicants for jobs with the Group. We do however agree with a recent
Institute of Directors commentary which stated that diversity should be approached through the lens of demonstrated
competence.
Briscoe Group has partnered with a number of external organisations to develop and deliver educational materials in this area, all
of which are available through our online training platform.
We acknowledge that any narrowness in diversity is not sustainable and believe that an increased emphasis on a collaborative
and inclusive culture and focus on developing talent will secure this realignment. Ensuring that all employees at all levels and in
all workplace environments feel secure and safe, confident and appreciated through understanding the importance of diversity
is most important to us.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
78
Director Training
Recommendation 2.6: “Directors should undertake appropriate training to remain current on how to best perform their duties
as Directors of an issuer.”
The Board expects all Directors to undertake continuous education to remain current on how to best perform their
responsibilities and keep abreast of changes and trends in economic, political, social, financial and legal climates and
governance practices. The Board also ensures that new Directors are appropriately introduced to management and the
business, that all Directors are updated on relevant industry and company issues and receive copies of appropriate company
documents to enable them to perform their roles. The expectation that Directors undergo ongoing training (informal or formal)
and education is reinforced in the Board Charter.
Board Evaluation
Recommendation 2.7: “The Board should have a procedure to regularly assess Director, Board and committee performance.”
The Chair of the Board leads regular internal performance reviews in addition to engaging a bi-annual external evaluation of
the performance of Directors, the Board as a whole, and of the Board committees against the Board and committee charters,
including seeking Director’s views relating to Board and committee process, efficiency and effectiveness. The Chair of the Board
also engages with individual Directors to evaluate and discuss performance and professional development.
Independent Directors
Recommendation 2.8: “A majority of the Board should be Independent Directors.”
The Board currently comprises five Directors; four independent and one executive Director. Further details of the Board
composition are above at Recommendation 2.4.
Separation of Board Chair and CEO
Recommendation 2.9: “The Chair and the CEO should be different people.”
The Board Charter makes explicit that the Chairman and the Managing Director roles are separate.
A breakdown of the gender composition of Directors and officers as at the Company’s balance date, including comparative
figures, is shown below:
30 January 202231 January 2021
FemaleMaleFemaleMale
Directors1414
Officers
1,2.
-3-3
Other Senior Management
3.
2222
1. Excludes Managing Director (included in breakdown of Directors).
2. Officers is defined as the members of the senior management team, who report either directly to the Board or to the Group
Managing Director.
3. General Manager positions not reporting directly to the Group Managing Director.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
79
Principle 3 – Board Committees
The Board should use committees where this will enhance its effectiveness in key areas, while still retaining
Board responsibility.
Audit and Risk Committee
Recommendation 3.1: “An issuer’s audit committee should operate under a written charter. Membership on the audit
committee should be majority independent and comprise solely of non-executive directors of the issuer. The chair of the audit
committee should not also be the Chair of the Board.”
The Audit and Risk Committee operates under a written Charter, and this is available on Briscoe Group’s website. The Audit and
Risk Committee currently comprises Tony Batterton (Chair), Dame Rosanne Meo and Andy Coupe and it met two times during
the year. The Audit and Risk Committee advises and assists the Board in discharging its responsibilities with respect to financial
reporting, compliance and risk management practices of Briscoe Group.
Recommendation 3.2: “Employees should only attend Audit Committee meetings at the invitation of the Audit Committee.”
The Managing Director, Chief Financial Officer, Chief Operating Officer, Finance Manager and Internal Audit Manager attend
Audit and Risk Committee meetings at the invitation of the Audit and Risk Committee. Briscoe Group’s external auditor also
attends meetings at the committee’s invitation. The Audit and Risk Committee receives reports from the external auditor
without management present, concerning any matters that arise in connection with the performance of management’s role and
otherwise as necessary to protect the independence of the Audit and Risk Committee from undue influence.
Remuneration Committee
Recommendation 3.3: “An issuer should have a Remuneration Committee which operates under a written charter (unless
this is carried out by the whole Board). At least a majority of the Remuneration Committee should be independent directors.
Management should only attend Remuneration Committee meetings at the invitation of the Remuneration Committee.”
The Board operates a Human Resources Committee which incorporates remuneration. The Human Resources Committee
currently comprises Andy Coupe (Chair), Dame Rosanne Meo and Mark Callaghan. It met three times during the year. It assists
the Board in discharging its responsibilities with respect to the remuneration and performance of the Group Managing Director
and other senior executives, remuneration of Directors and human resources policy and strategy. The Human Resources
Committee operates under the Human Resources Committee Charter, and this is available on Briscoe Group’s website. Selected
management only attend Human Resource Committee meetings at the invitation of the Human Resources Committee.
Nomination Committee
Recommendation 3.4: “An issuer should establish a nomination Committee to recommend Director appointments to the
Board (unless this is carried out by the whole Board), which should operate under a written charter. At least a majority of the
Nomination Committee should be independent Directors.”
The Board does not operate a separate Nomination Committee as Director appointments are considered by the Board as a
whole. The Board’s procedure for the nomination and appointment of Directors is summarised under Principle 2 above (under
the heading “Nomination and Appointment of Directors”).
Overview of Board Committees
Recommendation 3.5: “An issuer should consider whether it is appropriate to have any other Board committees as standing
Board committees. All committees should operate under written charters. An issuer should identify the members of each of its
committees, and periodically report member attendance.”
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
80
Takeover Protocols
Recommendation 3.6: “The Board should establish appropriate protocols that set out the procedure to be followed if there is a
takeover offer for the issuer (amongst other matters).”
Given Briscoe Group’s shareholding structure, with the largest Shareholder being a member of the Board, the Board considers
the likelihood of an unanticipated takeover to be low, and so the Board does not consider this recommendation to be necessary.
However, in the event of a takeover offer, the Board has already agreed that a Takeover Response Committee would be convened,
comprised of Independent Directors. That committee would consider the Company’s actions in relation to the takeover offer,
including seeking appropriate legal, financial and strategic advice, complying with takeover regulation (including the appointment
of an independent advisor under the Takeovers Code and the preparation of a Target Company Statement) and determining what
additional information (if any) would be provided by the Company to the bidder.
Principle 4 – Reporting and Disclosure
The Board should demand integrity in financial and non-financial reporting, and in the timeliness and balance of
corporate disclosures.
Continuous Disclosure
Recommendation 4.1: “An issuer’s Board should have a written Continuous Disclosure Policy.”
As a listed company, there is an imperative to ensure the market is informed, and the listed securities are being fairly valued by the
market. In addition to statutory disclosures, the company provides ongoing updates of its operations. This material is made publicly
available through releases to the NZX and ASX, in accordance with the relevant Listing Rules. Briscoe Group has a Continuous
Disclosure Policy, and this is available on Briscoe Group’s website. The purpose of this policy is to: ensure Briscoe Group complies
with its continuous disclosure obligations; ensure timely, accurate and complete information is provided to all Shareholders and
market participants; and outline the responsibilities in relation to the identification, reporting, review and disclosure of material
information relevant to Briscoe Group.
The Board does not operate any other committees apart from the Audit and Risk Committee and the Human Resources
Committee. Briscoe Group has considered whether any other standing Board committees are appropriate and has determined not.
Each committee operates under a charter which is available on Briscoe Group’s website. Committee members are appointed
from members of the Board and membership is reviewed on an annual basis. Any recommendations made by the committees
are submitted to the full Board for formal approval.
Attendance at Board and Committee Meetings
for the Year Ended 30 January 2022
BoardAudit and RiskHuman Resources
Number of meetings held
1.
1523
AttendedAttendedAttended
Dame Rosanne Meo
1523
Rod Duke
1523
Tony Batterton
2.
1521
Andy Coupe
1523
Mark Callaghan
3.
1413
1. Additional Board meetings were held in September to regularly assess the impacts of Covid-19.
2. Tony Batterton resigned from the HR Committee effective from 31 March 2021.
3. Mark Callaghan resigned from the Audit and Risk Committee effective from 31 March 2021.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
81
Charters and Policies
Recommendation 4.2: “An issuer should make its code of ethics, Board and committee charters and the policies recommended
by NZX Code, together with any other key governance documents, available on its website.”
Information about Briscoe Group’s corporate governance framework (including Code of Conduct, Board and Board committee
charters, and other selected key governance codes and policies) is available to view on Briscoe Group’s website.
Financial and Non-Financial Reporting
Recommendation 4.3: “Financial reporting should be balanced, clear and objective. An issuer should provide non-financial
disclosure at least annually, including considering environmental, economic and social sustainability factors and practices. It
should explain how operational or non-financial targets are measured. Non-financial reporting should be informative, include
forward looking assessments, and align with key strategies and metrics monitored by the Board.”
Financial Reporting
The Audit and Risk Committee oversees the quality and integrity of external financial reporting including the accuracy,
completeness and timeliness of financial statements, and ensuring that financial reporting is balanced, clear and objective.
It reviews annual and half year financial statements and makes recommendations to the Board concerning the application
of accounting policies and practice, areas of judgement, compliance with accounting standards, stock exchange and legal
requirements, and the results of the external audit.
Management’s accountability for Briscoe Group’s financial reporting is reinforced by the written confirmation from the
Managing Director and Chief Financial Officer that, in their opinion, financial records have been properly maintained and that the
financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and
performance of Briscoe Group. Such representations are given on the basis of a sound system of risk management and internal
control approved by the Audit and Risk Committee, which is operating effectively in all material respects in relation to financial
reporting risk.
Non-Financial Reporting - Sustainability
Briscoe Group assesses its exposure to environmental, economic and social sustainability as part of the overall framework for
managing risk (see Principle 6 – Risk Management). Briscoe Group is committed to improving standards of environmental
performance to enable a more efficient and sustainable future. Accordingly, we have the following initiatives which are
incorporated into regular management reporting to the Board.
Being one of New Zealand’s leading retailers encompassing multiple large-format retail outlets, there are many ways we look to
improve our environmental performance.
Briscoe Group has undertaken a materiality assessment to help formulate our strategic priorities. This assessment incorporated
input from internal and external stakeholders and helped to develop a new multi-year ESG framework which outlines the Group’s
environmental initiatives, social impacts and a new governance cadence (refer pages 24 - 27).
In parallel to this broader ESG framework the Group’s current sustainability initiatives cover:
• Waste Management
• Energy Efficiency
WASTE MANAGEMENT
The Group’s waste management strategy recognises that product sourcing is the first step in the supply chain and the best
opportunity in minimising unnecessary packaging. Initiatives have been implemented to:
• Work with suppliers to reduce packaging and specify recyclable packaging types at source,
• Ensure that the Group is using recyclable packaging materials in efficient quantities, and
• Ensure that stores have the adequate tools and services to enable effective landfill minimisation.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
82
ENERGY EFFICIENCY
Specifying energy efficient elements within our building documentation for new stores ensures a high level of energy efficiency
for the entire lifecycle of the building.
Operationally, comparing energy use on a site-by-site basis enables us to compare similarly sized stores and target potential
future savings through investment in heating, ventilation, air-conditioning and lighting systems.
Principle 5 – Remuneration
The remuneration of Directors and executives should be transparent, fair and reasonable.
Directors’ Remuneration
Recommendation 5.1: “An issuer should recommend director remuneration to shareholders for approval in a transparent
manner. Actual director remuneration should be clearly disclosed in the issuer’s Annual Report.”
In accordance with the Constitution, Shareholder approval is sought for any increase in the pool available to pay Directors’ fees.
Approval was last sought in 2021, when the pool limit was set at $400,000 per annum. No additional increase to the pool will be
sought during 2022.
The Board has determined the following allocation from the current pool:
PositionFees (per annum)
Board of Directors
Chair$140,000
Member$70,000
Audit and Risk Committee
Chair$12,000
Member$7,000
Human Resources Committee
Chair$10,000
Member$7,000
Remuneration of Directors in the reporting period is tabulated below:
Board
Fee
Audit and Risk
Committee
Human
Resources
Committee
Total
Fees
Other
Payments/
Benefits
Total
Remuneration
Dame Rosanne Meo$135,000$6,750$6,750$148,500-$148,500
Rod Duke
1.
----$2,166,319$2,166,319
Tony Batterton
2.
$68,125$12,000$1,375$81,500-$81,500
Andy Coupe$68,125$6,750$9,625$84,500-$84,500
Mark Callaghan
3.
$68,125$1,375$6,667$76,167$76,167
Total$339,375$26,875$24,417$390,667$2,166,319$2,556,986
1. No Directors’ fees are paid to Executive Directors. For more information in relation to Executive Director remuneration refer to
“Managing Director Remuneration” below.
2. Tony Batterton resigned from the HR Committee effective from 31 March 2021.
3. Mark Callaghan resigned from the Audit and Risk Committee effective from 31 March 2021.
Remuneration Policy
Recommendation 5.2: “An issuer should have a Remuneration Policy for remuneration of directors and officers, which outlines
the relative weightings of remuneration components and relevant performance criteria.”
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
83
RemunerationNumber of Employees
$100,000 - $109,9998
$110,000 - $119,99910
$120,000 - $129,9996
$130,000 - $139,9995
$140,000 - $149,99912
$150,000 - $159,9992
$160,000 - $169,9993
$170,000 - $179,9998
$180,000 - $189,9991
$190,000 - $199,9992
$200,000 - $209,9995
$210,000 - $219,9994
$230,000 - $239,9993
RemunerationNumber of Employees
$250,000 - $259,9991
$270,000 - $279,9991
$310,000 - $319,9991
$320,000 - $329,9992
$340,000 - $349,9991
$360,000 - $369,9991
$410,000 - $419,9991
$480,000 - $489,9991
$520,000 - $529,9991
$550,000 - $559,9991
$760,000 - $769,9991
$870,000 - $879,9991
$2,160,000 - $2,169,9991
Briscoe Group has adopted a Remuneration Policy which sets out the remuneration principles that apply to all Directors and
employees including senior executives, to ensure that remuneration practices are fair and appropriate, and that there is a clear link
between remuneration and performance. A copy of the Remuneration Policy, which is reviewed annually, is available on Briscoe
Group’s website. Briscoe Group is committed to applying fair and equitable remuneration and reward practices in the workplace,
taking into account internal and external relativity, the commercial environment, the ability to achieve Briscoe Group’s business
objectives and the creation of Shareholder value. Under Briscoe Group’s remuneration framework, job size relative to the relevant
competitive market for talent as well as individual performance against defined key performance objectives are key considerations
in all remuneration-based decisions, balanced by the organisational context. Remuneration for senior management includes a mix
of fixed and variable components. Criteria for performance payments which comprise short, medium and long-term incentives
are regularly appraised to ensure they incorporate changing market conditions as well as the Company’s performance in relation to
strategic initiatives that are deemed by the Board to be most relevant in driving Shareholder value.
Non-Executive Directors are paid fees in accordance with the table provided under 5.1. The levels at which fees are set reflects
the time commitment and responsibilities of the roles of Non-Executive Directors and the figures shown under 5.1 do not
include any performance-based payments. The Board uses various sources to inform its decision making on fees and consults
with expert independent advisors where appropriate.
In 2019 the Board introduced the Briscoe Group Senior Executive Incentive Plan to grant performance rights to key senior
management personnel as a long-term incentive (LTI) programme. Vesting is dependent upon achievement of Earnings per Share
(EPS) and Absolute Total Shareholder Return (aTSR) growth targets at the end of a three-year term. Four tranches of performance
rights have been issued under this programme. This replaced the existing Share Option Scheme which had been in place since 2003.
A medium-term incentive (MTI) scheme was also introduced for other selected senior management. This plan vests in cash
rather than equity over a two-year period, using the same measures of EPS and aTSR as the LTI.
Periodically the Human Resources Committee, on behalf of the Board, seeks independent external advice to ensure that
remuneration for senior executives is appropriate and fulfils the objectives of attraction, retention and motivation. This exercise
was repeated in 2021, including for the Group Managing Director.
In this manner, the various components of remuneration maintain alignment with the interests of Shareholders, the Company
and the individual.
Employee Remuneration
The number of employees and former employees within Briscoe Group (including the Managing Director but excluding any
other Director) receiving remuneration and benefits above $100,000, relating to the 52-week period ending 30 January 2022 is
set out in the table below:
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
84
Managing Director Remuneration
Recommendation 5.3: “An issuer should disclose the remuneration arrangements in place for the CEO in its Annual Report.
This should include disclosure of the base salary, short-term incentives and long-term incentives and the performance criteria
used to determine performance-based payments.”
The remuneration of the Managing Director for the year ended 30 January 2022 was:
Period Ended
30 January 2022
Base Salary$942,256
Other Benefits$117,052
STI$1,107,011
Subtotal$2,166,319
LTI (refer below)-
Total Remuneration$2,166,319
The remuneration of the Managing Director comprises fixed and performance payments. Fixed remuneration includes a base
salary and other benefits comprising; contributions to superannuation, life insurance, health insurance and a fuel card. The
Managing Director received a short-term incentive of $1,107,011. The target value of a STI payment is recommended by the
Human Resources Committee, approved by the Board and linked strongly to company financial performance and performance
against strategic initiatives. The Managing Director does not participate in the Medium Term Incentive Scheme and given his
shareholding in the Company, nor any equity-based Long-Term Incentive Scheme.
In accordance with an externally conducted review of the remuneration package of the role of Managing Director, it was
determined that, along with a review of quantums, that the structure of the package warranted change. Given the timing of the
outcomes of the review, the HR Committee recommended to the Board that the potential value earnable through the incentive
scheme components be treated in accordance with the Short Term Incentive Scheme rules for the balance of the current
financial year.
Senior Management
Briscoe Group’s senior management are appointed by the Managing Director and their key performance indicators (‘KPIs’) are
comprised of specific Briscoe Group financial objectives along with business related individual objectives. Establishing and
monitoring these KPIs is done annually by the Managing Director recommending the KPIs to the Human Resources Committee,
which in turn, makes recommendations to the Board for approval. The performance of the senior management against these
KPIs is evaluated annually and serves as a key determinant of any short-term incentive scheme values and payments.
Short Term Incentive Payments
Short term incentive (STI) payments are at risk cash payments designed to motivate and reward for short term (within each
financial year) performance. The target value of a STI payment is set by the Managing Director with a specified dollar potential
available to each participant in the scheme. The target areas for all employees who are entitled to a STI payment are set
based on a combination of company financial performance, specific financial performance relative to the employee’s areas of
responsibility and individual goals. The weightings applied to each of the target areas will be largely consistent throughout the
company for roles entitled to a STI payment but may vary depending on specific areas of focus as determined by the Managing
Director. The Board approves the STI payments to be made to senior management at the end of the financial year and approves
the senior management targets for the following year.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
85
Long Term Incentive Payments
On 26 March 2019 the Board approved a Senior Executive Incentive Plan under which selected senior employees could be
granted Performance Rights which upon vesting would reward the employees with ordinary shares in the Company. Vesting
of the Performance Rights occurs after three years and is subject to the achievement of certain performance hurdles, relating
to the Company’s achievement against Total Shareholder Return and Earnings Per Share growth targets. This plan replaced the
Share Option Scheme which had been in place since 2003. Participants in the LTI do not participate in the MTI.
Four tranches of Performance Rights have been issued under this Plan.
Principle 6 – Risk Management
Directors should have a sound understanding of the material risks faced by the issuer and how to manage them.
The Board should regularly verify that the issuer has appropriate processes that identify and manage potential
and material risks.
Risk Management
Recommendation 6.1: “An issuer should have a risk management framework for its business and the issuer’s Board should
receive and review regular reports. A framework should also be put in place to manage any existing risks and to report the
material risks facing the business and how these are being managed.”
The Board is responsible for Briscoe Group’s risk assessment, management and internal control and it believes has carried
out a robust risk assessment process. Principally through the Audit and Risk Committee, the Board monitors policies and
processes that identify significant business risks and implements procedures to monitor these risks. A management risk
committee comprising the Managing Director, Chief Financial Officer, Chief Operating Officer and Internal Audit Manager
meets every quarter to identify and assess the major risks affecting the business by maintaining a risk matrix which is used to
develop strategies to monitor and mitigate these risks. Risks are assessed against the impact of the risk and the likelihood of it
eventuating. The risk matrix is provided to the Board six monthly. The management risk committee reports to the Audit and Risk
committee. Significant risks are discussed at Board meetings, or as required. Briscoe Group maintains insurance policies that it
considers adequate to meet insurable risks.
Health and Safety
Recommendation 6.2: “An issuer should disclose how it manages its health and safety risks and should report on their health
and safety risks, performance and management.”
The Human Resources Committee, the General Manager Human Resources and specialist team members in the Human
Resource function assist the Board in meeting its responsibilities under the Health and Safety at Work Act 2015, other
regulations and policies.
The Human Resources Committee, along with management, is responsible for ensuring that Health and Safety has appropriate
focus and is sufficiently resourced to achieve its objectives within Briscoe Group.
Medium Term Incentive Payments
Medium term incentive (MTI) payments are at risk cash payments designed to motivate and reward for medium term (crossing
two financial years) performance. A two-year term provides for evaluation of performance over a longer term than used for
purposes of STI and ensures a degree of impact or sustainability thereby avoiding or reducing the risk of “short-termism”.
MTI participants are members of the senior management team who significantly influence achievement of the Company’s
performance. The target value of an MTI payment is recommended by the Managing Director for approval by the Board, with
a specified dollar amount potentially available to each participant in the scheme. Performance is assessed at Company rather
than individual level with measures aligned to those of the Long Term Incentive Scheme (LTI) scheme, albeit over a slightly lesser
timeframe. The Board will review performance and approve any MTI payments to be made to senior management at the end of
the financial year and approve objectives for the following year. Participants in the MTI do not participate in the LTI.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
86
Company performance across a range of measures of Health and Safety are a consistent and priority agenda item at all Board
meetings. The Board and senior management are apprised of all notifiable incidents and injuries and the actions taken to ensure
the health and wellbeing of injured persons. Actions taken to prevent incident recurrence are also advised.
Management operates and assesses the effectiveness of risk assessment and mitigation, safety processes and systems,
capability of staff and the general culture of the business in relation to safety.
Briscoe Group has implemented a Health and Safety Risk Matrix to identify specific hazards and risks, assess their severity
of impact and likelihood of occurrence, document mitigation strategies and determine the level of residual risk. The matrix
incorporates mental wellness in addition to physical safety. This matrix is reviewed at least annually by the Board and annual
Health and Safety objectives and KPIs are set for the business based on the significant risks identified.
The Company operates a continuous system of hazard identification and management along with monthly reviews of
performance to ensure that opportunities for improvement are identified and progressed. In 2021 significant teamwork across
the business saw the introduction of the External Contractor module in our online Health & Safety portal, ecoPortal. This
functionality provides for accreditation of approved suppliers and tradespeople and links works to be performed at our sites
with risks and mitigation requirements. Alongside the development of Traffic Management Plans (TMP’s) for our new sites at
Silverdale and in Morningside, reviews of TMP’s for our highest risk sites were commenced. Continuous vigilance in this area is
vital to the safety and wellbeing of our team and other visitors to our sites.
This year also saw extensive work in the area of team member and customer safety in response to increased anti-social and
violent behaviour by visitors to our sites. Work across the Briscoe Group team has been complemented by work with and by
external stakeholders including the New Zealand Police, other retailers and Retail New Zealand. We have recognised this as
a priority in order to protect both the physical and mental wellbeing of our team. Our work in this area will continue with a
wide range of considerations including but not limited to the training provided to our team, equipment provided to our Loss
Prevention Specialists and management teams, systems and processes used to identify and monitor undesirable behaviour. We
have been clear with our team that nothing, including loss of product, is more important than their health and safety.
With the continued impacts of the Covid-19 pandemic, we maintained our extensive communication and information activities
complemented by our physical and mental health and wellbeing programmes. We continue to closely monitor a range of
indicators including our Employee Assistance Programme information to ensure our actions are targeting known needs as well
as identifying new issues or concerns. The introduction of our Employee Engagement platform at the end of the last financial
year provides further opportunity for feedback from our team on health and safety as well as other matters.
Both senior management and the Board receive regular updates on our health and safety performance. Complementing
our regular reviews, our annual deep dive with the Board continues to ensure we challenge ourselves to improve on prior
performance through reductions in health and safety incidents, injury frequency and severity.
Despite the continuation of a significant Covid-19 related workload, the continued advances we have made in ensuring a healthy
and safe place to work have been pleasing.
Principle 7 – Auditors
The Board should ensure the quality and independence of the external audit process.
External Audit
Recommendation 7.1 and 7.2: The Board should establish a framework for the issuer’s relationship with its external auditors.
This should include procedures prescribed in the NZX Code. The external auditor should attend the issuer’s annual shareholders
meeting to answer questions from shareholders in relation to the audit.
The Audit and Risk Committee is responsible for the oversight of Briscoe Group’s external audit arrangements. These
arrangements include procedures for the matters described in Recommendation 7.1 of the NZX Code.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
87
The Audit and Risk Committee is committed to ensuring Briscoe Group’s external auditor is able to carry out its work
independently so that financial reporting is reliable and credible. Briscoe Group has an External Auditor Independence policy,
which is available on Briscoe Group’s website. The External Audit Independence policy implements the procedures set out in
the NZX Code. Regular rotation of the Company’s external audit firm is not mandated however, the Engagement and Quality
Review partners of the Company’s external auditors are required to rotate every five years and are subject to a two-year cooling-
off period.
The policy sets out the work that the external auditor is required to do and specifies the services that the external auditor is not
permitted to do unless authorised by the both the Chairman and Chairman of the Audit and Risk Committee and so advised to
the Board. This is so the ability of the auditor to carry out its work is not impaired and could not reasonably be perceived to be
impaired.
During 2021 a benchmarking exercise was undertaken by the Board which involved discussions with other external audit
companies capable of fulfilling the Group’s external audit requirements. As a result of this exercise the Board was satisfied that
the current external auditor remained the most appropriate choice for the Group’s external audit engagement.
The external auditor has historically attended the Annual Shareholders’ Meeting, and the lead audit partner is available to answer
relevant questions from Shareholders at that meeting.
Briscoe Group’s external auditor is PricewaterhouseCoopers. Total fees paid to PricewaterhouseCoopers in its capacity as
auditor for period ended 30 January 2022 were $134,000 (2021: 108,000). Total fees paid to PricewaterhouseCoopers for
other professional services for the period ended 30 January 2022 were $33,000 (2021: $26,000). The other service fees
comprise a half yearly review.
Internal Audit
Recommendation 7.3: Internal audit functions should be disclosed.
Briscoe Group has an internal audit team that performs assurance and compliance reviews across company operations as part
of a risk-based programme of work approved by the Audit and Risk Committee. In scope are all aspects of the Group’s store
and non-store operations. In addition to the assurance and compliance work, the internal audit team provide advice to improve
both established systems and processes, and during the design and implementation phase of new systems and processes. The
Internal Audit Manager reports functionally to the Audit and Risk Committee and administratively to the Chief Financial Officer.
The Internal Audit Manager provides regular reporting to management as well as to the Board and Audit and Risk Committee.
Principle 8 – Shareholder Rights and Relations
The Board should respect the rights of shareholders and foster constructive relationships with shareholders that
encourage them to engage with the issuer.
Information for Shareholders
Recommendation 8.1: “An issuer should have a website where investors and interested stakeholders can access financial and
operational information and key corporate governance information about the issuer.”
Briscoe Group is committed to an open and transparent relationship with Shareholders. The Board aims to ensure that all
Shareholders are provided with all information necessary to assess Briscoe Group’s direction and performance.
This is done through a range of communication methods including periodic and continuous disclosures to NZX and ASX, half
year and annual reports and the Annual Shareholders’ Meeting. Briscoe Group’s website provides financial and operational
information, information about its Directors and senior management and copies of its governance documents, for investors and
interested stakeholders to access at any time.
Briscoe Group Limited Annual Report 2022
Corporate Governance Statement
88
Communicating with Shareholders
Recommendation 8.2: “An issuer should allow investors the ability to easily communicate with the issuer, including providing
the option to receive communications from the issuer electronically.”
Shareholders have the option of receiving their communications electronically, including by email or through Briscoe Group’s
investor centre. Briscoe Group’s website includes a section for Shareholder communications and the Board has always been
committed to having an open dialogue with Shareholders and welcomes investor enquiries.
Shareholder Voting Rights
Recommendation 8.3: “Shareholders should have the right to vote on major decisions which may change the nature of the
company in which they are invested.”
In accordance with the Companies Act 1993, the Company’s Constitution, and the NZX and ASX Listing Rules, Briscoe Group
refers any significant matters to Shareholders for approval at a Shareholder meeting.
Further Capital
Recommendation 8.4: “If seeking additional equity capital, an issuer should offer further equity securities to existing
shareholders of the same class on a pro rata basis, and on no less favourable terms, before further equity securities are offered to
other investors.”
If the Company seeks additional equity capital, the Board will ensure it considers the interests of existing shareholders and,
where that is reasonable and in the best interests of the Company, permit shareholders to participate on a pro-rata basis.
Notice of Annual Shareholders meeting
Recommendation 8.5: “The Board should ensure that the annual shareholders notice of meeting is posted on the issuer’s
website as soon as possible and at least 20 working days prior to the meeting.”
Briscoe Group posts any Notices of Shareholder meetings on its website as soon as these are available. The general practice is to
make these available not less than four weeks prior to the Shareholder meeting.
Briscoe Group Limited Annual Report 2022
General Disclosures
89
General
Disclosures
Board of Directors
Dame Rosanne Meo, DNZM, OBE, BA, Dip BIA: Chairman (Non-Executive)
Director of AMP Administration (NZ) Ltd and Rosanne Meo Consulting. Chartered Fellow of Institute of Directors.
Rod Duke: Group Managing Director and Deputy Chairman
Group Managing Director since 1991. Director of Kein Geld (NZ) Limited, RA Duke Limited, Briscoe Share Plan Trustee Limited
and RD Golf Investments Limited.
Tony Batterton, BCom, C.A: Director (Non-Executive)
Partner and Executive Director of Evergreen Partners Ltd. Non-Executive Director of Direct Capital Investments Ltd, Direct
Capital IV Investments Ltd, Direct Capital IV Management Ltd, Direct Capital IV Partners Ltd, Direct Capital IV GP Ltd, P F Olsen
Group Ltd, PF Olsen Ltd, Siplow Nominees Ltd, Direct Capital Partners Ltd, NZ Fine Touring Group and Evergreen Partners
GP Ltd.
Andy Coupe, LLB: Director (Non-Executive)
Chairman of Television New Zealand Ltd and the New Zealand Takeovers Panel. Director of Kingfish Ltd, Barramundi Ltd, Marlin
Global Ltd. Chartered Member of Institute of Directors.
Mark Callaghan, BCA (Hons): Director (Non-Executive)
Chairman of OPD Holdings Ltd, Office Products Depot Ltd, Hepstone Ltd and Callaghan Associates Ltd.
Member of Institute of Directors.
Subsidiary Companies
No employee of the Group appointed as a Director of Briscoe Group Limited or its subsidiaries receives or retains any
remuneration or other benefits in their capacity as a Director.
The remuneration and other benefits of such employees (received as employees) totalling $100,000 or more during the year
ended 30 January 2022, are included in the relevant bandings for remuneration disclosed as part of the “Remuneration” section
of the Corporate Governance Statement included in this Annual Report (page 83).
The persons who held office as Directors of subsidiary companies at 30 January 2022 are as follows:
Briscoes (New Zealand) Limited
Rod Duke, Geoff Scowcroft
The Sports Authority Limited
Rod Duke, Geoff Scowcroft
Rebel Sport Limited
Rod Duke
Living & Giving Limited
Rod Duke
Briscoe Group Limited Annual Report 2022
General Disclosures
90
Principal Activities of the Group
Briscoe Group Limited is a non-trading holding company but provides management services to its subsidiaries.
The principal trading subsidiaries are Briscoes (New Zealand) Limited, a specialist homeware retailer selling leading branded products,
and The Sports Authority Limited, (trading as Rebel Sport), New Zealand’s largest retailer of most leading brands of sporting goods. The
subsidiaries are 100% owned by Briscoe Group Limited.
During the period there were no changes to the nature of Briscoe Group Limited’s business or that of its subsidiaries. There were also
no changes to company structure.
Directors
A. Shareholdings
Beneficially Held
As at 18 March 2022
Number of shares
RAB Coupe10,000
Non-Beneficially Held
As at 18 March 2022
Number of shares
RA Duke as Trustee of the RA Duke Trust171,566,383
RPO’L Meo100,000
AD Batterton20,000
For further details refer to Substantial Product Holders information (page 91).
B. Share dealings
During the 52 week period ended 30 January 2022 no director acquired shares in the Company.
There were no other changes to Directors’ interests in Briscoe Group Limited during the period.
C. Directors’ Insurance
As provided by the Group’s Constitution and in accordance with Section 162 of the Companies Act 1993 the Group has arranged
Directors’ and Officers’ Liability Insurance which ensures Directors will incur no monetary loss as a result of actions undertaken by them
as Directors provided they act within the law.
Briscoe Group Limited Annual Report 2022
General Disclosures
91
D. Interests in contracts
During the 52-week period ended 30 January 2022 the following Directors have declared pursuant to Section 140 (1) of the
Companies Act 1993 that they be regarded as having an interest in the following transactions:
• The RA Duke Trust, of which RA Duke is a trustee, as owner of the Rebel Sport premises at Panmure, Auckland, received rental
payments of $597,226 (2021: $613,663), under an agreement to lease premises to The Sports Authority Limited (trading as Rebel
Sport. Refer to Note 6.1.1 of the financial statements).
• Kein Geld (NZ) Limited, an entity associated with RA Duke, received rental payments of $502,000 (2021: $520,000), under an
agreement to lease premises to Briscoes (NZ) Limited. (Refer to Note 6.1.1 of the financial statements).
E. Directors’ and Officers’ use of Company Information
During the period the Board received no notices pursuant to Section 145 of the Companies Act 1993 relating to use of Company
information.
Shareholders Information
Holding Range at 18 March 2022
No. InvestorsTotal Holdings%
1 – 10001,212761,0620.34
1,001 – 5,0001,8155,211,4522.34
5,001 – 10,0006134,791,4052.15
10,001 – 100,00048011,256,1235.06
100,001 and over32200,625,54490.11
Total4,152222,645,586100%
Substantial Product Holders
The following information is given pursuant to section 293 of the Financial Markets Conduct Act 2013. As at 30 January 2022, details
of the Substantial Product Holders in the company and their relevant interests in the company’s shares are as follows:
Substantial
Product Holder
Holding as at
30 January 2022
1
R A Duke
2.
171,566,383
1. This information reflects the company’s records and disclosures made under section 280(1)(b) of the Financial Markets Conduct
Act 2013.
2. R A Duke has a relevant interest as a trustee of the R A Duke Trust which was disclosed in the SSH notice dated 13 October 2016, in
respect of 170,081,138 ordinary shares. As at 30 January 2022 this interest was in respect of 171,566,383 ordinary shares.
The total number of ordinary shares on issue (being all of the voting shares of the company) as at 30 January 2022
was 222,556,300.
Briscoe Group Limited Annual Report 2022
Top 20 Shareholders
92
Top 20
Shareholders
As at 18 March 2022
RankHolder’s Name*Total%
1JB Were (NZ) Nominees Limited **173,694,66978.01
2=Gerald Harvey5,250,0002.36
2=Harvey Norman Properties (NZ) Ltd5,250,0002.36
4Custodial Services Limited2,674,9391.20
5FNZ Custodians Limited1,369,4110.62
6
Alaister John Wall, Beverley Ann Wall and Benedict Dougles Tauber as
Trustees of Tunusa Trust established for the benefit of the family of AJ
and BA Wall
1,230,0000.55
7HSBC Nominees (New Zealand) Limited 1,013,4620.46
8Stuart Hamilton Johnstone and Lorraine Rose Johnstone1,000,0000.45
9Forsyth Barr Custodians Limited830,6410.37
10Accident Compensation Corporation706,5850.32
11Manhattan Trustee Limited683,0000.31
12Public Trust646,9550.29
13New Zealand Depository Nominee576,8500.26
14Peter William Burilin540,8390.24
15Shu Wen Chiang 534,8610.24
16Hobson Wealth Custodian Limited418,1200.19
17Carla Ingrid Brockman336,3000.15
18Gemscott Limited 335,0000.15
19Shih Ting Huang 306,7190.14
20Geoffrey Peter Scowcroft303,0610.14
* A number of the registered holders listed below hold shares as nominees for, or on behalf of, other parties.
** Includes 171,566,383 shares in relation to holdings associated with R A Duke.
Directors
Dame Rosanne PO’L Meo (Chairman)
Rodney A. Duke
Anthony (Tony) D. Batterton
Richard A. (Andy) Coupe
Hugh J. M. (Mark) Callaghan
Registered Office
1 Taylors Road,
Morningside,
Auckland 1025
Telephone +64 9 815 3737
Postal Address
PO Box 884
Auckland Mail Centre
Auckland
Solicitors
Simpson Grierson
Bankers
Bank of New Zealand
Auditors
PwC
Share Registrar
Link Market Services Limited
Level 30
PwC Tower
15 Customs Street West
Auckland 1010
Telephone +64 9 375 5998
Websites
www.briscoegroup.co.nz
www.briscoes.co.nz
www.rebelsport.co.nz
www.livingandgiving.co.nz
Directory
Briscoe Group Limited Annual Report 2022
Directory
93
Briscoe Group Limited Annual Report 2022
94
Continue to be relevant to our shoppers in a very testing, yet
dynamic marketplace. Challenge ourselves to test and trial better
ways of doing our business, to ensure these Brands will
continue to be successful and loved, now and in the future!
95
Briscoe Group Limited Annual Report 2022
Continue to be relevant to our shoppers in a very testing, yet
dynamic marketplace. Challenge ourselves to test and trial better
ways of doing our business, to ensure these Brands will
continue to be successful and loved, now and in the future!
briscoegroup.co.nz
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.