Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
1
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Description
of business
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Naked
Brand Group Limited (“the Group or the Company”) is a designer, distributor, wholesaler and retailer of women’s and
men’s intimates apparel globally. The Group sells its merchandise through retail and outlet stores in New Zealand and Australia,
wholesale operations in New Zealand, Australia, the United States and Europe, and through online channels. The Group operates both licenced
and owned brands, including the following:
Licenced
brands:
Heidi
Klum (terminated on 31 January 2020 with specific details below), Fredericks of Hollywood
Owned
brands:
Pleasure
State, Davenport, Lovable, Bendon, Fayreform, Naked, VaVoom, Evollove, Hickory
The
financial report covers Naked Brand Group Limited and its controlled entities (‘the Group’). Naked Brand Group Limited is
a for-profit Group, incorporated and domiciled in Australia.
Events
in the prior year the following significant changes occurred, of which there is further disclosure contained within this report:
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●
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On
28th January 2020, Naked Brand Group Limited agreed to sell all of its rights, title and interest in the trademarks related
to the “Naked” and “NKD” brands to Gogogo SRL for a consideration of US $0.6m (note 20).
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●
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On
31st January 2020, the licence agreement with Heidi Klum was terminated by mutual consent for a fee of US$3.5m which is
to be paid in monthly instalments up to and including 30 December 2020. Under the terms of termination, the Group had the right to
sell Heidi Klum branded product in the northern hemisphere until 31 July 2020 and the right to sell product in the southern hemisphere
until 31 January 2021. As at 31 January 2021, the Group had no outstanding termination fees payable and had inventory of $0.4m which
has been fully provided for.
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The
financial report was authorised for issue by the Directors on May 18, 2021.
Comparatives
are consistent with prior years, unless otherwise stated.
The
amounts in the financial statements have been rounded to the nearest thousand dollars.
These
general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. Naked Brand Group Limited is a for-profit entity for
the purpose of preparing the financial statements.
The
consolidated financial statements of the Group also complies with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
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(a)
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Historical
cost convention
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The
financial statements are based on historical costs, except for the measurement at fair value of selected financial assets and financial
liabilities.
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(b)
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New
standards, interpretations, and amendments not yet effective
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There
are a number of standards, amendments to standards, and interpretation which have been issued by the IASB that are effective in future
accounting periods that the group has decided not to adopt early.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
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(b)
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New
standards, interpretations, and amendments not yet effective (continued)
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In
January 2020 the IASB issued the final amendments in Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
which affect the presentation of liabilities in the statement of financial position. The amendments clarify that the classification
of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align
the wording in all affected paragraphs to refer to the “right” to defer settlement by at least twelve months and make explicit
that only rights in place “at the end of the reporting period” should affect the classification of a liability; clarify that
classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and
make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services. The changes
in Classification of Liabilities as Current or Non-Current – Deferral of Effective Date (Amendments to IAS 1) defer the
effective date of the January 2020 Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) to annual reporting
periods beginning on or after January 1, 2023. Earlier application of the January 2020 amendments is permitted. Management is currently
assessing the impacts of the amended standard.
In
May 2020, the IASB issued amendments to IAS 37, Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”).
The amendments clarify that for purpose of assessing whether a contract is onerous, the cost of fulfilling the contract includes both
the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts. The
amendments are effective for contracts for which an entity has not yet fulfilled all its obligations on or after January 1, 2022. Earlier
application is permitted. Management is currently assessing the impacts of the amended standard.
In
May 2020, the IASB issued further amendments to IFRS 3, Business Combinations (“IFRS 3”) which update references in
IFRS 3 to the revised 2018 Conceptual Framework. To ensure that this update in referencing does not change which assets and liabilities
qualify for recognition in a business combination, or create new Day 2 gains or losses, the amendments introduce new exception to the
recognition and measurement principles in IFRS 3.
An
acquirer should apply the definition of liability in IAS 37, rather than the definition in the Conceptual Framework, to determine
whether a present obligation exists at the acquisition date as a result of past events. For a levy in the scope of IFRIC 21, Levies
(“IFRIC 21”). The acquire should apply the criteria in IFRSIC 21 to determine whether the obligation event that gives
rise to a liability to pay the levy has occurred by the acquisition date. In addition, the amendments clarify that the acquirer should
not recognise a contingent asset at the acquisition date. The amendments to IFRS 3 are effective for business combinations occurring
in the reporting periods starting on or after January 1, 2022. Earlier application is permitted. Management is currently assessing the
impacts of the amened standard.
In
May 2020, the IASB issued Property, Plant and Equipment – Proceeds before Intended Use, which made amendments to IAS 16. The amendments
prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the
company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit
or loss. The amendments are affective for annual periods beginning on or after January 1, 2022. Early application is permitted. Management
is currently assessing the impacts of the amended standard.
In
May 2020, the IASB issued Annual Improvements to IFRS standards 2018-2020 which contain an amendment to IFRS 9. The amendment
clarifies which fees an entity includes when it applies the “10 per cent” test in paragraph B3.3.6 of IFRS 9 in assessing
whether to recognise a financial liability. An entity includes only fees pair or received between the entity (the borrower) and the lender,
including fees paid or received by either the entity or the lender on the other’s behalf. The amendment is effective for annual
reporting periods beginning on or after January 1, 2022. Management is currently assessing the impacts of the amended standard.
3
|
Summary
of Significant Accounting Policies
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The
financial statements have been prepared on the basis of going concern which contemplates continuity of normal business activities and
the realisation of assets and settlement of liabilities in the ordinary course of business.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
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(a)
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Going
concern (continued)
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For
the financial year ended 31 January 2021 the Group experienced a loss after income tax from continuing operations of NZ$68.3 million
and operating cash outflows of NZ$11.0 million. It also is in a net current asset position of NZ$63.8 million and a net asset
position of NZ$89.2 million.
The
losses in the year ended 31 January 2021 of NZ$68.3 million (2020: NZ$54.3 million) are NZ$14.0 million greater than in the
prior year. Gross profit was maintained at NZ$33.9 million with the negative impact of lower sales as a result of COVID being
offset by lower royalty costs following termination of the Heidi Klum license agreement in the prior year. All other costs were NZ$14.8
million higher with a foreign currency benefit of NZ$3.0 million and receipt of government subsidies and rent concessions
of NZ$4.2 million being more than offset by a NZ$26.6 million fair value adjustment on convertible notes. The Group maintained
its loan facility with the Bank of New Zealand, for the majority of the financial year ended 31 January 2021 the Group could not meet
the compliance covenants.
The
business raised NZ$113.0 million of funds in the form of issued capital and convertible notes during the financial year to assist
with the operating cash outflows and used this to repay $3.4m of the bank debt. The Group also received NZ$2.0 million in subsidies from
the New Zealand Government and $0.9m in subsidies from the Australian Government as well as receiving rent concessions of NZ$1.3
million as a goodwill gesture from landlords due to COVID.
Since
1 February 2021 and to the date of signing this report, the Group has raised NZ$298.3 million, in the form of issued shares and repaid
the bank debt of NZ$14.5 million in full on 9 February 2021.
As
such, with over NZ$300 million of cash in the business and a substantially strengthened Balance Sheet the directors have no reasonable
doubt that the Company has adequate resources to continue to use the going concern basis of accounting in preparing the financial statements.
Furthermore, whilst global macro-economic conditions remain uncertain with continued potential impacts from the COVID-19 pandemic and
divestment of the Bendon business puts the Company in a confident position to safeguard the Group’s ability to continue as a going
concern.
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(b)
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Basis
for consolidation
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Subsidiaries
Subsidiaries
are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group.
They are deconsolidated from the date that control ceases.
Intercompany
transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the group.
Non-controlling
interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, statement of
comprehensive income, statement of changes in equity and balance sheet respectively.
When
the group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant influence,
any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss.
This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate,
joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity
are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised
in other comprehensive income are reclassified to profit or loss.
If
the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
|
Summary
of Significant Accounting Policies
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(c)
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Business
combinations
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Business
combinations are accounted for by applying the acquisition method which requires an acquiring entity to be identified in all cases. The
acquisition date under this method is the date that the acquiring entity obtains control over the acquired entity.
The
fair value of identifiable assets and liabilities acquired are recognised in the consolidated financial statements at the acquisition
date.
Goodwill
or a gain on bargain purchase may arise on the acquisition date, this is calculated by comparing the consideration transferred and the
amount of non-controlling interest in the acquiree with the fair value of the net identifiable assets acquired. Where consideration is
greater than the net assets acquired, the excess is recorded as goodwill. Where the net assets acquired are greater than the consideration,
the measurement basis of the net assets are reassessed before a gain from bargain purchase recognised in profit or loss.
All
acquisition-related costs are recognised as expenses in the periods in which the costs are incurred except for costs to issue debt or
equity securities.
Any
contingent consideration which forms part of the combination is recognised at fair value at the acquisition date. If the contingent consideration
is classified as equity, then it is not remeasured, and the settlement is accounted for within equity. Otherwise subsequent changes in
the value of the contingent consideration liability are measured through profit or loss.
The
tax expense/(benefit) recognised in the consolidated statements of profit or loss and other comprehensive income comprises of current
income tax expense plus deferred tax expense/(benefit).
Current
tax is the amount of income taxes payable/(recoverable) in respect of the taxable profit/(loss) for the period and is measured at the
amount expected to be paid to/(recovered from) the taxation authorities, using the tax rates and laws that have been enacted or substantively
enacted by each jurisdiction by the end of the reporting period. Current tax liabilities/(assets) are measured at the amounts expected
to be paid to/(recovered from) the relevant taxation authority.
Deferred
tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets and liabilities
to the carrying amounts in the consolidated financial statements.
Deferred
tax is not provided for the following:
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●
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The
initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction,
affects neither accounting profit nor taxable profit/(tax loss).
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●
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Taxable
temporary differences arising on the initial recognition of goodwill.
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●
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Temporary
differences related to investment in subsidiaries, associates and jointly controlled entities to the extent that the Group is able
to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable
future.
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Deferred
tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability
is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by each jurisdiction by the end of the
reporting period.
Deferred
tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences and losses can be utilised.
Current
and deferred tax is recognised as income or an expense and included in profit or loss for the period except where the tax arises from
a transaction which is recognised in other comprehensive income or equity, in which case the tax is recognised in other comprehensive
income or equity respectively.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
|
Summary
of Significant Accounting Policies
|
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(d)
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Income
Tax (continued)
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In
determining the amount of current and deferred income tax, the Group takes into account the impact of uncertain income tax positions
and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy
of existing tax liabilities; such changes to tax liabilities will impact the income tax expense in the period that such a determination
is made.
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(e)
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Revenue
and other income
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Sale
of goods
Sales
of goods through retail stores, e-commerce and wholesale channels are recognised when control of the products have been transferred to
the customer which is a point in time. For wholesale and e-commerce sales, risks and rewards are transferred when goods are delivered
to customers, and therefore reflects an estimate of shipments that have not been received at year end based on shipping terms and historical
delivery times. The Group also provides a reserve for projected merchandise returns based on prior experience.
The
Group sells gift cards to customers. The Group recognises revenue from gift cards when they are redeemed by the customers. In addition,
the Group recognises revenue on all of its unredeemed gift cards when the gift cards have expired.
(i)
Sale of goods - wholesale
The
Group sells a range of lingerie products in the wholesale market. Sales are recognised when control of the products has transferred,
being when the products are delivered to the wholesaler, the wholesaler has full discretion over the channel and price to sell the products,
and there is no unfulfilled obligation that could affect the wholesaler’s acceptance of the products. Delivery occurs when the
products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the wholesaler, and
either the wholesaler has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the
group has objective evidence that all criteria for acceptance have been satisfied.
Revenue
from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. The estimates of
discount is based on the trading terms in the contracts, and revenue is only recognised to the extent that it is highly probable that
a significant reversal will not occur. A refund liability (included in trade and other payables) is recognised for expected volume payable
to customers in relation to sales made until the end of the reporting period. The Group’s obligation to provide a refund for faulty
products under the standard trading terms is recognised as a provision.
(ii)
Sale of goods - retail/e-commerce
The
group operates a chain of retail stores and e-commerce websites selling lingerie products. Revenue from the sale of goods is recognised
when a group entity sells a product to the customer.
Payment
of the transaction price is due immediately when the customer purchases the product. It is the group’s policy to sell its products
to the end customer with a right of return within 30 days. Therefore, a refund liability (included in trade and other payables) and a
right to the returned goods (included in inventory if deemed saleable) are recognised for the products expected to be returned. Accumulated
experience is used to estimate such returns at the time of sale at a portfolio level (expected value method). Because the number of products
returned has been steady for years, it is highly probable that a significant reversal in the cumulative revenue recognised will not occur.
The validity of this assumption and the estimated amount of returns are reassessed at each reporting date.
Interest
revenue
Interest
is recognised using the effective interest method.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
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Summary
of Significant Accounting Policies
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(e)
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Revenue
and other income (continued)
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Other
income
Other
income is recognised on an accruals basis when the Group is entitled to it.
Government
grants are recognised in the income statement so as to match them with the expenditure towards which they are intended to contribute,
to the extent that the conditions for receipt have been met and there is reasonable assurance that the grant will be received.
Rent
concessions are recognised in the income statement and relate to changes to lease expenditure as a result of COVID. The Group has elected
to utilise the practical expedient for all rent concessions that meet the criteria and credited the consolidated statement of profit
or loss and other comprehensive income.
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(f)
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Brand management, administrative, corporate and brand transition,
restructure and transaction expenses
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Corporate
expenses include head office costs such as human resources, finance team and rental costs. Administrative expenses include depreciation
and amortisation, as well as professional accounting fees. Brand management expenses includes other costs incurred in selling products,
including advertising, design and retail store occupancy and payroll. Brand transition, restructure and transaction expenses includes
costs are extraordinary costs not normally associate with trading.
Borrowing
costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take
a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowing
pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All
other borrowing costs are recognised as an expense in the period in which they are incurred.
Inventories
are measured at the lower of cost and net realisable value. Cost of inventory is determined using the weighted average costs basis and
is net of any rebates and discounts received. Net realisable value represents the estimated selling price for inventories less costs
necessary to make the sale. Net realisable value is estimated using the most reliable evidence available at the reporting date and inventory
is written down through an obsolescence provision if necessary.
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(i)
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Property,
plant and equipment
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Plant
and equipment
Plant
and equipment are measured using the cost model.
Under
the cost model the asset is carried at its cost less any accumulated depreciation and any impairment losses. Costs include purchase price
and other directly attributable costs associated with locating the asset to the installation site, where applicable.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
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Summary
of Significant Accounting Policies
|
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(i)
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Property,
plant and equipment (continued)
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Depreciation
Property,
plant and equipment, is depreciated on a straight-line basis over the asset’s useful life to the Group, commencing when the asset
is ready for use.
The
estimated useful lives used for each class f depreciable asset are shown below:
Fixed asset class
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Useful life
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Leasehold improvements
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1 - 10 years
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Plant, furniture, fittings and motor vehicles
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3 - 7 years
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At
the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions
are accounted for prospectively as a change in accounting estimate.
The
Group adopted IFRS 16 on 1 February 2019. The standard replaces IAS 17 ‘Leases’ and IFRIC 4 ‘Determining whether an
Arrangement Contains a Lease’ and for lessees eliminates the classifications of operating leases and finance leases. Straight-line
operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in operating costs)
and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods of the lease, the expenses
associated with the lease under IFRS 16 will be higher when compared to lease expenses under IAS 17. However, EBITDA (Earnings Before
Interest, Tax, Depletion, Depreciation and Amortisation) results improve as the operating expense is now replaced by interest expense
and depreciation in profit or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating
activities and the principal portion of the lease payments are separately disclosed in financing activities. For lessor accounting, the
standard does not substantially change how a lessor accounts for leases.
During
the period, the Group received rent concessions of NZ$1.3m, due to COVID-19. The Group has elected to utilise the practical expedient
for all rent concessions that meet the criteria. The practical expedient has been applied retrospectively, meaning it has been applied
to all rent concessions that satisfy the criteria, which in the case of the Group, occurred from March 2020 to June 2020. Rather than
revaluating each lease, the Group opted to credit the consolidated statement of profit or loss and other comprehensive income as it is
entitled to do under IFRS-16.
Accounting
for the rent concessions as lease modifications would have resulted in the Group remeasuring the lease liability to reflect the revised
consideration using a revised discount rate, with the effect of the change in the lease liability recorded against the right-of-use asset.
By applying the practical expedient, the Group is not required to determine a revised discount rate and the effect of the change in the
lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.
The
effect of applying the practical expedient is disclosed in note 24.
Right-of-use
assets
A
right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the
initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of
any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate
of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use
assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever
is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over
its estimated useful life. Right-of-use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
|
Summary
of Significant Accounting Policies
|
Lease
liabilities
A
lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of
the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, the consolidated entity’s incremental borrowing rate. Lease payments comprise of fixed payments less any
lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease
liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change
in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of
a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of
use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
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(k)
|
Financial instruments
|
Financial
instruments are recognised initially using trade date accounting, i.e. on the date that the Group becomes party to the contractual provisions
of the instrument.
On
initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at
fair value through profit or loss where transaction costs are expensed as incurred).
Financial
Assets
(i)
Classification
From
1 February 2018, the group classifies its financial assets in the following measurement categories:
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●
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those
to be measured subsequently at fair value (either through OCI or through profit or loss), and
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●
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those
to be measured at amortised cost.
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The
classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.
For
assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments
that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition
to account for the equity investment at fair value through other comprehensive income (FVOCI).
The
group reclassifies debt investments when and only when its business model for managing those assets changes.
(ii)
Recognition and derecognition
Regular
way purchases and sales of financial assets are recognised on trade-date, the date on which the group commits to purchase or sell the
asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred
and the group has transferred substantially all the risks and rewards of ownership.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
|
Summary
of Significant Accounting Policies
|
|
(k)
|
Financial
instruments (continued)
|
(iii)
Measurement
At
initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or loss.
Financial
assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal
and interest.
Debt
instruments
Subsequent
measurement of debt instruments depends on the group’s business model for managing the asset and the cash flow characteristics
of the asset. There are three measurement categories into which the group classifies its debt instruments:
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●
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Amortised
cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal
and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the
effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented
in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in
the consolidated statement of profit or loss.
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●
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FVOCI:
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash
flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through
OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised
in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified
from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in
finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses)
and impairment expenses are presented as separate line item in the consolidated statement of profit or loss.
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●
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FVPL:
Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is
subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which
it arises.
|
Equity
instruments
The
group subsequently measures all equity investments at fair value. Where the group’s management has elected to present fair value
gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss
following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income
when the group’s right to receive payments is established.
Changes
in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the consolidated statement of profit or loss
as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately
from other changes in fair value.
(iv)
Impairment
From
1 February 2018, the group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried
at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For
trade receivables, the group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised
from initial recognition of the receivables.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
|
Summary
of Significant Accounting Policies
|
|
(k)
|
Financial
instruments (continued)
|
(v)
Subsequent measurement
If
there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount of the
loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows
discounted at the financial assets original effective interest rate.
Subsequent
recoveries of amounts previously written off are credited against other expenses in profit or loss.
Financial
liabilities
Financial
liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities
depending on the purpose for which the liability was acquired. Although the Group uses derivative financial instruments in economic hedges
of currency and interest rate risk, it does not hedge account for these transactions and does not have any hedged contracts in place.
The
Group’s financial liabilities include borrowings, trade and other payables (including finance lease liabilities), which are measured
at amortised cost using the effective interest rate method.
All
of the Group’s derivative financial instruments that are not designated as hedging instruments are accounted for at fair value
through profit or loss.
|
(l)
|
Impairment
of non-financial assets
|
At
the end of each reporting period the Group determines whether there is an evidence of an impairment indicator for non-financial assets.
Where
an indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets not yet available for use, the
recoverable amount of the asset is estimated.
Where
assets do not operate independently of other assets, the recoverable amount of the relevant cash-generating unit (CGU) is estimated.
The
recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the
present value of the future cash flows expected to be derived from an asset or cash-generating unit.
Where
the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.
Reversal
indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.
|
(m)
|
Cash
and cash equivalents
|
For
the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts
are shown within borrowings in current liabilities in the balance sheet.
|
(n)
|
Trade
and other receivables
|
Trade
receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less
provision for impairment.
|
(o)
|
Trade
and other payables
|
These
amounts represent liabilities for goods and services provided to the group prior to the end of financial year which are unpaid. The amounts
are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless
payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured
at amortised cost using the effective interest method.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
|
Summary of Significant Accounting Policies
|
Goodwill
Goodwill
is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
i) the
consideration transferred;
ii) any
non-controlling interest; and
iii) the
acquisition date fair value of any previously held equity interest;
over
the acquisition date fair value of net identifiable assets acquired in a business combination.
Patents
and Licences
Separately
acquired patents and licences are shown at historical cost. Licences and customer contracts acquired in a business combination
are recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated
amortisation and impairment losses. Licence fees have an estimated useful life of 5 – 50 years.
Software
Software
has a finite life and is carried at cost less any accumulated amortisation and impairment losses. It has an estimated useful life of
between one and three years.
Brands
Brand
assets relate to brands owned by the Group that have arisen on historical acquisitions. These assets were initially measured at fair
value.
Brands
are considered as to whether they have a finite or indefinite useful life at their acquisition and are amortized if considered to have
a finite life. Brands are considered to have indefinite lives in circumstances when there is no foreseeable limit to the period over
which the asset is expected to generate net cash flows for the entity they are not amortised. Brands with indefinite useful lives have
been in existence for many years, are well established and show no signs of deteriorating. These indefinite life brands are assessed
for impairment annually or more frequently if impairment indicators are noted.
Amortisation
Amortisation
is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill and
indefinite life brands, from the date that they are available for use.
Amortisation
methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Goodwill
and indefinite life brands are not amortised but are tested for impairment annually or more frequently if impairment indicators exist.
Goodwill is allocated to the Group’s cash generating units or groups of cash generating units, which represent the lowest level
at which goodwill is monitored but where such level is not larger than an operating segment. Gains and losses on the disposal of an entity
include the carrying amount of goodwill related to the entity sold.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
|
Summary of Significant Accounting Policies
|
|
(i)
|
Short-term obligations
|
Liabilities
for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related service are recognised in respect of employees’ services
up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities
are presented as current employee benefit obligations in the balance sheet.
|
(ii)
|
Other long-term employee benefit obligations
|
The
liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after the end of the period
in which the employees render the related service. They are therefore measured as the present value of expected future payments to be
made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration
is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments
are discounted using market yields at the end of the reporting period of high-quality corporate bonds with terms and currencies that
match, as closely as possible, the estimated future cash outflows. Remeasurements as a result of experience adjustments and changes in
actuarial assumptions are recognised in profit or loss.
The
obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement
for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
|
(iii)
|
Share based payments for cash settled phantom warrants
|
The
Group also operates a phantom warrant share option scheme (a cash settled share based-payment) that vest in three tranches being 21 January
2021, 21 July 2021 and 21 January 2022. There are no conditions or restrictions to receiving the benefit of all the phantom warrants
for the full bonus calculation period. An option pricing model is used to measure the Group’s liability at each reporting date,
taking into account the terms and conditions on which the bonus is awarded. Each tranche of phantom warrants may be exercised for cash
at any time in the three year period following vesting date and as such is recognised as a liability. Movements in the liability (other
than cash payments are recognised in the consolidated statement of profit or loss and other comprehensive income.
Provisions
are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow
of economic benefits will result and that outflow can be reliably measured.
Provisions
are measured at the present value of management’s best estimate of the outflow required to settle the obligation at the end of
the reporting period. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. The increase in the provision due to the unwinding of the discount is taken to finance costs in
the consolidated statements of profit or loss and other comprehensive income.
Provisions
recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period.
|
(i)
|
Onerous contract provision
|
The
Group provides for future losses on long-term contracts where it is considered probable that the contract costs are likely to exceed
revenues in future years. A provision is required for the present value of future losses. Estimating these future losses involves a number
of assumptions about the achievement of contract performance targets and the likely levels of future cost escalation over time.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
|
Summary
of Significant Accounting Policies
|
|
(r)
|
Provisions
(continued)
|
The
Group is required to restore the lease premises of various retail stores to their original condition at the end of the respective lease
terms. Provisions for make good obligations are recognised when the group has a present legal or constructive obligation as a result
of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably
estimated. A provision is recognised for the present value of the estimated expenditure required to remove any leasehold improvements.
These costs have been capitalised as part of the cost of leasehold improvements and are amortised over the lease term.
|
(s)
|
Earnings/(loss) per share
|
(i)
Basic earnings/(loss) per share
Basic
earnings/(loss) per share is calculated by dividing:
|
●
|
the
profit/(loss) attributable to owners of the Group, excluding any costs of servicing equity
other than ordinary shares
|
|
●
|
by
the weighted average number of ordinary shares outstanding during the financial year.
|
(ii)
Diluted earnings/(loss) per share
Diluted
earnings/(loss) per share adjusts the figures used in the determination of basic earnings per share to take into account:
|
●
|
the after income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares, and
|
|
●
|
the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
|
For
periods in which the Group has reported net losses, diluted net loss per share attributable to common shareholders is the same as basic
net loss per share attributable to common stockholders, since their impact would be anti-dilutive to the calculation of net loss per
share.
Borrowings
are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period
of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction
costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred
until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down,
the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings
are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference
between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Where
the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part
of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between
the carrying amount of the financial liability and the fair value of the equity instruments issued.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
3
|
Summary of Significant Accounting Policies
|
|
(t)
|
Borrowings (continued)
|
Borrowings
are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12
months or more after the reporting period.
On
issuance of the convertible notes, an assessment is made to determine whether the convertible notes contain an equity instrument or whether
the whole instrument should be classified as a financial liability.
When
it is determined that the whole instrument is a financial liability and no equity instrument is identified (for example for foreign-currency-denominated
convertibles notes), the conversion option is separated from the host debt and classified as a derivative liability. The carrying value
of the host contract (a contract denominated in a foreign currency) at initial recognition is determined as the difference between the
consideration received and the fair value of the embedded derivative. The host contract is subsequently measured at amortised cost using
the effective interest rate method. The embedded derivative is subsequently measured at fair value at the end of each reporting period
through the profit and loss. The convertible note and the derivative are presented separately on the balance sheet to interest-bearing
loans and borrowings.
When
it is determined that the instrument contains an equity component based on the terms of the contract, on issuance of the convertible
notes, the fair value of the liability component is determined using a market rate for an equivalent non-convertible bond. This amount
is classified as a financial liability measured at amortised cost (net of transaction costs) until it is extinguished on conversion or
redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and included in equity. Transaction
costs are deducted from equity, net of associated income tax. The carrying amount of the conversion option is not re-measured in subsequent
years.
Ordinary
shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction
from equity, net of any tax effects.
|
(w)
|
Foreign currency transactions and balances
|
Each
of the entities within the Group prepare their financial statements based on the currency of the primary economic environment in which
the entity operates (functional currency). The consolidated financial statements are presented in New Zealand dollars which is the parent
entity’s presentation currency.
Transaction
and balances
Foreign
currency transactions are recorded at the spot rate on the date of the transaction.
At
the end of the reporting period:
|
●
|
Foreign
currency monetary items are translated using the closing foreign currency rate;
|
|
●
|
Non-monetary
items that are measured at historical cost are translated using the exchange rate at the
date of the transaction; and
|
|
●
|
Non-monetary
items that are measured at fair value are translated using the rate at the date when fair
value was determined.
|
Exchange
differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they
were translated on initial recognition or in prior reporting periods are recognised through profit or loss, except where they relate
to an item of other comprehensive income or whether they are deferred in equity as qualifying hedges.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
3
|
Summary
of Significant Accounting Policies
|
|
(w)
|
Foreign
currency transactions and balances
|
Group
companies
The
financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are
translated as follows:
|
●
|
assets
and liabilities are translated at period-end exchange rates prevailing at that reporting date;
|
|
|
|
|
●
|
income
and expenses are translated at average exchange rates for the period where the average rate approximates the rate at the date of
the transaction; and
|
|
|
|
|
●
|
retained
earnings are translated at the exchange rates prevailing at the date of the transaction.
|
Exchange
differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency translation reserve
in the consolidated balance sheets. These differences are recognised in the consolidated statements of profit or loss and other comprehensive
income in the period in which the operation is disposed.
Operating
segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The executive
directors are the chief operating decision maker, responsible for allocating resources and assessing performance of the operating segments.
4
|
Changes
in accounting policies
|
Effective
1 June 2020, IFRS 16 was amended to provide a practical expedient for lessees accounting for rent concessions that arise as a direct
consequence of the COVID-19 pandemic and satisfy the following criteria:
|
(a)
|
The
change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration
for the lease immediately preceding the change;
|
|
(b)
|
The
reduction is lease payments affects only payments originally due on or before 30 June 2021; and
|
|
(c)
|
There
are is no substantive change to other terms and conditions of the lease.
|
The
Group has elected to utilise the practical expedient for all rent concessions that meet the criteria.
This means the Group does not need to assess whether the rent concession meets the definition of a lease modification. Lessees apply
other requirements in IFRS 16 in accounting for the concession. The effect of applying the practical expedient is disclosed in note 24.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
5
|
Critical
Accounting Estimates and Judgments
|
The
directors make estimates and judgements during the preparation of these financial statements regarding assumptions about current and
future events affecting transactions and balances.
These
estimates and judgements are based on the best information available at the time of preparing the financial statements, however as additional
information is known then the actual results may differ from the estimates.
The
significant estimates and judgements made have been described below.
|
Key
estimates - inventory
|
Each
item on inventory is reviewed on an annual basis to determine whether it is being carried at higher than its net realisable value. During
the period, management have written down inventory based on best estimate of the net realisable value, although until the time that inventory
is sold this is an estimate.
|
Key
estimates - fair value of financial instruments
|
The
Group has certain financial assets and liabilities which are measured at fair value. Where fair value has not been able to be determined
based on quoted price, a valuation model has been used. The inputs to these models are observable, where possible, however these techniques
involve significant estimates and therefore fair value of the instruments could be affected by changes in these assumptions and inputs.
|
Key
estimates - impairment of non-financial assets
|
In
accordance with IAS 36 Impairment of Assets, the Group is required to estimate the recoverable amount of non-financial assets at each
reporting period.
Impairment
testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be supported by
their value in use or fair value less cost to sell.
In
calculating the fair value less costs to sell, certain assumptions are required to be made in respect of highly uncertain matters including
management’s expectations of:
|
●
|
growth
in brand revenues
|
|
●
|
market
royalty rate
|
|
●
|
the
selection of discount rates to reflect the risks involved, and
|
|
●
|
long-term
growth rates
|
|
●
|
cash
flows from cash generating units
|
Changing
the assumptions selected by management, in particular the growth rate, discount rate and market royalty rate assumption used, could significantly
affect the Group’s impairment evaluation and hence results.
The
Group’s review includes the key assumptions related to sensitivity in the model. Further details are provided in notes 18
to 20 to the consolidated financial statements
Deferred
tax assets
Determining
income tax provisions and the recognition of deferred tax assets including carried forward income tax involves judgment on the tax treatment
of certain transactions. Deferred tax is recognised on tax losses not yet used and on temporary differences where it is probable that
there will be taxable revenue against which these can be offset. Management has made judgments as to the probability of future taxable
income being generated against which tax losses will be available for offset based on budgets, current and future expected economic conditions.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
5
|
Critical
Accounting Estimates and Judgments (continued)
|
Key
judgments – determining the lease term of contracts with renewal options
The
Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the
lease if it is reasonably certain to be exercised within the next 12 months. As per the Company policy, the options are not exercised
when the lease terms are beyond 12 months as of the assessment date. When the Group has the option to lease the assets for additional
terms, it applies judgement in evaluating whether it is reasonably certain to exercise the option to renew, considering all relevant
factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease
term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not
to exercise) the option to renew.
Key
judgments – rent concessions
Lease
agreements have been reviewed and judgments have been made on whether rent concessions satisfy the criteria to be accounted for using
the practical expedient introduced by the amendments to IFRS 16. Lease concessions have been determined by the difference between the
cost per the lease contract and actual amounts paid.
Key
judgments – convertible notes
The
component of the convertible notes that exhibits characteristics of a liability is recognised as a liability at amortised cost in the
statement of financial position, net of transaction costs. On the issue of the convertible notes any fair value of the liability component
is identified as a derivative and determined using a market rate for an equivalent non-convertible bond and this amount is carried as
a non-current liability on a fair value basis until extinguished on conversion or redemption. Derivatives are initially recognised at
fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date
or as a result of contract covenant failure. The accounting for subsequent changes in fair value is recognised in the profit or loss.
The increase in the liability due to the passage of time is recognised as a finance cost. Any corresponding interest on convertible notes
is expensed to profit or loss.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
Revenue from continuing operations
|
|
|
For the Year Ended 31 January 2021
NZ$000’s
|
|
|
For the Year Ended 31
January 2020
NZ$000’s
|
|
|
For the Year Ended 31 January 2019
NZ$000’s
|
|
Gross revenue
|
|
|
81,155
|
|
|
|
93,302
|
|
|
|
120,278
|
|
Rebates
|
|
|
(1,116
|
)
|
|
|
(3,237
|
)
|
|
|
(8,358
|
)
|
|
|
|
80,039
|
|
|
|
90,065
|
|
|
|
111,920
|
|
Sale of goods by channel
|
|
|
|
|
|
|
|
|
|
|
|
|
- Retail
|
|
|
40,492
|
|
|
|
42,576
|
|
|
|
50,443
|
|
- Wholesale
|
|
|
7,496
|
|
|
|
15,553
|
|
|
|
29,394
|
|
- Online
|
|
|
32,051
|
|
|
|
31,936
|
|
|
|
32,083
|
|
|
|
|
80,039
|
|
|
|
90,065
|
|
|
|
111,920
|
|
Sales of goods by geography
|
|
|
|
|
|
|
|
|
|
|
|
|
- New Zealand
|
|
|
34,131
|
|
|
|
33,786
|
|
|
|
40,703
|
|
- Australia
|
|
|
21,011
|
|
|
|
24,365
|
|
|
|
32,065
|
|
- United States
|
|
|
24,432
|
|
|
|
30,863
|
|
|
|
34,156
|
|
- Europe
|
|
|
465
|
|
|
|
1,051
|
|
|
|
4,996
|
|
|
|
|
80,039
|
|
|
|
90,065
|
|
|
|
111,920
|
|
Disaggregation
of revenue
The
Group derives its revenue from the transfer of goods at a point in time. The table above provides a breakdown of revenue by major business
line. The categories above depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic data.
As disclosed in Note 13, the Group has three operating segments.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
The
loss for the period was derived after charging/(crediting):
|
|
For the Year Ended 31
January 2021
NZ$000’s
|
|
|
For the Year
Ended 31
January 2020
NZ$000’s
|
|
|
For the Year Ended 31 January 2019
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
Staff costs (see note 10)1
|
|
|
30,175
|
|
|
|
28,009
|
|
|
|
31,380
|
|
Depreciation of property, plant and equipment (see note 18)
|
|
|
1,098
|
|
|
|
1,338
|
|
|
|
2,151
|
|
Depreciation of right-of-use assets (see note 19)
|
|
|
7,144
|
|
|
|
8,676
|
|
|
|
-
|
|
Amortisation of acquired intangibles
(see note 20)2
|
|
|
458
|
|
|
|
589
|
|
|
|
231
|
|
Impairment of Plant and equipment (see note 18)
|
|
|
341
|
|
|
|
491
|
|
|
|
281
|
|
Impairment of right-of-use assets (see note 19)
|
|
|
1,221
|
|
|
|
-
|
|
|
|
-
|
|
Impairment of intangible assets (see note 20)
|
|
|
3,333
|
|
|
|
8,413
|
|
|
|
7,892
|
|
Loss on disposal of property, plant and equipment
|
|
|
134
|
|
|
|
322
|
|
|
|
232
|
|
Other income
|
|
|
|
|
|
|
|
|
|
|
|
|
- Proceeds from Government wage subsidies
|
|
|
(2,878
|
)
|
|
|
-
|
|
|
|
-
|
|
- Rent concessions received
|
|
|
(1,345
|
)
|
|
|
-
|
|
|
|
-
|
|
Brand transition, restructure and transaction expense
|
|
|
|
|
|
|
|
|
|
|
|
|
- Transaction expenses
|
|
|
3,009
|
|
|
|
9,597
|
|
|
|
9,267
|
|
- Agreed settlement of debt
|
|
|
5,701
|
|
|
|
-
|
|
|
|
-
|
|
- Contract termination costs
|
|
|
2,175
|
|
|
|
4,696
|
|
|
|
-
|
|
Operating lease rentals
|
|
|
|
|
|
|
|
|
|
|
|
|
- Land and buildings
|
|
|
-
|
|
|
|
-
|
|
|
|
9,236
|
|
- Other
|
|
|
-
|
|
|
|
-
|
|
|
|
524
|
|
Gain on sale of intangible assets
|
|
|
-
|
|
|
|
(906
|
)
|
|
|
-
|
|
Auditor’s remuneration (note 11)
|
|
|
743
|
|
|
|
679
|
|
|
|
1,050
|
|
1 Staff costs include an accrual of $11.6m for phantom warrants
which has been recognised in the brand transition, restructure and transaction expense line in the consolidated statement of profit or
loss and other comprehensive income
2 Amortisation charges on the Group’s intangible assets
are recognised in the administrative expenses line of the consolidated statement of profit or loss and other comprehensive income.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
|
|
For the Year Ended 31
January 2021
NZ$000’s
|
|
|
For the Year
Ended 31
January 2020
NZ$000’s
|
|
|
For the Year Ended 31
January 2019
NZ$000’s
|
|
- Interest expense on external borrowings
|
|
|
1,256
|
|
|
|
1,608
|
|
|
|
2,338
|
|
- Interest expense on convertible loan notes
|
|
|
5,681
|
|
|
|
1,425
|
|
|
|
-
|
|
- Interest expense on leases (see note 19)
|
|
|
1,405
|
|
|
|
1,674
|
|
|
|
-
|
|
- Interest (income)/expense on shareholder loans*
|
|
|
-
|
|
|
|
(165
|
)
|
|
|
1,062
|
|
- Amortisation of loan set up costs
|
|
|
(128
|
)
|
|
|
671
|
|
|
|
641
|
|
|
|
|
8,214
|
|
|
|
5,213
|
|
|
|
4,041
|
|
*
In the prior year, the shareholder loan payable was derecognised resulting in a reversal of interest expense.
9
|
Other
foreign currency (gains)/losses
|
|
|
For the Year Ended 31
January 2021
NZ$000’s
|
|
|
For the Year
Ended 31 January 2020
NZ$000’s
|
|
|
For the Year Ended 31 January 2019
NZ$000’s
|
|
- Fair value (gain)/loss on foreign exchange contracts
|
|
|
-
|
|
|
|
(729
|
)
|
|
|
1,065
|
|
- Net foreign exchange loss/(gain)
|
|
|
(3,642
|
)
|
|
|
114
|
|
|
|
(3,027
|
)
|
|
|
|
(3,642
|
)
|
|
|
(615
|
)
|
|
|
(1,963
|
)
|
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
|
|
For the Year Ended 31
January 2021
NZ$000’s
|
|
|
For the Year
Ended 31
January 2020
NZ$000’s
|
|
|
For the Year Ended 31
January 2019
NZ$000’s
|
|
Employee benefits expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
- Salaries and wages*
|
|
|
29,443
|
|
|
|
26,920
|
|
|
|
30,872
|
|
- Defined contribution expenses
|
|
|
732
|
|
|
|
1,089
|
|
|
|
508
|
|
|
|
|
30,175
|
|
|
|
28,009
|
|
|
|
31,380
|
|
*Included
in the current year’s $29.4m is an accrual for phantom warrants of $11.6m which has been recognised as a brand transition, restructure
and transaction expense in the consolidated statement of profit or loss and other comprehensive income. The Group uses the Black Scholes
option pricing model to determine the fair value of the phantom warrants which have an exercise price of US$0.37 which vests in three
tranches being 21 January 2021, 21 July 2021 and 21 January 2022 equal to 1.50% of the outstanding shares of the Company on the vesting
date. There are no conditions or restrictions to receiving the benefit of all the phantom warrants for the full bonus calculation period.
Each tranche of phantom warrants may be exercised for cash at any time in the three year period following vesting date and as such is
recognised as a liability.
11
|
Auditor’s
Remuneration
|
|
|
For the Year
Ended 31
January 2021
NZ$000’s
|
|
|
For the Year
Ended 31
January 2020
NZ$000’s
|
|
|
For the Year
Ended 31
January 2019
NZ$000’s
|
|
Pricewaterhouse Coopers Australia
|
|
|
|
|
|
|
|
|
|
|
|
|
- Audit fees
|
|
|
-
|
|
|
|
-
|
|
|
|
477
|
|
- Taxation fees
|
|
|
-
|
|
|
|
-
|
|
|
|
33
|
|
- Other
|
|
|
-
|
|
|
|
10
|
|
|
|
403
|
|
Total remuneration to Pricewaterhouse Coopers Australia
|
|
|
-
|
|
|
|
10
|
|
|
|
913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Network firms of Pricewaterhouse Coopers Australia
|
|
|
|
|
|
|
|
|
|
|
|
|
- Taxation services
|
|
|
-
|
|
|
|
-
|
|
|
|
137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BDO Audit Pty Ltd
|
|
|
|
|
|
|
|
|
|
|
|
|
- Audit fees
|
|
|
593
|
|
|
|
403
|
|
|
|
-
|
|
- Other
|
|
|
150
|
|
|
|
266
|
|
|
|
-
|
|
Total remuneration to BDO Audit Pty Ltd
|
|
|
743
|
|
|
|
669
|
|
|
|
-
|
|
Total Auditor Remuneration
|
|
|
743
|
|
|
|
679
|
|
|
|
1,050
|
|
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
12
|
Fair value loss on Convertible Notes derivative
and warrants
|
|
|
For the Year Ended 31
January 2021
NZ$000’s
|
|
|
For the Year
Ended 31
January 2020
NZ$000’s
|
|
|
For the Year Ended 31
January 2019
NZ$000’s
|
|
Fair value loss on Convertible
Notes and warrants
|
|
|
26,552
|
|
|
|
-
|
|
|
|
775
|
|
During the year ended 31 January 2021, the Group
issued 3 convertible notes in February, April and July 2020 which contained embedded derivatives and warrants. IAS 32 requires the Group
to measure the fair value of derivatives as at the inception date of the transaction and at each reporting period end until settled.
The fair value of the embedded derivatives and warrants were determined using the Black-Scholes option pricing model. The charge in the
year as a result of fair valuing the embedded derivatives was $26.6m.
13
|
Income
Tax Expense/(benefit)
|
|
(a)
|
The
major components of tax expense/(benefit) comprise:
|
|
|
For the Year Ended 31
January 2021
NZ$000’s
|
|
|
For the Year
Ended 31
January 2020
NZ$000’s
|
|
|
For the Year Ended 31
January 2019
NZ$000’s
|
|
Current tax
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax on profits for the period
|
|
|
27
|
|
|
|
28
|
|
|
|
(667
|
)
|
Adjustments for current tax of prior periods
|
|
|
107
|
|
|
|
53
|
|
|
|
(607
|
)
|
Total current tax expense/(benefit)
|
|
|
134
|
|
|
|
81
|
|
|
|
(1,274
|
)
|
Deferred tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in deferred tax assets (note 31)
|
|
|
-
|
|
|
|
701
|
|
|
|
-
|
|
Income tax expense/(benefit) for continuing operations
|
|
|
134
|
|
|
|
782
|
|
|
|
(1,274
|
)
|
(b)
Reconciliation of income tax to accounting profit:
Loss before income tax
|
|
|
(68,212
|
)
|
|
|
(53,523
|
)
|
|
|
(50,494
|
)
|
Tax at New Zealand tax rate of 28%
|
|
|
(19,099
|
)
|
|
|
(14,986
|
)
|
|
|
(14,138
|
)
|
Tax effect of:
|
|
|
|
|
|
|
|
|
|
|
|
|
- permanent differences (including impairment expense)
|
|
|
16,299
|
|
|
|
5,108
|
|
|
|
753
|
|
- adjustments in respect of current income tax of previous years
|
|
|
107
|
|
|
|
32
|
|
|
|
(522
|
)
|
- effects of different tax rates of subsidiaries operating in other jurisdictions
|
|
|
(1
|
)
|
|
|
(301
|
)
|
|
|
493
|
|
- deferred tax assets relating to the current year not brought to account
|
|
|
2,910
|
|
|
|
10,163
|
|
|
|
12,077
|
|
- deferred tax assets relating to prior periods no longer recognised (note 31)
|
|
|
-
|
|
|
|
701
|
|
|
|
-
|
|
- other
|
|
|
(12
|
)
|
|
|
65
|
|
|
|
63
|
|
Income tax expense/(benefit)
|
|
|
134
|
|
|
|
782
|
|
|
|
(1,274
|
)
|
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
13
|
Income
Tax Expense/(benefit) (continued)
|
(c)
Tax losses not recognised
|
|
For the Year
Ended 31
January 2021
NZ$000’s
|
|
|
For the Year
Ended 31
January 2020
NZ$000’s
|
|
|
For the Year
Ended 31
January 2019
NZ$000’s
|
|
Unused tax losses for which no deferred tax asset has been recognised
|
|
|
177,275
|
|
|
|
166,882
|
|
|
|
130,587
|
|
Potential tax benefit at 28%
|
|
|
49,637
|
|
|
|
46,727
|
|
|
|
36,564
|
|
The
Group has assessed future forecast profits and concluded that not enough criteria have been satisfied to recognise any deferred tax assets
at the period ended 31 January 2020. Unused tax losses do not have an expiry date. During the period, the Group de-recognised all deferred
tax assets on timing differences carried forward from prior years, amounting to $701,000 after accounting for exchange rate differences.
(d) Temporary differences not recognised
|
|
For the Year Ended 31
January 2021
NZ$000’s
|
|
|
For the Year
Ended 31
January 2020
NZ$000’s
|
|
|
For the Year
Ended 31
January 2019
NZ$000’s
|
|
Temporary differences for which no deferred tax asset has been recognised
|
|
|
10,115
|
|
|
|
9,825
|
|
|
|
14,504
|
|
Potential tax benefit at 28%
|
|
|
2,832
|
|
|
|
2,751
|
|
|
|
4,061
|
|
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
Segment
information
Identification
of reportable operating segments
The
consolidated entities’ Director examined the group’s performance from both sales channel and geographical perspective and identified
three reportable segments being Retail, Wholesale and e-commerce.
Retail
This
segment covers retail and outlet stores located in Australia and New Zealand.
Wholesale
This
segment covers wholesale intimates apparel to customers in New Zealand, Australia, Europe and USA.
E-commerce
This
segment covers the group’s online retail activities. E-commerce revenue includes revenue from a US brand called Fredericks of Hollywood
(FOH) for which the Group currently has a licence agreement.
These
operating segments are based on the internal reports that are reviewed and used by the Chief Executive Officer (who is identified as
the Chief Operating Decision Maker (‘CODM’)) in assessing performance and in determining the allocation of resources.
The
CODM reviews segment EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal
reporting to the CODM are consistent with those adopted in the financial statements.
EBITDA
is a financial measure which is not prescribed by IFRS and represents the profit adjusted for specific non-cash and significant items.
The directors consider EBITDA to reflect the core earnings of the consolidated entity.
The
information reported to the CODM is on a monthly basis.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
14
|
Operating
Segments (continued)
|
Other
Costs and Business Activities
Certain
costs are not allocated to our reporting segment results, such as costs associated with the following:
-
Corporate overheads, which is responsible for centralized functions such as information technology, facilities, legal, finance, human
resources, business development, and procurement. These costs also include compensation costs and other miscellaneous operating expenses
not charged to our operating segments, as well as interest and tax income and expense.
These
costs are included with in “unallocated” segment in our segment performance.
Other
assets and liabilities
Assets
and liabilities are managed on a Group basis, not by segment. CODM does not regularly review any asset or liability information by segment
and its preparation is impracticable. Accordingly, we do not report asset and liability information by segment.
Reconciliation
of segment revenue to consolidated statements of profit or loss and other comprehensive income:
|
|
For the Year Ended 31 January 2021
NZ$000’s
|
|
|
For the Year Ended 31 January 2020
NZ$000’s
|
|
|
For the Year Ended 31 January 2019
NZ$000’s
|
|
Total segment revenue
|
|
|
89,590
|
|
|
|
104,153
|
|
|
|
136,842
|
|
Intersegment eliminations
|
|
|
(9,551
|
)
|
|
|
(14,088
|
)
|
|
|
(24,922
|
)
|
Total revenue
|
|
|
80,039
|
|
|
|
90,065
|
|
|
|
111,920
|
|
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020 and 31
January 2019
14
|
Operating
Segments (continued)
|
Reconciliation
of segment EBITDA to the consolidated statements of profit or loss and other comprehensive income:
The
Board meets on a monthly basis to assess the performance of each segment, net operating profit does not include non-operating revenue
and expenses such as dividends, fair value gains and losses.
|
|
For the Year Ended 31 January 2021
NZ$000’s
|
|
|
For the Year Ended 31 January 2020
NZ$000’s
|
|
|
For the Year Ended 31 January 2019
NZ$000’s
|
|
Segment EBITDA
|
|
|
690
|
|
|
|
(16,167
|
)
|
|
|
(25,602
|
)
|
Any other reconciling items
|
|
|
(68,902
|
)
|
|
|
(37,356
|
)
|
|
|
(24,892
|
)
|
Income tax (expense)/benefit
|
|
|
(134
|
)
|
|
|
(782
|
)
|
|
|
1,274
|
|
Total net loss after tax
|
|
|
(68,346
|
)
|
|
|
(54,305
|
)
|
|
|
(49,220
|
)
|
Any
other reconciling items includes brand transition, finance expenses, impairment expense, depreciation and amortisation, fair value gain/loss
on foreign exchange contracts, and unrealised foreign exchange gain/loss that cannot be allocated to segments.
|
(b)
|
Geographical
information
|
In
presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers whereas
segment assets are based on the location of the assets.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
14
|
Operating
Segments (Continued)
|
|
(b)
|
Geographical
information
|
|
|
For the Year Ended 31 January 2021
NZ$000’s
|
|
|
For the Year Ended 31 January 2020
NZ$000’s
|
|
|
For the Year Ended 31 January 2019
NZ$000’s
|
|
New Zealand
|
|
|
34,131
|
|
|
|
33,786
|
|
|
|
40,703
|
|
Australia
|
|
|
21,011
|
|
|
|
24,365
|
|
|
|
32,065
|
|
United States
|
|
|
24,432
|
|
|
|
30,863
|
|
|
|
34,156
|
|
Europe
|
|
|
465
|
|
|
|
1,051
|
|
|
|
4,996
|
|
|
|
|
80,039
|
|
|
|
90,065
|
|
|
|
111,920
|
|
The
revenues resulting from the Naked business combination in the June 2018 are included in the United States segment shown above.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
14
|
Operating
Segments (continued)
|
|
|
Retail
NZ$000’s
|
|
|
Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
For the year ended 31 January 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
40,492
|
|
|
|
7,496
|
|
|
|
32,051
|
|
|
|
-
|
|
|
|
80,039
|
|
|
|
|
40,492
|
|
|
|
7,496
|
|
|
|
32,051
|
|
|
|
-
|
|
|
|
80,039
|
|
Cost of goods sold
|
|
|
(19,188
|
)
|
|
|
(4,636
|
)
|
|
|
(21,604
|
)
|
|
|
(719
|
)
|
|
|
(46,147
|
)
|
Gross profit
|
|
|
21,304
|
|
|
|
2,860
|
|
|
|
10,447
|
|
|
|
(719
|
)
|
|
|
33,892
|
|
Other segment expenses*
|
|
|
(17,359
|
)
|
|
|
(1,425
|
)
|
|
|
(10,096
|
)
|
|
|
-
|
|
|
|
(28,880
|
)
|
Unallocated expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(856
|
)
|
|
|
(856
|
)
|
Corporate expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,350
|
)
|
|
|
(9,350
|
)
|
Other income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,223
|
|
|
|
4,223
|
|
Other foreign exchange gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,661
|
|
|
|
1,661
|
|
EBITDA
|
|
|
3,945
|
|
|
|
1,435
|
|
|
|
351
|
|
|
|
(5,041
|
)
|
|
|
690
|
|
Brand transition, restructure and transaction expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(22,527
|
)
|
|
|
(22,527
|
)
|
Finance expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,214
|
)
|
|
|
(8,214
|
)
|
Interest income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
|
|
5
|
|
Impairment expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,895
|
)
|
|
|
(4,895
|
)
|
Depreciation and amortisation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,700
|
)
|
|
|
(8,700
|
)
|
Fair value gain on foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Unrealised foreign exchange gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,981
|
|
|
|
1,981
|
|
Fair value loss on Convertible Notes derivative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(26,552
|
)
|
|
|
(26,552
|
)
|
Income/(loss) before income tax expense
|
|
|
3,945
|
|
|
|
1,435
|
|
|
|
351
|
|
|
|
(73,943
|
)
|
|
|
(68,212
|
)
|
Income tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(134
|
)
|
|
|
(134
|
)
|
Income/(loss) after income tax expense
|
|
|
3,945
|
|
|
|
1,435
|
|
|
|
351
|
|
|
|
(74,077
|
)
|
|
|
(68,346
|
)
|
*
Other segment expenses relate to brand management expenses.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
14
|
Operating
Segments (continued)
|
|
|
Retail
NZ$000’s
|
|
|
Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
For the year ended 31 January 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
42,576
|
|
|
|
15,554
|
|
|
|
31,935
|
|
|
|
-
|
|
|
|
90,065
|
|
|
|
|
42,576
|
|
|
|
15,554
|
|
|
|
31,935
|
|
|
|
-
|
|
|
|
90,065
|
|
Cost of goods sold
|
|
|
(19,582
|
)
|
|
|
(11,342
|
)
|
|
|
(20,916
|
)
|
|
|
(4,407
|
)
|
|
|
(56,247
|
)
|
Gross profit
|
|
|
22,994
|
|
|
|
4,211
|
|
|
|
11,020
|
|
|
|
(4,407
|
)
|
|
|
33,818
|
|
Other segment expenses*
|
|
|
(18,784
|
)
|
|
|
(3,112
|
)
|
|
|
(13,659
|
)
|
|
|
-
|
|
|
|
(35,555
|
)
|
Unallocated expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,234
|
)
|
|
|
(1,234
|
)
|
Corporate expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(12,772
|
)
|
|
|
(12,772
|
)
|
Other foreign exchange loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(424
|
)
|
|
|
(424
|
)
|
EBITDA
|
|
|
4,210
|
|
|
|
1,099
|
|
|
|
(2,639
|
)
|
|
|
(18,837
|
)
|
|
|
(16,167
|
)
|
Brand transition, restructure and transaction expenses**
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(13,687
|
)
|
|
|
(13,687
|
)
|
Finance expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,213
|
)
|
|
|
(5,213
|
)
|
Interest income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
12
|
|
|
|
12
|
|
Impairment expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,904
|
)
|
|
|
(8,904
|
)
|
Depreciation and amortisation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,603
|
)
|
|
|
(10,603
|
)
|
Fair value gain on foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
729
|
|
|
|
729
|
|
Unrealised foreign exchange gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
310
|
|
|
|
310
|
|
Fair value gain/(loss) on Convertible Notes derivative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Income/(loss) before income tax expense
|
|
|
4,210
|
|
|
|
1,099
|
|
|
|
(2,639
|
)
|
|
|
(56,193
|
)
|
|
|
(53,523
|
)
|
Income tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(782
|
)
|
|
|
(782
|
)
|
Income/(loss) after income tax expense
|
|
|
4,210
|
|
|
|
1,099
|
|
|
|
(2,639
|
)
|
|
|
(56,975
|
)
|
|
|
(54,305
|
)
|
*
Other segment expenses relate to brand management expenses.
**
Brand transition, restructure and transaction expenses are shown net of proceeds from the sale of Naked brand and trademarks.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
14
|
Operating
Segments (continued)
|
|
|
Retail
NZ$000’s
|
|
|
Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
For the year ended 31 January 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
50,348
|
|
|
|
29,439
|
|
|
|
32,133
|
|
|
|
-
|
|
|
|
111,920
|
|
|
|
|
50,348
|
|
|
|
29,439
|
|
|
|
32,133
|
|
|
|
-
|
|
|
|
111,920
|
|
Cost of goods sold
|
|
|
(24,616
|
)
|
|
|
(24,582
|
)
|
|
|
(21,248
|
)
|
|
|
(4,034
|
)
|
|
|
(74,480
|
)
|
Gross profit
|
|
|
25,732
|
|
|
|
4,857
|
|
|
|
10,885
|
|
|
|
(4,034
|
)
|
|
|
37,440
|
|
Other segment expenses*
|
|
|
(24,540
|
)
|
|
|
(9,667
|
)
|
|
|
(11,247
|
)
|
|
|
—
|
|
|
|
(45,454
|
)
|
Unallocated expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,050
|
)
|
|
|
(1,050
|
)
|
Corporate expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(17,947
|
)
|
|
|
(17,947
|
)
|
Other foreign exchange gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,409
|
|
|
|
1,409
|
|
EBITDA
|
|
|
1,192
|
|
|
|
(4,810
|
)
|
|
|
(362
|
)
|
|
|
(21,622
|
)
|
|
|
(25,602
|
)
|
Brand transition, restructure and transaction expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,075
|
)
|
|
|
(10,075
|
)
|
Finance expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,041
|
)
|
|
|
(4,041
|
)
|
Impairment expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,173
|
)
|
|
|
(8,173
|
)
|
Depreciation and amortisation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,382
|
)
|
|
|
(2,382
|
)
|
Fair value loss on foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,704
|
)
|
|
|
(1,704
|
)
|
Unrealised foreign exchange gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,258
|
|
|
|
2,258
|
|
Fair value loss on Convertible Notes derivative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(775
|
)
|
|
|
(775
|
)
|
Income/(loss) before income tax expense
|
|
|
1,192
|
|
|
|
(4,810
|
)
|
|
|
(362
|
)
|
|
|
(46,514
|
)
|
|
|
(50,494
|
)
|
Income tax benefit
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,274
|
|
|
|
1,274
|
|
Income/(loss) after income tax expense
|
|
|
1,192
|
|
|
|
(4,810
|
)
|
|
|
(362
|
)
|
|
|
(45,240
|
)
|
|
|
(49,220
|
)
|
*
Other segment expenses relate to brand management expenses and some corporate expenses.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
15
|
Cash
and Cash Equivalents
|
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Cash on hand
|
|
|
38
|
|
|
|
44
|
|
Cash at bank
|
|
|
90,887
|
|
|
|
3,747
|
|
|
|
|
90,925
|
|
|
|
3,791
|
|
16
|
Trade
and Other Receivables
|
|
|
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
|
|
1,645
|
|
|
|
2,358
|
|
Provision for impairment
|
|
(a)
|
|
|
(183
|
)
|
|
|
(22
|
)
|
|
|
|
|
|
1,462
|
|
|
|
2,336
|
|
Prepayments
|
|
|
|
|
6,304
|
|
|
|
2,959
|
|
Other receivables
|
|
|
|
|
368
|
|
|
|
762
|
|
Total current trade and other receivables
|
|
|
|
|
8,134
|
|
|
|
6,057
|
|
Due
to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair
value.
Prepayments
consist of advance payments made to suppliers in order to begin production, remaining annual insurance premiums and deposits on certain
property leases.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
16
|
Trade
and Other Receivables (continued)
|
|
(a)
|
Impairment
of receivables
|
The
Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime
expected loss provision for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on
shared credit risk characteristics and the days past due. The loss allowance provision as at 31 January 2021 is determined as follows,
the expected credit losses incorporate forward looking information.
31 January 2021
|
|
0 - 30 days
|
|
|
31 - 60 days
|
|
|
61 - 90 days
|
|
|
> 91 days overdue
|
|
|
Total
|
|
Expected loss rate (%)
|
|
|
2
|
%
|
|
|
50
|
%
|
|
|
46
|
%
|
|
|
60
|
%
|
|
|
|
|
Gross carrying amount ($)
|
|
|
1,370
|
|
|
|
6
|
|
|
|
39
|
|
|
|
230
|
|
|
|
1,645
|
|
ECL provision
|
|
|
26
|
|
|
|
3
|
|
|
|
17
|
|
|
|
137
|
|
|
|
183
|
|
Reconciliation
of changes in the provision for impairment of receivables is as follows:
|
|
For the Year Ended 31 January 2021
NZ$000’s
|
|
|
For the Year Ended 31 January 2020
NZ$000’s
|
|
Opening impairment allowance calculated under IFRS 9
|
|
|
(22
|
)
|
|
|
(609
|
)
|
Movement through provision
|
|
|
(247
|
)
|
|
|
(4
|
)
|
Unused amounts reversed
|
|
|
85
|
|
|
|
616
|
|
Foreign exchange movement
|
|
|
1
|
|
|
|
(25
|
)
|
Balance at end of the period
|
|
|
(183
|
)
|
|
|
(22
|
)
|
The
Group measures the loss allowance for trade receivables at an amount equal to lifetime expected credit loss (ECL). The ECL on trade receivables
are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current
financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors
operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
The
Group has recognised a loss allowance of 60% (2020: 100%) against identifiable receivables at risk in excess of 90 days because historical
experience has indicated that these receivables are generally not recoverable.
The
Group revised its estimation techniques and assumptions during the current reporting period based on prior experience and relevant forward-looking
factors.
The
Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there
is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings,
whichever occurs first.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Finished goods
|
|
|
17,708
|
|
|
|
24,034
|
|
Provision for impairment
|
|
|
(1,112
|
)
|
|
|
(495
|
)
|
|
|
|
16,596
|
|
|
|
23,539
|
|
Write
downs of inventories to net realisable value during the period were NZ$617k (2020: NZ$51k) of which $425k is related to Heidi Klum products
which the Group no longer has a licence to sell. The sell through period for Heidi Klum products ended on 31 January 2021 following licence
termination on 31 January 2020.
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
18
|
Property,
plant and equipment
|
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Leasehold Improvements
|
|
|
|
|
|
|
|
|
At cost
|
|
|
8,598
|
|
|
|
11,456
|
|
Accumulated depreciation and impairment
|
|
|
(7,898
|
)
|
|
|
(9,690
|
)
|
|
|
|
700
|
|
|
|
1,766
|
|
Plant, furniture, fittings and motor vehicles
|
|
|
|
|
|
|
|
|
At cost
|
|
|
25,610
|
|
|
|
24,850
|
|
Accumulated depreciation
|
|
|
(23,333
|
)
|
|
|
(23,579
|
)
|
|
|
|
2,277
|
|
|
|
1,271
|
|
|
|
|
|
|
|
|
|
|
Total property, plant and equipment
|
|
|
2,977
|
|
|
|
3,037
|
|
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
18
|
Property,
plant and equipment (continued)
|
|
(a)
|
Movements
in carrying amounts of property, plant and equipment
|
Movement
in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial period:
|
|
Leasehold improvements
NZ$000’s
|
|
|
Plant, furniture, fittings and motor vehicles
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
Year ended 31 January 2021
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of year
|
|
|
1,766
|
|
|
|
1,271
|
|
|
|
3,037
|
|
Additions
|
|
|
23
|
|
|
|
1,475
|
|
|
|
1,498
|
|
Disposals
|
|
|
(131
|
)
|
|
|
(6
|
)
|
|
|
(137
|
)
|
Depreciation expense
|
|
|
(640
|
)
|
|
|
(458
|
)
|
|
|
(1,098
|
)
|
Reclassification
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Impairment loss
|
|
|
(341
|
)
|
|
|
-
|
|
|
|
(341
|
)
|
Adjustment to make good asset
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Foreign exchange movements
|
|
|
23
|
|
|
|
(5
|
)
|
|
|
18
|
|
Balance at the end of the year
|
|
|
700
|
|
|
|
2,277
|
|
|
|
2,977
|
|
Year ended 31 January 2020
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of year
|
|
|
3,264
|
|
|
|
499
|
|
|
|
3,763
|
|
Additions
|
|
|
191
|
|
|
|
1,103
|
|
|
|
1,294
|
|
Disposals
|
|
|
(28
|
)
|
|
|
(324
|
)
|
|
|
(352
|
)
|
Depreciation expense
|
|
|
(461
|
)
|
|
|
(877
|
)
|
|
|
(1,338
|
)
|
Reclassification
|
|
|
(1,070
|
)
|
|
|
1,120
|
|
|
|
50
|
|
Impairment loss
|
|
|
(213
|
)
|
|
|
(278
|
)
|
|
|
(491
|
)
|
Adjustment to make good asset
|
|
|
14
|
|
|
|
-
|
|
|
|
14
|
|
Foreign exchange movements
|
|
|
69
|
|
|
|
28
|
|
|
|
97
|
|
Balance at the end of the year
|
|
|
1,766
|
|
|
|
1,271
|
|
|
|
3,037
|
|
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
The
Group leases warehouse, retail and office facilities. The leases typically run for a period of 5 years with an option to renew the lease
after that date. Lease payments are renegotiated every resigning period to reflect market rentals. Some leases provide for additional
rent payments that are based on changes in local price indices. For certain leases, the Group is restricted from entering into any sub-leasing
arrangements. The Group also leases information technology and other point of sale equipment.
Information
about leases for which the Group is a lessee is presented below:
Right-of-use
assets
Right-of-use
assets related to leased properties that do not meet the definition of investment property are presented as property, plant and equipment
(see note 16).
|
|
Land & Buildings
|
|
|
Plant, furniture, fittings and motor vehicles
|
|
|
Total
|
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
Balance as at 1 February
|
|
|
23,392
|
|
|
|
417
|
|
|
|
23,809
|
|
Additions to right-of-use-assets
|
|
|
2,700
|
|
|
|
100
|
|
|
|
2,800
|
|
Depreciation charge for the year
|
|
|
(6,982
|
)
|
|
|
(162
|
)
|
|
|
(7,144
|
)
|
Impairment of right-of-use assets
|
|
|
(1,221
|
)
|
|
|
-
|
|
|
|
(1,221
|
)
|
Foreign exchange movements
|
|
|
157
|
|
|
|
-
|
|
|
|
157
|
|
Balance at 31 January 2021
|
|
|
18,046
|
|
|
|
355
|
|
|
|
18,401
|
|
|
|
Land & Buildings
|
|
|
Plant, furniture, fittings and motor vehicles
|
|
|
Total
|
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
Balance as at 1 February
|
|
|
25,616
|
|
|
|
542
|
|
|
|
26,158
|
|
Additions to right-of-use-assets
|
|
|
6,255
|
|
|
|
72
|
|
|
|
6,327
|
|
Depreciation charge for the year
|
|
|
(8,479
|
)
|
|
|
(197
|
)
|
|
|
(8,676
|
)
|
Balance at 31 January 2020
|
|
|
23,392
|
|
|
|
417
|
|
|
|
23,809
|
|
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
19
|
Right-of-use
assets (continued)
|
Amounts
recognised in profit or loss
|
|
2021
|
|
|
2020
|
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
Interest expense on lease liabilities
|
|
|
1,405
|
|
|
|
1,674
|
|
Extension
options
Some
property leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period.
Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options
held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably
certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is
a significant event or significant changes in circumstances within its control.
Naked
Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021, 31 January 2020
and 31 January 2019
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Goodwill
|
|
|
|
|
|
|
Cost
|
|
|
5,516
|
|
|
|
6,091
|
|
Accumulated impairment
|
|
|
(5,516
|
)
|
|
|
(6,091
|
)
|
|
|
|
-
|
|
|
|
-
|
|
Patents and licences
|
|
|
|
|
|
|
|
|
Cost
|
|
|
22,863
|
|
|
|
25,151
|
|
Accumulated amortisation and impairment
|
|
|
(3,649
|
)
|
|
|
(3,489
|
)
|
|
|
|
19,214
|
|
|
|
21,662
|
|
Brands
|
|
|
|
|
|
|
|
|
Cost
|
|
|
12,253
|
|
|
|
12,032
|
|
Accumulated amortisation and impairment
|
|
|
(8,810
|
)
|
|
|
(5,401
|
)
|
|
|
|
3,443
|
|
|
|
6,631
|
|
Software and Website
|
|
|
|
|
|
|
|
|
Cost
|
|
|
15,749
|
|
|
|
15,548
|
|
Accumulated amortisation and impairment
|
|
|
(15,557
|
)
|
|
|
(15,548
|
)
|
|
|
|
192
|
|
|
|
-
|
|
Total Intangible assets
|
|
|
22,849
|
|
|
|
28,293
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
20
|
Intangible
Assets (continued)
|
|
(a)
|
Movements
in carrying amounts of intangible assets
|
|
|
Goodwill
NZ$000’s
|
|
|
Patents and licences
NZ$000’s
|
|
|
Brands
NZ$000’s
|
|
|
Software and Website
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
Year ended 31 January 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the year
|
|
|
-
|
|
|
|
21,662
|
|
|
|
6,631
|
|
|
|
-
|
|
|
|
28,293
|
|
Additions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
211
|
|
|
|
211
|
|
Amortisation
|
|
|
-
|
|
|
|
(442
|
)
|
|
|
-
|
|
|
|
(16
|
)
|
|
|
(458
|
)
|
Impairment (note 7)
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,333
|
)
|
|
|
-
|
|
|
|
(3,333
|
)
|
Foreign exchange movements
|
|
|
-
|
|
|
|
(2,006
|
)
|
|
|
145
|
|
|
|
(3
|
)
|
|
|
(1,864
|
)
|
Closing value at 31 January 2021
|
|
|
-
|
|
|
|
19,214
|
|
|
|
3,443
|
|
|
|
192
|
|
|
|
22,849
|
|
|
|
Goodwill
NZ$000’s
|
|
|
Patents and licences
NZ$000’s
|
|
|
Brands NZ$000’s
|
|
|
Software and Website
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended 31 January 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the year
|
|
|
2,320
|
|
|
|
25,075
|
|
|
|
10,205
|
|
|
|
263
|
|
|
|
37,863
|
|
Adjustments*
|
|
|
-
|
|
|
|
(2,310
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,310
|
)
|
Amortisation
|
|
|
-
|
|
|
|
(589
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(589
|
)
|
Impairment (note 7)
|
|
|
(2,480
|
)
|
|
|
(2,037
|
)
|
|
|
(3,694
|
)
|
|
|
(202
|
)
|
|
|
(8,413
|
)
|
Reclassification
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(50
|
)
|
|
|
(50
|
)
|
Foreign exchange movements
|
|
|
160
|
|
|
|
1,523
|
|
|
|
120
|
|
|
|
(11
|
)
|
|
|
1,792
|
|
Closing value at 31 January 2020
|
|
|
-
|
|
|
|
21,662
|
|
|
|
6,631
|
|
|
|
-
|
|
|
|
28,293
|
|
*
During the prior year, a financial liability relating to a shareholder loan on the balance sheet of Frederick’s of Hollywood (FOH)
on the acquisition of FOH Online Corp Inc. was derecognised as the stock purchase agreement stipulated the transaction was debt free.
This has resulted in a reduction to the carrying value of the acquired intangible asset with a write back to the profit and loss account
for the accrued and capitalised interest.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
20
|
Intangible
Assets (continued)
|
|
(b)
|
Impairment
testing for goodwill
|
For
the purpose of impairment testing, goodwill is allocated to cash-generating units as below:
Description of the cash-generating unit (CGU)
|
|
For the Year Ended 31 January 2021
NZ $000’s
|
|
|
For the Year Ended 31 January 2020
NZ $000’s
|
|
United States
|
|
|
-
|
|
|
|
2,480
|
|
Impairment of goodwill
|
|
|
-
|
|
|
|
2,480
|
|
Impairment
assumptions
Goodwill
on the merger of Naked Inc. was allocated to the Group’s operation in United States which is the cash generating unit (CGU) for
the purpose of impairment testing. In the prior year, goodwill was fully impaired resulting in a carrying value of $nil.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
20
|
Intangible
Assets (continued)
|
|
(c)
|
Impairment
of patents & licences
|
In
the prior year, the Group fully impaired the carrying value of patents and licence acquired as part of the Naked merger and partially
impaired the Fredericks of Hollywood (FOH) licence which was acquired on 8 December 2018 as part of the Stock Purchase Agreement with
the shareholders of FOH Online Corp Inc.
|
|
For
the Year
Ended 31
January 2021
NZ $000’s
|
|
|
For the Year
Ended 31
January 2020
NZ $000’s
|
|
|
|
|
|
|
|
|
FOH licence
|
|
|
-
|
|
|
|
1,914
|
|
Naked patents & licence
|
|
|
-
|
|
|
|
123
|
|
Impairment of patents & licences
|
|
|
-
|
|
|
|
2,037
|
|
Impairment
assumptions
Management
has determined the recoverable amount of the FOH licence asset by assessing the value in use (VIU) of the underlying assets. These calculations
use cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year
period are extrapolated using the estimated growth rates shown below. These growth rates do not exceed the long-term average growth rates
for the industry. The result of the impairment assessment is that the value in use exceeded the carrying value of the FOH licence resulting
in no impairment charge during the year.
Management’s
approach and the key assumptions used to determine the VIU were as follows:
Sales
growth: 12.0% in FY22, 7.5% in FY23, 5% in FY24 and 4% in FY25 and FY26 (31 January 2020: 5.0% to 9.0%)
Net
margin: 31% to 35% between FY22 and FY26
EBITDA
margin: 3% to 10% between FY22 and FY26
Cash
flow - revenue forecast period: 5 years (31 January 2020: 5 years)
Post-tax
discount rate (%): 10.5% (31 January 2020: 10.5%)
Long
term sales growth rate (%): 2.0% (31 January 2020: 2.0%)
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
20
|
Intangible
Assets (continued)
|
|
(d)
|
Impairment
testing for indefinite-lived brand intangibles
|
Brand
intangible assets represent brands owned by the Group, that arose on historical acquisitions including Pleasure State, Davenport and
Lovable.
|
|
|
For the Year Ended 31 January 2021
NZ $000’s
|
|
|
|
For the Year Ended 31 January 2020
NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
Pleasure State
|
|
|
2,002
|
|
|
|
125
|
|
Davenport and Lovable
|
|
|
1,331
|
|
|
|
1,439
|
|
Naked
|
|
|
-
|
|
|
|
2,130
|
|
Impairment of indefinite-lived brand intangibles
|
|
|
3,333
|
|
|
|
3,694
|
|
The
brand intangible assets of $3,443,000 (2020: $6,631,000) are tested for impairment annually.
Impairment
assumptions
Management
has determined the recoverable amount of the indefinite-lived brand assets by assessing the fair value less cost of disposal (FVLCOD)
of the underlying assets. The relief from royalty method adopted to complete the valuation determines, in lieu of ownership, the cost
that would be required to obtain comparable rights to use the asset via a third-party licence arrangement. These calculations use cash
flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period
are extrapolated using the estimated growth rates shown below. These growth rates do not exceed the long-term average growth rates for
the industry. The result of the impairment assessment is that the carrying value has exceeded the fair value less costs to sell by $3.3m.
As such, the indefinite-lived brand assets has been partially impaired for the year ended 31 January 2021.
Management’s
approach and the key assumptions used to determine the FVLCOD were as follows:
Sales
growth: 0% (31 January 2020: 5-9%)
Royalty
rate: 5.0% (31 January 2020: 5.0%)
Cash
flow - revenue forecast period: 5 years (31 January 2020: 5 years)
Post-tax
discount rate (%) for US brands*: 10.50% (31 January 2020: 10.50%)
Post-tax
discount rate (%) for NZ brands: 15.50% (31 January 2020: 11.75%)
Long
term sales growth rate (%): 2% (31 January 2020: 2%)
Impact
of possible changes in key assumptions
The
directors have made judgements and estimates to assess indefinite-lived assets for impairment. Should these judgements and estimates
not occur the resulting carrying amount may decrease.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
20
|
Intangible
Assets (continued)
|
|
(d)
|
Impairment
testing for indefinite-lived brand intangibles
|
The
sensitivities that have been separately modelled are as follows:
(a)
a 0.8% increase in the post-tax discount rate
(b)
1.7% decrease in the terminal growth
(c)
5.0% decrease in sales forecast
The
carrying amounts of the indefinite-lived brand intangible assets are sensitive to assumptions used in the impairment test calculations
including the post-tax discount rate and sales growth rate. A 0.8% increase in the post-tax discount rate would result in an additional
impairment of $0.141 million (31 January 2020: an increase of 2.1% would result an impairment of $1.047 million) against the carrying
amount of the indefinite-lived brand intangibles. A 1.7% reduction in terminal growth would result in an additional impairment of $0.816
million against the carrying amount of the indefinite-lived brand intangibles. A 5% decrease in sales forecast would result in an additional
impairment of $0.581 million (31 January 2020: a reduction in sales growth to 0% would result an impairment of $1.749 million) against
the carrying amount of the indefinite-lived brand intangibles.
*On
28 January 2020, Naked Brand Group Limited agreed to sell all of its rights, title and interest in the trademarks related to the “Naked”
and “NKD” brands to Gogogo SRL for a consideration of US $0.6m. The Group therefore does not own a US brand.
In
the prior year, software was fully impaired ($0.202m) and in the current year, the Group capitalised website development costs of $0.2m
and will be subject to future impairment review.
|
(f)
|
Sale
of intangible asset
|
In
the prior year, Naked Brand Group Limited agreed to sell all of its rights, title and interest in the trademarks related to the “Naked”
and “NKD” brands to Gogogo SRL for a consideration of US $0.6m (NZ $0.906m). At the date of sale, the intangible assets sold
had a book value of nil as they had been fully impaired, resulting in a gain on sale of intangible assets of US$0.6m (NZ $0.906m) which
was recognised in the profit and loss account.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
21
|
Trade
and Other Payables
|
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Current:
|
|
|
|
|
|
|
Trade payables
|
|
|
6,250
|
|
|
|
10,407
|
|
Accruals
|
|
|
7,250
|
|
|
|
8,593
|
|
Employee benefit liabilities
|
|
|
15,228
|
|
|
|
3,430
|
|
|
|
|
28,728
|
|
|
|
22,430
|
|
Trade
and other payables are unsecured and are normally settled within terms of trade however some the trade creditors are out of term as at
31 January 2021. The Group is actively working to bring all of the creditors in term. The carrying amounts are considered to be a reasonable
approximation of fair value.
Employee
benefits liabilities includes an accrual of $11.6m relating to phantom warrants. The Group uses the Black Scholes option pricing model
to determine the fair value of the phantom warrants which have an exercise price of US$0.37 which vests in three tranches being 21 January
2021, 21 July 2021 and 21 January 2022 equal to 1.50% of the outstanding shares of the Company on the vesting date. There are no conditions
or restrictions to receiving the benefit of all the phantom warrants for the full bonus calculation period. Each tranche of phantom warrants
may be exercised for cash at any time in the three year period following vesting date and as such is recognised as a liability
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Amounts due in less than one year:
|
|
|
|
|
|
|
|
|
Secured liabilities:
|
|
|
|
|
|
|
|
|
Bank loans
|
|
|
14,500
|
|
|
|
17,900
|
|
Debt issuance costs in relation to bank loan
|
|
|
(7
|
)
|
|
|
-
|
|
Other loan
|
|
|
-
|
|
|
|
1,315
|
|
|
|
|
14,493
|
|
|
|
19,215
|
|
Amounts due after more than one year:
|
|
|
|
|
|
|
|
|
Unsecured liabilities:
|
|
|
|
|
|
|
|
|
Convertible loan notes
|
|
|
3,002
|
|
|
|
19,698
|
|
|
|
|
3,002
|
|
|
|
19,698
|
|
|
|
|
17,495
|
|
|
|
38,913
|
|
The
fair value of borrowings is not considered to be materially different to their carrying amounts.
|
(a)
|
Assets
pledged as collateral:
|
Borrowings
are collateralized by a fixed and floating charge over the assets of the Group. The lease liabilities are effectively secured as the
rights to the leased assets, recognised in the balance sheet, revert to the lessor in the event of default.
|
(b)
|
Bank overdrafts, bank loans and bank loan covenants
|
On
12 March 2020, the Group entered into a Deed of Amendment with the Bank of New Zealand to extend its loan facility of NZD$16,700,000
(31 January 2020: NZD$17,900,000) until March 2022. Interest rate charges ranged between 4.25% and 5.26%. The facility includes guarantees
and financial instruments totalling NZD$1,345,000.
Bank
of New Zealand has the first ranking charge over all assets of the Group. Under the terms of the facility, the Group must meet specific
covenant obligations namely sales and gross margin adverse variances to budget to be no greater than 15% and inventory to cover bank
debt 1.35 times (which increased to 1.65 times from and including 31 July 2020). Throughout the majority of the current financial year,
the Group was in breach of all covenant measures. The extended borrowing has therefore been classified as a current liability as at the
year end. Sales, gross margin and inventory were all negatively impacted by COVID-19 due to store closures and delayed inventory shipments
from suppliers.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
22
|
Borrowings
(continued)
|
The
component of the convertible notes that exhibits characteristics of a liability is recognised as a liability at amortised cost in the
statement of financial position, net of transaction costs. On the issue of the convertible notes any fair value of the liability component
is identified as a derivative and determined using a market rate for an equivalent non-convertible bond and this amount is carried as
a non-current liability on a fair value basis until extinguished on conversion or redemption. Derivatives are initially recognised at
fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date
or as a result of contract covenant failure. The accounting for subsequent changes in fair value is recognised in the profit or loss.
The increase in the liability due to the passage of time is recognised as a finance cost. Any corresponding interest on convertible notes
is expensed to profit or loss.
In
February and April 2020, the Group completed 2 separate private placements of secured convertible notes to 1 private investor for a cash
consideration of $7.2m (US$4.5m) with discounts and fees totalling $0.5m (US$0.3m) and a daily compounding interest rate of 20%. During
the year, the note holder elected to exchange their warrant in return for a one-time 5% increase on the Note balance on the date of election.
Total warrants exchanged for an increase in Note balance during the year was $0.3m (US$0.2m). In addition to warrant exchanges, the Note
holder is also entitled to a one-time 10% increase in Note value if the Group fails to meet its financial and/or filing obligations contained
under the Note agreement. The total increase in principal Note balance relating to financing and/or filing penalties during the year
was $1.4m (US$0.9m). By the year end the convertible note issued in February had been fully converted to equity while the convertible
note issued in April remained outstanding.
In
July 2020, the Group completed a private placement of a convertible promissory note (the “July Note”) and a warrant to purchase
ordinary shares (the “July Purchase Warrant”) to one of the Affiliated Holders, Iliad Research Trading L.P., pursuant to
a Securities Purchase Agreement, for an aggregate purchase price of $12.1m (US$8.0m). The July Note was issued with an original issue
discount of 5%, and certain expenses of the Affiliated Holder were added to the balance of the July Note, for an original principal balance
of $12.8m (US$8.4m). The Group also granted a financing rebate to the Affiliated Holder, resulting in net proceeds to the Group of approximately
$10.9m (US$7.2m) from the sale of the July Note. The July Note provided for interest at the following rates: (i) for a period of 90 days
starting on its issuance date, 2.0% per annum, (ii) for the next 90 days, 10.0% per annum and (iii) thereafter, 15.0% per annum, and
provided for maturity on the second anniversary of its issuance. The July Note was convertible, at our election (subject to certain limitations)
or at the election of the Affiliated Holder, into ordinary shares at a conversion price equal to US$0.2424. The July Purchase Warrant
entitled the Affiliated Holder to purchase ordinary shares at an exercise price of US$0.6707 per share. In addition, if the exercise
price of the July Purchase Warrant was higher than the last closing bid price of the ordinary shares, the July Purchase Warrant could
be exercised on a cashless basis for a number of shares equal to the Black-Scholes value per share underlying the July Purchase Warrant,
multiplied by the number of shares as to which the July Purchase Warrant was being exercised, divided by the closing bid price as of
two business days prior to the exercise date, but in any event not less than the floor price specified in the July Purchase Warrant.
For this purpose, the Black-Scholes value per share underlying the July Purchase Warrant was a fixed value as set forth in the July Purchase
Warrant.
The
July Note has been converted in full into an aggregate of 35,081,733 Ordinary Shares and the July Purchase Warrant had been exercised
in full, pursuant to the Black-Scholes cashless exercise provision, for an aggregate of 47,817,633 Ordinary Shares.
As
at 31 January 2021, the Group had a principal amount of $2.8m (US$2.0m) and accrued interest of $0.2m (US$0.1m) with the total owing
of $3.0m (US$2.1m) on the balance sheet and interest charged to the Profit or Loss account. When a conversion option is exercised the
amount of conversion is taken to share capital, reducing the loan note balance.
On
3 July 2020, the balance (principle and interest) that existed at 31 January 2020 (US$1.1m, NZ$1.6m) was fully converted into Naked ordinary
shares at a price of US$0.66 by mutual consent.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Current:
|
|
|
|
|
|
|
Other provisions
|
|
|
92
|
|
|
|
5,205
|
|
Make good
|
|
|
778
|
|
|
|
639
|
|
|
|
|
870
|
|
|
|
5,844
|
|
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Non-current:
|
|
|
|
|
|
|
Make good
|
|
|
1,212
|
|
|
|
1,796
|
|
|
|
|
1,212
|
|
|
|
1,796
|
|
|
|
Lease contributions
NZ$000’s
|
|
|
Other provisions
NZ$000’s
|
|
|
Make good
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
Opening balance at 1 February 2020
|
|
|
-
|
|
|
|
5,205
|
|
|
|
2,435
|
|
|
|
7,640
|
|
Additional provisions recognised
|
|
|
-
|
|
|
|
-
|
|
|
|
26
|
|
|
|
26
|
|
Amounts used during the period
|
|
|
-
|
|
|
|
(5,113
|
)
|
|
|
(506
|
)
|
|
|
(5,619
|
)
|
Exchange differences
|
|
|
-
|
|
|
|
-
|
|
|
|
35
|
|
|
|
35
|
|
Balance at 31 January 2021
|
|
|
-
|
|
|
|
92
|
|
|
|
1,990
|
|
|
|
2,082
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
23
|
Provisions
(continued)
|
|
|
Lease contributions
NZ$000’s
|
|
|
Other provisions
NZ$000’s
|
|
|
Make good
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
Opening balance at 1 February 2019
|
|
|
1,085
|
|
|
|
-
|
|
|
|
2,208
|
|
|
|
3,293
|
|
Impact of IFRS 16*
|
|
|
(1,102
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,102
|
)
|
Additional provisions recognised
|
|
|
-
|
|
|
|
5,205
|
|
|
|
307
|
|
|
|
5,512
|
|
Amounts used during the period
|
|
|
-
|
|
|
|
-
|
|
|
|
(64
|
)
|
|
|
(80
|
)
|
Exchange differences
|
|
|
17
|
|
|
|
-
|
|
|
|
(16
|
)
|
|
|
1
|
|
Balance at 31 January 2020
|
|
|
-
|
|
|
|
5,205
|
|
|
|
2,435
|
|
|
|
7,640
|
|
Other
provisions
On
31 January 2020, the Group entered into an agreement terminating the license agreement with Heidi Klum. The termination agreement provides
that we may continue selling existing Heidi Klum branded products, as well as Heidi Klum branded products manufactured on or prior to
June 30, 2020 under existing contracts. The right to continue selling such products will continue until six months after the date of
the termination agreement in the Northern Hemisphere and until 12 months after the date of the termination agreement in the Southern
Hemisphere. A termination fee to Heidi Klum in lieu of further royalties is payable in instalments through to 30 December 2020. At 31
January 2020 the termination costs of the contract are greater than the economic benefit and hence the contract has been identified as
onerous. A provision is recognised for an amount the termination costs exceed the economic benefits. At 31 January 2021, this provision
has been fully utilised.
Make
good
In
accordance with certain lease agreements, the Group must refurbish and restore the lease premises to a condition agreed with the landlord
at the end of the lease term or as prescribed. The provision has been calculated using a pre-tax discount rate of 2% (2019: 2%), and
other market assumptions and re-assessed annually.
During
the 2021 financial year an additional $26,000 (2020: $307,000) was recognised in relation to new retail leases in New Zealand and Australia.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
The
following elections for IFRS 16 were taken on transition date:
|
●
|
the
Group did not reassess whether existing contracts are, or contain, a lease and applied IFRS 16 only to existing contracts that were
previously identified as lease under IAS 17;
|
|
●
|
the
Group applied a single discount rate to a portfolio of leases with reasonably similar characteristics; and
|
|
●
|
leases
with a remaining term of less than 12 months from the transition date and low value lease are expensed on a straight-line basis to
the Consolidated Profit or Loss account.
|
Undiscounted
contractual maturity of lease liabilities
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Amounts payable:
|
|
|
|
|
|
|
|
|
Within one year
|
|
|
6,955
|
|
|
|
8,112
|
|
2 to 5 years inclusive
|
|
|
13,661
|
|
|
|
17,553
|
|
After 5 years
|
|
|
936
|
|
|
|
166
|
|
|
|
|
24,059
|
|
|
|
25,831
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
446,582,604 (2020: 4,697,204) Ordinary shares
|
|
|
338,498
|
|
|
|
170,193
|
|
|
|
For the Year Ended 31 January 2021
NZ$000’s
|
|
|
For the Year Ended 31 January 2020
NZ$000’s
|
|
At the beginning of the reporting period
|
|
|
170,193
|
|
|
|
134,183
|
|
Issuance of new shares
|
|
|
|
|
|
|
|
|
- Cash collected from sale of new share issuances and cash exercise of warrants
|
|
|
93,693
|
|
|
|
12,586
|
|
- Shares issued in lieu of agreed settlement
|
|
|
5,503
|
|
|
|
-
|
|
- Conversion of debt
|
|
|
1,689
|
|
|
|
-
|
|
- Shares issued in lieu of inventory payment
|
|
|
-
|
|
|
|
15, 525
|
|
- Shares issued in lieu of related party loan
|
|
|
-
|
|
|
|
1,546
|
|
- Convertible notes converted to equity
|
|
|
67,420
|
|
|
|
5,979
|
|
Warrants issued
|
|
|
-
|
|
|
|
374
|
|
At the end of the reporting period
|
|
|
338,498
|
|
|
|
170,193
|
|
The
holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Group. On a show of hands at
meetings of the Group, each holder of ordinary shares has one vote in person or by proxy, and upon a poll each share is entitled to one
vote.
On
20 December 2019 the company executed a 1-100 reverse share split reducing the number of shares.
The
Group does not have authorised capital or par value in respect of its shares.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
25
|
Share Capital (continued)
|
The
key objectives of the Group when managing capital is to safeguard its ability to continue as a going concern and maintain optimal benefits
to stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity.
The Group defines capital as its equity and net debt.
There
has been no change to capital risk management policies during the year.
Management
are constantly adjusting the capital structure to take advantage of favourable costs of capital or high return on assets. As the market
is constantly changing, management may change the amount of dividends to be paid to shareholders, return capital to shareholders or sell
assets to reduce debt. The Group is not subject to any externally imposed capital requirements.
The
gearing ratio for the years ended 31 January 2021 and 31 January 2020 are as follows:
|
|
Note
|
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Total borrowings
|
|
|
22
|
|
|
|
17,495
|
|
|
|
38,913
|
|
Less Cash and cash equivalents
|
|
|
15
|
|
|
|
(90,925
|
)
|
|
|
(3,791
|
)
|
Net cash)/ net debt
|
|
|
|
|
|
|
(73,430
|
)
|
|
|
35,122
|
|
Equity
|
|
|
|
|
|
|
89,191
|
|
|
|
(6,284
|
)
|
Total capital
|
|
|
|
|
|
|
15,788
|
|
|
|
28,838
|
|
Gearing ratio
|
|
|
|
|
|
|
20
|
%
|
|
|
(619
|
)%
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
25
|
Share
Capital (continued)
|
The
following warrants were outstanding as at 31 January 2021 (31 January 2020: 610,122).
Average Exercise Price (USD)
|
|
|
Issue Date
|
|
Expiry Date
|
|
No. of warrants
|
|
|
|
|
Mar-19
|
|
Mar-21
|
|
|
42,285
|
|
|
|
|
Mar-19
|
|
Mar-23
|
|
|
14,000
|
|
$0.01 - $0.50
|
|
|
Apr-19
|
|
Apr-22
|
|
|
500
|
|
|
|
|
May-19
|
|
May-21
|
|
|
10,000
|
|
|
|
|
Jul-19
|
|
May-25
|
|
|
170,100
|
|
|
|
|
Aug-19
|
|
Feb-25
|
|
|
285,714
|
|
|
|
|
Aug-19
|
|
Aug-24
|
|
|
22,857
|
|
$1.51 - $2.00
|
|
|
Nov-17
|
|
Nov-21
|
|
|
2,000
|
|
|
|
|
Oct-18
|
|
Oct-21
|
|
|
20,000
|
|
$2.01 - $4.00
|
|
|
Jun-18
|
|
Jun-23
|
|
|
8,000
|
|
|
|
|
Mar-19
|
|
Mar-21
|
|
|
3,922
|
|
$4.01+
|
|
|
May-18
|
|
May-21
|
|
|
2,816
|
|
Total number of outstanding warrants as at 31 January 2021
|
|
|
582,194
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Foreign currency translation reserve
|
|
|
|
|
|
|
|
|
Opening balance
|
|
|
118
|
|
|
|
(2,013
|
)
|
Transfers in
|
|
|
(4,484
|
)
|
|
|
2,131
|
|
Balance at the end of the year
|
|
|
(4,366
|
)
|
|
|
118
|
|
Foreign
currency translation reserve
Exchange
differences arising on translation of the foreign controlled entity are recognised in other comprehensive income - foreign currency translation
reserve. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
|
(a)
|
Basic
and diluted loss per share
|
|
|
For the Year
Ended
31
January 2021
NZ$
|
|
|
For the Year
Ended
31 January 2020
NZ$
|
|
From continuing operations attributable to the ordinary equity holders of the Group
|
|
|
(0.62
|
)
|
|
|
(34.74
|
)
|
Total basic and diluted loss per share attributable to the ordinary
equity holders of the Group
|
|
|
(0.62
|
)
|
|
|
(34.74
|
)
|
|
(b)
|
Reconciliation
of loss used in calculating loss per share
|
|
|
For the Year
Ended
31
January 2021
NZ$000’s
|
|
|
For the Year
Ended
31 January 2020
NZ$000’s
|
|
Basic and diluted loss per share
|
|
|
|
|
|
|
|
|
Loss attributable to the ordinary equity holders of the Group used in calculating basic earnings per share:
|
|
|
(68,346
|
)
|
|
|
(54,305
|
)
|
|
(c)
|
Weighted
average number of shares used as the denominator
|
|
|
31 January 2021
Number
|
|
|
31 January 2020
Number
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share
|
|
|
109,370,410
|
|
|
|
1,563,056
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
27
|
Loss
per Share (continued)
|
|
(d)
|
Information
concerning the classification of securities
|
Convertible
Notes
At
31 January 2021, the Group had 1 outstanding convertible note principal of $2.8m and accrued interest and fair value adjustments
of $0.8m. Please refer to note 22(c).
|
|
Year Ended
31 January 2021
NZ$000’s
|
|
|
Year Ended
31 January 2020
NZ$000’s
|
|
Accumulated losses at the beginning of the financial year
|
|
|
(176,595
|
)
|
|
|
(121,651
|
)
|
Adoption of IFRS 16
|
|
|
-
|
|
|
|
(639
|
)
|
Loss for the year
|
|
|
(68,346
|
)
|
|
|
(54,305
|
)
|
Accumulated losses at end of the financial year
|
|
|
(244,941
|
)
|
|
|
(176,595
|
)
|
29
|
Other
Financial Commitments
|
|
(a)
|
Contracted
Commitments
|
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Licence contract
|
|
|
|
|
|
|
|
|
- not later than one year
|
|
|
-
|
|
|
|
5,392
|
|
- between one year and five years
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
5,392
|
|
On
31 January 2020 the Group, through mutual consent, terminated the licence agreement with Heidi Klum and Heidi Klum Company LLC of a fee
of US$3.5m which was paid in full during the year.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
30
|
Financial
Risk Management
|
The
Group is exposed to a variety of financial risks through its use of financial instruments.
The
Group’s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of financial markets.
The
most significant financial risks to which the Group is exposed to are described below:
Specific
risks
|
●
|
Liquidity
risk
|
|
●
|
Credit
risk
|
|
●
|
Market
risk - currency risk, interest rate risk and price risk
|
Financial
instruments used
The
principal categories of financial instruments used by the Group are:
|
●
|
Trade
receivables
|
|
●
|
Cash
at bank
|
|
●
|
Bank
overdraft
|
|
●
|
Trade
and other payables
|
|
●
|
Floating
rate bank loans
|
|
●
|
Forward
currency contracts
|
|
●
|
Shareholders
loan
|
Objectives,
policies and processes
The
Board of Directors have overall responsibility for the establishment of the Group’s financial risk management framework. This includes
the development of policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk and the use of derivatives.
Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The
day-to-day risk management is carried out by the Group’s finance function under policies and objectives which have been approved
by the Board of Directors.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
30
|
Financial
Risk Management (continued)
|
The
financial assets of the Group were as follows:
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
- Cash and cash equivalents
|
|
|
90,925
|
|
|
|
3,791
|
|
- Trade receivables
|
|
|
1,462
|
|
|
|
2,336
|
|
|
|
|
92,387
|
|
|
|
6,127
|
|
The
Directors consider that the carrying amount for all financial assets approximates to their fair value.
Objectives,
policies and processes
Mitigation
strategies for specific risks faced are described below:
Liquidity
risk
Liquidity
risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt instruments.
It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
The
Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities as and when they fall
due.
The
Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long-term financial liabilities as well
as cash-outflows due in day-to-day business.
The
timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does
not reflect management’s expectations that banking facilities will be rolled forward. The amounts disclosed in the table are the
undiscounted contracted cash flows and therefore the balances in the table may not equal the balances in the consolidated balance sheets
due to the effect of discounting.
Due
to the recent developments of COVID-19, the company has been further tasked to preserve cash due to the recent lockdown procedures that
have occurred in the company’s main markets meaning retail stores are closed and the company is heavily reliant on its e-commerce
segment. In addition, the company has applied for government subsidies where appropriate to help alleviate the impact of reduced cash
inflow from store closures. At the date of this report, the Group had received $2.0m in subsidies from the New Zealand Government and
$0.8m from the Australian Government.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
30
|
Financial
Risk Management (continued)
|
The
Group’s liabilities have contractual maturities which are summarised below, it should be noted these amounts are undiscounted
contractual cash flows as required by IFRS 7:
|
|
Non-derivatives Borrowings
NZ$000’s
|
|
|
Non-derivatives Trade payables
NZ$000’s
|
|
|
Non-derivatives Total
NZ$000’s
|
|
|
Derivatives Gross future cash settlement on forward currency contracts - inflow
NZ$000’s
|
|
|
Derivatives Gross future cash settlement on forward currency contracts - (outflow)
NZ$000’s
|
|
|
Derivatives Total
NZ$000’s
|
|
Not later than 1 month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2021
|
|
|
48
|
|
|
|
6,250
|
|
|
|
6,289
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
31 January 2020
|
|
|
2,052
|
|
|
|
10,407
|
|
|
|
12,459
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
1 to 3 months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2021
|
|
|
14,596
|
|
|
|
-
|
|
|
|
14,596
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
31 January 2020
|
|
|
18,044
|
|
|
|
-
|
|
|
|
18,044
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
3 months to 1 year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
31 January 2020
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
1 to 5 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2021
|
|
|
4,256
|
|
|
|
-
|
|
|
|
4,256
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
31 January 2020
|
|
|
28,764
|
|
|
|
-
|
|
|
|
28,764
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2021
|
|
|
18,900
|
|
|
|
6,250
|
|
|
|
25,150
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
31 January 2020
|
|
|
48,860
|
|
|
|
10,407
|
|
|
|
59,267
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
30
|
Financial
Risk Management (continued)
|
Credit
risk
Credit
risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group.
Credit
risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well
as credit exposure to wholesale and retail customers, including outstanding receivables and committed transactions.
The
Group operates out of 59 stores across Australasia while having offices in New Zealand which all have committed leasing
obligations. COVID-19 has caused the Group to negotiate payments terms across its supplier ledger until such time that normal trading
resumes.
Trade
receivables and contract assets
Trade
receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation
is performed on the financial condition of accounts receivable.
The
Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from
defaults. The utilisation of credit limits by customers is regularly monitored by line management. Customers who subsequently fail to
meet their credit terms are required to make purchases on a prepayment basis until creditworthiness can be re-established.
Management
considers that all the financial assets that are not impaired for each of the reporting dates under review are of good credit quality,
including those that are past due.
The
Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties.
The
credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks
with high quality external credit ratings.
On
a geographical basis, the Group has significant credit risk exposures in New Zealand and Australia, given the substantial operations
in those regions.
The
credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings if
available or historical information about counterparty default rate.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
30
|
Financial
Risk Management (continued)
|
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
|
31 January 2019
NZ$000’s
|
|
Trade receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
Counterparty without external credit ratings
|
|
|
|
|
|
|
|
|
|
|
|
|
New customer less than 6 months
|
|
|
-
|
|
|
|
-
|
|
|
|
42
|
|
Existing customers (more than 6 months with default in past)
|
|
|
1,645
|
|
|
|
2,358
|
|
|
|
7,747
|
|
Total
|
|
|
1,645
|
|
|
|
2,358
|
|
|
|
7,789
|
|
Cash at bank
|
|
|
31
January 2021
NZ$000’s
|
|
|
|
31 January 2020
NZ$000’s
|
|
|
|
31 January 2019
NZ$000’s
|
|
Credit ratings
|
|
|
|
|
|
|
|
|
|
|
|
|
AA-
|
|
|
90,887
|
|
|
|
3,747
|
|
|
|
1,915
|
|
A+
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
90,887
|
|
|
|
3,747
|
|
|
|
1,915
|
|
The
Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties.
On
a geographical basis, the Group has significant credit risk exposures in New Zealand and Australia, United States and United Kingdom
given the substantial operations in those regions.
Market
risk
Market
risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.
A
significant amount of inventory is purchased in US dollars with sales primarily being generated in Australian and New Zealand dollars.
COVID-19 will put additional uncertainty as exchange rates become more volatile.
(i)
Foreign exchange risk
Exposure
to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement in foreign
exchange rates of currencies in which the Group holds financial instruments which are other than the functional currency of the Group.
Exposures
to currency exchange rates arise from the Group’s overseas sales and purchases, which are primarily denominated in currencies other
than the functional currency, in particular USD.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
30
|
Financial
Risk Management (continued)
|
Foreign
currency denominated financial assets and liabilities, translated into New Zealand Dollars at the closing rate, are as follows:
|
|
AUD
NZ$000’s
|
|
|
USD
NZ$000’s
|
|
|
GBP
NZ$000’s
|
|
|
EUR
NZ$000’s
|
|
|
HKD
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
31 January 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominal amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
13
|
|
|
|
90
|
|
|
|
-
|
|
|
|
101
|
|
Trade payables
|
|
|
20
|
|
|
|
741
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
761
|
|
Cash and cash equivalents
|
|
|
9,943
|
|
|
|
78,506
|
|
|
|
89
|
|
|
|
12
|
|
|
|
2
|
|
|
|
88,552
|
|
31 January 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominal amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
-
|
|
|
|
19
|
|
|
|
20
|
|
|
|
441
|
|
|
|
-
|
|
|
|
480
|
|
Trade payables
|
|
|
12
|
|
|
|
4,068
|
|
|
|
85
|
|
|
|
1
|
|
|
|
2
|
|
|
|
4,168
|
|
Cash and cash equivalents
|
|
|
1,500
|
|
|
|
747
|
|
|
|
85
|
|
|
|
5
|
|
|
|
4
|
|
|
|
2,341
|
|
31 January 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominal amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
51
|
|
|
|
42
|
|
|
|
-
|
|
|
|
285
|
|
|
|
-
|
|
|
|
378
|
|
Trade payables
|
|
|
1
|
|
|
|
9,035
|
|
|
|
8
|
|
|
|
61
|
|
|
|
7
|
|
|
|
9,112
|
|
Cash and cash equivalents
|
|
|
623
|
|
|
|
149
|
|
|
|
38
|
|
|
|
8
|
|
|
|
11
|
|
|
|
829
|
|
The
table on the next page illustrates the sensitivity of the net result for the year and equity in regards to the Group’s financial
assets and financial liabilities and the US dollar - New Zealand Dollar, Australian Dollar - New Zealand Dollar, GB Pound - New Zealand
Dollar, Euro - New Zealand Dollar, and Hong Kong Dollar - New Zealand Dollar exchange rates. There have been no changes in the assumptions
calculating this sensitivity from prior years.
It
assumes a 10% change of the New Zealand Dollar / Australian Dollar exchange rate for the year ended 31 January 2021 (31 January 2020:
10%, 31 January 2019: 10%). A 10% change is considered for the New Zealand Dollar / US Dollar exchange rate (31 January 2020: 10%, 31
January 2019: 10%). A 10% change is considered for the New Zealand Dollar / GB Pound exchange rate (31 January 2020: 10%, 31 January
2019: 10%). A 10% change is considered for the New Zealand Dollar / Euro exchange rate (31 January 2020: 10%, 31 January 2019: 10%).
All of these percentages have been determined based on the average market volatility in exchange rates in the previous 12 months.
The
year-end rates are 0.9348 AUD, 0.7168 USD, 0.5228 GBP, 0.5921 EUR and 5.5574 HKD.
The
sensitivity analysis is based on the foreign currency financial instruments held at the reporting date.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
30
|
Financial
Risk Management (continued)
|
If
the New Zealand Dollar had strengthened and weakened against the Australian Dollar, US Dollar, GB Pound, Euro and HK Dollar by 10% (31
January 2020: 10%, 31 January 2019: 10%) and 10% (31 January 2020: 10%, 31 January 2020: 10%) respectively then this would have had the
following impact:
|
|
NZ$000’s
|
|
|
|
|
+10%
|
|
|
|
-10%
|
|
USD
|
|
|
|
|
|
|
|
|
Net
results/Equity (31 January 2021)
|
|
|
(460
|
)
|
|
|
460
|
|
Net
results/Equity (31 January 2020)
|
|
|
(594
|
)
|
|
|
594
|
|
Net
results/Equity (31 January 2019)
|
|
|
(954
|
)
|
|
|
954
|
|
AUD
|
|
|
|
|
|
|
|
|
Net
results/Equity (31 January 2021)
|
|
|
(2
|
)
|
|
|
2
|
|
Net
results/Equity (31 January 2020)
|
|
|
(1
|
)
|
|
|
1
|
|
Net
results/Equity (31 January 2019)
|
|
|
(5
|
)
|
|
|
5
|
|
GBP
|
|
|
|
|
|
|
|
|
Net
results/Equity (31 January 2021)
|
|
|
(9
|
)
|
|
|
9
|
|
Net
results/Equity (31 January 2020)
|
|
|
(16
|
)
|
|
|
16
|
|
Net
results/Equity (31 January 2019)
|
|
|
(1
|
)
|
|
|
1
|
|
EUR
|
|
|
|
|
|
|
|
|
Net
results/Equity (31 January 2021)
|
|
|
(10
|
)
|
|
|
10
|
|
Net
results/Equity (31 January 2020)
|
|
|
(42
|
)
|
|
|
42
|
|
Net
results/Equity (31 January 2019)
|
|
|
(32
|
)
|
|
|
32
|
|
HKD
|
|
|
|
|
|
|
|
|
Net
results/Equity (31 January 2021)
|
|
|
-
|
|
|
|
-
|
|
Net
results/Equity (31 January 2020)
|
|
|
-
|
|
|
|
-
|
|
Net
results/Equity (31 January 2019)
|
|
|
(1
|
)
|
|
|
1
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
30
|
Financial
Risk Management (continued)
|
Exposures
to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered
to be representative of the Group’s exposure to foreign currency risk.
Forward
exchange contracts
The
Group has no open forward exchange contracts at the end of the reporting period.
The
following table summarises the notional amount of the Group’s commitments in relation to forward exchange contracts.
|
|
Notional Amounts
|
|
|
Average Exchange Rate
|
|
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
|
31 January 2019
NZ$000’s
|
|
|
31 January 2021
$
|
|
|
31 January 2020
$
|
|
|
31 January 2019
$
|
|
Buy USD / sell NZD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than
6 months
|
|
|
-
|
|
|
|
-
|
|
|
|
34,395
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.6620
|
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Buy AUD / sell NZD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 6 months
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
30
|
Financial Risk Management (continued)
|
(ii) Interest rate risk
The Group is exposed to interest rate risk as funds
are borrowed at floating and fixed rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.
The Group’s policy is to minimise interest rate
cash flow risk exposures on long-term financing. Longer-term borrowings are therefore usually at fixed rates. At the reporting
date, the Group is exposed to changes in market interest rates through its bank borrowings, which are subject to variable interest
rates.
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Floating rate instruments
|
|
|
|
|
|
|
|
|
Bank overdrafts
|
|
|
-
|
|
|
|
-
|
|
Working capital financing bank facility
|
|
|
-
|
|
|
|
-
|
|
Convertible notes
|
|
|
-
|
|
|
|
-
|
|
Borrowings
|
|
|
14,500
|
|
|
|
17,900
|
|
|
|
|
14,500
|
|
|
|
17,900
|
|
The following table illustrates the sensitivity of the
net result for the year and equity to a reasonably possible change in interest rates of +1.00%/-1.00% (2020: +1.00%/-1.00%, 2019:
+1.00%/-1.00%), with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation
of current market conditions and economist reports.
The calculations are based on the financial instruments
held at each reporting date. All other variables are held constant.
|
|
NZ$000’s
|
|
|
|
1.00%
|
|
|
-1.00%
|
|
|
|
|
|
|
|
|
Net results/Equity
(31 January 2021)
|
|
|
145
|
|
|
|
(145
|
)
|
Net results/Equity (31
January 2020)
|
|
|
179
|
|
|
|
(179
|
)
|
Naked Brand Group Limited
ACN 619 054 938
Notes to the Consolidated Financial Statements
For the Years Ended 31 January 2021,
31 January 2020 and 31 January 2019
31
|
Tax assets and liabilities
|
|
|
Opening Balance
NZ$000’s
|
|
|
Charged to Income
NZ$000’s
|
|
|
Charged directly to Equity
NZ$000’s
|
|
|
Changes
in Tax Rate
NZ$000’s
|
|
|
Exchange Differences
NZ$000’s
|
|
|
Closing Balance
NZ$000’s
|
|
Deferred tax assets/(liabilities)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried forward tax losses
|
|
|
630
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
630
|
|
Intangible assets
|
|
|
(630
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(630
|
)
|
Balance at 31 January 2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried forward tax
losses
|
|
|
1,322
|
|
|
|
(701
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
|
|
630
|
|
Intangible
assets
|
|
|
(630
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(630
|
)
|
Balance at 31 January 2020
|
|
|
692
|
|
|
|
(701
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
|
|
-
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
No final dividend will be paid in respect of the year
ended 31 January 2021 (31 January 2020: nil, 31 January 2019: nil).
Franking account
|
|
31 January 2021
NZ$000’s
|
|
|
31 January 2020
NZ$000’s
|
|
Australian franking credits available for subsequent financial years at a tax rate of 30%
|
|
|
3,995
|
|
|
|
3,995
|
|
New Zealand imputation credits available for subsequent financial years at a tax rate of 28%
|
|
|
236
|
|
|
|
236
|
|
The above amounts are based on
the dividend franking account at period-end adjusted for:
|
(a)
|
Franking credits that will arise from the payment of the current tax liabilities;
|
|
(b)
|
Franking debits that will arise from the payment of dividends recognised as a liability at the period end;
|
|
(c)
|
Franking credits that will arise from the receipt of dividends recognised as receivables at the end of the period.
|
33
|
Key Management Personnel Remuneration
|
Key management personnel remuneration included within
employee expenses for the period is shown below:
|
|
For the Year Ended
31
January 2021
NZ$000’s
|
|
|
For the Year Ended
31 January 2020
NZ$000’s
|
|
|
For the Year Ended
31 January 2019
NZ$000’s
|
|
Short-term employee benefits*
|
|
|
13,865
|
|
|
|
3,182
|
|
|
|
2,056
|
|
|
|
|
13,865
|
|
|
|
3,182
|
|
|
|
2,056
|
|
*Included in the current year’s $13.9m is an accrual
for phantom warrants of $11.6m which has been recognised as a brand transition, restructure and transaction expense in the consolidated
statement of profit or loss and other comprehensive income. The Group uses the Black Scholes option pricing model to determine
the fair value of the phantom warrants which have an exercise price of US$0.37 which vests in three tranches being 21 January 2021,
21 July 2021 and 21 January 2022. There are no conditions or restrictions to receiving the benefit of all the phantom warrants
for the full bonus calculation period. Each tranche of phantom warrants may be exercised for cash at any time in the three year
period following vesting date and as such is recognised as a liability.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
34
|
Interests in Subsidiaries
|
Composition of the Group
|
|
Principal place of business / Country of Incorporation
|
|
Percentage Owned (%)*
31
January 2021
|
|
|
Percentage Owned (%)*
31 January 2020
|
|
|
Percentage Owned (%)*
31 January 2019
|
|
Subsidiaries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bendon Retail Limited
|
|
New Zealand
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Holdings Limited
|
|
New Zealand
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Holdings Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Intimates Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
PS Holdings No. 1 Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Pleasure State Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Pleasure State (HK) Limited
|
|
Hong Kong
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon UK Limited
|
|
United Kingdom
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon USA Inc
|
|
United States of America
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Limited
|
|
New Zealand
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Naked Brand Inc.
|
|
United States of America
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
FOH Online Corp Inc.
|
|
United States of America
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
*The percentage of ownership interest held is equivalent
to the percentage voting rights for all subsidiaries.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
35
|
Fair
Value Measurement
|
The Group measures the following
assets and liabilities at fair value on a recurring basis:
|
●
|
Financial assets - derivative financial instruments
|
|
●
|
Financial liabilities - derivative financial instruments
|
|
●
|
Financial liabilities – convertible notes with embedded derivatives
|
|
●
|
Financial liabilities – Phantom Warrants
|
Fair value hierarchy
IFRS 13 Fair Value Measurement requires all assets
and liabilities measured at fair value to be assigned to a level in the fair value hierarchy as follows:
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
|
|
|
|
|
Level 2
|
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
|
|
|
|
Level 3
|
Unobservable inputs for the asset or liability.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
35
|
Fair Value Measurement (continued)
|
The table below shows the assigned level for each asset
and liability held at fair value by the Group:
31 January 2021
|
|
Level 1
NZ$000’s
|
|
|
Level 2
NZ$000’s
|
|
|
Level 3
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Financial derivative liabilities
|
|
|
-
|
|
|
|
629
|
|
|
|
-
|
|
|
|
-
|
|
Phantom warrant liabilities
|
|
|
|
|
|
|
11,642
|
|
|
|
-
|
|
|
|
|
|
31 January 2020
|
|
|
Level 1
NZ$000’s
|
|
|
|
Level 2
NZ$000’s
|
|
|
|
Level 3
NZ$000’s
|
|
|
|
Total
NZ$000’s
|
|
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Financial derivative liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
There were no transfers between levels during the financial
periods.
The carrying amount of trade and other receivables and
trade and other payables are assumed to approximate their fair values due to their short-term nature. Bank loans approximate fair
value of the carrying amount on the basis of the variable nature of the interest rates associated with the loans.
Valuation techniques for fair value measurements
categorised within level 2
The fair value of the derivative
on convertible notes and the fair value accrual for phantom warrants has been determined using a Black-Scholes model. Measurement
inputs include share price on measurement date, expected term of the instrument, risk free rate, expected volatility and expected
dividend rate. The Group used valuations specialists to perform these valuations.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
35
|
Fair Value Measurement (continued)
|
Fair value measurements using
significant unobservable movements (level 3)
For the
years ended 31 January 2021 and 31 January 2020, there were no financial instruments that were level
3.
Contingent Liabilities
The Group has entered into a number of trade guarantee
arrangements in the normal course of business totalling $0.8m (2020: $0.7m)
In
February 2020, a group of investors, who had invested in Bendon Limited prior to its merger with the Company, claimed misrepresentations
had been made and they had been misled into investing in Bendon. No litigation has been commenced to date.
On
February 9, 2021, the Group was requested by the Securities and Exchange Commission (the “SEC”) to provide certain documents
and information for its investigation.
On March 24, 2020, Timothy Connell filed a complaint
against us, a subsidiary of ours, and Mr. Davis-Rice, alleging, among other things, that certain shares issued to him in satisfaction
of a debt were not registered for resale as promised. Mr. Connell sought rescission of the transaction. During the year, the Group
has settled through the issuance of shares.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
|
(a)
|
Loans (to)/from related parties
|
|
|
Opening balance
NZ$000s
|
|
|
Closing balance
NZ$000s
|
|
Loans to related parties
|
|
|
|
|
|
|
|
|
Whitespace Atelier Limited
- 31 January 2021
|
|
|
-
|
|
|
|
-
|
|
Whitespace
Atelier Limited - 31 January 2020
|
|
|
282
|
|
|
|
-
|
|
Loans from related parties
|
|
|
|
|
|
|
|
|
SBL Holdings - 31 January 2021
|
|
|
-
|
|
|
|
-
|
|
SBL Holdings - 31 January 2020
|
|
|
(1449
|
)
|
|
|
-
|
|
EJ Watson – 31 January 2021
|
|
|
-
|
|
|
|
-
|
|
EJ Watson – 31 January 2020
|
|
|
(2,289
|
)
|
|
|
-
|
|
|
(b)
|
Transactions with related parties
|
In the prior year, a financial liability
relating to a shareholder loan created on the acquisition of FOH Online Corp Inc. was derecognised as the current acquisition accounting
results in a debt free balance with the shareholder. This adjustment is reflected in the 31 January 2020 accounts in a reduction to the
carrying value of the acquired intangible asset with a write back to the profit and loss account for the accrued and capitalised interest.
This has resulted in a reduction to the carrying value of the acquired intangible asset with a write back to the profit and loss account
for accrued and capitalised interest. Further information can be found in note 19.
In the prior year, the loan payable to SBL Holdings
Limited was extinguished through the issuance of shares in the Company.
In the prior year, the Group received tax services from
Rothsay Chartered Accountants, an accountancy firm, in which a director of the company held a senior position. The Group received
services to the value of $32,503.
During the current year, the Group
procured goods for resale from The Way Store Pty Ltd, a company registered in Australia, which is related through common
directorship. The Group purchased $0.5m worth of inventory.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
|
(a)
|
Reconciliation of result for the year to cashflows from operating activities
|
Reconciliation of net income to net cash provided by operating activities:
|
|
For
the Year
Ended
31 January 2021
NZ$000’s
|
|
|
For
the Year
Ended
31 January 2020
NZ$000’s
|
|
|
For
the Year
Ended
31 January 2019
NZ$000’s
|
|
Loss
for the year
|
|
|
(68,346
|
)
|
|
|
(54,305
|
)
|
|
|
(49,220
|
)
|
Cash
flows excluded from profit attributable to operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
-
interest paid on borrowings
|
|
|
1,256
|
|
|
|
2,868
|
|
|
|
3,400
|
|
-
gain on sale of intangible assets
|
|
|
-
|
|
|
|
(906
|
)
|
|
|
-
|
|
Non-cash
flows in profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Interest on convertible note borrowings
|
|
|
5,681
|
|
|
|
-
|
|
|
|
-
|
|
-
depreciation and amortisation expense
|
|
|
8,700
|
|
|
|
10,603
|
|
|
|
2,382
|
|
-
impairment expense
|
|
|
4,895
|
|
|
|
8,904
|
|
|
|
8,173
|
|
-
shares issued in lieu of inventory payment
|
|
|
-
|
|
|
|
5,942
|
|
|
|
-
|
|
-
shares issued for agreed settlement
|
|
|
5,701
|
|
|
|
-
|
|
|
|
-
|
|
-
fair value on warrants issued
|
|
|
-
|
|
|
|
371
|
|
|
|
-
|
|
-
fair value loss/(gain) on convertible notes derivative
|
|
|
26,552
|
|
|
|
-
|
|
|
|
775
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(increase)/decrease in trade and other receivables
|
|
|
(2,082
|
)
|
|
|
2,901
|
|
|
|
14,267
|
|
-
(increase)/decrease in current tax receivables
|
|
|
2
|
|
|
|
368
|
|
|
|
(355
|
)
|
-
(increase)/decrease in inventories
|
|
|
6,604
|
|
|
|
(1,912
|
)
|
|
|
13,350
|
|
-
(increase)/decrease in deferred tax asset/(liability)
|
|
|
-
|
|
|
|
711
|
|
|
|
(692
|
)
|
-
(increase)/decrease in related party receivables
|
|
|
-
|
|
|
|
282
|
|
|
|
6,531
|
|
-
increase/(decrease) in trade and other payables
|
|
|
6,037
|
|
|
|
402
|
|
|
|
(5,681
|
)
|
-
increase/(decrease) in income taxes payable
|
|
|
205
|
|
|
|
(140
|
)
|
|
|
226
|
|
-
increase/(decrease) in provisions
|
|
|
(5,622
|
)
|
|
|
5,534
|
|
|
|
(522
|
)
|
-
increase/(decrease) in foreign currency derivative liability
|
|
|
-
|
|
|
|
(1,484
|
)
|
|
|
(1,712
|
)
|
-
net exchange differences
|
|
|
(601
|
)
|
|
|
(33
|
)
|
|
|
(355
|
)
|
Cashflows
from operations
|
|
|
(11,018
|
)
|
|
|
(19,894
|
)
|
|
|
(9,434
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
38
|
Cash Flow Information (continued)
|
|
(b)
|
Non-cash investing and financing activities
|
Investing and financing transactions that do not require
the use of cash or cash equivalents (i.e. non-cash) are excluded from the statement of cash flows. Such transactions are disclosed
below that provides all the relevant information about the non-cash investing and financing activities specific to the Group:
|
|
For the Year
Ended
31
January 2021
NZ$000’s
|
|
|
For the Year
Ended
31 January 2020
NZ$000’s
|
|
|
For the Year
Ended
31 January 2019
NZ$000’s
|
|
Shares issued in lieu of inventory payment
|
|
|
-
|
|
|
|
15,525
|
|
|
|
-
|
|
Shares issued in lieu of agreed debt
|
|
|
5,701
|
|
|
|
-
|
|
|
|
-
|
|
Shares issued on conversion of debt
|
|
|
1,689
|
|
|
|
-
|
|
|
|
-
|
|
Warrants issued
|
|
|
-
|
|
|
|
371
|
|
|
|
-
|
|
|
|
|
7,192
|
|
|
|
15,896
|
|
|
|
-
|
|
39
|
Events occurring after the reporting date
|
On February 1, 2021, Naked Brand Group Ltd (“The
Company”) received an instruction to issue 29,415,000 ordinary shares at a price of US$1.70 for net proceeds of US$46,920,170,
based on a Placement Agent Agreement with Maxim Group LLC date January 27, 2021.
On February 9, 2021, the Company repaid its loan facility
held with the Bank of New Zealand. The total settlement amount was NZ$14,779,607 and included interest of NZ$17,436 and fees of
NZ$262,171.
On February 23, 2021, the Company announced that it
had received notification from the Nasdaq that the Company had regained compliance with Nasdaq’s minimum bid price requirement.
On February 24, 2021 the Company entered
into a Securities Purchase Agreement (the “SPA”) with certain accredited investors, pursuant to which the Company will sell
to the investors in a private placement an aggregate of US$100,000,000 of units (“Units”), each unit consisting of one ordinary
share, no par value, and one warrant, each warrant entitling the holder to purchase one ordinary share (the “Warrant Shares”)
at an initial exercise price of US$1.13. The units will be sold at a price per Unit of US$0.93, resulting in the issuance of an aggregate
of 107,526,882 Units (representing an aggregate of 107,526,882 ordinary shares and 107,526,882 warrants. On March 11, 2021 the SPA was
amended which reduced the price per unit from US$0.93 to US$0.85 resulting in aggregate ordinary shares of 117,647,059 and 117,647,059
warrants. The exercise price of the warrants was also reduced from US$1.13 to US$0.935 and expire five years from the date of the closing.
They can be exercised on a net share exercise basis at any time. The Company
plans to use the proceeds to pay down certain liabilities and fund working capital.
On
February 25, 2021, we exchanged the Prior Note issued in April 2020 for 4,002,789 Ordinary Shares. Prior to the exchange, through a board
resolution, the conversion price of the Note issued in April was reduced from US$4.00 per share to US$0.60 per share resulting in an
additional 3,403,703 shares compared to the previously announced estimate of 599,086 in the October Prospectus.
On
March 11, 2021 the Company consummated the offer and sale of an aggregate of 117,647,059 units (“Units”), each unit consisting
of one ordinary share, no par value and one warrant to certain accredited investors pursuant to the previously disclosed Securities
Purchase Agreement between the Company and Investors, dated as of February 24, 2021 (as amended, the “SPA”). The Company
received net proceeds of US$95,000,000 from the sale of the units, after offering expenses. The units, ordinary shares, and warrants
issued pursuant to the SPA were offered and sold, and the ordinary shares issuable upon the exercise of the Warrants were offered, in
private placements to accredited investors. No underwriting discounts or commissions were paid with respect to such sales.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Years Ended 31 January 2021, 31 January 2020 and 31 January 2019
39
|
Events occurring after the reporting date (continued)
|
In April, 2021, Esousa
Holdings LLC, Streeterville Capital LLC and Aquitas collectively acquired 99,787,027 ordinary shares, which were issued upon exercise
of the warrants and accounted for no more than 9.9% of this class of share at the time of issuance.
On April 19,
2021 Mark Ziirsen was appointed as Chief Financial Officer, replacing Cheryl Durose.
On April 26,
2021, the Group received a notice from Nasdaq’s Listing Qualifications Department stating that, for the 30 consecutive business
days ending April 23, 2021, the closing bid price for the Ordinary Shares had been below the minimum of $1.00 per share required
for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). The notification letter stated that
we would be afforded 180 calendar days (until October 25, 2021) to regain compliance with the minimum bid price requirement. In
order to regain compliance, the closing bid price for the Ordinary Shares must be at least $1.00 per share for a minimum of ten
consecutive business days. The notification letter also stated that in the event we do not regain compliance within the 180-day
period, we may be eligible for additional time.
The Nasdaq
notification did not have any immediate effect on the listing of the Ordinary Shares, and the Ordinary Shares continue to trade
uninterrupted under the symbol “NAKD”. Naked management intends to actively monitor the bid price for the Ordinary
Shares and will consider all available options to regain compliance with the Nasdaq minimum bid price requirement.
On January 21, 2021, the Company announced plans to
undertake a transformative restructure in which it would dispose of its bricks-and-mortar operations in order to focus exclusively
on its e-commerce business. To that end, the Company signed a non-binding and non-exclusive term sheet to divest its Bendon Limited
(“Bendon”) subsidiary, to a group composed of existing management of the Company, including Justin Davis-Rice, the
Executive Chairman and Chief Executive Officer of the Company, and Anna Johnson, the Chief Executive Officer of Bendon (the “Bendon
Sale”). On April 23, 2021, the Company held an Extraordinary General Meeting of Shareholders, at which shareholders approved
the Bendon Sale. On April 30, 2021, the Company signed a conditional share sale agreement for the Bendon Sale (the “Bendon
Share Sale Agreement”) and simultaneously consummated the transactions contemplated thereby.
Following the Bendon Sale, the Group’s sole operating
entity will be FOH Online Corp. (“FOH”). Through FOH, we are the exclusive licensee of the Frederick’s of Hollywood
global online license, under which we sell Frederick’s of Hollywood intimates products, sleepwear and loungewear products,
swimwear and swimwear accessories products, and costume products.