Annual financial statement
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$'000 Up 1.9% to 655,679 Up 56.7% to 24,043 Up 376.1% to 9,995 Amount per security Franked amount per security cents per share cents per share - - 2.0 1.0 2026 2025 $ $ 0.20 0.17 Anthea Noble General Manager - Investor Relations & Treasury investor@michaelhill.com.au http://investor.michaelhill.com 28 August 2026 https://meetings.lumiconnect.com/300-037-987-913 Media & Investors: Webcast scheduled to take place at 8.00am (Brisbane, Qld) on Monday, 31 August 2026. Please use the following link to register. Revenue from contracts with customers Comparable earnings before interest and taxation (EBIT)1 Net profit after tax for the period attributable to members BRIEF EXPLANATION OF FIGURES REPORTED ABOVE TO ENABLE THE FIGURES TO BE UNDERSTOOD DIVIDENDS 1Comparable EBIT is unaudited non-IFRS information. Please refer to unaudited non-IFRS information in the Directors' Report for an explanation of unaudited non-IFRS information and a reconciliation of Comparable EBIT. MICHAEL HILL INTERNATIONAL LIMITED ABN 25 610 937 598 APPENDIX 4E RESULTS FOR ANNOUNCEMENT TO THE MARKET REPORTING PERIOD R I Fyfe Chair Brisbane This report is based on the consolidated financial statements which have been audited and an unqualified opinion given. For commentary on the results, please refer to the attached full financial report for all other disclosures in respect of the Appendix 4E. ²Net tangible assets were calculated including the Group's right-of-use assets and lease liabilities recognised under AASB16 Leases. No interim dividend was declared for the year ended 28 June 2026 Final dividend for the year ended 28 June 2026 declared NET TANGIBLE ASSETS Net tangible asset² backing per ordinary security Reporting period: Previous reporting period: 52 weeks ended 28 June 2026 52 weeks ended 29 June 2025 RESULTS FOR ANNOUNCEMENT TO THE MARKET MICHAEL HILL INTERNATIONAL LIMITED APPENDIX 4E
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1 2 24 25 26 27 28 29 66 67 68 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AUDITOR'S REPORT FOR THE YEAR ENDED 28 JUNE 2026 AUDITOR'S INDEPENDENCE DECLARATION FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS DIRECTORS' REPORT CONSOLIDATED ENTITY DISCLOSURE STATEMENT DIRECTORS' DECLARATION MICHAEL HILL INTERNATIONAL LIMITED ABN 25 610 937 598 DIRECTORS' REPORT AND ANNUAL FINANCIAL REPORT TABLE OF CONTENTS CORPORATE DIRECTORY MICHAEL HILL INTERNATIONAL LIMITED
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TERMINOLOGY In this report, unless otherwise specified or appropriate in the context, the term “Company” refers to Michael Hill International Limited, the term “Group” or “Michael Hill Group” refer to the Company and its subsidiaries (as appropriate), and the use of “Michael Hill”, “Bevilles”, “TenSevenSeven” and “Medley” is reference to the relevant brand within the Michael Hill Group. Except as required by applicable laws or regulations (including the ASX Listing Rules), the Group does not intend, and does not assume any obligation, to update any forward- looking statements contained herein. 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 report. 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”, “projects”, “assumes”, “forecast”, “likely”, “outlook”, “would”, “could”, “should”, “continues”, “estimates” or similar expressions or the negatives thereof, generally identify 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, sustainability targets, 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, they are not guarantees or predictions of future performance or statements of fact. 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 report. 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, as there can be no assurance the actual outcomes will not differ materially from the forward-looking statements in this report. MICHAEL HILL INTERNATIONAL LIMITED
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online@michaelhill.com.au www.bevilles.com.au http://investor.michaelhill.com EMAIL www.michaelhill.com.au www.michaelhill.co.nz www.michaelhill.ca www.michaelhill.com SOLICITOR Allens Linklaters Level 26 480 Queen Street Brisbane QLD 4000 BANKERS ANZ Australia ANZ New Zealand Bank of Montreal Commonwealth Bank of Australia Royal Bank of Canada WEBSITES 34 Southgate Avenue Cannon Hill QLD 4170 Australia SHARE REGISTER Computershare Investor Services Pty Ltd Level 1 200 Mary Street Brisbane QLD 4000 1300 552 270 (within Australia) +61 3 9415 4000 (outside of Australia) AUDITOR Ernst & Young Level 51 111 Eagle Street Brisbane QLD 4000 MICHAEL HILL INTERNATIONAL LIMITED CORPORATE DIRECTORY DIRECTORS R I Fyfe B.Eng, F.E.N.Z., C.N.Z.M. Chair C Batten LLB (Hons), B.Com, Deputy Chair COMPANY SECRETARY C Hoyle LLB (Hons) MA (Merit) G.A.I.C.D PRINCIPAL REGISTERED OFFICE IN AUSTRALIA E J Hill B.Com., M.B.A. D Whittle B.A., B.Com G W Smith B.Com., F.C.A., F.A.I.C.D. A Slingsby B.A., PPL (HBS) MICHAEL HILL INTERNATIONAL LIMITED 1
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2026 2025 $'000 $'000 - - - - 7,697 - • • o o o • • • • • • • • FY26 marked the beginning of a significant strategic and operational turnaround for the Michael Hill Group. Under new leadership, the Group has undertaken a strategic simplification of the business, sharpening its focus on its two core brands, Michael Hill and Bevilles. Building on this simplification, the Group has strengthened retail operating discipline and decision-making, refined its go-to-market strategies and strengthened its focus on customer outcomes. Together, these initiatives have generated meaningful momentum across the business and underpinned the improved performance delivered in FY26. MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT The Directors present their report on the consolidated entity (referred to hereafter as the ‘Group’) consisting of Michael Hill International Limited ACN 610 937 598 (‘Michael Hill International’ or the ‘Company’) and all controlled subsidiaries for the 52 week period ended 28 June 2026. The Group operates predominately in the retail sale of jewellery and related services sector in Australia, Canada and New Zealand. Dividends paid to members during the financial year were as follows: No final dividend was declared for the year ended 29 June 2025 (2024: no final dividend declared) PRINCIPAL ACTIVITIES DIVIDENDS There were no significant changes in the nature of the Group’s activities during the year. No interim dividend was declared for the year ended 28 June 2026 (2025: no interim dividend declared) Final dividend was declared for the year ended 28 June 2026 (2025: nil) As a result of the improvement in operating performance and the strength of the Company’s balance sheet, the Board has decided to declare a final dividend of AU2.0 cents per share, partially franked (50%) for Australian purposes, with partial New Zealand imputation credits (50%) and with conduit foreign income. This decision reflects the Board's increased confidence in the progress of the turnaround and the Group's focus on building a simpler, stronger, and more sustainable business. KEY FINANCIAL RESULTS Canada delivered another record performance, with SSS up +7.0% on prior year. 2Excludes relevant one-off normalisations. Australia delivered a strong performance, with SSS up +4.8% on prior year. New Zealand delivered a marked acceleration from Q2, with SSS up +3.6% on prior year. Group net debt position of $5.5m (FY25: $41.9m), a $36.3m improvement on prior year. Final dividend declared of 2.0cps (FY25: nil). Online sales grew to 8.7% of total sales. Cost of Doing Business3 % (CODB) as a percentage of revenue is down 70 bps to 57.1% (FY25: 57.8%). FY26 – GROUP BUSINESS & FINANCIAL PERFORMANCE 1Same store sales reflect sales through store and online channels on a comparable trading day basis and are unaudited. Group revenue reached a record $655.7m (FY25: $643.7m), up +1.9% on prior year, and up +4.1% on a constant currency basis. Same store sales1 (SSS) growth of +3.0% on prior year, and +5.2% on a constant currency basis with the first half momentum continuing through the second half: Gross margin2 held flat at 60.5%, demonstrating the Group's ability to offset elevated precious metal costs while consumers continue to navigate cost-of-living pressures. Comparable Earnings Before Interest and Tax (EBIT)4 of $24.0m (FY25: $15.3m), up 57% on prior year. Group inventory levels reduced by $9.4m to $189.7m, a reduction of 4.7% on prior year. Statutory Net Profit After Tax (NPAT) of $10.0m (FY25: $2.1m), up 376% on prior year. 3Cost of Doing Business is an unaudited non-IFRS measure calculated on a normalised basis and excludes foreign exchange gains/losses. 4Comparable EBIT is an unaudited non-IFRS measure prepared on a normalised basis. Further information on the reconciliation of comparable to the statutory result is contained in the Directors’ report and investor presentation. MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT 2
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2026 2025 2024 2023 2022 371,787 362,646 359,102 331,007 303,409 225,826 215,446 217,074 211,823 196,936 60.7% 59.4% 60.4% 64.0% 64.9% 36,270 26,987 29,568 53,549 51,750 9.8% 7.4% 8.2% 16.2% 17.1% 157 160 171 172 147 Group revenue grew to a record $655.7m (FY25: $643.7m), up 1.9% on the prior year and 4.1% on a constant currency basis. Same store sales grew 3.0%, and 5.2% on a constant currency basis, with the positive momentum of the first half continuing through the second half, and every market delivering same store sales growth. As part of the strategic simplification announced at our Investor Day on 14 April 2026, the Group undertook decisive action to focus on its two core brands, Michael Hill and Bevilles. As a result, the Group recognised non-cash write-offs of $6.1m, largely relating to the closure of Medley and TenSevenSeven which has been excluded from Comparable EBIT. This simplifies the Group's operating model and allows management to concentrate resources and attention on driving profitable growth across its core brands. The results below are expressed in local currency. The Group ended the year with closing net debt of $5.5m (FY25: $41.9m), a material improvement of $36.3m on the prior year, reflecting disciplined cash and working capital management through the year, including successful negotiation of new supplier terms with a key partner. The year saw the successful opening of four MH flagship stores: Rundle Mall, Adelaide (refurbishment), Bondi Junction, Sydney (new store), Yorkdale, Toronto (refurbishment), and Pacific Centre, Vancouver (new store); with all stores incorporating our new brand design and a modernised in-store customer experience, with the refit programme delivering improvements in average transaction values and conversion rates above the network average. During the year, the store network reduced by a net total of six stores, taking the network to 281 across all markets (FY25: 287). Gross margin of 60.5% was in line with the prior year, demonstrating the Group's ability to offset elevated precious metal costs, including gold achieving multiple record highs, through a stronger product mix and disciplined pricing execution. As a percentage of revenue, Group Cost of Doing Business (CODB) reduced by 70bps to 57.1% (FY25: 57.8%). The improvement reflected disciplined cost management across the Group, which enabled reinvestment in team while supporting stronger sales performance. Our proprietary Retail Assist AI now powers over 50% of all retail support enquiries, providing instant knowledge to teams to better focus on customers. OPERATING RESULTS (AU $'000) Comparable EBIT Comparable EBIT as a % of revenue Online is a key growth engine, and grew 10% in Michael Hill on a constant currency basis, materially ahead of the physical network and with Canada again the standout with 22% growth. Our digital channel is now by far the largest store in the Michael Hill brand and is increasingly where customers discover and buy. For the Group, online now represents 8.7% of total revenue, growth was driven by improvements to the digital experience, which uplifted both conversion and average transaction sales. With penetration still below that of many comparable peers, management believes there is significant runway for further growth. Group inventory reduced by $9.4m to $189.7m, down 4.7% on the prior year, reflecting a deliberate plan to improve stock productivity. Group Gross Margin Return On Investment (GMROI) improved 13% over the year, meaning the reduction was driven by better inventory management and stronger clearance sell-thru. The Group activated a partnership with Impact Analytics to build AI-driven demand forecasting and planning, further improving inventory productivity and allocation across the network. Within this result, the Bevilles business gained traction with a clear inflection between the halves, demonstrating the effectiveness of the brand’s turnaround strategy. After year-on-year declines in the first half, same store sales, gross margin, and gross profit dollars all returned to growth in the second half, with same store sales up 5.8% in FY26H2 against a 4.6% decline in FY26H1, gross margin grew by 660 basis points in FY26H2 vs FY26H1. AUSTRALIAN RETAIL PERFORMANCE SEGMENT RESULTS Retail segment revenue increased by 2.5% to $371.8m (FY25: $362.6), and same store sales increased by 4.8% for the year, with second half same store sales up by 4.4% on the prior comparable period. Gross margin increased by 130 bps to 60.7% (FY25: 59.4%), driven by disciplined pricing, an improved product mix and a continued focus on profitable growth, demonstrating the ability to increase sales without compromising margin. Higher sales and gross margin drove a healthy uplift in gross profit, largely underpinning the improvement in Australian Comparable EBIT. Gross margin Gross profit Revenue The Group delivered a materially stronger operating performance in FY26, with Comparable EBIT increasing 57% to $24.0m (FY25: $15.3m) against a challenging macroeconomic environment. The result reflected stronger sales, resilient gross margins despite elevated gold input costs, and disciplined management of operating expenses in an inflationary environment. These factors combined to improve operating leverage, increase cash generation and strengthen returns. The Australian store network finished the year with 157 stores, including 36 Bevilles stores (FY25: 160 including 37 Bevilles stores), with 4 store closures (Michael Hill: 3, Bevilles: 1) and one new store for Michael Hill. Number of stores During the year, the business successfully refinanced its existing debt facility on improved margins for an additional two years, with its long- term banking partner, ANZ and introduced a new lender, CBA. In addition, the business remained committed to a reduced capital expenditure profile relative to historical levels, reducing the inventory profile across the business and implementing working capital efficiencies. MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT 3
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2026 2025 2024 2023 2022 174,229 162,368 157,094 158,894 159,661 105,131 97,583 95,222 100,531 103,623 60.3% 60.1% 60.6% 63.3% 64.9% 21,929 18,853 18,775 27,110 28,785 12.6% 11.6% 12.0% 17.1% 18.0% 81 82 85 86 85 2026 2025 2024 2023 2022 112,435 109,047 114,785 132,359 125,090 65,265 63,566 68,453 81,961 79,288 58.0% 58.3% 59.6% 61.9% 63.4% 14,047 13,714 14,538 25,622 30,130 12.5% 12.6% 12.7% 19.4% 24.1% 43 45 44 46 48 Gross margin was 58.0% (FY25: 58.3%), reflecting a deliberate focus on adapting our offer to the trading environment. This was balanced with a higher contribution from bridal, which delivered strong growth in both sales and gross profit. Gross profit Retail segment revenue increased by 3.1% to NZ$112.4m (FY25: NZ$109.0m), and same store sales increased by 3.6% for the year. The second half delivered marked acceleration in growth, with same store sales up by 5.6% on the prior comparable period. The performance reflects the decision to fund investment into teams and customer-facing initiatives enhancing the customer experience and supporting sales growth. Gross margin Comparable EBIT OPERATING RESULTS (CA $'000) CANADA RETAIL PERFORMANCE Revenue Number of stores Gross profit Gross margin Comparable EBIT During the year, one store opened and two stores closed, resulting in 81 stores at year end (FY25: 82). It remains our fastest-growing market and our clearest growth opportunity. During the year we opened a new flagship store at Pacific Centre in Vancouver, our second Canadian flagship, reflecting the confidence we have to invest in growth with a focus on extending this momentum. Gross margin improved by 20 bps to 60.3% (FY25: 60.1%), achieved through targeted country-specific go-to-market initiatives. The Canadian segment delivered particularly strong growth in bridal sales, outpacing other segments and supporting the acquisition of higher-value customers. This performance is strategically important, as bridal customers typically generate higher lifetime value and support future purchasing across multiple categories, contributing to sustained profitable growth over time. Retail segment revenue increased by 7.3% to CA$174.2m (FY25: CA$162.4m), and same store sales increased by 7.0% for the year, with second half same store sales up by 7.6% on the prior comparable period. This segment delivered another year of record sales, reflecting the effectiveness of our strategy, the strength of the proposition and the commitment of our team members. Number of stores During the year, two stores closed, resulting in 43 stores at year end (FY25: 45). As part of our broader reset, we are also refreshing skills and capability across both the Executive team and the Board, with succession planning a key focus. Rob Fyfe has advised the Board of his intention to retire as a Director and Chair of the Company, effective 28 November 2026. The Board has appointed current Non-Executive Director Claudia Batten to succeed Mr Fyfe as Chair from 28 November 2026. Comparable EBIT as a % of revenue Comparable EBIT as a % of revenue Revenue NEW ZEALAND RETAIL PERFORMANCE OPERATING RESULTS (NZ $'000) CHAIR SUCCESSION MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT 4
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The Group regularly reviews its product range to ensure it satisfies consumer demand and offers choices in the markets we operate. This is supported by a long-standing vendor relationships with key jewellery manufacturers and buyers who have global insights and can advise on market trends. Further the Group has vendor and product strategies focused on market demand, margin management and product education. Both mined and laboratory created diamonds feature in our core range and collections targeted to specific consumer preferences. Competition between mined and laboratory created diamonds, vendor consolidation and changing market perceptions may impact pricing of our range and could influence consumer behaviours to the detriment of one or both precious stones. The Group has in-house legal and compliance teams who are focused on compliance in our three markets and utilise external firms for specialised advice when required. Any new legislative requirements or rectification initiatives have dedicated teams focused on ensuring our compliance and training our teams appropriately. Ability to respond to rapidly changing customer demographics, requirements and behaviours. The Group regularly conducts range reviews to ensure product mix is on trend and meets customer demands and customer demographics. We are investing in customer and product analytic platforms to better understand our current and future customers and tailoring our channels and product mix to meet the desired customer demands. Breach of regulation or law in one of our jurisdictions in an increasingly complex compliance environment. The safety and security of our staff and customers is our most important priority. We are investing in initiatives and processes which improve the overall security of our stores and contribute to the safety of our staff and customers. We are working with both local and national law enforcement bodies and other external parties to better the overall retail environment for our staff and customers. The Group continues to operate a dedicated executive led taskforce responding to the increasing escalation of theft and violence in all operating environments, with the remit of developing tailored and appropriate actions to keep our team members and customers safe. The Group continues to operate in a volatile, dynamic and uncertain global environment. Ongoing disparity in the timing of economic recovery in the countries we operate in, coupled with shifting geopolitical risks, may adversely affect consumer confidence, discretionary spending and margin resilience across the Group’s markets. Within the jewellery sector, several external pressures are intensifying. Collectively, these factors may impact the Group’s ability to execute its strategic initiatives effectively. The Board believes that a strong risk management framework supports the Group’s growth and success. The Group regularly reviews its risk environment and has identified the following at risk areas and mitigating strategies: Strategies and mitigationRisk The Group monitors trading conditions and financial impacts of country performance through executive governance and Board reporting. The Group has a growth strategy that embraces omni-channel expansion in markets that limit cannibalisation of sales and focusses on improving the customer experience. Furthermore, there is executive oversight of all drivers, both internal and external, and prudent policy execution and governance mechanisms to respond accordingly. RISK MANAGEMENT Theft appeal of our product increases during periods of financial hardship and uncertainty. The high-impact nature of these crimes may place team members and customers at risk and result in financial loss, operational disruption and damage to property. Increase in cyber-attacks disrupting operations and increased reliance on third-party platform providers to have robust cyber controls. The Group has tasked the Technology Governance Committee to oversee its response to cyber risk and the maturing of our cyber resilience. The Group continues to invest in new technologies and remove vulnerable points of attack throughout its digital network. External partners have been engaged to uplift our capabilities, including both proactive and reactive responses to cyber-attacks. Penetration testing and disaster recovery planning are built into our operating rhythm to further prepare and respond to attacks. The rapid evolution of artificial intelligence creates governance, data management, and internal and external experience and benefits realisation risks if adoption is not appropriately controlled and aligned to strategy. The Group has tasked the Technology Governance Committee to oversee its governance and management of artificial intelligence. Artificial intelligence is an enabler of business growth and maturity and risks are managed in line with achieving our strategic objectives whilst having appropriate governance mechanisms in place, including centre of excellence and use of third party tools. MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT 5
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• • • • 2026 2025 $'000 $'000 17,692 2,193 Finance expenses (excluding interest on lease liabilities) 3,979 5,739 Interest income (296) (243) Impact of AASB16 Leases (2,322) (264) Impact of IFRIC SaaS-related guidance (2,488) 929 Litigation judgement (313) (3,031) Strategic review and simplification 6,128 - Brand impairment - 7,400 Bevilles integration costs - 1,029 Transition costs 1,088 436 Employee restructure costs 575 1,157 24,043 15,345 Under the Financial Markets Conduct (Climate-related Disclosures for Overseas Climate Reporting Entities) Exemption Notice 2026 (New Zealand) (Notice), Michael Hill International Limited relies on the exemption in clause 6 of the Notice for FY26. The effect of the exemption is that the Company is not required to prepare climate statements under the New Zealand climate-related disclosure regime for FY26. The Group’s FY26 Sustainability Report, prepared under the Australian reporting regime, is available at https://investor.michaelhill.com/financial- reports/annual-reports. Comparable EBIT COMPARABLE EBIT The Group has determined that its operations are not subject to any particular and significant environmental regulation requiring disclosure in this Directors’ Report. The Directors continue to monitor the Group’s compliance with applicable environmental laws and regulatory requirements.The Group’s FY26 Sustainability Report contains the Group’s climate statements prepared in accordance with the Corporations Act 2001 (Cth) and Australian Sustainability Reporting Standard AASB S2 Climate-related Disclosures. The Sustainability Report has been separately released and lodged in accordance with applicable requirements and is available at https://investor.michaelhill.com/financial- reports/annual-reports. It includes the directors’ declaration and the auditor’s report in respect of the Sustainability Report. This report contains certain non-IFRS financial measures of historical financial performance. Non-IFRS financial measures are financial measures other than those defined or specified under all relevant accounting standards. The measures therefore may not be directly comparable with other companies' measures. Many of the measures used are common practice in the industry in which the Group operates. Non-IFRS financial information should be considered in addition to, and is not intended to be a substitute for, or more important than, IFRS measures. The presentation of non-IFRS measures is in line with Regulatory Guide 230 issued by Australian Securities and Investments Commission (ASIC) to promote full and clear disclosure for investors and other users of financial information, and minimise the possibility of those users being misled by such information. The measures are used by management and directors for the purpose of assessing the financial performance of the Group and individual segments. The directors also believe that these non-IFRS measures assist in providing additional meaningful information on the drivers of the business, performance and trends, as well as the position of the Group. Non-IFRS financial measures are also used to enhance the comparability of information between reporting periods by adjusting for non-recurring or controllable factors which affect IFRS measures, to aid the user in understanding the Group's performance. Consequently, non-IFRS measures are used by the directors and management for performance analysis, planning, reporting and incentive setting. These measures are not subject to audit. The non-IFRS measures used in describing the business performance include: Comparable EBIT has been calculated as follows: ENVIRONMENTAL REGULATIONS AND CLIMATE REPORTING NON-IFRS FINANCIAL INFORMATION Profit before income tax Comparable EBIT Cost Of Doing Business (CODB) Gross Margin Gross Margin Return On Investment (GMROI) MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT 6
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Sir Richard (Michael) Hill K.N.Z.M. Sir Michael was the founder of Michael Hill, and his visionary leadership was the foundation for the Company’s listing on the New Zealand Stock Exchange (NZX) in 1987 and successful international expansion. Sir Michael’s dedication to the jewellery retailing industry and his commitment to excellence was evident throughout his career. He had 23 years of jewellery retailing experience before establishing Michael Hill in 1979, and his strategic decisions and innovative approaches have played a significant role in the growth and success of Michael Hill. Sir Michael led the Group as Chairman from when it listed on NZX in 1987 until 2015, and was appointed a director of the Company on 9 June 2016 until his passing on 29 July 2025. Sir Michael’s contribution to both business and the arts has been widely recognised and celebrated. In 2008, he was recognised as Ernst & Young’s ‘Entrepreneur of the Year’ and in 2011 was appointed a Knight Companion of the New Zealand Order of Merit for services to business and the arts. His leadership inspired those within the company and the industry as a whole. Non-Executive Director Nil Ordinary Shares Sir Michael was not a director of any other listed entities and did not have any directorships of listed entities in the last three years. INFORMATION ON DIRECTORS Information on the directors of Michael Hill International Limited in office during the financial year and until the date of this report (unless otherwise noted) are set out below. Special Responsibilities Director's Interests in shares and options Robert Fyfe CNZM, BE(Hons), Dcom, DistFEngNZ Chair Non-Executive and independent Director Member of ARMC Member of PDRC 1,953,578 Ordinary Shares Rob is also a director of Air Canada. He has not had any other directorships of listed entities in the last three years. Rob was appointed as a director of the Company on 9 June 2016 having previously served as director of Michael Hill’s listed entity in New Zealand commencing 6 January 2014. He was appointed Chair of the Board in June 2021. Prior to joining the Company, Rob served as CEO of Air New Zealand between 2005 and 2012, a period that saw a resurgence of Air New Zealand to become one of the most recognised and awarded airlines in the world and one of the best performers in a tough industry. Rob also has extensive general management and board experience in various retail businesses operating in New Zealand, Australia and Great Britain, across sectors including retail banking, telecommunications, pay television, sport, manufacturing and outdoor apparel. In 2015 Rob was awarded an Honorary Doctor of Commerce from University of Canterbury and on New Year’s Eve 2020, Rob was appointed as a Companion of the New Zealand Order of Merit for services to business and tourism. Director Experience and Directorships MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT 7
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102,000 Ordinary Shares Gary is a director of Flight Centre Travel Group Limited (ASX: FLT). He has not had any other directorships of listed entities in the last three years. Director Non-Executive and independent Director Member of ARMC 70,431 Ordinary Shares Dave was appointed as a director of the Company on 2 August 2023. Dave has considerable brand, data, technology, omni-channel retail and digital transformation experience. He is a founder of Lexer, a global AI led software company helping brands and retailers genuinely understand and engage their customers. In 2015, Dave became the youngest ASX 200 non-executive director when he joined the board of Myer (ASX: MYR). Previously, Dave spent 10 years with global advertising group M&C Saatchi in several local and international leadership roles, culminating in three years as Managing Director in Australia. He is currently a non-executive director of Metcash Limited (ASX: MTS) and Challenger Limited (ASX: CGF), and has held several directorships and advisory roles for private, Government and not-for-profit organisations. Dave served as a non- executive director of MYER Holdings Limited from November 2015 until December 2024. He has not had any other directorships of listed entities in the last three years. David Whittle B.A., B.Com 167,487,526 Ordinary Shares Emma Hill B.Com, M.B.A Gary Smith B.Com, F.C.A., F.A.I.C.D. Special Responsibilities Experience and Directorships Director's Interests in shares and options Emma is not a director of any other listed entities and has not had any directorships of listed entities in the last three years. Emma was appointed as a director of the Company on 9 June 2016 having previously served as director of Michael Hill’s listed entity in New Zealand commencing 22 February 2007. She served as Deputy Chair of the Group from 2011 until 2015 and as Chair from 2015 until June 2021. Emma has over 30 years’ experience working in various roles within the Group, commencing on the shop floor in Whangarei, New Zealand. She held a number of management positions in the Australian company before successfully leading the expansion of the Group into Canada as Retail General Manager in 2002. Emma holds a Bachelor of Commerce degree and an MBA from Bond University. Non-Executive Director Chair of PDRC Gary was appointed as a director of the Company on 24 February 2016 having previously served as director of Michael Hill’s listed entity in New Zealand commencing 2 November 2012. Gary has extensive director experience across a range of boards and tourism related industry bodies. He is Chairman of Flight Centre Travel Group Ltd, one of Australia’s top public companies and is a member of their Audit and Remuneration sub-committees. He is also a director of the National Roads and Motorists' Association (NRMA) and is a Chartered Accountant and a Fellow of the Australian Institute of Company Directors. Non-Executive and independent Director Chair of ARMC Member of PDRC MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT 8
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Director Experience and Directorships Special Responsibilities Director's Interests in shares and options Nil Ordinary Shares Andrea is currently a director of Prime Financial Group (ASX: PFG). She has not had any other directorships of listed entities in the last three years. Andrea Slingsby B.A., PPL (HBS) Andrea was appointed as an alternate director of the Company on 14 April 2025 and ceased as alternate director on 29 July 2025. Andrea was then appointed as a director of the Company on 8 September 2025. Andrea has extensive Board governance, C-Suite executive, consulting and advisory experience across a range of industry sectors including global retail. Andrea brings expertise in both domestic and international growth and sustainable scaling of Australian brands such as Flight Centre and Blackmores. Andrea’s previous executive roles with the Company include Interim Chief People Office from August 2018 to December 2018 and Chief Operating Officer from January 2019 to January 2021. Alternate director to Sir Richard Michael Hill from 14 April 2025 to 29 July 2025 Non-Executive and independent Director Claudia Batten LLB (Hons), B.Com Claudia was appointed as a director of the Company on 30 August 2024. Claudia started her professional career at law firm Russell McVeagh specialising in contract, IP, and technology law before moving to New York in 2002. Claudia was a member of the founding team of Massive Incorporated, a network for advertising in video games which helped pioneer “digital” as a media buy. Massive was sold to Microsoft in 2006, where Claudia spent 3 years scaling the in-game network. In 2009 she co-founded Victors & Spoils, the first advertising agency built on the principles of crowdsourcing which was acquired by French holding company Havas Worldwide just two years later. Deputy Chair Non-Executive and independent Director Member of PDRC Nil Ordinary Shares Claudia has been widely recognised for her work supporting the technology and start up scene in New Zealand and spent three years running North American operations for NZTE, supporting disruptive thinking for the growth of NZ exports in North America. Claudia is a graduate of Victoria University of Wellington with degrees in Law (Hons) and Commerce.Claudia is currently a director of Air New Zealand Limited (ASX/NZX: AIZ), Vista Group International Limited (NZX: VGL) and is Chair of Serko Limited (ASX/NZX: SKO). She has not had any other directorships of listed entities in the last three years. MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT 9
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A B A B A B 8 8 3 4 4 5 1 1 - - - - 8 8 - - 5 5 7 8 4 4 5 5 8 8 4 4 - - 8 8 - - 5 5 6 7 - - - - Claudia Batten COMMITTEE MEMBERSHIP Emma Hill (Chair) Robert Fyfe Gary Smith AUDIT AND RISK MANAGEMENT COMMITTEE Gary Smith (Chair) Robert Fyfe PEOPLE DEVELOPMENT AND REMUNERATION COMMITTEE As at the date of this report, Michael Hill International Limited has an Audit and Risk Management Committee and a People Development and Remuneration Committee. David Whittle ^A Slingsby appointed as an alternate director to Sir Richard Michael Hill on 14 April 2025 and attended the relevant meeting as his alternate director. A Slingsby was then appointed as a director effective 8 September 2025. R I Fyfe Sir R M Hill^ E J Hill G W Smith A = Number of meetings attended D Whittle B = Number of meetings held during the time the director held office or was a member of the committee during the year C Batten A Slingsby^ COMPANY SECRETARY MEETINGS OF DIRECTORS Full meetings of directors Audit and Risk Management People Development and Remuneration Kate Palethorpe, who was also the General Counsel of the Group, was appointed to the position of Company Secretary on 18 March 2024 and resigned as Company Secretary on 17 March 2026. Kate is an experienced ASX company secretary and governance professional, starting her career at top-tier law firm Minter Ellison before moving to in-house roles including Aesop, Aussie Farmers Direct and Australian Dairy Nutritionals. Kate holds a Bachelor of Laws (Hons), Bachelor of Science (Biochemistry) (Hons), Graduate Diploma in Legal Practice, and Graduate Diploma of Applied Corporate Governance and Risk Management. The numbers of meetings of the Company's Board of Directors and of each Board committee held during the year ended 28 June 2026, and the numbers of meetings attended by each director were: Meeting of committees Matthew Kremastos, who also holds the position of Senior Legal Counsel for the Group, was appointed to the position of Company Secretary on 17 March 2026 and resigned as Company Secretary on 2 July 2026. Matthew has been a part of the Michael Hill team since March 2023 and is an experienced senior lawyer. Matthew Holds a Bachelor of Laws, Bachelor of Justice (Policing) (Dist), and Graduate Diploma of Legal Practice. Catherine (Cathy) Hoyle, who also holds the role of General Counsel of the Group, was appointed Company Secretary of the Company on 2 July 2026. Cathy is an experienced General Counsel and Company Secretary with extensive expertise supporting ASX-listed and international organisations. She brings deep capability in ASX Listing Rules compliance, continuous disclosure, board and shareholder governance. Cathy is a practicing Solicitor in New South Wales Australia, a Graduate of the Australian Institute of Company Directors, and holds several degrees including a Master of Laws from the Australian National University. MICHAEL HILL INTERNATIONAL LIMITED DIRECTORS' REPORT 10
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Jonathan Waecker commenced as Chief Executive Officer in August 2025, with a mandate to accelerate performance, simplify execution, and position the group for its next phase of growth. This marked the beginning of a new chapter for the Group. On behalf of the Board and the People Development and Remuneration Committee (PDRC), I am pleased to present Michael Hill International's FY26 Remuneration Report. FY26 was shaped by significant leadership and organisational change. The year began with the Board continuing the Chief Executive Officer succession process following the sudden passing of Daniel Bracken in February 2025. In July 2025, the Group also mourned the passing of its Founder and Director, Sir Michael Hill. Their respective contributions and legacies continue to be deeply felt across Michael Hill. Dear Shareholders, AUDITED REMUNERATION REPORT The Directors present the 2026 Michael Hill International Limited remuneration report, outlining key aspects of our remuneration policy and framework, and remuneration awarded during FY26. The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. Letter from the Chair of the People Development and Remuneration Committee Remuneration Overview Remuneration Framework Relationship of Remuneration to Group Performance FY26 Executive Key Management Personnel (KMP) Remuneration Section 1 Section 2 Section 3 Section 4 Section 5 CONTENTS Section 6 FY26 Non-Executive Director Remuneration SECTION 1LETTER FROM THE CHAIR OF THE PEOPLE DEVELOPMENT AND REMUNERATION COMMITTEE FY26 also saw meaningful progress in strengthening our organisational culture and leadership capability throughout the company. Despite the extent of leadership and organisational change, team member engagement increased to 84%. This result demonstrates positive momentum in employee experience, leadership effectiveness, and organisational alignment. Following Jonathan’s commencement, we reviewed the Group’s organisational structure and leadership requirements. This resulted in several changes to the Executive Leadership Team, including the removal of the Chief Retail Officer role and a reduction in the size of the Executive team to sharpen operational focus, clarify accountability, improve transparency and accelerate decision-making across our markets. During the year Elodie Guillaumond joined the Executive as Chief Financial Officer, Tonia Zehrer joined as Chief Product Officer and Tanya Atkinson joined as Executive General Manager Bevilles, all appointments bringing elevated experience and expertise to the Group. With this refreshed Executive team, led by Jonathan, the Board believes the Group has the leadership experience, commercial discipline and customer focus required to improve business performance and deliver sustainable value for shareholders. In this environment, the Board remained focused on maintaining financial discipline and ensuring that Executive remuneration continued to be closely linked to company performance, individual accountability and the creation of sustainable long-term shareholder value. In determining remuneration outcomes, the Board considered both the results achieved and the broader experience of shareholders during the year. During the year, the PDRC also reviewed the way we communicate remuneration outcomes to shareholders. Following engagement with shareholders and proxy advisors, we have enhanced the transparency of this report by providing greater disclosure of performance measures, incentive outcomes and the relationship between Executive remuneration and company performance. We believe these changes improve the readability of the report and provide shareholders with a clearer understanding of how remuneration decisions are made. Our remuneration philosophy remains unchanged. We seek to attract and retain talented leaders, reward the achievement of strategic and financial objectives, and ensure a meaningful proportion of Executive remuneration is linked to the delivery of sustainable long-term shareholder value. The Board believes the remuneration outcomes outlined in this report appropriately reflect company performance, Executive accountability, and the broader operating environment experienced during FY26. These leadership and organisational changes took place against a challenging external backdrop. Across our markets, consumers continued to experience cost-of-living pressures and the lingering effects of elevated inflation and higher interest rates. Geopolitical uncertainty and volatile commodity markets also affected consumer confidence and discretionary spending, creating difficult trading conditions for many retailers, including Michael Hill. MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 11
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• • • • Chair of the People Development and Remuneration Committee SECTION 2REMUNERATION OVERVIEW This report sets out the remuneration arrangements for Michael Hill International’s key management personnel (KMP). Our KMP have the authority and responsibility for planning, directing and controlling the activities of the entity. All KMP listed below have held their positions for the entire reporting period unless indicated otherwise underneath each chart. Sir Richard Michael Hill2 Founder and Non-Executive Director 2016 Name Position Commencement as KMP Non-Executive Directors Robert Fyfe Chair and Non-Executive Director 2016 People Development and Remuneration Committee (PDRC) The primary objective of the People Development and Remuneration Committee (PDRC) is to assist the Board to fulfil its corporate governance and oversight responsibilities in relation to the Company’s people strategy including remuneration components, performance measurements and accountability frameworks, recruitment, engagement, retention, talent management and succession planning. The following Non-Executive Directors are members of the PDRC for the 2026 reporting period: Regards, 2016 Gary Smith Non-Executive Director 2016 Emma Hill On behalf of the PDRC, I extend gratitude to our team members across Australia, New Zealand and Canada for their dedication, resilience and commitment throughout another year of change and opportunity. Their passion for serving our customers and supporting one another continues to be a defining strength of Michael Hill. Jonathan Waecker commenced as CEO on 27 August 2025. Prior to that time, Andrew Lowe served as the only Executive KMP, holding the roles of Interim CEO and Group CFO. Upon the commencement of Mr. Waecker, Mr. Lowe reverted to his substantive role as Chief Financial and Supply Chain Officer. On the resignation of Mr. Lowe, a thorough search was conducted to find a suitable replacement, with Elodie Guillaumond commencing with the business on 2 February 2026 as Chief Financial Officer. Michael Hill International Limited Claudia Batten Deputy Chair and Non-Executive Director 2025 Andrew Lowe 2025 Emma Hill Non-Executive Director CEO Daniel Bracken3 Managing Director and Chief Executive Officer 2019 Interim CEO 2025 David Whittle Non-Executive Director 2024 Andrea Slingsby1 Non-Executive Director Interim CEO and Group CFO 2025 Jonathan Waecker5 Chief Executive Officer 2025 Elodie Guillaumond6 1Andrea Slingsby was appointed as Non-Executive Director on 8 September 2025. 2Sir Richard Michael Hill ceased as a Director on 29 July 2025. 3Daniel Bracken ceased as a Director on 26 February 2025. 4Andrew Lowe has held the position of CFO since 2017 and was appointed Interim CEO on 6 March 2025 until 26 August 2025. Mr Lowe resigned the position of Chief Financial and Supply Chain Officer, leaving the business in February 2026. 5Jonathan Waecker commenced as CEO on 27 August 2025. 6Elodie Guillaumond commenced as CFO on 2 February 2026. Executive Chief Financial Officer and Supply Chain Officer 2017 Emma Hill - Chair of the PDRC Robert Fyfe - Chair of the Board of Directors Gary Smith - Chair of the Audit and Risk Committee Claudia Batten - Deputy Chair and Committee member Chief Financial Officer 2026 Andrew Lowe4 MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 12
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Our Values We care We are professional We are inclusive and diverse We create outstanding experiences Attract, motivate and retain high quality and high performing executive talent Reward annual performance and achievement of strategic objectives Align to shareholder value creation Long Term Incentive (LTI) Our Remuneration Philosophy Executives participate in the Group’s STI program prioritising Board approved On- Target and Outperformance Targets. The Company has established an LTI plan as deferred compensation. How was it delivered? Base salary plus any fixed elements including superannuation and leave entitlements. Cash for On-Target performance and for Outperformance. An annual issue of share rights is made to Executive KMP. The rights vest at the end of the relevant performance period if certain performance hurdles and vesting conditions are met. Under the LTI Plan Rules, the Board also has discretion to settle an issue of vested shares via an equivalent cash payment. How is it set? Fixed Remuneration is set with reference to market competitive rates in comparative companies for similar positions, adjusted to account for the experience, ability and effectiveness of the individual Executive. Our Remuneration Framework - FY26 Framework Fixed Remuneration Short Term Incentive (STI) REMUNERATION FRAMEWORK Our remuneration philosophy is guided by our vision to make modern luxury accessible. The structure of compensation is designed with a mix of market competitive fixed remuneration, short-term incentives (STIs) which reward annual performance and long-term incentives (LTIs) to align financial performance and shareholder value creation. SECTION 3 Use of Remuneration Consultants The PDRC obtains independent advice every three years to assess the appropriateness of the Group’s remuneration practices, having regard to market trends, comparable companies and the objectives of the Group’s remuneration strategy. In FY25, the Chair of PDRC engaged PayIQ to benchmark Executive team remuneration and review Short Term and Long Term bonus frameworks compared to market peers. Following this review, the Board approved changes to the Executive KMP remuneration framework for FY26 to more closely align with market practice and the Company's pay-for-performance philosophy. The revised framework increased the proportion of remuneration delivered through at-risk and deferred incentives while reducing the proportion of fixed remuneration. STI design changes included a modest increase in target incentive opportunity and a reduction in the maximum STI payout from 200% to 150% of target for CEO and CFO. To strengthen alignment with business financial performance, the weighting of Financial KPIs increased from 60% to 70% of the STI scorecard. Consistent with the objective of increasing executive alignment with long-term shareholder outcomes, LTI opportunity was increased to 105% of fixed remuneration for CEO and to 50% for CFO. Collectively, these changes ensured that KMP reward was aligned with company performance and shareholder value creation. The engagement of PayIQ was done directly with the Chair of PDRC, providing assurance to the Board that the advice provided by PayIQ was provided free from undue influence by the members of the key management personnel to whom the recommendation relates. What is the objective? Attract and retain key Executive talent. Drive annual profit growth and align Executive reward with achievement of performance targets that underpin Group strategy and drive shareholder value creation. Reward Executives for sustainable long term growth aligned to shareholders' interests. MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 13
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2026 2025 2024 2023 2022 655,679 643,655 644,929 629,562 595,210 24,043 15,345 15,898 58,889 62,870 9,995 2,099 (479) 35,182 46,712 2.60c 0.55c (0.12c) 9.20c 12.03c - - 20,195 30,719 25,239 126,998 159,700 173,081 339,822 361,105 0.33 0.42 0.45 0.90 0.93 (28.4)% (23.3)% (18.5)% (2.2)% 13.9% 2.0% 0.4% (0.1)% 6.7% 9.3% Share price at year end ($) Compound annual growth rate Return on average total assets *Comparable EBIT is unaudited Non-IFRS Information. Please refer to unaudited Non-IFRS Information in the Directors' Report for an explanation of unaudited Non- IFRS information and a reconciliation of Comparable EBIT. 1Adjusted Earnings Per Share is calculated similarly to statutory Earnings Per Share except EBIT is adjusted to Comparable EBIT as set out in the Directors' Report. 1The dividends paid in FY22 are the postponed interim dividend for FY21 and the interim dividend for FY22. SECTION 4 RELATIONSHIP OF REMUNERATION TO GROUP PERFORMANCE The graphs below show the relationship of KMP remuneration to revenue and Adjusted Earnings Per Share1 for the last four financial years. The first graph below shows the share price movement compared to the ASX300 whilst the second graph shows the dividend paid and yield per financial year. The remuneration framework operates to create a clear link between Executive remuneration and the Group’s performance. The overall level of remuneration takes into consideration the performance of the Group over several years. The performance of the Group over the past five years is summarised below: Revenue ($'000) Comparable EBIT* ($'000) Profit for the year attributable to owners of the Company ($'000) Earnings per share (cents) Dividends paid during the financial year1 ($'000) Market capitalisation ($'000) MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 14
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STI Earned LTI Accrued3 192,606 15,410 - - - - - - - (75,076) 100,160 150,822 342,850 290,033 535,544 156,176 Earnings Per Share (EPS) Dividend Per Share 2.60c AUD 2.00c 0.55c - (0.12c) AUD 1.75c 9.20c AUD 7.50c 12.03c AUD 7.50c Fixed Remuneration Maximum STI LTI Total 35.7% 26.8% 37.5% 100.0% 45.5% 27.2% 27.3% 100.0% 45.5% 27.2% 27.3% 100.0% Elodie Guillaumond Fixed remuneration is reviewed annually, and our policy is to consider the consumer price index (CPI), wage price index (WPI) and the Mercer retail increase report in the annual remuneration review. In addition, base remuneration is set with reference to market competitive rates in comparable companies for similar positions adjusted for experience, capability, and effectiveness of the individual KMP. Fixed remuneration includes base salary and superannuation contributions at the rate of the concessional contributions cap. FY23 0.05 FY25 (0.04) 0.42 FY22 0.17 0.93 1,769,272 1Mr Lowe was Interim CEO from 6 March 2025 to 26 August 2025. 2Personal leave paid to the Estate of Daniel Bracken, paid on probate September 2025. Note the lapsing of FY25 LTIs on a pro rata basis, due to the passing of Daniel the previous year. 3LTI vests on satisfaction of conditions. Company Performance Year Total Shareholder Return (TSR) Share Price FY26 (0.09) 0.33 FY22 Daniel Bracken 1,077,552 FY24 (0.39) 0.45 1Ms. Guillaumond is only eligible to participate in the FY27 STI and FY28 LTI programs. 2Mr Lowe held the role of Interim CEO and CFO from 6th March 2025, returning to his substantive role of Chief Financial and Supply Chain Officer (CFSCO) on 27 August 2025. Mr Lowe subsequently resigned from the business, departing on 17 February 2026. Ms Guillaumond stepped into the CFO role on 2 February 2026. For the FY26 financial year, the Board approved an uplift of 3% to base remuneration, following a full executive remuneration market review conducted by PayIQ the prior financial year. This increase has been applied effectively from 7 July 2025. Fixed Remuneration Andrew Lowe2 As per our Remuneration Policy, formal benchmarking of KMP remuneration is conducted every three years. As noted above, at the end of FY25 PayIQ were engaged to conduct a market review of the Executive remuneration framework including fixed remuneration and the STI and LTI framework. The findings from this activity were used to inform the FY26 KMP remuneration framework. The total remuneration for Executive KMPs comprises both fixed remuneration and at-risk components in the form of an On-Target and Outperformance STI as well as an LTI opportunity. Maximum STI and LTI incentives are calculated as a percentage of the relevant Executive KMPs fixed remuneration component, with the actual amount awarded to the KMP being subject to the satisfaction of clear and measurable performance conditions. The remuneration mix is designed to compensate KMP in a way that strongly correlates to Group performance. The Outperformance STI gives the KMPs the ability to earn an additional 50% of On-Target STI value, paid in cash. The table below shows how the Executive remuneration is structured, noting ineligibility for Elodie Guillaumond and Andrew Lowe for 2026. KMP Jonathan Waecker CEO Remuneration Daniel Bracken2 34,435 34,435 Andrew Lowe1 252,788 252,788 681,783 0.90 SECTION 5FY26 EXECUTIVE KEY MANAGEMENT PERSONNEL (KMP) REMUNERATION Remuneration Mix The following table details the nature and amount of CEO remuneration paid over a 5 year period. 925,353 Total Remuneration Year Jonathan Waecker Fixed Pay 717,337 CEO Andrew Lowe1 150,714 150,714 FY25 FY26 FY24 Daniel Bracken 1,176,765 1,427,747 FY23 Daniel Bracken 1,090,437 1,723,320 Daniel Bracken2 756,859 MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 15
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Target Achieved $27.1m $24.0m + 10% + 10.9% Budget Not Achieved + 8.4% + 14% The former Interim CEO and CFO, whose scorecard was comprised of 60% Group Comparable EBIT Target and 40% successful conclusion of the Group’s bank refinancing arrangements was not awarded STI as the Comparable EBIT hurdle gate of 90% was not met. Customer 10% 55% of target awarded Incentive Award Gate opened for KPI awards 35% Awarded 10% Awarded 0% 10% Awarded Group Comparable EBIT Online Sales growth Bevilles Performance Brillance Profit Growth (all segments) KPI Strategic 10% Strategic 10% Total 100% opportunity The FY26 result has delivered a 57% uplift in Comparable EBIT compared to prior year, with increased sales and profit across all markets. The Board consider that the Comparable EBIT outcome, alongside the strong cost management focus, delivery of key strategic enablers and the decrease in net debt by 85%, place MHJ in a strong financial position moving into FY27. This result is supported further by the Bevilles delivery during the second half. The Board was accordingly satisfied that the Group’s underlying trajectory supported the exercise of discretion to open the gate for eligible Executives, resulting in 55% of STI awarded. CEO Opportunity Threshold Financial 70% $24.4m Performance measure for Outperformance component CFO and Interim CEO – Maximum 60% of Fixed Remuneration comprised of 40% for On- Target performance, and 60% for Outperformance. Annual award for Financial, Strategic and Customer KPIs, subject to the Group meeting an annual financial performance hurdle. In cash for both On-Target performance and Outperformance. Short Term Incentive (STI) Scheme The Group’s STI program is designed to reward delivery of annual profit targets and ensure achievement of strategic and operational objectives. The maximum STI is calculated as a percentage of the relevant KMP's fixed remuneration component and detailed in performance scorecards set by the PDRC. The scorecards detail the performance targets, indicators, and weightings for each Executive across the key performance areas of Financial, Strategic and Customer. The CEO’s scorecard is comprised of core objectives to drive the business forward, and aligned with relevant Executives, who further cascade the STIs throughout the business to drive focused performance. Financial KPI 70% weighting. All On-Target performance subject to financial performance hurdle. CEO – Maximum 75% of Fixed Remuneration comprised of 50% for On-Target performance, and maximum of 75% for Outperformance. The STI program is supported by a performance management system giving visibility and transparency of progress by each Executive. Performance against key performance indicators (KPIs) is measured annually but reviewed on an informal basis, in regular meetings and at half-year end. The STI program in FY26 for KMP was structured as follows: Performance period How the STI is paid? The Incentive payout begins once 90% of Comparable EBIT is achieved, with 100% of the At Target payout made upon reaching Comparable EBIT. For performance exceeding the target, an additional incentive (Outperformance STI) is paid on a linear scale for Comparable EBIT performance between 100% and 150% of the target. On-Target performance measures Strategic and Customer KPIs 30% weighting. The following tables detail the FY26 scorecard KPIs applied to the current CEO. Note: Ms Guillaumond, current CFO, was not entitled to participate in the FY26 STI program. Ms Guillaumond is eligible to receive a sign-on bonus of $120,000, payable in August 2026 on completion of 6-months service. How is STI assessed? The PDRC reviews the CEO’s performance against the performance targets set for that year. The CEO assesses the performance of his direct reports, including the CFO. The PDRC reviews assessed performance for Board endorsement. STI Outcomes Opportunity Andrew took carriage of both the CEO and Interim CEO duties during a very difficult time for the business. Prior to his departure Andrew supported the leadership transition and renegotiated the company refinance. In recognition of Andrew's significant contribution, the Board have awarded Mr Lowe with a one-off discretionary payment of $68,022. MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 16
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% of Base Target Awarded %* $ %* $ %* $ % %* $ 50.0% 350,192 75.0% 525,288 27.5% 192,606 55.0% 47.5% 338,682 * Pro-rata ** of Fixed Pay FY26 Short Term Incentive Outcomes The Normalised EPS condition requires the Company to achieve specified EPS growth over the 3-year performance period. This measure focuses on executives delivering sustainable earnings growth from the underlying business and supports alignment between executive rewards and long-term shareholder value creation. LTI Outcomes FY26 LTI Normalised EPS TSR compound annual growth rate (CAGR) % Share Rights Vesting EPS compound annual growth rate (CAGR) % Share Rights Vesting Less than 10% TSR CAGR Between 10% TSR CAGR and 20% TSR CAGR Absolute TSR The Absolute TSR condition requires the Company to achieve a specified level of total shareholder return over the performance period, measured independently of other companies. It is designed to align executive rewards with shareholder outcomes by focusing on absolute value creation through share price growth and dividends. The Board has simplified LTI disclosures to clearly show performance hurdles, actual outcomes, and vesting results. This approach improves transparency and readability for shareholders while maintaining all required disclosures. 10% vesting for each 1% increase in EPS CAGR performance 100% Sliding scale between threshold and stretch Absolute TSR 50% Eligibility Normalised EPS 50% Eligibility 3 years FY26 Long Term Incentive (LTI) Framework Description Vesting Feature Only the CEO was eligible to participate in the FY26 LTI program in accordance with the LTI program detailed in the preceding table. The new CFO, as per her contract of employment, is entitled to a guaranteed LTI grant (in the form of Share Rights) after 18 months of service. For the CEO, the grant of share rights under the FY26 LTI plan was approved by shareholders at the 2025 Annual General Meeting held on 22 October 2025. Performance period Measures Instrument Service condition Equal to or above 20% TSR CAGR Nil 10% vesting for each 1% increase in TSR CAGR performance 100% Less than 20% EPS CAGR Between 20% EPS CAGR and 30% EPS CAGR Equal to or above 30% EPS CAGR Performance Rights Total Shareholder Return (TSR) and Earnings per Share (EPS) – 50% equally Nil Executive Jonathan Waecker* STI at Target STI Stretch Opportunity STI Awarded STI foreited Participants are required to remain employed by the business in order for Rights to vest to Shares. Where a participant has died, becomes totally and permanently disabled, is retrenched or retires, the number of Rights retained by the participant will be reduced pro- rata (at the Board’s discretion) and will be tested in the ordinary course. MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 17
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Target Actual 20% CAGR (27%) 10% CAGR (37%) (64%) % of Rights Vested Rights Vested 0% - 0% - 0% - 1 155,743 rights were not retained on Daniel's passing, due to a pro-rata of outstanding amounts as per LTI policy. $ All non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter contains Board policies and terms, including remuneration, relevant to the office of director. Non-executive directors do not receive performance-related compensation. Directors’ fees cover all main Board activities and membership of committees. Non-executive directors are not provided with retirement benefits apart from statutory superannuation. Executive KMP does not receive any additional benefits, such as non-cash benefits, other than superannuation and leave entitlements, as part of the terms and conditions of their appointment. Loans are not provided. Service contracts It is the Group’s policy that service contracts for KMP are unlimited but can terminate on six months’ notice. Noting that the Group retains the right to terminate a KMP contract immediately, by making payment equal to six months’ pay in lieu of notice. KMP are also entitled to receive on termination of employment their statutory entitlements of accrued annual and long service leave, together with any superannuation benefits. Total compensation for all Non-Executive Directors, voted upon by shareholders on 14 November 2023, is not to exceed $1,200,000 per annum. Directors’ base fees for FY26 were $114,118 per annum. The Board Chair receives the base fee twice. The Deputy Board Chair receives a premium on the base fee. Additional fees are paid where a Director is Chair of a committee. It is the Company’s policy to undertake an annual review of Non-Executive Director fees, taking into consideration internal market benchmarking, movements in the Consumer Price Index (CPI), and the Wage Price Index (WPI). Following this review, the Board approved an increase of 3% to Non- Executive Director fees for FY26, consistent with the annualised CPI increase for the March 2025 quarter. The fee increase became effective on 7 July 2025. Other benefits SECTION 6FY26 NON-EXECUTIVE DIRECTOR REMUNERATION Committee Chair fees People Development and Remuneration 23,576 Audit and Risk 35,366 FY23 LTI Grant (assessed in FY26) Rights Forfeited 750,956 195,411 Executive Rights Granted Daniel Bracken1 906,699 Andrew Lowe 195,411 TSR CAGR Weighting 50% EPS CAGR 50% 5% CAGR Total 1,102,110 946,367 FY23 LTI Vesting Summary Performance Measure 0% Total 100% 0% Threshold Vesting Outcome 10% CAGR 0% MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 18
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Short-term Long-term Post-employment Proportion remuneration Value of rights as proportion Salary & fees*STI cash bonus TotalLong service leaveSuperannuation benefits performance related of remuneration Name $ $ $ $ $ $ $ $ % % NON-EXECUTIVE DIRECTORS Robert Ian Fyfe 2026 228,238 - 228,238 - - - - 228,238 - - 2025 225,189 - 225,189 - - - - 225,189 - - Claudia Batten 2026 149,485 - 149,485 - - - - 149,485 - - 2025** 161,202 - 161,202 - - - - 161,202 - - Emma Jane Hill 2026 137,696 - 137,696 - - - - 137,696 - - 2025 135,856 - 135,856 - - - - 135,856 - - Sir Richard Michael Hill (until his passing on 29 July 2025) 2026 9,067 - 9,067 - - - - 9,067 - - 2025 112,594 - 112,594 - - - - 112,594 - - Gary Warwick Smith 2026 133,469 - 133,469 - 16,016 - - 149,485 - - 2025 130,017 - 130,017 - 15,114 - - 145,131 - - David Whittle 2026 111,062 - 111,062 - 3,057 - - 114,119 - - 2025 99,257 - 99,257 - 11,538 - - 110,795 - - Andrea Slingsby (appointed 14 April 2025 and resigned 29 July 2025 as Alternative Director and and reappointed to Non-Executive Director 8 September 2025) 2026 101,331 - 101,331 - 12,160 - - 113,491 - - 2025 20,880 - 20,880 - 2,442 - - 23,322 - - TOTAL NON-EXECUTIVE DIRECTOR REMUNERATION 2026 870,348 - 870,348 - 31,233 - - 901,581 - - 2025 884,995 - 884,995 - 29,094 - - 914,089 - - Details of the nature and amount of each major element of remuneration of each Director of the Company and other KMP of the consolidated entity are: DIRECTOR AND EXECUTIVE REMUNERATION OUTCOMES FOR FY26 *Salary and fees include the net leave entitlement accrual, calculated as leave accrued less leave taken Termination benefits Share-based payments (share rights) Total **Includes consulting fees MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 19
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Short-term Long-term Post-employment Proportion remuneration Value of rights as proportion Salary & fees*STI cash bonus TotalLong service leaveSuperannuation benefits performance related of remuneration Name $ $ $ $ $ $ $ $ % % EXECUTIVE DIRECTOR Daniel Bracken**, CEO (until his passing on 26 February 2025) 2026 33,511 - 33,511 - 924 - - 34,435 - - 2025 737,244 - 737,244 101,906- 19,615 - 75,076- 579,877 - -12.95% TOTAL DIRECTOR REMUNERATION 2026 903,859 - 903,859 - 32,157 - - 936,016 - - 2025 1,622,239 - 1,622,239 101,906- 48,709 - 75,076- 1,493,966 - -5.03% EXECUTIVE KMP Jonathan Waecker, CEO (commenced 27 August 2025) 2026 687,337 192,606 879,943 10,923 30,000 - 15,410 936,276 20.6% 1.65% 2025 - - - - - - - - - - Elodie Guillaumond#, CFO (commenced 2 February 2026) 2026 233,228 97,702 330,930 3,508 26,308 - - 360,746 27.1% - 2025 - - - - - - - - - - Andrew Lowe, CFO (resigned 17 February 2026)*** 2026 391,704 - 391,704 100,833- 19,615 68,022 14,797- 363,711 - -4.07% 2025 656,217 - 656,217 41,398 30,000 - 38,251 765,866 - 4.99% TOTAL EXECUTIVE KMP REMUNERATION 2026 1,312,269 290,308 1,602,577 86,402- 75,923 68,022 613 1,660,733 17.5% 0.04% 2025 656,217 - 656,217 41,398 30,000 - 38,251 765,866 - 4.99% TOTAL DIRECTOR AND EXECUTIVE KMP REMUNERATION 2026 2,216,128 290,308 2,506,436 86,402- 108,080 68,022 613 2,596,749 11.2% 0.02% 2025 2,278,456 - 2,278,456 60,508- 78,709 - 36,825- 2,259,832 - -1.63% #CFO Elodie Guillaumond is not eligible for the FY26 LTI share offer. **Paid to the Estate of Daniel Bracken in September 2025 upon finalisation of probate. *** Andrew Lowe was paid a one-off discretionary payment in recognition of past service. Andrew was entitled to retain a pro-rata portion of unvested share rights, as approved by the Board. *Salary and fees include the net leave entitlement accrual, calculated as leave accrued less leave taken Termination benefits Share-based payments (share rights) Total MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 20
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Issued during the year Fair value per share right Number $ 2,664,527 0.18 RECONCILIATION OF OPTIONS AND SHARE RIGHTS HELD BY KMP Vested and Exercisable Unvested Issued Forfeited Vested Exercised Other changes Vested and Exercisable Unvested Andrew Lowe1 FY20 LTI Plan Tranche three - 12,847 - - 12,847 (12,847) - - - FY23 LTI Plan Single Issue - 195,411 - (195,411) - - - - - FY24 LTI Plan Single Issue - 241,871 - (43,412) - - (198,459) - - FY25 LTI Plan Single Issue - 452,168 - (222,030) - - (230,138) - - ADDITIONAL STATUTORY INFORMATION EQUITY INSTRUMENTS All options or rights refer to options or rights over ordinary shares of Michael Hill International Limited, which are exercisable on a one-for-one basis under the Company's Equity Incentive Plan (Plan). MODIFICATION OF TERMS OF EQUITY-SETTLED SHARE-BASED PAYMENT TRANSACTIONS The terms of the Plan were approved by shareholders at the Company's 2023 Annual General Meeting held on 14 November 2023. The Plan replaced the Group’s previous incentive scheme approved by shareholders to address significant changes to the Corporations Act covering employee share schemes. No changes were otherwise made to the terms of the Plan during the reporting period. The Plan applies to any rights or shares issued after 14 November 2023 as part of the Company’s LTI remuneration strategy. The terms of equity-settled share-based payment transactions (including options and rights granted as compensation to a KMP) entered into prior to 14 November 2023 have not been altered or modified by the Company during the reporting period or the prior period. Upon exercise of any option previously granted with a NZ$ exercise price, the exercise price will be converted to AU$ with reference to the Reserve Bank of Australia foreign exchange rate on that date. The exercise price of any future option grants will be set by using the same method, with reference to the Australian Securities Exchange ('ASX'). ANALYSIS OF OPTIONS AND RIGHTS OVER EQUITY INSTRUMENTS GRANTED AS COMPENSATION The number of share rights issued to KMP and senior management during FY26 was 2,664,527 share rights. Of these, share rights issued to KMP are set out below. Refer to note D3 of the accompanying financial report for further details. No options were granted to KMP as compensation for the financial year. SHARE RIGHTS Balance at end of the year KMP Jonathan Waecker No options are held by KMP. The number of rights over ordinary shares held during the financial year by KMP, including the number issued, vested, exercised and forfeited is set out below. Balance at start of the year MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 21
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Vested and Exercisable Unvested Issued Forfeited Vested Exercised Other changes Vested and Exercisable Unvested Jonathan Waecker* FY26 LTI Plan Single Issue - - 2,664,527 - - - - - 2,664,527 Total - 902,297 2,664,527 (460,853) 12,847 (12,847) (428,597) - 2,664,527 Sir Richard (Michael) Hill*1 Jonathan Waecker Gary Smith 102,000 - - 102,000 - End of remuneration report. 2Ceased as KMP on his resignation on 17 February 2026. 1 Ceased as KMP on his passing on 29 July 2025. NON-DIRECTOR - - - Balance at start of the year Balance at end of the year Emma Hill 167,487,526 Claudia Batten *Includes common shareholding. Andrea Slingsby - - - - Andrew Lowe2 818,377 12,847 (831,224) - VOTING OF SHAREHOLDERS AT LAST YEAR'S ANNUAL GENERAL MEETING The Company received 98.37% of “For” votes on its remuneration report for FY25. The Company did not otherwise receive any specific feedback at the AGM or throughout the year on its remuneration practices. NON-AUDIT SERVICES To the extent permitted by law, the Company has agreed to indemnify its auditor, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year. 1,953,578 David Whittle 70,431 - - 70,431 Robert Fyfe - - - - INSURANCE OF OFFICERS AND INDEMNITIES The Company’s Constitution provides that it may indemnify any person who is, or has been, an officer of the Group, including the directors, the Secretaries and other officers, against liabilities incurred whilst acting as such officers to the extent permitted by law. The Company has entered into a Deed of Indemnity, Insurance and Access with each of the Company’s directors, Company Secretaries and certain other officers. No director or officer of the Company has received benefits under an indemnity from the Company during or since the end of the year. The Company has paid a premium for insurance for officers of the Group. This insurance is against a liability for costs and expenses incurred by officers in defending civil or criminal proceedings involving them as such officers, with some exceptions. The contract of insurance prohibits disclosure of the nature of the liability insured against and the amount of the premium paid. There were no non-audit services provided by the entity's auditor, Ernst & Young (Australia). - - - - Elodie Guillaumond 1 Ceased as KMP on his resignation on 17 February 2026. Andrew was entitled to retain a pro-rata portion of unvested share rights (FY24 LTI Plan: 198,458, FY25 LTI Plan: 230,138), as approved by the Board. 148,330,600 - (148,330,600) - 1,953,578 - - - - 167,487,526 *Share rights granted to Jonathan Waecker during the reporting period were approved by shareholders at the Company's 2025 AGM as required by ASX Listing Rule 10.14. SHAREHOLDINGS NON-EXECUTIVE DIRECTORS Balance at start of the year Received on exercise of rights Other changes Balance at end of the year Number Number Number Number The number of ordinary shares held during the financial year by KMP is set out below: MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 22
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R I Fyfe Chair Brisbane 28 August 2026 This report is made on 28 August 2026 in accordance with a resolution of directors as required by section 298 of the Corporations Act 2001. A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 (Cth) is included in this report. ROUNDING OF AMOUNTS The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the 'rounding off' of amounts in the Directors' Report. Amounts in the Directors' Report have been rounded off in accordance with the instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar. AUDITOR'S INDEPENDENCE DECLARATION MICHAEL HILL INTERNATIONAL LIMITED REMUNERATION REPORT 23
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 111 Eagle Street Brisbane QLD 4000 Australia GPO Box 7878 Brisbane QLD 4001 Tel: +61 7 3011 3333 Fax: +61 7 3011 3100 ey.com/au Auditor’s independence declaration to the directors of Michael Hill International Limited As lead auditor for the audit of the financial report of Michael Hill International Limited and for the review of the selective sustainability information in the sustainability report for the financial year ended 28 June 2026, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit and review; b. No contraventions of any applicable code of professional conduct in relation to the audit and review; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit and review. This declaration is in respect of Michael Hill International Limited and the entities it controlled during the financial year. Ernst & Young Rebecca Burrows Partner 28 August 2026
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NOTES 2026 2025 $'000 $'000 A2 655,679 643,655 3,130 1,901 (259,338) (254,217) D1 (183,163) (179,707) (16,111) (15,055) (35,991) (37,455) (25,333) (24,796) (2,347) (2,841) F5 - (7,400) F1 (63,006) (65,536) (3,642) (518) (17,728) (18,596) (20,753) (20,335) Finance expenses F1 (13,705) (16,907) Profit before income tax 17,692 2,193 F8 (7,697) (94) 9,995 2,099 NOTES 2026 2025 Other comprehensive income $'000 $'000 (7,353) 1,301 (7,353) 1,301 2,642 3,400 2,642 3,400 NOTES 2026 2025 cents cents F2 2.60 0.55 F2 2.52 0.53 Owners of Michael Hill International Limited Loss on disposal of property, plant and equipment and intangibles Administrative expenses Other expenses Item that may be reclassified subsequently to profit or loss: Currency translation differences arising during the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Total comprehensive income for the year is attributable to: Impairment of property, plant and equipment and other assets Depreciation and amortisation expense Income tax expense Profit for the year Impairment of intangible assets Basic earnings per share Diluted earnings per share CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. Earnings per share for profit/(loss) attributable to the ordinary equity holders of the Company: Revenue from contracts with customers Other income Cost of goods sold Employee benefits expense Occupancy costs Marketing expenses Selling expenses MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 25
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NOTES 2026 2025 $'000 $'000 B1 14,461 10,248 F3 14,669 14,653 A3 189,742 199,099 2,014 7,419 A2 436 438 6,981 6,217 228,303 238,074 F3 1,471 1,232 A4 109,800 121,470 F4 50,995 52,938 F5 41,262 47,463 F8 53,149 56,911 A2 61 123 190 184 256,928 280,321 485,231 518,395 F6 81,497 68,685 A4 35,901 38,784 A2 14,980 16,785 F7 10,127 10,215 172 827 322 270 142,999 135,566 A4 90,568 102,601 A2 49,150 49,984 B2 20,000 52,100 F7 9,398 7,525 169,116 212,210 312,115 347,776 173,116 170,619 F10 12,858 12,850 (6,056) 1,450 166,314 156,319 173,116 170,619 Contributed equity Reserves Retained profits Total equity Total non-current liabilities Total liabilities Net assets EQUITY Non-current liabilities Lease liabilities Contract liabilities Borrowings Provisions Provisions Current tax liabilities Deferred revenue Total current liabilities LIABILITIES Current liabilities Trade and other payables Lease liabilities Contract liabilities Contract assets Other non-current assets Total non-current assets Total assets Trade and other receivables Right-of-use assets Property, plant and equipment Intangible assets Deferred tax assets CONSOLIDATED STATEMENT OF FINANCIAL POSITION The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. ASSETS Current assets Cash and cash equivalents Trade and other receivables Inventories Current tax receivables Contract assets Other current assets Total current assets Non-current assets MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 26
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NOTES CONTRIBUTED EQUITY SHARE BASED PAYMENTS RESERVE FOREIGN CURRENCY TRANSLATION RESERVE RETAINED PROFITS TOTAL EQUITY $'000 $'000 $'000 $'000 $000 12,763 1,078 (1,180) 154,220 166,881 Profit for the year - - - 2,099 2,099 Currency translation differences - - 1,301 - 1,301 Total comprehensive income/(loss) for the year - - 1,301 2,099 3,400 Transactions with members in their capacity as owners: Issue of share capital on exercise of share rights F10 87 (87) - - - Share-based payments expense D1 - 338 - - 338 87 251 - - 338 12,850 1,329 121 156,319 170,619 Profit for the year - - - 9,995 9,995 Currency translation differences - - (7,353) - (7,353) Total comprehensive income/(loss) for the year - - (7,353) 9,995 2,642 Issue of share capital on exercise of share rights F10 8 (8) - - - Share-based payments expense D1 - (145) - - (145) 8 (153) - - (145) Balance at 28 June 2026 12,858 1,176 (7,232) 166,314 173,116 Attributable to owners of Michael Hill International Limited Balance at 30 June 2024 Balance at 29 June 2025 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Transactions with members in their capacity as owners: MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 27
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NOTES 2026 2025 $'000 $'000 741,243 726,427 (588,862) (603,363) 152,381 123,064 296 243 177 647 (3,584) (5,247) (9,726) (11,167) 324 (11,699) (40,743) (40,770) B1 99,125 55,071 (12,853) (8,787) (1,328) (1,343) (14,181) (10,130) 100,500 69,400 (132,600) (76,200) (47,965) (48,067) (80,065) (54,867) 4,879 (9,926) 10,248 20,174 (666) - B1 14,461 10,248 Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year Net cash (outflow) from financing activities Net increase/(decrease) in cash and cash equivalents CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings Repayment of borrowings Principal portion of lease payments Cash and cash equivalents at the beginning of the financial year Payments for property, plant and equipment Payments for intangible assets Net cash (outflow) from investing activities Net GST and sales taxes paid Net cash inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES CONSOLIDATED STATEMENT OF CASH FLOWS The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of GST and sales taxes) Payments to suppliers and employees (inclusive of GST and sales taxes) Interest received Other revenue received Interest paid Leasing interest paid Income tax received/(paid) MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 28
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CORPORATE INFORMATION 30 F OTHER INFORMATION 44 F1 Expenses 44 A FINANCIAL OVERVIEW 30 F2 Earnings per share 44 A1 Segment information 30 F3 Trade and other receivables 45 A2 Revenue 32 F4 Property, plant and equipment 46 A3 Inventories 33 F5 Intangible assets 47 A4 Leases 33 F6 Trade and other payables 49 F7 Provisions 49 B CASH MANAGEMENT 35 F8 Tax 50 B1 Cash and cash equivalents 35 F9 Auditors' remuneration 51 B2 Borrowings 35 F10 Contributed equity 51 B3 Dividends 36 F11 Reserves 52 C FINANCIAL RISK MANAGEMENT 37 G GROUP STRUCTURE 53 C1 Financial risk management 37 G1 Interests in other entities 53 C2 Derivative financial instruments 39 G2 Deed of cross guarantee 53 C3 Capital management 40 G3 Parent entity financial information 56 D REWARD AND RECOGNITION 41 H UNRECOGNISED ITEMS 57 D1 Employee benefits 41 H1 Contingencies and commitments 57 D2 Key management personnel 41 H2 Events occurring after the end of the reporting57 D3 Share-based payments 41 period E RELATED PARTIES 43 I SUMMARY OF ACCOUNTING POLICIES AND 58 SIGNIFICANT ESTIMATES AND JUDGEMENTS I1 Summary of material accounting policy information 58 I2 Significant estimates and judgements 65 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 29
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A A1 A2 A3 A4 A1 NOTES TO THE FINANCIAL STATEMENTS CORPORATE INFORMATION The consolidated financial statements of Michael Hill International Limited and its subsidiaries (collectively, the Group) for the 52 weeks ended 28 June 2026 were authorised for issue in accordance with a resolution of the directors on 28 August 2026. Michael Hill International Limited (the Company or Parent) is a for profit company limited by shares incorporated in Australia. The Company is listed on the Australian Securities Exchange ('ASX') as its primary listing, and maintains a secondary listing on the New Zealand Stock Exchange ('NZX'). FINANCIAL OVERVIEW Segment information Revenue Inventories The Group's operations are in three geographical segments: Australia, Canada and New Zealand. TYPES OF PRODUCTS AND SERVICES The Corporate segment includes revenue and expenses that do not relate directly to the relevant Michael Hill Group retail segments. These predominately relate to refining income, head office staff sales, corporate costs and Australian based support costs, but also include manufacturing activities, warehouse and distribution, interest and company tax. Inter-segment pricing is at arm's length or market value and inter- segment revenue is eliminated on consolidation. Michael Hill International Limited and its controlled entities sell goods and provide services to a number of customers from which revenue is derived. There is no single customer from which the Group derives more than 10% of total consolidated revenue. Michael Hill International Limited and its controlled entities operate predominately in the sale of jewellery and related services. MAJOR CUSTOMERS Leases The amounts provided to the Board and Executive Management team in respect of total assets and liabilities are measured in a manner consistent with the financial statements. These reports do not allocate total assets or total liabilities based on the operations of each segment or by geographical location. Management have determined the operating segments based on the reports reviewed by the Board and Executive Management team (Chief Operating Decision Makers (CODM)) that are used to make strategic decisions. The Board and Executive Management team consider, organise and manage the business primarily from a geographic perspective, being the country of origin where the sale and service was performed. SEGMENT INFORMATION MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 30
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Australia Canada New Zealand Corporate Group $'000 $'000 $'000 $'000 $'000 371,787 186,337 97,125 430 655,679 225,826 112,523 56,389 2,240 396,978 (176,563) (82,113) (41,002) (47,066) (346,744) (12,993) (6,848) (3,220) (3,130) (26,191) Comparable EBIT 36,270 23,562 12,167 (47,956) 24,043 (575) (1,088) (6,128) 313 2,488 2,322 296 (3,979) 17,692 362,646 179,798 99,429 1,782 643,655 215,446 108,034 57,954 8,004 389,438 (175,072) (80,064) (41,748) (50,161) (347,045) (13,387) (7,102) (3,710) (2,849) (27,048) Comparable EBIT 26,987 20,868 12,496 (45,006) 15,345 (1,157) (436) (1,029) (7,400) 3,031 (929) 264 243 (5,739) 2,193 Gross Profit Operating expenses Depreciation and amortisation SEGMENT RESULTS Year ended 28 June 2026 Revenue from external customers The CODM assesses the performance of the Group's operating segements based on Comparable EBIT. Reportable Segments Group net profit before tax Transition costs Employee restructure costs Strategic review & simplification Litigation judgement Interest income Finance expenses (excluding interest on lease liabilities) Impact of AASB 16 Leases Impact of IFRIC SaaS guidance Adjusted for: Year ended 29 June 2025* Revenue from external customers Gross Profit Operating expenses Depreciation and amortisation Adjusted for: * The measures disclosed in the prior year have been re-presented in the table above on a consistent basis with the current period. Transition costs Employee restructure costs Litigation judgement Bevilles integration costs Interest income Finance expenses (excluding interest on lease liabilities) Impact of AASB 16 Leases Impact of IFRIC SaaS guidance Group net profit before tax Bevilles brand impairment MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 31
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A2 2026 2025 $'000 $'000 626,561 609,597 27,144 32,030 644 590 1,330 1,438 655,679 643,655 Australia Canada New Zealand Corporate & other Total $'000 $'000 $'000 $'000 $'000 355,896 177,484 92,752 429 626,561 15,891 8,853 4,373 1 29,118 371,787 186,337 97,125 430 655,679 Australia Canada New Zealand Corporate & other Total $'000 $'000 $'000 $'000 $'000 344,392 169,631 93,793 1,780 609,596 18,254 10,167 5,636 2 34,059 362,646 179,798 99,429 1,782 643,655 2026 2025 $'000 $'000 379 347 118 214 497 561 57,301 60,146 6,127 5,968 702 655 64,130 66,769 2026 2025 $'000 $'000 21,575 22,404 (1,345) 2,676 Revenue recognition patterns are regularly reassessed based on new and historical trends resulting in remeasurement of revenue recognised in previous years. Total contract assets Deferred service revenue - PCP The Group derives revenue from the transfer of goods and services over time and at a point in time in the following geographical regions: REVENUE RECOGNISED IN RELATION TO CONTRACT LIABILITIES Deferred service revenue - Lifetime Diamond Warranty Rights of return liabilities Total contract liabilities Over time Impact on revenue recognised relating to performance obligations satisfied in previous years Revenue recognised that was included in the contract liability balance at the beginning of the year Revenue from sale of goods and repair services REVENUE 2025 At a point in time Timing of revenue recognition Revenue from Professional Care Plans (PCP) Interest and other revenue from in-house customer finance program Revenue from Lifetime Diamond Warranty (LTDW) Total revenue from contracts with customers DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS ASSETS AND LIABILITIES RELATED TO CONTRACTS WITH CUSTOMERS 2026 Timing of revenue recognition At a point in time Over time Deferred PCP bonuses Right of return assets The following table shows how much of the revenue recognised in the current reporting year relates to carried-forward contract liabilities and how much relates to performance obligations that were satisfied or partially satisfied in a prior year: MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 32
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(i) (ii) (iii) (iv) A3 2026 2025 $'000 $'000 5,243 5,839 179,002 186,775 5,497 6,485 189,742 199,099 A4 2026 2025 $'000 $'000 Right-of-use assets 400,573 374,163 Less: Accumulated depreciation (290,773) (252,693) 109,800 121,470 NOTES 2026 2025 $'000 $'000 121,470 133,988 29,379 28,386 9,034 6,458 F1 (46,317) (47,988) (3,766) 626 109,800 121,470 2026 2025 $'000 $'000 35,901 38,784 90,568 102,601 126,469 141,385 Lifetime Diamond Warranty Sales of goods are recognised when a Group entity delivers a product to the customer. Retail sales are usually by cash, payment and instalment plans or debit and credit cards. The recorded revenue is the gross amount of sale (excluding taxes), including any fees payable for the transaction and net amounts deferred under AASB15 Revenue from Contracts with Customers such as significant financing components and potential customer returns. Repair services RECONCILIATION OF RIGHT-OF-USE ASSETS Opening carrying value ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES LEASES Sales of services for repair work performed is recognised in the accounting period in which the services are performed. Deferred service revenue and expenses Sale of goods RIGHT-OF-USE ASSETS INVENTORIES LTDW is a warranty provided to customers with the purchase of jewellery items set with a diamond (excluding watches). This has been deemed a service-type warranty and is calculated with reference to the estimated value of service provided to customers and the stand-alone value of customers obtaining the service independently. Income in relation to the LTDW is recognised in line with the estimated pattern of customers utilising this service-type warranty. The Group offers a PCP product which is considered deferred revenue until such time that service has been provided. A PCP is a plan under which the Group offers future services, such as cleaning, repairs and resizing, to customers based on the type of plan purchased. The Group subsequently recognises the income in revenue in the Consolidated Statement of Profit or Loss and Other Comprehensive Income once these services are performed. An estimate based on the timing and quantum of expected services under the plans is used as a basis to establish the amount of service revenue to recognise in the Consolidated Statement of Profit or Loss and Comprehensive Income. LEASE LIABILITIES Foreign currency translation Closing carrying value Current Additional right-of-use assets relating to leases entered into during the year Lease modifications agreed during the year Depreciation expense Non-current Finished goods are held at the lower of cost and net realisable value (NRV). During the year, finished goods have been reduced by $1,382,000 (2025: $474,000) as a result of the write-down to NRV. This is recognised in cost of goods sold in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. During the year, packaging and other consumables have been reduced by $1,275,000 (2025: $553,000) to reflect obsolescence. This is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income in impairment of other assets. Raw materials Finished goods Packaging and other consumables MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 33
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NOTES 2026 2025 $'000 $'000 141,385 154,581 29,503 28,749 7,665 5,508 F1 9,726 11,167 (57,815) (59,234) (3,995) 614 126,469 141,385 Group as a lessee Right-of-use assets Lease liabilities The expense related to short-term property leases was $4,084,000 in the current year (2025: $3,057,000). The Group applies the short-term lease recognition exemption to its short-term leases of property, machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low- value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are expensed on a straight-line basis over the lease term. At commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payment (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. Short-term leases and leases of low-value assets Interest expense RECONCILIATION OF LEASE LIABILITIES Opening carrying value ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS The incremental borrowing rate used in determining the lease liability ranged between 3.04% and 9.59% (2025: 2.52% and 10.06%). The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group leases property, as well as machinery and office equipment. The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets which are recognised in the profit or loss. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of- use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term. The right-of-use assets are also subject to impairment. Refer to the accounting policies in note I1(F). The Group has several lease contracts that include extension options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Group’s business needs. Management exercises significant judgement in determining whether these extension options are reasonably certain to be exercised (refer to note I1). If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. Lease repayments Foreign currency translation Closing carrying value Additional lease liabilities entered into during the year Lease modifications agreed during the year MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 34
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B B1 B2 B3 B1 2026 2025 $'000 $'000 14,461 10,248 2026 2025 $'000 $'000 Profit/(loss) for the year 9,995 2,099 Adjustment for: Depreciation of property, plant and equipment F4 12,907 13,363 Depreciation of right-of-use assets A4 46,317 47,988 Amortisation of intangible assets F5 4,096 4,185 Impairment of property, plant and equipment and other assets 2,347 2,066 Impairment of other intangible assets F5 - (97) Impairment of Bevilles brand intangibles assets F5 - 7,400 Non-cash employee benefits expense - share-based payments D3 (145) 338 Make good interest 392 149 Net loss on disposal of non-current assets 3,642 518 Gain on lease modification (1,369) - Net exchange differences (4,283) (2,065) Change in operating assets and liabilities (Increase)/decrease in trade and other receivables (334) 8 (Increase)/decrease in inventories 8,494 (3,274) (Increase)/decrease in deferred tax assets 3,762 (4,405) (Increase)/decrease in other non-current assets 53 343 (Increase)/decrease in other current assets (727) 1,867 Decrease in current tax receivable/(decrease) in current tax liability 4,750 (6,700) (Decrease)/increase in trade and other payables 12,622 2,445 (Decrease)/increase in provisions (708) (5,612) (Decrease)/increase in contract liabilities (2,686) (5,545) Net cash inflow from operating activities 99,125 55,071 B2 Current Non- current Total Current Non- current Total $'000 $'000 $'000 $'000 $'000 $'000 - 20,000 20,000 - 52,100 52,100 - 20,000 20,000 - 52,100 52,100 CASH AND CASH EQUIVALENTS Cash at bank and on hand Total secured borrowings BORROWINGS Bank loans NOTES The facility also contains terms that are typical for a transaction of this nature including conditions for repayment, financial covenants, guarantee provisions, representations and warranties made by the borrowers, information undertakings, cancellation and termination of the facility and events of default. Refer Note C3 Capital Management. CASH MANAGEMENT Cash and cash equivalents Borrowings Dividends RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES In December 2025, the Company refinanced its debt facility for an additional availability period of two years, maturing on 31 August 2028. This facility is funded by ANZ Banking Group and Commonwealth Bank of Australia. The financial arrangement is a $90m core working capital facility that temporarily increases to $110m each year from 15 September to 14 January, in line with the prior financial year. The CBA facility agreement includes a $3m contingent liability facility. Each subsidiary of the Group guarantees the Company's obligations under the faciltiy. 2026 2025 MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 35
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B3 2026 2025 Ordinary shares $'000 $'000 - - - - 2026 2025 $'000 $'000 7,697 - 2026 2025 $'000 $'000 9,194 16,613 6,483 4,597 The above imputation credit amounts represent the balance of the imputation account as at the end of the financial year, adjusted for imputation credits that will arise from the payment and refund of income tax payable. The dividend recommended by the Directors since year-end, but not recognised as a liability at year-end, will be partially franked and partially imputed. The impact of this is estimated to be a reduction in the franking credit account of $1.6m (2025: Nil) and a reduction in the imputation credit of NZ$1.5m (2025: Nil). Dividends not recognised at the end of the reporting period No final dividend was declared for the year ended 29 June 2025 (2024: no final dividend declared) The franking credit amounts represent the balance of the franking account as at the end of the financial year, adjusted for franking credits that will arise from the payment and refund of income tax payable. No interim dividend was declared for the year ended 28 June 2026 (2025: no interim dividend declared) DIVIDENDS Imputation credits (NZ$) available for subsequent reporting periods based on New Zealand tax rate of 28.0% (2025: 28.0%) Franking credits available for subsequent reporting periods based on a tax rate of 30.0% (2025: 30.0%) Since year-end, the Directors have recommended a 2.0 cents (2025: nil) per fully paid share final dividend. Franking and imputation credits MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 36
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C FINANCIAL RISK MANAGEMENT C1 C2 C3 C1 FINANCIAL RISK MANAGEMENT Management may include: USD NZD CAD EUR SGD USD NZD CAD EUR THB $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Cash and cash equivalents 385 - 5 1 - 26 5 10 27 - Trade receivables 87 24 13 - - 117 4 30 6 - Trade payables (17,273) (1,888) - (1,497) (256) (11,495) (1,455) (139) (1,194) (6,522) Forward exchange contracts: Buy foreign currency 12,090 - - 2,260 - 6,000 - - - - Net foreign currency exposure (4,711) (1,864) 18 764 (256) (5,352) (1,446) (99) (1,161) (6,522) The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, including the purchase of inventory. Where it is considered appropriate, the Group enters into forward foreign exchange contracts to buy specified amounts of various foreign currencies in the future at a pre-determined exchange rate. Financial risk management Derivative financial instruments Capital management Rolling cash flow forecasts Ageing analysis - foreign exchange - interest rate Credit risk Diversification of bank deposits, credit limits and letters of credit Availability of committed credit lines and borrowing facilities 2025 Long-term borrowings at variable rates Forward exchange contracts (FEC) Interest rate swaps The Group manages its financial risks in accordance with its Treasury Policy. Any derivatives are used exclusively for risk management purposes and not for trading or speculative purposes. Cash and cash equivalents and trade receivables Sensitivity analysis Market risk The Group's overall risk management program includes a focus on financial risk including the unpredictability of financial markets and foreign exchange risk. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities that are denominated in a currency that is not the entity’s functional currency and net investments in foreign operations. The Group currently does not use derivative financial instruments to hedge its exposures to foreign currency risk arising from intercompany loans. Exchange rates and the carrying amounts of the loan are monitored to assess the ongoing impact on the Group's financial performance. FOREIGN EXCHANGE RISK The policies are overseen by the Board and executed by management who undertake regular reviews to enable prompt identification of financial risks so that appropriate actions may be taken. Liquidity risk Borrowings and other liabilities Risk Exposure arising from Measurement Future commercial transactions Recognised financial assets and liabilities not denominated in AUD 2026 The Group’s activities expose it to a range of financial risks, including foreign exchange risk, interest rate risk, credit risk and liquidity risk. The Group’s risk management framework is designed to manage financial market volatility and minimise potential adverse effects on the Group’s financial performance. The Group's exposure to foreign currency risk at the end of the reporting year, expressed in the presentation currency, was as follows: Exposure Cash flow forecasting and sensitivity analysis MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 37
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Foreign exchange rate sensitivities AUD increases 10% AUD decreases 10% Bank overdrafts and bank loans Net exposure to cash flow interest rate risk Interest rates - increase by 100 basis points Interest rates - decrease by 100 basis points CREDIT RISK LIQUIDITY RISK Impact on other components of equity (55) (419) - - - 5.53% 20,000 6.48% 52,100 28 June 2026 % - Credit risk is managed on a Group basis and refers to the risk of a counterparty failing to discharge an obligation. In the normal course of business, the Group incurs credit risk from trade receivables and transactions with financial institutions. The Group places its cash and short term deposits with only high credit quality financial institutions. Sales to retail customers are required to be settled via cash, major credit cards or passed onto various credit providers in each country. At the reporting date, no material credit risk exposure existed in relation to potential counterparty failure on financial instruments. The Group provides interest-free consumer credit in Canada as a secondary product and the credit risk exposure which exists against this financial instrument is detailed in note F3. Other than the loss allowance recognised in trade and other receivables in note F3, no financial assets were impaired or past due. The maximum exposure to credit risk at the end of the reporting year is the carrying amount of each class of financial assets disclosed in note F3. Sensitivity Weighted average interest rate Balance 2025 2026 2025 419 2026 Weighted average interest rate Balance % $'000 $'000 Profit or loss is sensitive to higher/lower interest income from cash and cash equivalents as a result of changes in interest rates. All other non-derivative financial liabilities have a contractual maturity of less than 6 months. Impact on pre-tax profit 20,000 52,100 The Group maintains prudent liquidity risk management with sufficient cash and the availability of funding through an adequate amount of committed credit facilities. 29 June 2025 The Group’s current external funding arrangement is a working capital facility domiciled in and denominated in Australian dollars, and there is no corporate long-term debt. The Group does not currently use interest rate swaps. At 28 June 2026, the Group had no corporate long- term debt and no interest rate swaps in place (2025: no corporate long-term debt and no interest rate swaps in place). If additional debt facilities are established, including in Canada or New Zealand, the Group may consider the use of interest rate swaps or other appropriate derivative instruments to manage the associated interest rate risk, in accordance with its Treasury Policy. $'000 2026 2025 The details of the variable rate borrowings outstanding are outlined below. 667 1,064 (1,300)(815) - - 2,561 $'000 55 Impact on other components of equityImpact on pre-tax profit 2026 2025 $'000 $'000 $'000 (3,130) To manage variable interest rate borrowings risk, the Group may enter into interest rate swaps in which the Group agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At 28 June 2026, the Group had no corporate long term debt and there were no swaps in place (2025: no corporate long term debt and no swaps in place). Sensitivity The following table summarises the sensitivity of the Group's financial assets and financial liabilities to foreign currency risk. The foreign exchange sensitivities are based on the Group's exposure existing at balance date. Sensitivity figures are pre-tax. INTEREST RATE RISK $'000 $'000 The Group is exposed to interest rate risk principally through cash balances and variable-rate borrowings. Variable-rate borrowings expose the Group to cash flow interest rate risk, while fixed-rate borrowings expose the Group to fair value interest rate risk. 100% (2025: 100%) of the Group's borrowings are variable rate borrowings. $'000 MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 38
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Floating rate • • Contractual maturities of financial liabilities Less than 6 months 6-12 months Between 1 and 2 years Between 2 and 5 years Over 5 years Total contractual cash flow At 28 June 2026 $'000 $'000 $'000 $'000 $'000 $'000 Non-derivatives 22,796 20,570 32,536 49,132 36,095 161,129 Trade payables 81,497 - - - - 81,497 Borrowings 553 553 1,106 20,184 - 22,396 Total non-derivatives 104,846 21,123 33,642 69,316 36,095 265,022 Derivatives Outward payments FECs 20,792 - - - - 20,792 Inward receipts FECs (21,238) - - - - (21,238) Net FECs (446) - - - - (446) At 29 June 2025 Non-derivatives 25,275 22,173 36,572 54,526 43,285 181,831 Trade payables 68,685 - - - - 68,685 Borrowings 1,688 1,688 52,663 - - 56,039 Total non-derivatives 95,648 23,861 89,235 54,526 43,285 306,555 Derivatives 9,188 - - - - 9,188 (9,166) - - - - (9,166) 22 - - - - 22 C2 DERIVATIVE FINANCIAL INSTRUMENTS The Group did not hold any derivatives at financial year end. 70,000 71,818 2025 $'000 1,925 37,900 39,825 $'000 1,818 The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows. all non-derivative financial liabilities, and 2026 The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for: The maturity date of the financing facilities provided to the Group by both Australia and New Zealand Banking Group Limited and Commonwealth Bank of Australia Limited is 31 August 2028. Maturities of financial liabilities Financing arrangements In FY26, the Group had access to an overdraft facility and a $90m core working capital facility that temporarily increases to $110m each year from 15 September to 14 January, in line with the prior financial year. The following were undrawn from these facilities at the end of the reporting year: The Group’s objectives when managing capital are to ensure sufficient liquidity to support its financial obligations and execute the Group's operational and strategic plans. The Group continually assesses its capital structure and makes adjustments to it with reference to changes in economic conditions and risk characteristics associated with its underlying assets. Outward payments FECs Inward receipts FECs - Expiring beyond one year (bank overdrafts) - Expiring beyond one year (bank loans) Lease liabilities Lease liabilities The Group is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments are foreign currency risk and interest rate risk. The Group does not apply hedge accounting. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 39
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C3 CAPITAL MANAGEMENT For the purpose of the Group's capital management, capital includes issued capital, and all equity reserves attributable to the equity holders of the parent. The Group actively manages its capital structure, taking account of changes in economic conditions, operational requirements and the financial covenant requirements of its debt facilities. To maintain or adjust its capital structure, the Group may adjust dividends paid to shareholders, return capital to shareholders, issue new shares or dispose of assets to reduce debt. Non-compliance with financial covenants may, unless remedied or waived in accordance with the facility documentation, constitute an event of default. In those circumstances, the lenders may be entitled to declare loans and borrowings immediately due and payable. The Group complied with its financial covenants for all applicable quarterly testing periods up to and including 28 June 2026. The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, thereby enabling it to provide returns to shareholders and benefits to other stakeholders, and to maintain an appropriate capital structure that supports an efficient cost of capital. The Group’s debt facilities, including its working capital facility, are subject to external bank financial covenants. Compliance with these covenants is calculated and reported to the relevant lenders quarterly on a pre-AASB 16 Leases basis. The principal covenants relevant to capital management comprise the fixed charge cover ratio, debt-to-EBITDA ratio, gross debt-to-capitalisation ratio and borrowing base ratio. For the purposes of the covenant calculations, net debt comprises interest-bearing loans and borrowings less cash and short-term deposits. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 40
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D D1 D2 D3 D1 2026 2025 EMPLOYEE BENEFITS $'000 $'000 Employee wages 159,720 156,046 Employee wages on-costs and post-retirement benefits 23,588 23,323 Employee share-based payments expense (145) 338 183,163 179,707 D2 2026 2025 $ $ Short-term employee benefits 2,506,436 2,278,456 Long-term benefits (86,402) (60,508) Post-employment benefits 108,080 78,709 Termination benefits 68,022 - Share-based payments 613 (36,825) 2,596,749 2,259,832 D3 Set out below are summaries of options granted under the plan: Average exercise price per option Number of options Average exercise price per option Number of options Opening balance NZD options 1.17 100,000 1.40 200,000 Expired during the year 1.14 (100,000) 1.63 (100,000) Closing balance NZD options - - 1.17 100,000 Opening balance AUD options 1.56 300,000 1.56 300,000 Closing balance AUD options 1.56 300,000 1.56 300,000 Grant date Expiry date Exercise price 2026 2025 22 January 2016 30 September 2025 NZ$1.14 - 100,000 22 September 2016 30 September 2026 AU$2.12 100,000 100,000 5 October 2017 30 September 2027 AU$1.44 100,000 100,000 22 September 2018 30 September 2028 AU$1.11 100,000 100,000 300,000 400,000 OPTIONS Options are granted from time to time at the discretion of Directors to senior executives within the Group. Motions to issue options to related parties of Michael Hill International Limited are subject to the approval of shareholders at the Annual General Meeting in accordance with the Company's constitution. Options are granted under the plan for no consideration. Options expire ten years after granted, vest over five years, are exercisable at any time during the final five years and vesting is subject to remaining employed by the Group. Options granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share. 2026 2025 SHARE-BASED PAYMENTS Employee benefits EMPLOYEE BENEFITS KEY MANAGEMENT PERSONNEL REWARD AND RECOGNITION Key management personnel Share-based payments Options outstanding at the end of the year have the following expiry dates and exercise prices: The weighted average remaining contractual life of share options outstanding at the end of the period was 1.3 years (2025: 1.8 years). MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 41
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` Average fair value per share right Number of share rights Average fair value per share right Number of share rights Opening balance 1.35 8,926,315 1.09 7,434,253 Granted 0.17 8,325,263 0.39 5,943,791 Exercised 0.74 (23,326) 0.44 (195,313) Forfeited 0.54 (4,308,656) 0.37 (4,256,416) Closing balance 1.23 12,919,596 1.35 8,926,315 2026 2025 Number of rights 8,325,263 5,943,791 Share price $0.33 $0.59 Annualised volatility 40% 40% Expected dividend yield 8.5% 5.7% Risk free rate 3.87% 3.95% Fair value of share right $0.17 $0.39 2026 2025 $ $ (144,550) 338,479 Less than 20% CAGR Less than 10% CAGR No share rights vest Expenses arising from share-based payment transactions SHARE RIGHTS Between 20% CAGR and <30% CAGR Between 10% CAGR and <20% CAGR EPS: 10% of share rights vest for each 1% increase in CAGR TSR: 10% of share rights vest for each 1% increase in CAGR Equal to or greater than 30% CAGR Equal to or greater than 20% CAGR 100% of share rights vest Each share right represents a right to receive on ordinary share in the Company, subject to the terms and conditions of the Plan including satisfaction of certain performance metrics. An allocation of share rights is made to an eligible participant on an annual basis typically calculated as a percent of the value of their total fixed remuneration. 50% of a participants share rights are allocated to an earnings per share (EPS) performance hurdle and 50% of share rights are allocated to a total shareholder return (TSR) performance hurdle. Vesting of the share rights is subject to the Company achieving a minimum compound annual growth rate (CAGR) in EPS or TSR (as the case requires) over three years (Performance Period). Subject to the participant remaining an employee of the Group at the end of the Performance Period, the share rights vest based on the following vesting schedule: 2026 2025 The Company’s Equity Incentive Plan was approved by shareholders at the 2023 Annual General Meeting held on 14 November 2023 (Plan). The Plan allows the Board to issue share rights to executive directors, executives and other senior leaders eligible to participate in the Plan. Share rights issued during the current financial year used the Monte Carlo model to determine the fair value of share rights using the following inputs: The number of share rights in each tranche is based on the prescribed dollar value for each tranche divided by the volume weighted average share price ('VWAP') of Michael Hill International Limited shares over ten trading days following the shares trading subsequent to the final Annual results announcement. Vesting outcome No share rights vest EPS: 10% of share rights vest for each 1% increase in CAGR TSR: 10% of share rights vest for each 1% increase in CAGR 100% of share rights vest During the year, the Board agreed to grant 8,325,263 share rights to eligible participants. TSR CAGR Less than 10% CAGR Between 10% CAGR and <20% CAGR 2024 issue Equal to or greater than 20% CAGR EPS CAGR Less than 5% CAGR Between 5% CAGR and <10% CAGR Equal to or greater than 10% CAGR 2023 issue Less than 5% CAGR Less than 10% CAGR No share rights vest Between 5% CAGR and <10% CAGR Between 10% CAGR and <20% CAGR EPS: 20% of share rights vest for each 1% increase in CAGR TSR: 10% of share rights vest for each 1% increase in CAGR Equal to or greater than 10% CAGR Equal to or greater than 20% CAGR 100% of share rights vest 2025 and 2026 issue MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 42
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• • • E 2026 2025 Related party transactions $ $ - 36,544 1Ceased to be a related party in the current reporting period. Contribution to Michael Hill Violin Charitable Trust1 Share rights RELATED PARTIES Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital. including any market performance conditions (e.g. the entity’s share price) excluding the impact of any service and non-market performance vesting conditions (e.g. profitability, sales growth targets and remaining an employee of the entity over a specified period), and including the impact of any non-vesting conditions (e.g. the requirement for employees to save or holdings shares for a specific period of time). The fair value was measured at grant date and is recognised over the period during which the employees become unconditionally entitled to the options. The fair value at grant date for options issued during prior financial years was independently determined using a Binomial option pricing model, which is an iterative model for options that can be exercised at times prior to expiry. The model takes into account the grant date, exercise price, market performance conditions, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. It also assumes the options will be exercised at the mid-point of the exercise period. ACCOUNTING POLICY The fair value of rights granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value was measured at grant date and is recognised over the period during which the employees become unconditionally entitled to the rights. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each year, the entity revises its estimates of the number of share rights that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. Upon the exercise of the share rights, the balance of the share-based payments reserve relating to those rights is transferred to share capital. Options The fair value of options granted is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted: The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each year, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 43
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F F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 F1 2026 2025 $'000 $'000 12,593 13,363 Depreciation on right-of-use assets A4 46,317 47,988 Total depreciation 58,910 61,351 Amortisation on software F5 4,096 4,185 Total amortisation 4,096 4,185 Total depreciation and amortisation 63,006 65,536 2026 2025 FINANCE COSTS $'000 $'000 A4 9,726 11,167 3,587 5,591 Interest on make good provision 392 149 13,705 16,907 F2 RECONCILIATION OF EARNINGS USED IN CALCULATING EARNINGS PER SHARE 2026 2025 Basic earnings per share $'000 $'000 9,995 2,099 Diluted earnings per share 9,995 2,099 2026 2025 Number Number 384,837,668 384,744,855 Adjustments for calculation of diluted earnings per share: 11,187,240 8,471,976 396,024,908 393,216,831 Share rights Property, plant and equipment Intangible assets Trade and other payables Provisions Tax Auditors' remuneration Contributed equity Reserves Options and share rights granted to employees under the Michael Hill International Limited Employee Option Plan are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive. All options outstanding at financial year end were considered to be anti-dilutive. The options and share rights have been excluded in the determination of basic earnings per share. Details are set out in note D3. EXPENSES Depreciation on property, plant and equipment NOTES Interest on lease liabilities Profit from continuing operations attributable to the ordinary equity holders of the Company Weighted average number of ordinary and potential ordinary shares used as the denominator in calculating diluted earnings per share OTHER INFORMATION Expenses Earnings per share Trade and other receivables EARNINGS PER SHARE Profit attributable to the ordinary equity holders of the Company used in calculating basic earnings per share Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share NOTES DEPRECIATION AND AMORTISATION Bank and interest charges WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 44
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F3 Current Non-current Total Current Non-current Total $'000 $'000 $'000 $'000 $'000 $'000 Trade receivables 3,618 - 3,618 3,446 - 3,446 (21) - (21) (57) - (57) 3,597 - 3,597 3,389 - 3,389 Canadian in-house customer finance 5,767 1,579 7,346 5,401 1,279 6,680 (387) (107) (494) (207) (47) (254) 5,380 1,472 6,852 5,194 1,232 6,426 5,692 (1) 5,691 6,070 - 6,070 14,669 1,471 16,140 14,653 1,232 15,885 2026 2025 Ageing of trade receivables $'000 $'000 3,527 3,248 69 129 15 35 7 34 3,618 3,446 2026 2025 Movements in the provision for ECL of trade receivables are as follows: $'000 $'000 57 127 21 57 (57) (127) 21 57 2026 2025 Ageing of Canadian in-house customer debtor finance $'000 $'000 6,713 6,153 278 244 355 283 7,346 6,680 Closing balance Current, aged 0 - 30 days Past due, aged 31 - 90 days Past due, aged more than 90 days Trade receivables from sales made to customers through third party credit providers are non-interest bearing and are generally on 0 - 30 day terms. Sundry debtors relates to supplier credits, security deposits, insurance recoveries and other sundry receivables. Based on the credit history of these debtors, it is expected that these amounts will be received when due and no impairment is recognised. Effective interest rates Canadian in-house customer finance Canadian in-house customer finance debtors represent amounts receivable under the Michael Hill Canadian in-house credit programme, which offers customers interest-free instalment payment plans over terms of 6, 12, 18, or 24 months. The outstanding balance includes both accrued interest and annual fee components, with interest charged only on expiry of the promotional period or instances of customer delinquency. 20252026 Current An ECL analysis is performed at each reporting date. The maximum exposure to credit risk is the carrying value of in-house customer finance program and trade receivables. The Group does not hold collateral as security. The Group evaluates the concentration of risk with respect to these receivables as low. For further details refer to note C1. < 30 days past due 30 - 60 days past due 60+ days past due Opening balance Additional provisions recognised Net amounts written off All receivables are non-interest bearing except for a small portion of in-house customer finance receivables. In-house customer finance receivables are recognised net of significant financing components determined in accordance with AASB15 Revenue from Contracts with Customers. TRADE AND OTHER RECEIVABLES Provision for expected credit loss Provision for expected credit loss Sundry debtors ECL and risk exposure Sundry debtors Trade receivables MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 45
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2026 2025 $'000 $'000 254 217 896 895 (656) (858) 494 254 F4 Plant and equipment Fixtures and fittings Leasehold improvements Display materials Total At 30 June 2024 $'000 $'000 $'000 $'000 $'000 45,104 41,086 102,283 10,527 199,000 (32,335) (31,747) (68,622) (6,589) (139,293) 12,769 9,339 33,661 3,938 59,707 12,769 9,339 33,661 3,938 59,707 57 67 199 20 343 1,547 3,167 3,858 557 9,129 (293) (167) (338) (14) (812) (3,184) (2,411) (6,672) (1,096) (13,363) (249) (244) (1,566) (7) (2,066) 10,647 9,751 29,142 3,398 52,938 At 29 June 2025 44,634 41,991 102,343 10,778 199,746 (33,987) (32,240) (73,201) (7,380) (146,808) 10,647 9,751 29,142 3,398 52,938 At 28 June 2026 10,647 9,751 29,142 3,398 52,938 (455) (470) (1,011) (149) (2,085) 4,826 2,431 5,916 1,732 14,905 (553) (269) (223) (401) (1,446) (3,300) (2,428) (6,315) (864) (12,907) (70) (50) (288) (2) (410) 11,095 8,965 27,221 3,714 50,995 At 28 June 2026 42,980 39,147 98,521 10,226 190,874 Accumulated depreciation and impairment (31,885) (30,182) (71,300) (6,512) (139,879) Net book amount 11,095 8,965 27,221 3,714 50,995 Australia Canada New Zealand Michael Hill Group 306 - 104 410 1,296 525 82 1,903 Depreciation charge NOTES Year ended 29 June 2025 As per the Group's accounting policies, the Group impairs assets where the recoverable amount is less than the carrying amount and reverses the impairment if no longer applicable. This also includes assets held at stores facing closure. Any assets held at an impaired store that are able to be redeployed throughout the Group are not impaired. Cost Accumulated depreciation and impairment Net book amount Additional provisions recognised Opening balance Net amounts written off Closing balance Movements in the provision for ECL of Canadian in-house customer debtor finance are as follows: The Group treats each store as a separate cash-generating unit for impairment testing of property, plant and equipment and right-of-use assets. A review of impairment indicators was performed. Where an indicator was identified a Value in Use "VIU" assessment was performed resulting in an impairment loss being recorded. The accounting policy for this is disclosed in note I1(F). Impairment write-back/(loss) Closing net book amount Opening net book amount Exchange difference The recoverable amount of each store has been determined based on the value-in-use approach. As a result of the annual impairment assessment performed, a total impairment expense of $410,000 was recognised in relation to the stores within the Group. Impairment loss - 2026 Impairment loss - 2025 Current year Opening net book amount Exchange difference Additions PROPERTY, PLANT AND EQUIPMENT Cost Accumulated depreciation and impairment Impairment testing Additions Disposals Depreciation charge Impairment loss Closing net book amount Cost Disposals Net book amount MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 46
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• 4 - 7 years • 3 - 5 years • 6 - 10 years • 6 - 10 years • 2 - 5 years F5 GoodwillBrand, Loyalty Programs & Trademarks Computer software Total At 30 June 2024 $'000 $'000 $'000 $'000 19,223 20,500 40,001 79,724 - - (21,921) (21,921) 19,223 20,500 18,080 57,803 19,223 20,500 18,080 57,803 - - (1) (1) - - 1,343 1,343 - (7,400) (97) (7,497) - - (4,185) (4,185) 19,223 13,100 15,140 47,463 At 29 June 2025 19,223 20,500 41,326 81,049 - (7,400) (26,186) (33,586) 19,223 13,100 15,140 47,463 Year ended 28 June 2026 19,223 13,100 15,140 47,463 - - 1,328 1,328 - - (3,433) (3,433) - (336) (3,760) (4,096) 19,223 12,764 9,275 41,262 At 28 June 2026 19,223 20,500 37,720 77,443 - (7,736) (28,445) (36,181) 19,223 12,764 9,275 41,262 Impact of possible changes in key assumptions Impairment Closing net book amount Cost Accumulated amortisation Net book amount Amortisation charge Closing net book amount Cost Cost Accumulated amortisation and impairment Additions Disposals Amortisation charge NOTES Additions Opening net book amount INTANGIBLE ASSETS Net book amount Year ended 29 June 2025 Opening net book amount Exchange difference Accumulated amortisation and impairment Display materials Leasehold improvements Fixtures and fittings Motor vehicles Plant and equipment Depreciation is calculated using the straight-line method to allocate the cost or revalued amounts of the assets, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows: Key assumptions used for value-in-use The pre-tax discount rates used in determining the recoverable amount ranged between 7.45% and 14.25%, depending on both the geographical segment of the assets and the underlying brand to which the assets are deployed. These assumptions have been used for the analysis of each CGU, in line with the expected long-term inflation of each geographical location and store EBIT with no terminal value. A reasonably possible change in key assumptions will not lead to a further impairment. Net book amount Depreciation methods and useful lives MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 47
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2026 2025 $'000 $'000 11,929 11,929 1,171 1,171 13,100 13,100 • • • • • • • • • Goodwill Indefinite life brand names The recoverable amount of the Bevilles brand has been determined based on a fair value less costs of disposal, using the income approach (specifically the relief from royalty method), to fair value the brand. As a result of the annual assessment performed, no impairment loss is recognised in relation to the Bevilles brand name. The carrying value of the Bevilles brand remains unchanged at $11.9m. Goodwill Goodwill acquired through business combinations is allocated to the group of stores operating in Australia (group of CGUs). The brand intangible asset with an indefinite useful life is allocated to the group of stores operating in Australia (group of CGUs) for which the brand operates. Brand, Loyalty Programs & Trademarks Bevilles brand Loyalty Programs and Trademarks Total Brand, Loyalty Programs and Trademarks The Group tests goodwill and indefinite life intangibles (brand names) annually for impairment, in accordance with the accounting policy stated in note I1(K). For all cash-generating units (CGUs) which contain goodwill or indefinite life intangibles and all other CGUs which show an indicator of impairment, the recoverable amounts have been determined based on the higher of fair value less costs of disposal or value-in-use calculations. Current year There was no impairment of goodwill in the current year. Impairment testing of goodwill and indefinite life intangibles (brand names) Goodwill The carrying value of goodwill is not sensitive to changes in key assumptions. Indefinite life brand names The carrying value of the brand approximates its recoverable value. Any adverse change in key assumptions will lead to a further impairment. A long-term growth rate of 2.50% (2025: 2.50%) has been used to calculate a terminal value; and A post-tax discount rate of 14.25% (2025: 13.75%) was applied. The discount rate is based on available market data and data from comparable listed companies within the jewellery industry and is determined using the weighted average cost of capital. EBITDA within the asessment period is based on management's forthcoming year budget and subsequent years forecasts of revenue, taking into account the expected growth in the business in the coming years as a result of operational effectiveness and market sentiment of both retail and online operations; Revenue forecasts take into account historical revenue and consider external factors such as market sector and geography. These financial revenue estimates are projected for a further nine years based on an average growth rate of 4.97%; Costs are calculated taking into account historical margins, forecast increases and estimated inflation rates over the period, consistent with the locations in which Bevilles operate; Long-term EBIT margins have been applied to forecasts beyond FY30 ranging from 7.07% to 8.49%; Key assumptions used for value-in-use / fair value less cost to sell calculations The recoverable amount has been calculated using the value-in-use method. This is a level 3 estimate. A pre-tax discount rate of 10.61% (2025: 7.58%) was applied. For the purposes of impairment testing, a long-term growth rate of 2.5% (2025: 2.4%) was used to extrapolate cash flows beyond the budget period and calculate a terminal value, in line with the Australian expected long-term inflation. Impact of reasonably possible changes in key assumptions The basis of estimation of the five-year cash flows uses the following key operating assumptions: Five-year budgeted EBITDA is based on management’s forecasts of revenue; Revenue forecasts take into account historical revenue and consider external factors such as market sector and geography; and Costs are calculated taking into account historical margins, forecast increases and estimated inflation rates over the period. Indefinite life brand names The royalty rate has been applied at 2.20% (2025: 2.4%), indicating the hypothetical royalties the Group would have to pay for the use of the brand asset if it did not own it. The recoverable amount has been calculated using the fair value less cost of disposal, using the income approach, specifically the relief from royalty method. This is a level 3 estimate. The basis of estimation of the ten-year cash flows uses the following key operating assumptions: MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 48
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F6 2026 2025 $'000 $'000 48,128 40,763 8,469 8,718 3,982 1,527 4,296 3,174 16,622 14,503 81,497 68,685 F7 2026 2025 Current Non-current Total Current Non-current Total $'000 $'000 $'000 $'000 $'000 $'000 Employee benefits 7,794 1,873 9,667 7,801 2,127 9,928 Assurance-type warranties 1,871 - 1,871 1,678 - 1,678 Make good provision 163 7,525 7,688 244 5,398 5,642 Restructuring costs 299 - 299 492 - 492 10,127 9,398 19,525 10,215 7,525 17,740 Employee benefits Assurance-type warranties Make good provision Restructuring costs Total Movements in provisions $'000 $'000 $'000 $'000 $'000 Opening carrying amount 9,928 1,678 5,642 492 17,740 Changes in provisions recognised 848 194 2,417 300 3,759 Amounts incurred and charged (950) - (228) (492) (1,670) Exchange differences (159) (1) (143) (1) (304) Closing carrying amount 9,667 1,871 7,688 299 19,525 Employee benefits includes provision for long service leave and the provision for remediation. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting year. The liability for long service leave is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. The Group has an obligation to restore certain leasehold sites to their original condition upon store closure or relocation. This provision represents the present value of the expected future make good commitment. Amounts charged to the provision represent both the cost of make good costs incurred and the costs incurred which mitigate the final liability prior to the closure or relocation. Trade payables Annual leave liability Accrued expenses Consumption taxes payable Other payables PROVISIONS TRADE AND OTHER PAYABLES ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES Employee benefits Make good provision MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 49
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F8 INCOME TAX EXPENSE 2026 2025 Current tax $'000 $'000 Current tax on profits for the year 4,831 4,669 Adjustments for current tax of prior periods 34 (185) Total current tax expense 4,865 4,484 Deferred income tax (Increase)/decrease in deferred tax assets 2,846 (4,348) Adjustments for deferred tax of prior periods (35) 185 Rerecognised tax losses utilised during the year 21 (227) Total deferred tax expense/(benefit) 2,832 (4,390) Income tax expense 7,697 94 2026 2025 NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLE $'000 $'000 Profit before income tax expense 17,692 2,193 Tax at the Australian tax rate of 30.0% (2025: 30.0%) 5,308 658 Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Non-deductible expenditure/non-assessable income 821 403 Assessable income 2,094 - 8,223 1,061 Difference in overseas tax rates (545) (774) Adjustments for current tax of prior periods 33 (187) Adjustments for deferred tax of prior periods (35) 185 Utilisation of tax losses not recognised - (191) Tax losses not recognised 21 - Income tax expense at the effective tax rate of 44% (2025: 4%) 7,697 94 2026 2025 $'000 $'000 Unused United States tax losses for which no deferred tax asset has been recognised 35,860 37,922 Potential tax benefit @ 21.0% (2025: 25%) 7,531 9,481 Unused New Zealand tax losses for which no deferred tax asset has been recognised 1,405 1,574 Potential tax benefit @ 28.0% (2025: 28%) 393 441 TAX UNRECOGNISED POTENTIAL DEFERRED TAX ASSETS The unused tax losses incurred in the United States and New Zealand are available indefinitely for offsetting against future taxable profits of the countries in which the losses arose. Deferred tax assets have not been recognised in respect of these losses as it is unknown when the New Zealand losses may be used to offset taxable profits and the United States losses are not expected to be used. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 50
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2026 2025 DEFERRED TAX BALANCES $'000 $'000 The balance comprises temporary differences attributable to: Expected credit loss provision 135 78 Fixed assets and intangibles 11,328 12,935 Intangible assets from intellectual property transfer 12,256 13,837 Deferred expenditure (34) (61) Prepayments - 16 Deferred service revenue 21 859 Right-of-use assets (31,842) (35,363) Lease liabilities 39,155 44,178 Provisions 13,720 14,343 Unrealised foreign exchange losses 101 (20) Sundry items (33) (26) Inventories 38 42 Tax losses recognised 8,304 6,093 Net deferred tax assets 53,149 56,911 Expected settlement: Deferred tax assets expected to be recovered within 12 months 28,219 32,138 Deferred tax assets expected to be recovered after more than 12 months 24,930 24,773 53,149 56,911 Movements: Opening balance at 30 June 2025 56,911 52,507 Credited/(charged) to the income statement (2,846) 4,348 Prior year adjustment 35 (185) Foreign exchange differences (930) 241 Derecognised tax losses (21) - Closing balance at 28 June 2026 53,149 56,911 F9 2026 2025 $ $ 676,636 549,581 30,000 - 706,636 549,581 F10 2026 2025 2026 2025 SHARE CAPITAL Shares Shares $'000 $'000 384,842,602 384,819,276 12,858 12,850 384,842,602 384,819,276 12,858 12,850 Total MOVEMENTS IN ORDINARY SHARES $'000 384,623,963 12,763 195,313 87 384,819,276 12,850 23,326 8 384,842,602 12,858 AUDITORS' REMUNERATION ERNST & YOUNG (AUSTRALIA) During the year the following fees were paid or payable for services provided by the auditor of the parent entity, Michael Hill International Limited, its related practices and non-related audit firms: Fees for auditing the statutory financial report of the Company and its subsidiaries* Fees for other services: Regulatory sustainability report assurance Number of shares Ordinary shares - fully paid Total share capital CONTRIBUTED EQUITY * Inclusive of the December half-year review Balance at 28 June 2026 Balance at 29 June 2025 Opening balance at 1 July 2024 Rights converted Rights converted MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 51
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F11 Rights issue Exchange differences arising on translation of foreign controlled entities are recognised in other comprehensive income as described in note I1(C) and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of. The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remunerations. Refer to note D3 for further details of these plans. Ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding up the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and on a poll each share is entitled to one vote. Information relating to the Michael Hill International Employee Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out in note D3. Information relating to share rights issued under the Company's deferred compensation plan, including details of rights issued, exercised and lapsed during the financial year and rights outstanding at the end of the financial year, is set out in note D3. RESERVES NATURE AND PURPOSES OF OTHER RESERVES Share-based payments Foreign currency translation Options Ordinary shares MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 52
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G G1 G2 G3 G1 2026 2025 % % Michael Hill Jeweller (Australia) Pty Ltd Australia 100 100 Michael Hill Wholesale Pty Ltd Australia 100 100 Michael Hill Manufacturing Pty Ltd Australia 100 100 Michael Hill Franchise Pty Ltd Australia 100 100 Michael Hill Franchise Services Pty Ltd Australia 100 100 Michael Hill Finance A Ltd Partnership Australia 100 100 Michael Hill Group Services Pty Ltd Australia 100 100 Michael Hill Charms Pty Ltd Australia 100 100 MH Bespoke Diamonds AU Pty Ltd Australia 100 100 Fine Jewellery Retail AU Pty Ltd Australia 100 100 Medley Jewellery Pty Ltd Australia 100 100 Durante Holdings Pty Ltd Australia 100 100 Michael Hill New Zealand Ltd New Zealand 100 100 Michael Hill Jeweller Ltd New Zealand 100 100 Michael Hill Finance (NZ) Ltd New Zealand 100 100 MHJ (US) Ltd New Zealand 100 100 Michael Hill Wholesale NZ Ltd New Zealand 100 100 Michael Hill Jeweller (Canada) Ltd Canada 100 100 Michael Hill LLC United States 100 100 G2 Country of incorporation Pursuant to ASIC Class Order 2016/785, the Australian wholly-owned subsidiaries included in the list below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports and directors' report in Australia. The subsidiaries subject to the deed are: Durante Holdings Pty Ltd, Michael Hill Group Services Pty Ltd, Michael Hill Jeweller (Australia) Pty Ltd, Michael Hill Manufacturing Pty Ltd, Michael Hill Wholesale Pty Ltd, Michael Hill Franchise Services Pty Ltd, Michael Hill Franchise Pty Ltd, Michael Hill New Zealand Ltd, Michael Hill Jeweller Ltd, Michael Hill Finance (NZ) Ltd, MH Bespoke Diamonds AU Pty Ltd, Michael Hill Charms Pty Ltd, Fine Jewellery Retail AU Pty Ltd, Medley Jewellery Pty Ltd, Michael Hill Online Holdings Ltd and Michael Hill Wholesale NZ Limited. The Class Order requires the Parent Company and each of the subsidiaries to enter into a Deed of Cross Guarantee. The effect of the deed is that the Company guarantees each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Corporations Act 2001, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up. The above companies represent a Closed Group for the purposes of the Class Order and, as there are no other parties to the Deed of Cross Guarantee that are controlled by Michael Hill International Limited, they also represent the Extended Closed Group. DEED OF CROSS GUARANTEE GROUP STRUCTURE Interests in other entities Deed of cross guarantee Parent entity financial information INTERESTS IN OTHER ENTITIES The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note I1(B): Ownership interest held by the group MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 53
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2026 2025 CONSOLIDATED STATEMENT OF PROFIT OR LOSS $'000 $'000 469,341 463,867 17,942 14,056 (188,373) (184,452) (144,790) (141,275) (10,270) (9,765) (25,692) (27,459) (15,336) (15,889) (13,390) (14,237) - (7,400) (51,104) (52,701) (3,591) (188) (17,589) (19,481) (10,741) (13,563) 6,407 (8,487) Income tax expense (4,118) 2,683 Profit/(loss) for the year 2,289 (5,804) OTHER COMPREHENSIVE INCOME 2026 2025 Items that may be reclassified to profit or loss $'000 $'000 (6,365) 1,784 Other comprehensive income/(loss) for the period, net of tax (6,365) 1,784 Total comprehensive income/(loss) for the year (4,076) (4,020) 2026 2025 STATEMENT OF CHANGES IN EQUITY $'000 $'000 407,346 411,028 (4,076) (4,020) (145) 338 Total equity at the end of the financial year 403,125 407,346 Finance costs Profit/(loss) before income tax Exchange differences on translation of foreign operations Equity at the beginning of the financial year Total comprehensive income/(loss) Share rights through share-based payments reserve Marketing expenses Selling expenses Depreciation and amortisation expense Loss in disposal of property, plant and equipment Other expenses Administrative expenses Impairment of intangible assets CONSOLIDATED STATEMENT OF PROFIT OR LOSS, STATEMENT OF COMPREHENSIVE INCOME AND SUMMARY OF MOVEMENTS IN CONSOLIDATED RETAINED EARNINGS Set out below is a consolidated statement of profit or loss, a consolidated statement of comprehensive income and a summary of movements in consolidated retained earnings for the year ended 28 June 2026 of the closed group consisting of Michael Hill International Limited and the entities noted above. Revenue from sales of goods and services Other income Cost of goods sold Employee benefits expense Occupancy costs MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 54
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2026 2025 CURRENT ASSETS $'000 $'000 Cash and cash equivalents 8,321 6,264 Trade receivables 7,474 7,964 Inventories 139,905 148,674 Other current assets 5,863 5,630 1,790 7,238 Total current assets 163,353 175,770 NON-CURRENT ASSETS Property, plant and equipment 37,639 40,327 Right-of-use assets 89,239 98,623 Investments in subsidiaries 23,651 44,521 Loans to related parties 249,243 234,166 Other non-current assets 237 271 Intangible assets 41,262 47,463 48,172 50,665 Total non-current assets 489,443 516,036 Total assets 652,796 691,806 CURRENT LIABILITIES Trade and other payables 60,308 52,903 Lease liabilities 26,749 28,495 Contract liabilities 10,443 11,742 Provisions 9,517 9,603 Total current liabilities 107,017 102,743 NON-CURRENT LIABILITIES Lease liabilities 76,626 85,477 Contract liabilities 36,630 36,615 Provisions 9,398 7,525 20,000 52,100 Total non-current liabilities 142,654 181,717 Total liabilities 249,671 284,460 Net assets 403,125 407,346 EQUITY Contributed equity 297,318 297,310 Reserves 7,927 14,443 97,880 95,593 Total equity 403,125 407,346 Deferred tax assets Set out below is a consolidated statement of financial position as at 28 June 2026 of the Closed Group consisting of Michael Hill International Limited and the entities noted above. Retained profits Borrowings Current tax asset CONSOLIDATED STATEMENT OF FINANCIAL POSITION MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 55
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G3 2026 2025 STATEMENT OF FINANCIAL POSITION $'000 $'000 Current assets 144 158 369,015 349,603 Total assets 369,159 349,761 Net assets 369,159 349,761 Issued capital 293,070 292,993 Reserves 32,050 32,272 44,039 24,496 Total equity 369,159 349,761 2026 2025 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME $'000 $'000 19,543 (4,332) Total comprehensive profit/(loss) 19,543 (4,332) (i) (ii) SUMMARY FINANCIAL INFORMATION GUARANTEES ENTERED INTO BY THE PARENT ENTITY The Parent has issued the following guarantees in relation to the debts of its subsidiaries: Pursuant to Class Order 2016/785, Michael Hill International Limited and the subsidiaries listed below entered into a deed of cross guarantee on 30 June 2016. The effect of the deed is that Michael Hill International Limited has guaranteed to pay any deficiency in the event of winding up of any controlled entity or if they do not meet their obligations under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee. The controlled entities have also given a similar guarantee in the event that Michael Hill International Limited is wound up or if it does not meet its obligations under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee. Refer to Note G2 for subsidiaries subject to the deed. The Parent entity had no material contingent liabilities as at balance date. PARENT ENTITY FINANCIAL INFORMATION The individual financial statements for Michael Hill International Limited (the Parent) show the following aggregate amounts. CONTINGENT LIABILITIES OF THE PARENT ENTITY Non-current assets Retained earnings Profit/(loss) for the year MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 56
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H H1 H2 H1 Within one year One to five years Greater than five years Total $'000 $'000 $'000 $'000 Future lease payments for these non-cancellable lease contracts 658 2,805 1,541 5,004 H2 COMMITMENTS CONTINGENCIES AND COMMITMENTS CONTINGENT LIABILITIES CONTINGENT ASSETS The Group has no material contingent assets existing as at balance date (2025: Nil). The following sets out the various lease contracts that the Group has entered into and have yet to commence as at 28 June 2026. Except for the dividend declared (Note B3), no matters or circumstances have occurred subsequent to year end that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group or economic entity in subsequent financial years. EVENTS OCCURRING AFTER THE END OF THE REPORTING PERIOD UNRECOGNISED ITEMS Contingencies and commitments Events occurring after the end of the reporting period The Group had no material contingent liabilities as at balance date (2025: Nil). From time to time, Companies within the Group are party to various legal actions as well as inquiries from regulators and government bodies that have arisen in the normal course of business. The Directors have given consideration to such matters which are or may be subject to claims or litigation at year end and are of the opinion that that any liabilities arising over and above already provided in the financial statements from such action would not have a material effect on the Group's financial performance. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 57
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I I1 I2 I1 (A) (B) (C) Functional currency translation Transactions and balances Group companies • • • SUMMARY OF ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES AND JUDGEMENTS Summary of material accounting policy information Significant estimates and judgements The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial statements have been prepared on a historical cost basis, except for derivative financial instruments that have been measured at fair value. The consolidated financial statements provide comparative information in respect of the previous period. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Net foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end of monetary assets and liabilities denominated in foreign currencies are recognised as other income or other expenses, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. The results and financial position of all the Group entities (none of which have the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the statement of financial position; income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates, unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions; and Items included in the financial statements of each of the Group entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The Group financial statements are presented in Australian dollars, which is the Group's presentation currency. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION FOREIGN CURRENCY TRANSLATION For reporting purposes, the Group adopts a weekly 'retail calendar' closing each Sunday. The current 52 week reporting period ended on 28 June 2026. The consolidated financial statements of the Group comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Subsidiaries are all entities (including special purpose) over which the Group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power to direct the activities of the investee. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Investments in subsidiaries are accounted for at cost in the individual financial statements of Michael Hill International Limited. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the transferred asset. On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. BASIS OF PREPARATION PRINCIPLES OF CONSOLIDATION all resulting exchange differences are recognised in other comprehensive income. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 58
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(D) Current income tax Deferred income tax Tax consolidation group (E) • • (F) The income tax expense or credit for the year is the tax payable on the current year's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting year in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. TAXES GOODS AND SERVICES TAX (GST) IMPAIRMENT OF ASSETS Michael Hill International Limited and its wholly-owned Australian controlled entities form a tax consolidation group. As a consequence, one income tax return is completed for the Australian tax group and is treated for income tax purposes as one taxpayer. The tax balances have been attributed for reporting purposes to each of the entities on the basis of their individual results. Amounts of tax due to and receivable from the Australian Taxation Office are made by Michael Hill International Limited as nominated member of the Australian tax consolidated group. The current tax balance for the Australian tax group has been allocated between the members based on each entity’s current tax movement for the period. Where tax losses are incurred by Australian tax group members, these are offset within the group. Cash flows are included in the statement of cash flows on a gross basis and the GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority, are presented as operating cash flows. At each annual reporting date (or more frequently if events or changes in circumstances indicate that they might be impaired), the Group assesses whether there is any indication that an asset may be impaired. Where such an indication is identified, the Group estimates the recoverable amount of the asset and recognises an impairment loss where the recoverable amount is less than the carrying amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value-in-use. Where the recoverable amount exceeds the carrying amount of an asset, an impairment loss is recognised. Right-of-use assets are also incorporated into the calculation. Subsequent to an impairment occurring, if the recoverable amount from assets exceeds the carrying value, the impairment loss is reversed to the extent that it has been recognised. When the GST incurred on a sale or purchase of assets or services is not payable to or recoverable from the taxation authority, in which case the GST is recognised as part of the revenue or the expense item or as part of the cost of acquisition of the asset, as applicable; or When receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. Revenues, expenses, assets and liabilities are recognised net of the amount of GST, except: Current tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Deferred income tax is provided in full, using the liability method, on temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax assets and liabilities are classified as non-current assets and liabilities.Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Parent Entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 59
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(G) (H) (I) (i) Financial assets Initial recognition and measurement Subsequent measurement • • Financial assets at amortised cost (debt instruments) • • Financial assets at fair value through profit or loss The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Group’s financial assets at amortised cost include trade receivables included under current and non-current financial assets. Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortised cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch. Financial assets at amortised cost are subsequently measured using the Effective Interest Rate (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. Whilst there are four categories, two are relevant in the current reporting period for the Group, being: Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through Other Comprehensive Income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under AASB15 Revenue from Contracts with Customers. Refer to the accounting policies in note A2. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘Solely Payments of Principal and Interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets at amortised cost (debt instruments) CASH AND CASH EQUIVALENTS INVENTORIES FINANCIAL INSTRUMENTS - INITIAL RECOGNITION AND SUBSEQUENT MEASUREMENT Management review stock holdings based on recoverability at a product level and write-down as appropriate. 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 statement of financial position when utilised. All uncleared balances from EFT, credit card and debit card point of sales transactions at period end are classified as cash and cash equivalents. Short-term deposits are made for varying periods, depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates. Raw materials and finished goods are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure (including depreciation), the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met: Financial assets at fair value through profit or loss MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 60
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Derecognition • • Impairment of financial assets (ii) Financial liabilities Initial recognition and measurement Subsequent measurement Financial liabilities at fair value through profit or loss Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in AASB9 Financial Instruments are satisfied. The Group has not designated any financial liability as at fair value through profit and loss. The Group recognises an allowance for Expected Credit Losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Group considers a financial asset in default when contractual payments are past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss. This category includes derivative instruments which the Group had not irrevocably elected to classify at fair value through OCI. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The measurement of financial liabilities depends on their classification, as described below. Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by AASB9 Financial Instruments. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss. A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Group’s consolidated statement of financial position) when: The rights to receive cash flows from the asset have expired; or The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Further disclosures relating to impairment of financial assets are also provided in note F3. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 61
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Loans and borrowings at amortised cost Derecognition Offsetting of financial instruments (J) (K) Goodwill Brand • • PROPERTY PLANT AND EQUIPMENT INTANGIBLE ASSETS AND GOODWILL Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non- controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Brand names are acquired as part of business combinations and are recognised initially at fair value. Where they have an indefinite useful life, they are not subject to amortisation but are tested annually for impairment or more frequently if events or changes in circumstances indicate they may be impaired. Key factors taken into account in assessing useful life of brands are: The brands are well established and protected by trademarks; and There are currently no legal, technical or commercial obsolescence factors applying to the brands which indicate that the life should be considered limited. This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Depreciation on other assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives (note F4). Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. All property, plant and equipment is stated at historical cost less depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting year in which they are incurred. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings. For more information, refer to note C1. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting year. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 62
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Loyalty program Software • • • • • • Useful life (L) Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting year. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Directly attributable costs that are capitalised as part of the software include employee costs and an appropriate portion of relevant overheads. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. In respect to cloud computing arrangements, the Group assesses whether the arrangement contains a lease and if not, whether the arrangement provides the Group with a resource that it can control. Costs associated with implementation are then assessed as to whether they can be capitalised in accordance with relevant accounting standards. management intends to complete the software and use or sell it; there is an ability to use or sell the software; adequate technical, financial and other resources to complete the development and to use or sell the software are available; it can be demonstrated how the software will generate probable future economic benefits; and the expenditure attributable to the software during its development can be reliably measured. Loyalty programs associated to brands operate a customer loyalty program which attributes value to the business by offering a returning customer base. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. Computer software development costs recognised as assets are amortised over their estimated useful lives (not exceeding ten years). The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life i.e. three years for customer loyalty program and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category that is consistent with the function of the intangible assets. PROVISIONS Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives (three to five years). Costs associated with developing or maintaining software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met: it is technically feasible to complete the software so that it will be available for use; Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 63
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(M) Short-term obligations Other long-term employee benefit obligations Profit-sharing and bonus plans Retirement benefit obligations (N) (O) (P) Basic earnings per share • • Diluted earnings per share • • The Group recognises a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration the profit attributable to the Company's shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation. The Group provides retirement benefits to employees through a defined contribution superannuation fund. Contributions are recognised as expenses as they become payable. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting year but not distributed at the end of the reporting year. 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 year in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting year and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months after the end of the year in which the employees render the related service are 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 year 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 the Milliman G100 discount rates at the end of the reporting period. 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 statement of financial position if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting year, regardless of when the actual settlement is expected to occur. DIVIDENDS EARNINGS PER SHARE EMPLOYEE ENTITLEMENTS CONTRIBUTED EQUITY Basic earnings per share is calculated by dividing: Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares (note F2). 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 (note F2). MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 64
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(Q) (R) New and amended standards and interpretations AASB 2026-1 Amendments to Australian Accounting Standards - Disclosures about Uncertainties in the Financial Statements Standards and interpretations issued that are not yet effective • • • • AASB 18 Presentation and Disclosure in Financial Statements (effective for annual reporting periods commencing 1 January 2027) I2 AASB 2024-2 Amendments to Australian Accounting Standards – Classification and Measurement of Financial Instruments (effective for annual reporting periods commencing 1 January 2026) This Standard amends AASB 136 to add additional examples to illustrate how an entity discloses information about the key assumptions it uses to determine the recoverable amount of assets. This amendment did not have a material impact on the Group's financial statements. The comparative for the measure of segment profit has been updated to Comparable EBIT in line with the current year disclosure. The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 July 2025: There will be three new categories of income and expenses, two defined income statement subtotals and one single note on management- defined performance measures. AASB 18 Presentation and Disclosure in Financial Statements aims to provide greater consistency in presentation of the income and cash flow statements, and more disaggregated information. The standard will change how companies present their results on the face of the income statement and disclose information in the notes to the financial statements. Certain ‘non-GAAP’ measures – management performance measures (MPMs) – will now form part of the audited financial statements. The amendment: provides clarification of the timing of the recognition and derecognition of financial assets and financial liabilities, particularly when they are settled using electronic payment systems. The amendment also provides an exception if certain criteria are met, for the timing of derecognition of certain financial liabilities settled using an electronic payment system; provides further guidance about specific types of financial assets, specifically contractually linked instruments (CLIs); provides clarification of the classification of financial assets that are linked to environmental, social and governance (ESG) and similar characteristics; and requires additional disclosure requirements with regard to investments in equity instruments measured at fair value through other comprehensive income and financial instruments with contingent features. Certain new accounting standards and interpretations have been published that are not mandatory or effective for the 28 June 2026 year end. The Group is in the process of determining the impact of these new standards and amendments, which are summarised below: The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the 'rounding off' of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance with the instrument to the nearest thousand dollars, or in certain cases, the nearest dollar. The significant accounting judgements relate to the pattern of PCP revenue recognition (note A2), the calculation of the net realisable value of inventory (note A3) and brand intangible impairment (note F5) testing. The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective. ROUNDING OF AMOUNTS AND COMPARATIVES CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES SIGNIFICANT ESTIMATES AND JUDGEMENTS The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are incorporated within the relevant note. MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 65
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Entity type Trustee, Partner or JV Participant Place formed or incorporated % of share capital held (i) Australian or foreign Foreign jurisdiction Body corporate No Queensland N/A Australian N/A Body corporate Yes - partner Queensland 100% Australian N/A Body corporate No Queensland 100% Australian N/A Body corporate No Queensland 100% Australian N/A Body corporate No Queensland 100% Australian N/A Body corporate No Canada 100% Foreign Canada Body corporate No Queensland 100% Australian N/A Body corporate No Queensland 100% Australian N/A Body corporate No Queensland 100% Australian N/A Body corporate No Queensland 100% Australian N/A Body corporate No Queensland 100% Australian N/A Body corporate No New South Wales 100% Australian N/A Body corporate Yes - partner New South Wales 100% Australian N/A Partnership N/A Queensland N/A Australian N/A Body corporate No New Zealand 100% Foreign New Zealand Body corporate No New Zealand 100% Foreign New Zealand Body corporate No New Zealand 100% Foreign New Zealand Body corporate No New Zealand 100% Foreign New Zealand Body corporate No New Zealand 100% Foreign New Zealand Body corporate No Delaware, US 100% Foreign Delaware, US CONSOLIDATED ENTITY DISCLOSURE STATEMENT Michael Hill Finance (NZ) Ltd Michael Hill Wholesale NZ Ltd MHJ (US) Ltd Michael Hill LLC Michael Hill Franchise Pty Ltd Michael Hill Franchise Services Pty Ltd Michael Hill Charms Pty Ltd Entity name Tax residencyBodies corporate Michael Hill International Limited Durante Holdings Pty Ltd MH Bespoke Diamonds AU Pty Ltd The above Consolidated Entity Disclosure Statement should be read in conjunction with the accompanying notes. BASIS OF PREPARATION The consolidated entity disclosure statement has been prepared in accordance with subsection 295(3A)(a) of the Corporations Act 2001. The entities listed in the statement are Michael Hill International Limited and all the entities it controls in accordance with AASB 10 Consolidated Financial Statements. The percentage of share capital disclosed for bodies corporate included in the statement represents the economic interest consolidated in the consolidated financial statements controlled by Michael Hill International Limited either directly or indirectly. In relation to the tax residency information included in the statement, judgement may be required in the determination of residency of the entities listed. Michael Hill Jeweller (Canada) Ltd Fine Jewellery Retail AU Pty Ltd Medley Jewellery Pty Ltd Michael Hill Group Services Pty Ltd Michael Hill Manufacturing Pty Ltd Michael Hill Jeweller Ltd Michael Hill Wholesale Pty Ltd Michael Hill Jeweller (Australia) Pty Ltd Michael Hill Finance A Ltd Partnership Michael Hill New Zealand Ltd MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 JUNE 2026 66
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DIRECTORS' DECLARATION (a) (b) (i) (ii) (iii) (c) R I Fyfe Chair Brisbane 28 August 2026 In the directors' opinion: This declaration is made in accordance with a resolution of the directors. The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001. Note I1(A) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. the financial statements and notes of the Group for the financial year ended 28 June 2026, are in accordance with the Corporations Act 2001, including: there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, giving a true and fair view of the consolidated entity's financial position as at 28 June 2026 and of its performance for the financial year ended on that date, and as at the date of this declaration, there are reasonable grounds to believe that the members of the extended group identified in note G1 will be able to meet any obligations or liabilities to which they are, or may become, subject to by virtue of the deed of cross guarantee described in note G2. the consolidated entity disclosure statement required by section 295(3A) of the Corporations Act is true and correct; MICHAEL HILL INTERNATIONAL LIMITED FINANCIAL STATEMENTS 67
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 111 Eagle Street Brisbane QLD 4000 Australia GPO Box 7878 Brisbane QLD 4001 Tel: +61 7 3011 3333 Fax: +61 7 3011 3100 ey.com/au Independent auditor’s report to the members of Michael Hill International Limited Report on the audit of the financial report Opinion We have audited the financial report of Michael Hill International Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 28 June 2026, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 28 June 2026 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit proc edures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Existence of inventories Why significant How our audit addressed the key audit matter As at 28 June 202 6 the Group’s inventories balance totals $190 million which represents 39% of the Group’s total assets. Inventories are primarily kept in the Group’s 281 retail stores located in Australia, New Zealand and Canada and the distribution and manufacturing centres. Inventories comprise a large number of physically small but high value items which are subject to misappropriation and loss. The Group accounts for inventories in accordance with the policy disclosed in Note I1(H) and further disclosure is included in Note A4 of the financial report. Inventory is considered a key audit matter due to the nature, size and geographic spread of locations where items are held. Our audit procedures included the following: • Attended a sample of stocktakes conducted at retail stores across Australia, New Zealand and Canada. • In addition to the retail stores, we attended the stocktakes completed at each of the distribution and manufacturing centres in June 2026 prior to year end. • Tested the operating effectiveness of key controls relevant to the conduct of physical stocktakes, the review and evaluation of inventory variances, and the approval of adjustments made to inventory quantities. • Where stocktakes were attended across the retail stores, distribution and manufacturing centres, we observed compliance with the stocktake instructions and selected a sample of items to re -count to assess the accuracy and completeness of the counts performed by the Group. • Where stocktakes were completed prior to balance date, we performed a roll forward and completed risk assessment analytics across retail store inventory by location and geographical segment to identify stock levels outside of expectation. Where contrary evidence was identified, the variances where assessed and supporting documentation obtained. • Analytics were performed across stores inventory over each geographical segment to identify stores where stock on hand is outside of our expectation. • Assessed the adequacy and appropriateness of the disclosures included in the Notes to the financial statements.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation P rofessional Care Plan (PCP) revenue recognition Why significant How our audit addressed the key audit matter The balance of the deferred PCP revenue liability at 28 June 2026 was $57 million, and PCP revenue recognised in the consolidated statement of profit or loss and other comprehensive income for the year ended 28 June 2026 was $27 million as disclosed in Note A2. The recognition of PCP revenue involves a significant degree of estimation in determining the appropriate revenue recognition pattern for lifetime, 10 year and three year plans offered to the Group’s customers. Under these plans, revenue is deferred on receipt of the payment from the customer and recognised over time in a manner that reflects the proportion of actual services used by customers relative to the total amount of expected services to be provided under the PCPs. The estimation process for PCP revenue is based on an analysis of actual services performed under these plans since inception, with management judgement applied to take account of emerging trends in customer behaviour, industry data and exceptional circumstances. The result of the estimation process is reviewed by the Group on at least an annual basis. As circumstances change over time, the Group updates its measure of progress, and any adjustments are recognised as a cumulative catch up in revenue recognition (or reversal) in the current year results. Accordingly, this is considered a key audit matter. Our audit procedures included the following: • Assessed the Group’s PCP revenue recognition accounting policies and compliance in accordance with the requirements of Australian Accounting Standards. • Assessed the accuracy of the data used in the PCP revenue estimation calculation and challenged the reasonableness of the key judgements including: • Obtained details of the sales of PCP products to customers during the year, and on a sample basis, we vouched the cash receipts to bank statements and assessed that the revenue was appropriately deferred. • Obtained details of the actual repair services during the year and tested a sample of transactions to understand if repairs are accurately tagged to the associated PCP plan date. • Performed analysis over the historic repairs data, to assess whether the assumptions made by the Group were supportable. • Tested the mathematical accuracy of the PCP revenue estimation model and re -performed the Group’s calculation supporting the estimate relating to PCP revenue recognition. • Assessed the adequacy and appropriateness of disclosures included in the Notes to the financial statements.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Impairment assessment of Brand Intangible Why significant How our audit addressed the key audit matter As detailed in Note F5, at 28 June 2026, the Group reported a brand intangible of $11.9m for the Bevilles business. In accordance with the Group’s accounting policy and the requirements of AASB 136 Impairment of Assets, an impairment test is required to be performed at least annually for cash generating units (“CGUs”) to which brand intangible has been allocated. Management use a relief from royalty method for measuring the recoverable amount of the brand intangibles for their impairment testing. Impairment assessments are complex and involve judgements and estimation relating to sales and gross margin forecasts and the discount rate applied. Accordingly, impairment testing of brand intangible was considered to be a key audit matter. Our audit procedures included the following: • Evaluated the method and associated model used by management to test impairment of brand intangibles for consistency with the requirements of Australian Accounting Standards • Agreed the cash flow forecasts used in the impairment models to Board-approved budgets and assessed the historical accuracy of forecasting. • Assessed the reasonableness of future cash flow assumptions and estimates detailed in Note F5 through comparison with current trading performance, and inquiry of management. • Assessed revenue and margin forecasts discount rate and other key assumptions with involvement from EY valuation specialists. • Reviewed the competency, capabilities and objectivity of management’s specialist, including the nature and scope of their engagement. • Tested the mathematical accuracy of the impairment model, including recalculating the recoverable amount. • Performed independent sensitivity analysis of key impairment model assumptions. • Assessed the adequacy and appropriateness of disclosure included in the Notes to the financial statements. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s 2026 annual report, but does not include the financial report and our auditor’s report thereon and the Company’s Sustainability Report. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. We have issued a separate auditor’s report on selective sustainability information included in the Sustainability Report.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard . Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of: ► The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and ► The consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001; and for such internal control as the directors determine is necessary to enable the preparation of: ► The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ► The consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor ’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ► Plan and perform the Group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the Group financial report. We are responsible for the direction, supervision and review of the audit work performed for the purposes of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 11 to 23 of the directors’ report for the year ended 28 June 2026. In our opinion, the Remuneration Report of Michael Hill International Limited for the year ended 28 June 2026, complies with section 300A of the Corporations Act 2001.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young Rebecca Burrows Partner Brisbane 28 August 2026