Michael Hill International : 2022 Annual Report

ANNUAL REPORT 2022

DISCLAIMER: Certain statements in this report constitute forward-looking statements. Forward-looking statements are statements (other than statements of historical fact) relating to future events and the anticipated or planned financial and operational performance of Michael Hill International Limited and its related bodies corporate (the Group). The words "targets," "believes," "expects," "aims," "intends," "plans," "seeks," "will," "may," "might," "anticipates," "would," "could," "should," "continues," "estimates" or similar expressions or the negatives thereof, identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. Forward-looking statements include, among other things, statements addressing matters such as the Group's future results of operations; financial condition; working capital, cash flows and capital expenditures; and business strategy, plans and objectives for future operations and events, including those relating to ongoing operational and strategic reviews, expansion into new markets, future product launches, points of sale and production facilities. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the Group's actual results, performance, operations or achievements or industry results, to differ materially from any future results, performance, operations or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others: global and local economic conditions; changes in market trends and end-consumer preferences; fluctuations in the prices of raw materials, currency exchange rates, and interest rates; the Group's plans or objectives for future operations or products, including the ability to introduce new jewellery and non-jewellery products; the ability to expand in existing and new markets and risks associated with doing business globally and, in particular, in emerging markets; competition from local, national and international companies in the markets in which the Group operates; the protection and strengthening of the Group's intellectual property rights, including patents and trademarks; the future adequacy of the Group's current warehousing, logistics and information technology operations; changes in laws and regulations or any interpretation thereof, applicable to the Group's business; increases to the Group's effective tax rate or other harm to the Group's business as a result of governmental review of the Group's transfer pricing policies, conflicting taxation claims or changes in tax laws; and other factors referenced to

in this presentation. Should one or more of these risks or uncertainties materialise, or should any underlying assumptions prove to be incorrect, the Company's actual financial condition, cash flows or results of operations could differ materially from that described herein as anticipated, believed, estimated or expected. Accordingly, you are cautioned not to place undue reliance on any forward-looking statements, particularly in light of the current economic climate and the significant volatility, uncertainty and disruption caused by the COVID-19 pandemic. The Group does not intend, and do not assume any obligation, to update any forward-looking statements contained herein, except as may be required by law. All subsequent written and oral forward-looking statements attributable to us or to persons acting on the Group's behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this announcement.

TERMINOLOGY: In this report, unless otherwise specified or appropriate in the context, the term "Company" refers to Michael Hill International Limited, and the terms "Group" or "Michael Hill" refer to the Company and its subsidiaries (as appropriate).

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CONTENTS

5	6	7	8
Company	Letter from	CEO's	Performance
Profile	the Chair	Message	Highlights
9	10	12	14
Key Facts	Performance	Trend	Sustainability
		Statement
38	41	54	67
Our Executive	Directors'	Remuneration	Auditor's
Team	Report	Report	Independence
			Declaration
69	124	125	129
Financial	Directors'	Independent	Additional
Statements	Declaration	Auditor's Report	Information

131	The Directors are pleased to present the
annual report of Michael Hill International
Corporate	Limited and its subsidiaries for the year
Directory	ended 26 June 2022.

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COMPANY PROFILE

Michael Hill is a market leading, premium jewellery brand, operating a network of 280 stores across Australia, New Zealand and Canada, with multiple international digital platforms.

The first Michael Hill store opened in 1979 when Sir Michael Hill and his wife, Lady Christine Hill launched their unique retail jewellery formula in Whangarei, on the North Island of New Zealand.

With engaging store designs, a product range devoted exclusively to accessible jewellery and the clever use of high impact advertising, Michael Hill rapidly gained popularity and rose to national prominence.

In 2016, Michael Hill moved its primary stock exchange listing to the Australian Securities Exchange and maintains a secondary listing on the New Zealand Stock Exchange (ASX/NZX: MHJ).

Over the last three years, the Company has been on a transformative journey reshaping many aspects of the business, underpinned by a clearly defined strategic agenda to elevate the brand and drive growth. The strategic framework is customer-led and continually evolving as we adapt to the ever-changing landscape of retail - with a focus on elevating our Brand, growing our Loyalty membership, enhancing and innovating our Digital & Omni-channel capabilities, refining our

Retail Fundamentals, continual Product Evolution, exploring New Territories & Services, maintaining a Cost Conscious Culture and with a focus on Sustainability.

Around the world, the Group employs over 2,500 employees across retail sales, manufacturing and corporate roles. As of 26 June 2022, the Group operates 147 stores in Australia, 48 in New Zealand and 85 stores in Canada.

From 1979 to the present day, and as we look to the future, Michael Hill is dedicated to creating quality jewellery for our customers to celebrate the key moments in their lives.

At Michael Hill, we are committed to becoming a more sustainable and ethically responsible business, protecting our eco-system and contributing to

the communities we serve in meaningful ways, for generations to come.

Information on our corporate governance policies and practices, including our Corporate Governance Statement, is available on our Investor Centre website at investor.michaelhill.com

Our purpose: The people behind the moments that matter

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