Kathmandu Annual Report 2017

kathmandu.com.au
kathmandu.co.nz
kathmandu.co.uk
kathmanduoutdoor.com
Annual
Report 2017

OUR
STORY
We were born in New Zealand
— a breathtaking country where
isolation breeds innovation and
the hunger to explore.
For 30 years we have designed gear
to endure the rugged landscapes of
our homeland, and to outfit the
adventurous spirit of our people.
With Kiwi ingenuity, and an open
mind, we continuously adapt our
gear to endure different weather
conditions, diverse terrain and the
ever-changing needs of travellers.
We act with people and the planet in
mind — from the creative minds of
our designers to the careful hands of
our suppliers, to backs of our
customers all around the world.
We believe that adventure begins
when you pack your bag.
We are Kathmandu.
Original.
Sustainable.
Engineered.
Adaptive.
These four principles are the
foundation of every piece that
carries the Kathmandu logo.
They’re the basis of the questions
we ask ourselves throughout the
design and manufacturing process.

FINANCIAL
HIGHLIGHTS
445.3m
7. 5 %1.726m
Online % of total salesSummit club members
15.9% online sales growth 127,000 active members
5 7. 0m38.0m
EBIT $
5.5%
Sales $
6.9m13cps
Same store sales growth
Net debt $
4.6%, 5.8% at constant currency
Dividend
29.9M reduction, record low debt 18.2%
AU 6.9% NZ 3.6%
Net profit after tax $
12.0% 13.5%
2KATHMANDU ANNUAL REPORT 2017

Launched international wholesale
and responsive website
4
Four quarters
of continued
same store
sales growth
Implemented
automated
distribution centre
in Australia
new stores
opened in
Australia
Record low
net debt
Record full
year dividend
3KATHMANDU ANNUAL REPORT 2017INTRODUCTION

CONTENTS
NOTICE OF ANNUAL MEETING 2017
11.00 am Friday
24 November 2017
Collins Square
727 Collins Street
Melbourne
Australia
Chairman and CEO’s Letter
Result and Financial Performance
Substainability Highlights
The Board
Management Team
Directors' Report
Corporate Governance
Financial Statements
Statutory Information
Directory
5
7
10
12
13
14
24
29
73
78
4KATHMANDU ANNUAL REPORT 2017

CHAIRMAN
AND CEO’S
LETTER
DAVID KIRK
CHAIRMAN
XAVIER SIMONET
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
2017 was a successful year where
we again improved our financial
performance in a challenging and
competitive retail environment.
We were pleased to achieve strong
same store sales growth driven
by innovative new products and
inspiring digital content. In addition
to top line growth, continued
cost control and working capital
efficiency resulted in very solid
profit growth. Our financial position
strengthened further during FY2017,
and we ended the year with lower
inventory and record low net debt.
We commenced new international
wholesale relationships, and while
we are still early into our wholesale
journey, we are committed to
developing new international
channels for the Kathmandu brand.
Growth Strategies
and Investments
Kathmandu’s strategy can
be divided in to two streams.
Continuous improvement in our
core Australasian market, and
international growth initiatives to
grow in new markets and channels.
Continuous improvement (Australasia):
• Elevate brand distinctiveness
through product design and
innovation, with a focus on our
expertise in adventure travel;
• Inspire our customers and
engage with our Summit Club
members with a focus on social
media and digital channels;
• Refine the structure of promotions
to leverage foot traffic in key
trading periods, increase basket
size, and maximise gross profit;
• Provide a channel agnostic
offer, with one range available
to all customers wherever
they choose to purchase;
• Continue to improve cost efficiency,
through infrastructure investments,
automation and leveraging
advertising content across social
and digital media channels;
• Invest in new stores where return
on investment is justified;
• Invest in existing stores to
refine visual merchandising,
product presentation, optimise
allocation and improve the
customer experience to deliver
same store sales growth.
International growth strategies:
• Leverage our brand equity and
online platform to expand
internationally using a capital light
model across a variety of business
models appropriate for the market;
• Evaluate opportunities to offer
our products on international
marketplace sites where
strategically relevant;
5KATHMANDU ANNUAL REPORT 2017CHAIRMAN AND CEO'S LETTER

• Further investment in our online
platform will be made to further
improve usability and functionality.
Sustainability
As a key value of Kathmandu,
sustainability is an integral part of
our business. Our goal is Australasian
industry leadership in sustainability.
Key achievements during the
year include the launch of our 5
Green Star distribution centre in
Melbourne, partnering with Bluesign
to eliminate harmful chemicals
in our supply chain and winning
the Banksia “Large Business
Sustainability Leadership” award.
Full details of our progress can be
found in our 2017 Sustainability
Report, released in conjunction
with our Annual Report and
prepared in accordance with the
Global Reporting Initiative (GRI).
People
Directors Christine Cross and John
Holland retired from the Board in
October. Christine has brought deep
retail experience and understanding to
the Board, while John’s understanding
of the business, combined with his
legal and commercial judgement will
be sorely missed by the Board. We
thank Christine and John very much
for their service and wish them all
the best in their other endeavours.
Two new directors joining the
Board are Philip Bowman and Brent
Scrimshaw who were appointed
after an extensive international
search. We are delighted that Philip
and Brent have agreed to join the
Board. They both bring absolutely
first class understanding of retail,
brand development and international
markets. They are a great fit for the
next stage of Kathmandu's journey.
"As a key value
of Kathmandu,
sustainability is
an integral part
of our business".
David Kirk
Chairman
Xavier Simonet
Managing Director and
Chief Executive Officer
Dividend
The Director’s have declared a final
dividend of 9 cents per share, which
with the 4 cents interim dividend
makes a total payout of 13 cents per
share, and increase of 2 cents per
share compared to last year. The
final dividend will be fully imputed for
New Zealand shareholders and fully
franked for Australian shareholders.
Outlook
As a product and brand led business,
we are focused on engaging our
customers by creating distinctive,
sustainable, quality products and by
promoting our brand authenticity.
In the year ahead, we will strive
to grow in our core markets.
Maintaining gross margin, and
delivering operating efficiency
remain a key management focus.
As we look forward, we are excited
about the wholesale trials we
are conducting in Europe, and
remain committed to developing
new international channels for
the Kathmandu brand.
6KATHMANDU ANNUAL REPORT 2017

RESULT AND
FINANCIAL PERFORMANCE
KEY PERFORMANCE INDICATORS20172016
162164Store count
26.1%
$
1.80
$
2.27Share Price
7.9%
1.599m
1.726mSummit club members
0.5%1,8951,90 4Employees
18.1%11.0cps13.0cpsDividend
13.9%16.6cps18.9cpsEarnings per share
NPAT 13.5%
$
33.5m
$
38.0m
EBIT
EBIT margin
12.0%
$
50.9m
12.0%
$
5 7. 0m
12.8%
EBITDA
EBITDA margin
9.4%
$
64.8m
15.2%
$
70.8m
15.9%
Operating expenses
Operating expenses % of sales
1.8%
$
201.6m
47.4%
$
205.4m
46.1%
Gross profit
Gross margin
3.7%
$
266.4m
62.6%
$
276.2m
62.0%
Sales
Same store sales growth
4.6%
$
425.6m
4.4%
$
445.3m
5.5%
(81.3)%
$
36.8m
$
6.9mNet Debt
7KATHMANDU ANNUAL REPORT 2017RESULTS

"Our financial
position continued
to strengthen during
FY2017, and we ended
the year with lower
inventory and record
low net debt".
For FY2017 we were pleased to achieve
strong same store sales growth driven
by innovative new products and
inspiring digital content. In addition
to top line growth, continued cost
control and working capital efficiency
delivered very solid profit growth.
Our financial position continued
to strengthen during FY2017, and
we ended the year with lower
inventory and record low net debt.
Group sales of $445.3m increased
by 4.6% overall, with an increase in
same store sales of 5.5% measured at
constant exchange rates. By country
the change in same store sales was:
• Australia +6.9%
• New Zealand +3.6%
Gross profit increased by $9.8m
(3.7%), however gross margin
(62.0%) was 60bps lower than last
year. This sits in the middle of our
long-term target range 61% to 63%.
Sourcing negotiations, product
newness, price action and improved
stock control all helped to offset
the gross margin challenges caused
by higher input costs as a result of
foreign currency. By country the
change in gross margins were:
• Australia +002bps
• New Zealand -220bps
Our foreign currency forward hedging
policy is on a 12 month basis with
prescribed levels of maximum
hedging beyond 6 months.
Operating Expenses excluding
depreciation, amortisation and
financing costs increased by $3.8m
(1.9%), however as a percentage of
sales decreased from 47.4% to 46.1%.
Efficiencies were achieved through
optimising retail labour, targeting
advertising expenditure towards
promotional periods and increasing
spending mix towards more effective
digital channels. Support office costs
also benefited from the full year impact
of the structural review completed
during FY2016. Rental costs increased
as a percentage of sales due to the full
year impact of the new support office
in Christchurch and a new distribution
centre in Melbourne. Operating cost
efficiency remains a key area of focus
in FY2018, with our aim to further drive
operating leverage within the business.
Capital expenditure decreased by
$9.9m (43%) compared to FY2016.
This is mainly due to physical
infrastructure investments made in
our partly automated warehousing
facility in Melbourne and a new
support office (Christchurch) in the
prior year. The investment made in
“bricks and mortar” retail, (new stores,
relocations and refurbishments),
increased by $1.5m (19%). Technology
investments decreased by $0.4m
(19%) as investments were focussed
on online enhancements, including
responsive website design and
product lifecycle management.
Depreciation and amortisation
expense decreased by $0.1m (0.7%),
as the impact of capital expenditure
was offset by existing assets
being fully depreciated. Capital
expenditure in FY2018 will be higher
than FY2017, as investments will be
made in existing retails sites timed
with reference to lease renewals,
new stores, and increasing systems
spend as investments are made
in omni-channel infrastructure.
Finance costs reduced as a
result of lower average debt levels
throughout the year, and a decline
in effective interest rates.
Inventory levels decreased by $6.2m
(6.5%), and by 7.6% on a per store
basis (constant exchange rates)
as we continue focus on improving
stock turnover. Ongoing benefits
were realised from investments in
demand planning software which
has enabled more accurate buying
to reflect store range differences.
Taxation The effective tax rate
increased to c.31% from c.29%. This
increase is due to higher non-deductible
expenditure relating to legal fees and
long term incentive performance rights.
8KATHMANDU ANNUAL REPORT 2017

9KATHMANDU ANNUAL REPORT 2017RESULTS
"Sales growth was driven by innovative new
products and inspiring digital content".

B+ in the Ethical
Fashion Guide
supporting
worker’s rights
Partnered with
bluesign
®
to
eliminate harmful
chemicals
OUR TOP 10
SUSTAINABILITY
HIGHLIGHTS
Won the Banksia ‘Large
Business Sustainability
Leadership’ award and
two APC awards
Increased sustainable
cotton from 59% to 74%
74
%
Recycled 3.9 million
plastic bottles
3.9
M
10KATHMANDU ANNUAL REPORT 2017

8.5 million bottles of water saved
8.5
M
899kg of clothes donated
to Red Cross shops
899
kg
Launched our 5 Green Star
AU Distribution Centre
5
Ranked #2 in the outdoor
and sports category 2017
Textile Exchange Preferred
Fibres and Materials report
Increased recycling rate
from 69% to 72%. 106 stores
now recycling polybags
11KATHMANDU ANNUAL REPORT 2017SUSTAINABILITY HIGHLIGHTS

1 DAVID KIRK CHAIRMAN
Mr Kirk is the Chairman of Trade Me Group Ltd, the co-
founder and Managing Partner of Bailador Investment
Management, and sits on the Board of Bailador portfolio
companies. Mr Kirk’s Executive Management career has
seen him hold Chief Executive Officer roles at Fairfax Media
and PMP Limited and the Regional President (Australasia)
for Norske Skog.
2 XAVIER SIMONET
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER
Joined Kathmandu in July 2015 with over 20 years
international experience in building brands and
developing successful retail businesses in fashion,
apparel, accessories and related products.
Prior roles include CEO of Radley (London), VP & GM
International of DB Apparel, 11 years at LVMH (primarily
Asia-Pacific) and International Director of Seafolly.
3 PHILIP BOWMAN (appointed 2 October 2017)
NON-EXECUTIVE DIRECTOR
Mr Bowman has extensive experience in retail including
roles as CFO of Bass, CEO of Bass Taverns, Executive
Chairman of Liberty PLC, CEO of Allied Domecq, Chairman
of Coral Eurobet, CEO of Scottish Power and CEO of Smiths
Group. He has held office as an independent director of
BSkyB, Scottish & Newcastle and Berry Bros. & Rudd. He
currently sits on the boards of Burberry Group, Ferrovial
SA, and is Chairman of Majid al Futtaim Properties and
housebuilder The Miller Homes Group (UK).
4 JOHN HARVEY NON-EXECUTIVE DIRECTOR
Mr Harvey is a professional director with a background in
accounting and professional services, including 23 years
as a partner of PricewaterhouseCoopers where he held a
number of leadership and governance roles. Mr Harvey has
extensive experience in financial reporting, governance,
information systems and processes, business evaluation,
acquisition, merger and takeover reviews.
1
5
2
786
4
3
5 SANDRA MCPHEE NON-EXECUTIVE DIRECTOR
Ms McPhee is an experienced executive and non-executive
Director in consumer facing sectors including aviation,
retail, energy and media. She held a range of senior
international executive roles in the aviation industry, most
recently with Qantas Airways Limited.
6 BRENT SCRIMSHAW (appointed 2 October 2017)
NON-EXECUTIVE DIRECTOR
Mr Scrimshaw has had an 18-year career with Nike Inc
across Marketing, Commerce and General Management.
He led marketing across Nike Pacific, was the Regional GM
for Nike North America, was the Chief Marketing officer
for Nike EMEA, and also served as Vice President and Chief
Executive of Nike Western Europe. He is currently the CEO
and Co-Founder of Unscriptd.com and is a Non-Executive
Director of ASX listed Rhinomed (RNO) and Catapult
International Limited (CAT).
7 CHRISTINE CROSS (retired 2 October 2017)
NON-EXECUTIVE DIRECTOR
Ms Cross has extensive experience in international
retail and consumer goods including 14 years as a
Director on the operating board of Tesco Plc. Ms
Cross currently runs a retail advisory consultancy
focusing on international best practice in customer
led business planning and value chain management.
8 JOHN HOLLAND (retired 2 October 2017)
NON-EXECUTIVE DIRECTOR
Mr Holland is a consultant in the national New Zealand
law firm Chapman Tripp, and was a partner for 19 years,
specialising in general corporate and commercial law.
Mr Holland’s securities law experience includes acting
on initial public offerings, advising on employee share
schemes and in the private equity area.
12KATHMANDU ANNUAL REPORT 2017
THE BOARD

13KATHMANDU ANNUAL REPORT 2017OUR TEAM
MANAGEMENT TEAM
1 XAVIER SIMONET
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
2 REUBEN CASEY
CHIEF OPERATING AND FINANCIAL
OFFICER, AND COMPANY SECRETARY
3 PAUL STERN
GENERAL MANAGER, MARKETING,
ONLINE AND INTERNATIONAL
4 BEN RYAN
GENERAL MANAGER,
PRODUCT
5 REBECCA EDWARDS
GENERAL MANAGER,
HUMAN RESOURCES
6 STEPHEN DOMANCIE
GENERAL MANAGER,
RETAIL STORES AND OPERATIONS
7 CALEB NICOLSON
GENERAL MANAGER,
SUPPLY CHAIN
8 JOLANN VAN DYK
CHIEF INFORMATION OFFICER
21
34
56
78

DIRECTORS'
REPORT
YOUR DIRECTORS PRESENT THEIR REPORT AND THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31 JULY 2017.
Directors
The following persons were Directors
of Kathmandu Holdings Limited during
the financial year (unless stated).
DAVID KIRK
Was re-appointed as a non-Executive
Director, Chairman, Member of
the Audit and Risk Committee,
and Member of the Remuneration
Committee on 18 November 2016.
He continues in these offices
at the date of this report.
XAVIER SIMONET
Was appointed as Managing Director
and Chief Executive Officer on 29
June 2015 and continues in these
offices at the date of this report.
JOHN HARVEY
Was re-appointed as a non-Executive
Director, Chair of the Audit and
Risk Committee, and Member of
the Remuneration Committee on 21
November 2014.He continues in these
offices at the date of this report.
JOHN HOLLAND
Was re-appointed as a non-
Executive Director, and Member
of the Remuneration Committee,
Member of the Remuneration and
Nomination Committee on 20
November 2015, and retired as a
Director effective 2 October 2017.
SANDRA MCPHEE
Was re-appointed as a non-Executive
Director, Member of the Audit and
Risk Committee, and Chair of the
Remuneration Committee on 18
November 2016, and continues in these
offices at the date of this report.
CHRISTINE CROSS
Was re-appointed as a non-
Executive Director, Member of the
Remuneration Committee, Member
of the Audit and Risk Committee on
20 November 2015, and retired as a
Director effective 2 October 2017.
PHILIP BOWMAN
Was appointed as a non-Executive
Director, Member of the Remuneration
Committee, Member of the Audit
and Risk Committee on 2 October
2017 and continues in these offices
at the date of this report.
BRENT SCRIMSHAW
Was appointed as a non-Executive
Director, Member of the Remuneration
Committee, Member of the Audit
and Risk Committee on 2 October
2017 and continues in these offices
at the date of this report.
Details of the experience and expertise
of the Directors are outlined on
page 12 of this annual report.
Retirement of Directors
In accordance with the Company’s
constitution, John Harvey, Philip
Bowman and Brent Scrimshaw will
retire as Directors at the annual
general meeting and being eligible,
offer themselves for re-election.
Board Tenure
The average tenure for non-executive
Directors as at 31 July 2017 is 6 years 4
months, with the following tenure mix:

3 - 5 Years

6 - 8 Years
40%
%
60%
Meeting of Directors
The number of meetings of the
Board of Directors and Committees
held during the year ended 31 July
2017 and the numbers of meetings
attended by each Director were:
DIRECTOR
MEETINGS
AUDIT AND RISK
COMMITTEE
MEETINGS
REMUNERATION
COMMITTEE
MEETINGS
DirectorABABAB
David Kirk884455
Xavier Simonet88XXXXXXXX
John Harvey 884455
John Holland884455
Sandra McPhee884455
Christine Cross684455
A – Number of meetings attended
B – Number of meetings held during the time the Director held office during the year
XX - Not a member of relevant Committee
14KATHMANDU ANNUAL REPORT 2017

0%20%40%60%80%100%
Executive Leadership
International Business
Capital Projects, Mergers and Acquisitions
Retail and Consumer Experience
Remuneration
Governance
Strategy
Financial Acumen
Marketing and Product Development
Technology and Data
Executive Leadership: Experienced
and successful leadership at a senior
executive level of large organisations.
International Business Development:
Experienced in multi-national, complex
environments, including multi-
channel business development.
Capital Projects, Mergers and
Acquisitions: Experience in
evaluating and implementing
projects involving large-scale
financial commitments, investment
horizons and major transactions.
Retail and Consumer Experience:
Experienced in retail and consumer
sectors, understanding multi-channel
retailing and brand development.
Remuneration: Experience in
remuneration design to drive
business success.
Governance: Knowledge and
experience of high standards of
corporate governance, including ASX/
NZX Listing Rules and practices.
Strategy: Expertise in the development
and implementation of strategic
plans and risk management to
deliver investor returns over time.
Financial acumen: Expertise in
understanding financial accounting
Board Skills Matrix
The Board benefits from the
combination of the different skills,
experiences and expertise that
Directors bring to the Board and the
insights that result from this diversity.
The following chart summarises
the skills, attributes and experience
of the Company’s Directors.
Percentages are determined as
at the date of this report.
and reporting, corporate finance and
internal financial controls, including
an ability to probe the adequacies
of financial and risk controls.
Marketing and product
development: Expertise and
senior executive experience
in marketing and new media
marketing metrics and tools.
Technology and data: Expertise
and experience in the adoption of
new technology and use of data
analytics in a consumer environment.
15KATHMANDU ANNUAL REPORT 2017DIRECTORS REPORT

Principal Activities
The Group’s principal activity in
the course of the financial year
was the design, marketing and
retailing of clothing and equipment
for outdoor, travel and adventure.
It operates through wholly owned
subsidiaries in New Zealand,
Australia and the United Kingdom.
Matters Subsequent to the
End of the Financial Year
No matters or circumstances have
arisen since the end of the financial
year which significantly affect or may
significantly affect the operations
of the consolidated entity, the
results of those operations, or the
state of affairs of the consolidated
entity in future financial years.
Likely Developments
and Expected Results
of Operations
Likely developments in the operations
of the consolidated entity and the
expected results of those operations
in future financial years are contained
on pages 5 to 6 of this annual report.
Environmental Regulation
The consolidated entity's operations
are not regulated by any significant
environmental regulation under
a law of the Commonwealth
or of a State or Territory of
Australia, or of New Zealand.
Dividends
Since the end of the financial year the
Directors have declared the payment
of a final ordinary dividend of NZ 9.0
cents per share. Dividends will carry
full New Zealand imputation credits
and full Australian franking credits.
The dividend will be paid
on 24 November 2017.
The Company does not currently
have a dividend re-investment plan.
Insurance of Officers
The Company has entered into deeds
of indemnity, insurance and access
with each Director which confirms
each person’s right of access to
certain books and records of the
Company for a period of seven years
after the Director ceases to hold
office. This seven year period can be
extended where certain proceedings
or investigations commence before
the seven years expires. The deed
also requires the Company to provide
an indemnity for liability incurred as
an officer of the Company, to the
maximum extent permitted by law.
Indemnification: Pursuant to the
Constitution, the Company is
permitted to indemnify all Directors
and employees, past and present
against all liabilities allowed under
law. The Company has entered into
an agreement with each Director to
indemnify those parties against all
liabilities to another person that may
arise from their position as Director
or other officer of the Company or
its controlled entities to the extent
permitted by law. The deed stipulates
that the Company will meet the full
amount of any such liabilities, including
reasonable legal costs and expenses.
Insurance: Pursuant to the Constitution,
the Company may arrange and
maintain Directors’ and officers’
insurance during each Director’s period
of office, and for a period of seven
years after a Director ceases to hold
office. This seven year period can be
extended where certain proceedings
or investigations commence
before the seven years expires.
Remuneration Report
1. SUMMARY
Kathmandu’s financial results
for FY2017 reflect a continuation
of a return to sustainable long-
term profitable growth.
Earnings before interest and tax
(EBIT) was $57.0m an increase of
12.0% and Net Profit after Tax was
$38.0m, a 13.5% increase over FY2016.
FY2017 remuneration
• Executive base salaries
increased 1.5% for New Zealand
based executives and 2% for
Australian based executives.
• Short term incentives (cash) were
paid to all eligible Executives
(including the CEO) for
exceeding the Group financial
performance target (EBIT).
• Short term incentives (equity)
were earned by all eligible
Executives (excluding the CEO)
and will vest subject to the
Executives remaining employed
by the Group as at 31 July 2018.
• Non-Executive Directors fees
remained unchanged for the
third consecutive year.
2. KEY MANAGEMENT
PERSONNEL
The following Executives are identified
as key management personnel with
the authority and responsibility along
with the Directors for planning,
directing and controlling the
activities of the Group, directly or
indirectly, during the financial year:
Currently Employed:
Xavier Simonet
– Chief Executive Officer
Reuben Casey
– Chief Operating and Financial
Officer, and Company Secretary
16KATHMANDU ANNUAL REPORT 2017

OTHER MANAGEMENT TEAM
(EXECUTIVE) MEMBERS:
Currently Employed:
Ben Ryan
– General Manager, Product,
from 1 March 2016
Rebecca Edwards
– General Manager, Human Resources
Stephen Domancie
– General Manager, Retail Stores
& Operations, from 20 July 2016
Caleb Nicolson
– General Manager, Supply Chain
Paul Stern
– General Manager, Marketing,
Online & International
Jolann van Dyk
– Chief Information Officer
The Group employed all of the
above Executives for the full
years ended 31 July 2017 and
2016, unless otherwise stated.
Mark Handy has been subsequently
appointed General Manager,
Merchandising effective from
4 September 2017.
Throughout their period of
employment, Reuben Casey, Caleb
Nicolson, Jolann Van Dyk, Rebecca
Edwards and Ben Ryan were employees
of Kathmandu Limited (New Zealand)
and Xavier Simonet, Paul Stern, and
Stephen Domancie were employees of
Kathmandu Pty Limited (Australian).
3. PRINCIPLES USED TO
DETERMINE THE NATURE AND
AMOUNT OF REMUNERATION
The Company’s Remuneration and
Nomination Committee of the Board,
currently comprising all independent
non-Executive Directors, determines
the quantum and structure of Directors
and Executive remuneration. The
composition, role and responsibility
of the Committee is outlined in the
Corporate Governance Statement
on page 24 of this annual report. The
Committee adopts a series of principles
in determining remuneration related
decisions. The principles used are:
• The remuneration structure
should reward those employees
who have the ability to influence
the achievement of the Group’s
strategic objectives and business
plans to enhance shareholder
value for successful Group
performance outcomes and
their contribution to these;
• Executive remuneration should
be market competitive, and
generally account for market
practice including consideration
of employee place of domicile;
• Executives’ remuneration
package should have:
– a substantial portion of their
total remuneration that is “at
risk” and aligned with reward
for creating shareholder value;
– an appropriate balance
between short and long-
term performance focus
and outcomes;
– a mix of cash and equity
based remuneration.
• The CEO because of his leadership
role in establishing and delivering
achievement of medium and
long term Group strategic
objectives and business plans,
and increasing shareholder value
over that period should, relative
to other Executives have:
– a greater proportion of total
remuneration (at least 50%)
that is “at risk”, i.e. contingent
upon the achievement of
performance hurdles; and
– a greater proportion of “at
risk” remuneration weighted
towards equity based
rewards rather than cash.
• Non-Executive Directors’
remuneration should enable the
Company to attract and retain
high quality Directors with the
relevant experience. In order
to maintain independence and
impartiality, non-Executive
Directors should not receive
performance based remuneration;
• The Board uses discretion
when setting remuneration
levels, taking into account
interests of shareholders, the
current market environment
and Group performance.
4. REMUNERATION FRAMEWORK
The Board, through the Committee
undertakes its governance role in
establishing Executive remuneration
including, where required,
use of external independent
remuneration consultants and/
or available market information.
The Executive remuneration
structure has three components:
a) Base salary and benefits;
b) Short term incentives determined
on the basis of achievement of
specific targets and outcomes
relating to annual Group financial
performance and individual value
adding performance objectives.
The available incentive reward is
split between cash and equity.
c) Long term incentives via
participation in the Company’s
Long Term Incentive plan.
a) Base salary and benefits
Base salary for Executives is
reviewed annually to assess
appropriateness to the position and
competitiveness with the market.
17KATHMANDU ANNUAL REPORT 2017DIRECTORS REPORT

b) Short term incentives (STI)
Executives are eligible to participate
in an annual STI that delivers rewards
by way of cash and/or deferred equity.
Group Earnings before interest and
tax (EBIT), has been determined as
the appropriate financial performance
target to trigger payment of STI.
The amount of any STI paid in
a year is dependent upon:
a. the level of performance
achieved against the Group’s
financial performance target
(EBIT) for the year; and
b. the outcome of individual
value adding performance,
measured by achievement of
individual KPI’s, subject to a
minimum level of performance
SHORT TERM INCENTIVE WEIGHTING:CEOEXECUTIVES
CASHEQUITYCASHEQUITY
Group financial performance target70%-29%46%
Individual KPI achievement30%-25%-
Total100%-54%46%
The weighting of STI between Group financial performance, individual KPI’s,
cash and deferred equity is:
achieved by the Group relative
to the financial performance
target (EBIT) for the year.
For Executives where a short term
equity incentive is earned, vesting is
subject to ongoing employment by
the Group for a period of one year
following the end of the financial year
in which the incentive is earned.
c) Long Term Incentive Plan (LTI)
Shareholders reapproved the current
LTI at the Company’s 2016 Annual
General Meeting based on the granting
of nil cost performance rights. Rights
have been offered each year since the
plan was originally approved in 2010.
The plan is intended to focus
performance on achievement of key
long term performance metrics. The
selected performance measures provide
an appropriate balance between
relative and absolute Company
performance. The Board continues to
reassess the plan and its structure to
ensure it will best support and facilitate
the growth in shareholder value over
the long term relative to current
business plans and strategies. Any
grants made to Executive Directors are
subject to shareholder approval.
Rights granted are dependent upon the
Company achieving Earnings per Share
(EPS) and/or relative TSR targets over
specified performance periods, with the
value of rights allocated between EPS
and relative TSR determined each year.
EPS is measured on a compound annual
growth basis and TSR is measured on
a relative basis against a comparator
group of ASX listed companies (other
than metal and mining stocks) ranked
101 to 200 in the S&P/ASX200 as at the
date of the grant.
18KATHMANDU ANNUAL REPORT 2017

"As a product and brand led business,
we are focused on engaging our
customers by creating distinctive,
sustainable, quality products and by
promoting our brand authenticity".
19KATHMANDU ANNUAL REPORT 2017DIRECTORS REPORT

Performance measurement under
either criterion is at the end of each
applicable performance period with no
ability to re-test. Fifty per cent of the
relevant portion of the award vests for
achievement of targets and a further
fifty per cent vests for the achievement
of aspirational targets. A sliding
scale operates between target and
aspirational performance levels.
In 2017 grants were made to the
CEO and COO/CFO (2016: CEO only).
The Board resolved to grant nil cost
performance rights that:
• Were measurable for a single
specified performance period of
three years;
• Required achievement of relative
TSR targets and EPS growth targets
over a single specified performance
period of three years with the value
of rights allocated 50:50 between
EPS and relative TSR;
• Performance measurement under
either criterion is at the end of the
performance period with no ability
to re-test.
d) CEO remuneration
CEO remuneration comprises a mixture
of base salary, STI and LTI:
CEO 2017 Remuneration package A$’000
Fixed
(Base salary, superannuation) 796
STI (60% of fixed) 477
LTI (70% of fixed)* 557
Maximum potential remuneration 1,830
* Vesting dependent on achievement of
performance hurdles measured over a three-
year period. Vesting date 1 December 2019.
• More than half (56%) the total
remuneration for the CEO is at risk;
• Over 85% of the at risk
remuneration (all except for the
STI KPI’s) is solely dependent on
outcomes of Group financial
performance against short and
long term targets;
CEO
COO/CFO
Executives
Fixed STI LTI
44%
56%
66%
19%25%
34%
26%30%
1
Comprises of cash salary and fees, non-monetary benefits, superannuation.
2
Acting CEO during
FY2015.
3
Includes non-monetary benefits settling obligations arising over tax residency status for
period May 2011 to July 2013.
Details of the remuneration of the Directors and Key Management Personnel and
total remuneration of other Executives of the Group, for the current and prior
financial years are set out in section 5.3 of the financial statements.
5. Executive Service agreements
All Executives are on employment terms consistent with the remuneration framework
outlined in this report. Each of the agreements has an open term, and the period
of notice to be given by the employee is three months (six months for the CEO).
The agreements provide for three months base salary inclusive of any applicable
superannuation to be paid in the event of a redundancy (six months for the CEO).
6. Non-Executive Directors’ fees
The current aggregate limit for non-Executive Directors’ fees is $A800,000 per
annum. In FY2017 the base fee payable (including superannuation if applicable) to
the Chairman was $A222,480 and to a non-Executive Director $A116,390 per annum.
• All long term incentive (70% of Fixed Annual Remuneration) will be measured on
a single 3-year performance period.
REMUNERATION STRUCTURE – CEO AND EXECUTIVES:
FY2017 STI outcomes
For the year ended 31 July 2017 the Group financial performance targets were
exceeded and as a result, short-term cash incentives were paid to the extent of 52%
(86% of potential) of fixed annual remuneration for the Chief Executive Officer.
5 Year CEO Remuneration
SINGLE
FIGURE
REMUNERATION
1
% STI
ACHIEVED
AGAINST
MAXIMUM
PERCENTAGE
VESTED LTI'S
AGAINST
MAXIMUM
SPAN OF
LTI PER-
FORMANCE
PERIOD
2017Xavier Simonet1,290,026 86% N/A N/A
2016Xavier Simonet1,391,983100% N/A N/A
2015Xavier Simonet136,267 - N/A N/A
Mark Todd
2
715,539 - 54%2010-2014
2014Peter Halkett1 ,0 0 9,10 8 33%74%2010-2013
2013Peter Halkett
3
1,658,711 58%100%2010-2012
20KATHMANDU ANNUAL REPORT 2017

No additional fees are paid for sub-committee attendances. No increase was made in 2017.
Any Executive Directors do not receive Directors’ fees. The amounts approved for Directors’ fees are expressed in AUD given the
specific requirements for remuneration reporting applying to ASX listed companies, however all amounts reported in the tables
within this report are specified in NZD, being the reporting currency of the Company.
The Board reviews Directors’ fees annually seeking advice from external independent remuneration consultants as necessary.
Non-Executive Directors do not participate in the Company short or long term incentive schemes.
The following fees apply per annum:
TOTAL FEESAUD $
Chairman222,480
Other non-Executive Directors116,390
Actual fees paid in year ended 31 July 2017 (converted to reporting currency)NZD $
Chairman236,428
Other non-Executive Directors123,687
7. Details of share-based compensation
Long term incentive plan
The Company Long term incentive plan entitles the Board to grant performance rights for no cash consideration, at intervals
determined by the Board.
The number of rights granted and the applicable performance period over which EPS and relative TSR is measured is set out
below, along with the fair value of the rights at the grant date.
GRANT
DATE
RIGHTS GRANTED
DURING THE YEAR
DATE
EXERCISABLE
EXPIRY
DATE
TOTAL FAIR VALUE OF
PERFORMANCE RIGHTS AT
GRANT DATE $
Executive Director – Xavier Simonet
201619 Dec 2016293,0781 Dec 20191 Dec 2019378,071
201516 Dec 20154 0 7, 4 6 31 Dec 20181 Dec 2018433,94 8
Shares issued to Directors and Other Executives on Vesting of Performance Rights:
2017DATE GRANTEDDATE SHARES ISSUEDNUMBER OF SHARES ISSUED
Other Executives and Senior Management18 Dec 201529 Mar 201712,537
Total12,537
No shares were issued to Directors or Other Executives during FY2017 on exercise of performance rights.
Performance rights granted to each Executive will, subject to satisfaction of performance conditions, vest on the basis of one
ordinary share for each performance right which vests, at the end of each performance period.
21KATHMANDU ANNUAL REPORT 2017DIRECTORS REPORT

8. Additional information, Performance Rights Vesting
Performance rights granted, the percentage that vested, the percentage that forfeited and future potential vesting periods are
shown in the table below:
GRANT
DATE
VESTED
%
FORFEITED
%
FINANCIAL
PERIODS IN
WHICH RIGHTS
MAY VE ST
MAXIMUM TOTAL
NUMBER OF
RIGHTS YET TO
VEST
MAXIMUM
TOTAL VALUE OF
GRANTS YET TO
VEST
Executive Directors
Xavier SimonetFY20170.0%0.0%FY2020293,078378,071
Xavier SimonetFY20160.0%0.0%F Y2019407,4634 33,94 8
Other Executives and
Senior Management
FY20170.0%0.0%FY202082,732106,724
Other Executives and
Senior Management
FY20170.0%0.0%F Y2019523,139894,567
Other Executives and
Senior Management
FY20166 9. 3%30.7%FY2018
1
669,669971,020
1
Shares were issued on 22 August 2017
The maximum value of performance rights yet to vest has been determined as the total number of performance rights still to
vest multiplied by the fair value of each performance right at grant date.
Company performance
All Executives’ short term incentive is dependent upon the Company’s overall financial performance for each financial year.
Long term incentive is dependent upon both earnings per share growth and relative total shareholder returns over a range of
performance periods.
With reference to the measurement of long term incentive performance the table below outlines the Company’s earnings and
share performance since its listing on 13 November 2009:
YEARNPAT GROWTH
EPS CENTS
PER
SHARE
EPS
GROWTH
SHARE PRICE
AT START OF
YEAR
SHARE PRICE
AT END OF
YEAR
SHARE
PRICE
GROWTH
ORDINARY DIVIDENDS
PAID OR DECLARED
PER SHARE
FY2010 $9. 4 m NA 0.3NA$2.13$2.05(3.8%)$0.07
FY2011 $ 39. 1 m 316.0% 19. 565x$2.05$2.207. 3 %$0.10
FY2012$34.9m(10.7%)1 7. 40.9 x$2.20$1.59( 2 7. 7 % )$0.10
FY2013$44.2m26.6%22.11.3x$1.59$2.374 9. 1%$0.12
F Y2014$42.2m(4.5%)21.01.0x$2.37$3.3340.5%$0.12
FY2015$20.4m(51.7%)10.10.5x$3.33$1.70(4 8.9%)$0.08
FY2016$33.5m64.2%16.61.6x$1.70$1.805.9%$0.11
FY2017$38.0m13.5%18.91.1x$1.80$2.2726.1%$0.13
Share price quoted is the NZX listing price. The Company is listed on both the ASX and NZX and options will vest on both
exchanges, dependent on where the employee is based.
Shares under options or performance rights
There are no unissued ordinary shares of the Company under any vested options or performance rights at the date of this report.
22KATHMANDU ANNUAL REPORT 2017

9. Remuneration of Auditors
Details of remuneration of Auditors is set out in Note 5.8 of the Financial Statements.
Non-Audit Services
PricewaterhouseCoopers were appointed auditors of Kathmandu Holdings Limited in 2009 and whilst their
main role is to provide audit services to the Company, the Company does employ their specialist advice
where appropriate. In each instance, the Board has considered the nature of the advice sought in the context
of the audit relationship and in accordance with the advice received from the Audit and Risk Committee,
does not consider these services compromised the auditor independence for the following reasons:
• All non-audit services have been reviewed by Audit and Risk Committee to ensure they do not impact the impartiality and
objectivity of the auditor.
• None of the services undermined the general principles relating to auditor independence, including not reviewing or auditing
the auditor's own work, not acting in a management or a decision making capacity for the Company, not acting as
advocate for the Company or not jointly sharing economic risk or rewards.
This report is made in accordance with a resolution of the Directors.
David Kirk
Chairman
Xavier Simonet
Managing Director
23KATHMANDU ANNUAL REPORT 2017DIRECTORS REPORT

CORPORATE
GOVERNANCE
The Board and management of the
Company are committed to ensuring
that the Company adheres to best
practice governance principles
and maintains the highest ethical
standards. The Board is responsible for
the overall corporate governance of
the Company, including adopting the
appropriate policies and procedures
and seeking to ensure Directors,
management and employees fulfil their
functions effectively and responsibly.
The Company is listed on both the
New Zealand and Australian stock
exchanges. Corporate governance
principles and guidelines have been
introduced in both countries. These
include the Australian Securities
Exchange (ASX) Corporate Governance
Council Corporate Governance
Principles and Recommendations
(Third Edition) (ASX Code), the New
Zealand Stock Exchange Listing Rules
relating to corporate governance, the
NZX Corporate Governance Code 2017
(NZX Code), and the New Zealand
Financial Markets Authority Corporate
Governance Principles and Guidelines
2014 (collectively, the Principles).
Although reporting on the NZX Code
is not mandatory this year as the
Code applies for reporting periods
from 1 October 2017, the Company has
chosen to adopt the recommendations
earlier to demonstrate how
Kathmandu’s corporate governance
practices align with the best
practice recommended by NZX.
The Company has followed each
of the recommendations set out
in the Principles where appropriate
for the size of the Company and
the Board, the resources available
and the activities of the Company.
After due consideration, the Board
considers that the Company’s
corporate governance practices and
procedures depart from the Principles
during the reporting period only as
set out below. The information in this
statement is current as at 31 July 2017.
Explanation for departure from NZX Corporate Governance Code 2017 and
ASX Corporate Governance Principles and Recommendations (3rd Edition)
REFERENCERECOMMENDATIONDEPARTURE
EXPLANATION FOR
DEPARTURE
NZX Code 3.4
ASX Code 2.1
An issuer should
establish a
nomination
committee to
recommend director
appointments to the
board
The Company
has not
maintained
a separate
nomination
committee
The Board considers that
it is able to deal efficiently
and effectively with the
processes of appointment
and reappointment of
directors to the Board
and considerations of
Board composition and
succession planning
NZX Code 7.3
ASX Code 7.3
Internal audit
functions should be
disclosed
The Company
does not have
an internal
audit function
The Company considers
that the external advisors
it currently engages
provide a sufficient
system for evaluating
and continually improving
the effectiveness of risk
management for the
Company and delivers
appropriate objective
assurance on risk
management.
The full content of the Company’s Corporate governance policies, practices and
procedures can be found on the Company’s website (kathmanduholdings.com).
24KATHMANDU ANNUAL REPORT 2017

Board of Directors,
Charter and its
Committees
The Board has adopted a written
charter to provide a framework for the
effective operation of the Board. The
charter addresses the following matters
and responsibilities of the Board:
•enhancing Shareholder value;
•oversight of the Company,
including its control and
accountability systems;
•appointing and removing the
Managing Director (or equivalent)
and the Chief Financial Officer;
•ratifying the appointment, and
where appropriate, the removal
of the senior Executives;
•input into and approval
of corporate strategy and
performance objectives;
•reviewing and ratifying systems
of risk management and internal
compliance and control, codes of
conduct and legal compliance;
•monitoring senior management’s
performance and implementation
strategy, and seeking to ensure
appropriate resources are available;
•approving and monitoring
the progress of major capital
expenditure, capital management
and acquisitions and divestitures;
•approving budgets; and
•approving and monitoring
financial and other reporting.
BOARD COMPOSITION
At present, there are six Directors on
the Board. Five out of the six Directors
are non-Executive Directors. Xavier
Simonet (Managing Director and Chief
Executive Officer,) is the only Executive
Director on the Board. The Chairman of
the Board is David Kirk. The biography
of each Board member, including
Company or another Group member
in an Executive capacity and is not
considered to be an independent
Director based on the criteria set out
in the Board Charter. All remaining
Directors satisfy the criteria and are
considered independent Directors.
BOARD COMMITTEES
The Board may from time to time
establish appropriate committees
to assist in the discharge of its
responsibilities. The Board has
established the Audit and Risk
Committee and the Remuneration
Committee. Other committees may
be established by the Board as and
when required. Membership of Board
committees will be based on the needs
of the Company, relevant legislative
and other requirements and the skills
and experience of individual Directors.
AUDIT AND RISK COMMITTEE
Under its charter, this committee
must have at least three members, a
majority of whom must be independent
Directors and all of whom must be non-
Executive Directors. Currently, all the
non-Executive Directors are members of
this committee. John Harvey is Chair of
the committee. The primary role of this
committee includes:
•overseeing the process of financial
reporting, internal control,
continuous disclosure, financial and
non-financial risk management and
compliance and external audit;
•monitoring Kathmandu’s
compliance with laws and
regulations and Kathmandu’s own
codes of conduct and ethics;
•encouraging effective relationships
with, and communication between,
the Board, Management and
Kathmandu’s external auditor; and
25KATHMANDU ANNUAL REPORT 2017
each Director’s skills, experience,
expertise and the term of office held
by each Director at the date of this
Annual Report is set out in pages 12
to 15 of this Annual Report.
BOARD AND EXECUTIVE
PERFORMANCE
The Board Charter provides for an
annual performance evaluation that
compares the performance of the
Board with the requirements of this
Charter, reviews the performance
of the Board’s committees and
individual Directors and sets forth
the goals and objectives of the Board
for the upcoming year and effecting
any amendments to this Charter
considered necessary or desirable
of the Board and its Committees.
The Board is currently undertaking a
review of its performance during the
reporting period by the anonymous
completion by directors and executives
of evaluation que
stionnaires relating to
Board and committee composition and
performance, and individual interviews
of
directors with the Chairman.
The Group has a robust process
for annual evaluation of its senior
executives that compares the
performance of each individual
senior executive against the goals
and objectives set for the year. A
performance evaluation of each
senior executive was undertaken
in relation to the reporting period
in acco
rdance with this process.
INDEPENDENCE OF
DIRECTORS
The factors that the Company will
take into account when assessing
the independence of its Directors
are set out in its Charter, a copy of
which is available on the Company’s
website
(kathmanduholdings.com).
The Managing Director (Xavier
Simonet) is employed by the
CORPORATE GOVERNANCE

• evaluating the adequacy of
processes and controls established
to identify and manage areas
of potential risk and to seek to
safeguard the Company’s assets.
Under the charter it is the policy of the
Company that its external auditing
firm must be independent of the
Company. The committee will review
and assess the independence of the
external auditor on an annual basis.
As noted above, the Company
does not currently have an internal
audit function. The Committee will
continue to monitor whether this
current practice is sufficient for
the Company’s requirements.
REMUNERATION COMMITTEE
Under its charter, this committee
must have at least three members, a
majority of whom must be independent
Directors and all of whom must be
non-Executive Directors. Currently,
all the non-Executive Directors are
members of this committee. Sandra
McPhee is Chair of the committee. The
purpose of this committee is to ensure
the remuneration programme of the
Kathmandu Group delivers the business
plan, is fit for purpose and is one
which considers the current business
needs of the Group whilst supporting
shareholder and customer value. The
main functions of the committee
are to assist the Board in fulfilling
its responsibilities to stakeholders
on management activities for the
Kathmandu Group in relation to:
• Overseeing the development
and application of the Group
Human Resources strategy,
the remuneration framework
and associated policies;
• The remuneration of senior
executives, non-executive
Directors and Directors;
• Providing effective remuneration
policies and programs to
motivate high performance
from all employees; and
• Ensuring appropriate and effective
policies for managing the
performance and development
of employees at all levels.
Policies, practices
and processes
The main policies and practices
adopted by the Company
are summarised below.
RISK MANAGEMENT POLICY
The identification and proper
management of the Company’s risk
are an important priority of the Board.
The Company has a Risk Management
Policy (available on the Company’s
website kathmanduholdings.com)
appropriate for its business. This
policy highlights the risks relevant to
the Company’s operations, and the
Company’s commitment to designing
and implementing systems and
methods appropriate to minimise
and control its risk. The Audit and
Risk Committee assists the Board
in discharging its responsibility for
monitoring risk management and
that Committee is responsible for
establishing procedures which seek
to provide assurance that major
business risks are identified, consistently
assessed and appropriately addressed.
A risk management framework is in
place to identify, oversee, manage
and control risk. A formal review of
the risk framework was undertaken
during the reporting period by the
Committee. A robust risk assessment
process of reviewing existing risks and
identifying any new and emerging
risks facing the Company, and how
these are to be managed, was carried
out during the reporting period.
HEALTH AND SAFETY
The Company is committed to
cultivating a strong safety culture
and awareness of health and safety
risks, performance and management
within the Group. The Group has
adopted an integrated approach to
safety and wellbeing which recognises
that workplace safety, health and
mental health all contribute to an
employee’s overall wellbeing. During
the reporting period, the Company
has introduced a new Safety and
Wellbeing intranet site ‘Destination
Safe’ which contains a range of
resources, tools and information
employees can access to assist in
keeping workplaces safe covering
incident and emergency response
and hazard and risk management.
Lag indicators of health and
safety risks during the reporting
period are set out below:
Lost time injury frequency rate
(number of claims per 1,000,000
hours worked): 5.3 (FY2016: 6.6).
More information on Health, Safety and
Wellbeing in the Group can be found
in the Company’s Sustainability Report
available at kathmanduholdings.com
CONTINUOUS
DISCLOSURE POLICY
The Company is committed to
observing its disclosure obligations
under the Listing Rules. The Company
has a policy that establishes procedures
which are aimed at ensuring that
Directors and Executives are aware
of and fulfil their obligations in
relation to the timely disclosure of
material price-sensitive information.
SECURITIES TRADING POLICY
The Company has guidelines for
dealing in securities which are intended
to explain the prohibited type of
26KATHMANDU ANNUAL REPORT 2017

conduct in relation to dealings in
securities under the Corporations Act
2001 (Australia) and the Financial
Markets Conduct Act 2013 (NZ) and
to establish a best practice procedure
in relation to Directors’, Executives’
and employees’ dealings in Shares
in the Company. Subject to the
overriding restriction that persons may
not deal in Shares while they are in
possession of material price sensitive
information, Directors, Executives and
Key management personnel will only
be permitted to deal in Shares during
certain ‘window periods’, following the
release of the Company’s full and half
year financial results or the release
of a disclosure document offering
shares in the Company. Outside of
these periods, Directors, Executives
and key management personnel must
receive clearance in accordance with
the protocols detailed in the policy
for any proposed dealing in Shares.
CODE OF CONDUCT
The Board recognises the need to
observe the highest standards of
corporate practice and business
conduct. Accordingly, the Board
has a formal code of conduct, to be
followed by all employees and officers.
The key aspects of this code are to:
• act with honesty, integrity
and fairness and in the best
interest of the Company;
• act in accordance with all
applicable laws, regulations,
policies and procedures; and
• use Company resources
and property properly.
DIVERSITY POLICY
Kathmandu recognises the value of
a diverse and skilled workforce and is
committed to creating and maintaining
an inclusive and collaborative
workplace culture that will provide
sustainability for our business into
the future. Different perspectives
arising from diversity encourage an
innovative, responsive, productive and
competitive business and create value
for our customers and shareholders.
We are committed to leveraging the
diverse backgrounds, experiences
and perspectives of our people to
provide excellent customer service
and innovative products to an
equally diverse community.
Kathmandu’s commitment to
recognising the importance of
diversity extends to all areas of the
business including talent acquisition,
learning and development, succession
planning, internal transfer and
promotion, retention of employees,
and company policy and procedures.
Kathmandu has established a Diversity
Policy in accordance with ASX CGC
Corporate Governance Principles and
Recommendation 1.5, NZX Corporate
Governance Code Recommendation
2.5, the NZX Listing rules relating to
diversity and the NZX Diversity Policies
and Disclosure Guidance note. A copy
of Kathmandu’s Diversity Policy can be
obtained from the Company Website
kathmanduholdings.com. This policy
encompasses Kathmandu’s Diversity
Principles which affirm the Company’s
27KATHMANDU ANNUAL REPORT 2017CORPORATE GOVERNANCE

commitment to harnessing differences
to encourage an innovative, responsive
and productive workplace, creating
value and rewards for customers, the
team, shareholders and the community.
As part of its Diversity Policy,
Kathmandu has established
measurable objectives for achieving
diversity, including across the Gender,
Generation and Culture profiles of the
Company. Kathmandu has carried out
an annual assessment of its diversity
objectives for FY17. The Company
considers that it has continued to
make good progress towards achieving
these objectives. In relation to gender
diversity, Kathmandu considers its
current level of employee gender
diversity to be effective; however it
remains vigilant in the review of this
measureable diversity objective. The
benefits of diversity will continue to be
tested and re-affirmed with reference
to Kathmandu team composition.
As at 31 July 2017, in relation
to Kathmandu’s:
• Board of Directors, two out
of six Directors were women
(this is the same as FY16)
• Executive Management, one out
of eight positions were held by
women (this is the same as FY16).
Kathmandu considers its gender
diversity as a strength and will continue
to support strategies and initiatives
that address any significant adverse
changes in diversity ratios through
employee turnover. Kathmandu is
also proud of its ethnic diversity which
reflects the diversity of its customers;
business partners and community.
Kathmandu is committed to rewarding
its employees with compensation and
benefit programmes that are based
on performance merit and experience.
In 2017 a review on employee pay
parity was completed. Based upon the
results of this audit, Kathmandu has
evidence that supports pay equality
between gender and other diversity
indicators, with no evidence of pay
disparity between persons holding
the same or similar roles. A review of
gender pay parity continues to be an
on-going focus for the company.
COMMUNICATIONS WITH
SHAREHOLDERS
The Company is committed to
keeping Shareholders informed of all
major developments affecting the
Company’s state of affairs relevant
to Shareholders in accordance with
all applicable laws. Information is
communicated to Shareholders
through the lodgement of all relevant
financial and other information
with ASX and NZX and publishing
information on the Company’s
website (kathmanduholdings.com).
In particular, the Company’s website
will contain information about the
Company, including media releases,
key policies and the terms of reference
of the Company’s Board Committees.
All relevant announcements made
to the market and any other relevant
information will be posted on the
Company’s website as soon as they
have been released to ASX and NZX.
ECONOMIC, ENVIRONMENTAL
AND SOCIAL SUSTAINABILITY
The Company prepares a
separate sustainability report in
accordance with the new Global
Reporting Initiative (GRI) Standards
framework. It is available online
at kathmanduholdings.com.
28KATHMANDU ANNUAL REPORT 2017

29KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
FINANCIAL
STATEMENTS
Directors’ Approval of Consolidated Financial Statements ...30
Consolidated Statement of Comprehensive Income .............31
Consolidated Statement of Changes in Equity ....................32
Consolidated Balance Sheet ...............................................33
Consolidated Statement of Cash Flows ...............................34
Notes to the Financial Statements
Section 1: Basis of Preparation .....................................36
Section 2: Results for the Year......................................38
Section 3: Operating Assets and Liabilities ...................44
Section 4: Capital Structure and Financing Costs ..........51
Section 5: Other Notes ................................................60
Auditors’ Report ................................................................68
TABLE OF CONTENTS
IN THIS SECTION
The financial statements have been presented in a style which attempts to make them less complex
and more relevant to shareholders. We have grouped the note disclosures into five sections: ‘Basis of
Preparation’, ‘Results for the Year’, ‘Operating Assets and Liabilities’, ‘Capital Structure and Financing
Costs’ and ‘Other Notes’. Each section sets out the accounting policies applied in producing the
relevant notes. The purpose of this format is to provide readers with a clearer understanding of what
drives financial performance of the Group. The aim of the text boxes is to provide commentary on
each section, or note, in plain English.
KEEPING IT SIMPLE
Notes to the financial statements provide information required by accounting standards or Listing
Rules to explain a particular feature of the financial statements. The notes which follow will also
provide explanations and additional disclosure to assist readers’ understanding and interpretation of
the annual report and the financial statements.
FOR THE YEAR ENDED
31 JULY 2017

30KATHMANDU ANNUAL REPORT 2017
Authorisation for Issue
The Board of Directors authorised the issue of these Consolidated Financial Statements on 26 September 2017.
Approval by Directors
The Directors are pleased to present the Consolidated Financial Statements of Kathmandu Holdings Limited for the year ended
31 July 2017 on pages 31 to 67.
26 September 2017
David Kirk Date
26 September 2017
Xavier Simonet Date
For and on behalf of the Board of Directors
DIRECTORS’ APPROVAL OF
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 JULY 2017

31KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
SECTION
2017
NZ$’000
2016
NZ$’000
Sales445,348425,593
Cost of sales(169,165)(159,232)
Gross profit 276,183266,361
Selling expenses(143,740)(139,285)
Administration and general expenses(61,613)(62,278)
(205,353)(201,563)
Earnings before interest, tax, depreciation and amortisation70,83064,798
Depreciation and amortisation3.2/3.3(13,826)(13,917)
Earnings before interest and tax57,00450,881
Finance income2826
Finance expenses(2,058)(3,582)
Finance costs - net4.1.1(2,030)(3,556)
Profit before income tax54,97447,325
Income tax expense2.3(16,935)(13,804)
Profit after income tax38,03933,521
Other comprehensive income that may be recycled through profit and loss:
Movement in cash flow hedge reserve 4.3.2209(15,891)
Movement in foreign currency translation reserve4.3.2209(6,384)
Other comprehensive income/(expense) for the year, net of tax418(22,275)
Total comprehensive income for the year attributable to shareholders38,45711,246
Basic earnings per share 2.418.9cps16.6cps
Diluted earnings per share2.418.7cps16.6cps
Weighted average basic ordinary shares outstanding (‘000)2.4201,489201,484
Weighted average diluted ordinary shares outstanding (‘000)2.4203,324202,439
FOR THE YEAR ENDED
31 JULY 2017

32KATHMANDU ANNUAL REPORT 2017
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
SHARE
CAPITAL
NZ$’000
CASH
FLOW
HEDGE
RESERVE
NZ$’000
FOREIGN
CURRENCY
TRANSLATION
RESERVE
NZ$’000
SHARE
BASED
PAYMENTS
RESERVE
NZ$’000
RETAINED
EARNINGS
NZ$’000
TOTAL
EQUITY
NZ$’000
Balance as at 31 July 2015200,19110,360(13,318)24118,607315,864
Profit after tax----33,52133,521
Other comprehensive income/(expense)-(15,891)(6,384)--(22,275)
Dividends paid----(16,119)(16,119)
Issue of share capital------
Share options / performance rights lapsed---(24)24-
Share based payment expense---692-692
Balance as at 31 July 2016200,191(5,531)(19,702)692136,033311,683
Profit after tax----38,03938,039
Other comprehensive income/(expense)-209209--418
Dividends paid----(24,179)(24,179)
Issue of share capital18--(18)--
Share options / performance rights lapsed------
Share based payment expense---1,139-1,139
Balance as at 31 July 2017200,209(5,322)(19,493)1,813149,893327,100
FOR THE YEAR ENDED
31 JULY 2017

33KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
CONSOLIDATED
BALANCE SHEET
SECTION
2017
NZ$’000
2016
NZ$’000
ASSETS
Current assets
Cash and cash equivalents3.1.23,5376,891
Trade and other receivables3.1.36,2845,031
Inventories3.1.189,20695,436
Total current assets99,027107,358
Non-current assets
Property, plant and equipment3.261,02661,609
Intangible assets3.3279,014280,083
Total non-current assets340,040341,692
Total assets439,067449,050
LIABILITIES
Current liabilities
Trade and other payables3.1.456,73551,084
Derivative financial instruments4.27,0347,529
Current tax liabilities3,4751,212
Total current liabilities67,24459,825
Non-current liabilities
Derivative financial instruments4.2265604
Interest bearing liabilities4.110,43143,691
Deferred tax2.334,02733,247
Total non-current liabilities44,72377,542
Total liabilities111,967137,367
Net assets327,100311,683
EQUITY
Contributed equity - ordinary shares4.3.1200,209200,191
Reserves4.3.2(23,002)(24,541)
Retained earnings149,893136,033
Total equity327,100311,683
FOR THE YEAR ENDED
31 JULY 2017

34KATHMANDU ANNUAL REPORT 2017
CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED
31 JULY 2017
SECTION
2017
NZ$’000
2016
NZ$’000
Cash flows from operating activities
Cash was provided from:
Receipts from customers444,100424,182
Income tax received-1,357
Interest received2826
444,128425,565
Cash was applied to:
Payments to suppliers and employees360,122336,968
Income tax paid14,57116,688
Interest paid2,1622,829
376,855356,485
Net cash inflow from operating activities67,27369,080
Cash flows from investing activities
Cash was provided from:
Proceeds from sale of property, plant and equipment15
15
Cash was applied to:
Purchase of property, plant and equipment3.211,41920,729
Purchase of intangibles3.31,8572,467
13,27623,196
Net cash outflow from investing activities(13,275)(23,191)
Cash flows from financing activities
Cash was provided from:
Proceeds of loan advances90,33063,047
Proceeds from share issues--
90,33063,047
Cash was applied to:
Dividends paid24,17916,119
Repayment of loan advances123,53387,658
147,712103,777
Net cash outflow from financing activities(57,382)(40,730)
Net increase / (decrease) in cash held(3,384)5,159
Opening cash and cash equivalents 6,8911,700
Effect of foreign exchange rates3032
Closing cash and cash equivalents3.1.23,5376,891

35KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
RECONCILIATION OF NET PROFIT AFTER TAXATION WITH CASH INFLOW FROM OPERATING ACTIVITIES
SECTION2017
NZ$’000
2016
NZ$’000
Profit after taxation 38,03933,521
Movement in working capital:
(Increase) / decrease in trade and other receivables(1,249)(1,440)
(Increase) / decrease in inventories6,28313,528
Increase / (decrease) in trade and other payables5,5968,735
Increase / (decrease) in tax liability2,257(388)
12,88720,435
Add non cash items:
Depreciation3.210,63010,019
Amortisation of intangibles3.33,1963,898
Impairment of Assets3.2-1,094
Revaluation of derivative financial instruments(816)5,436
Increase / (decrease) in deferred taxation733(6,481)
Employee share based remuneration5.41,139692
Loss on sale of property, plant and equipment3.21,465466
16,34715,124
Cash inflow from operating activities67,27369,080

36KATHMANDU ANNUAL REPORT 2017
SECTION 1
IN THIS SECTION
This section sets out the Group’s accounting policies that relate to the financial statements as a
whole. Where an accounting policy is specific to one note, the policy is described in the note to
which it relates.
1.1 General information
Kathmandu Holdings Limited (the Company) and its
subsidiaries (together the Group) is a designer, marketer and
retailer of clothing and equipment for travel and adventure. It
operates in New Zealand, Australia and the United Kingdom.
The Company is a limited liability company incorporated and
domiciled in New Zealand. Kathmandu Holdings Limited
is a company registered under the Companies Act 1993
and is a FMC reporting entity under Part 7 of the Financial
Markets Conduct Act 2013. The address of its registered office
is 223 Tuam Street, Central Christchurch, Christchurch.
The Company is listed on the NZX and ASX.
The financial statements of the Group have been prepared in
accordance with the requirements of Part 7 of the Financial
Markets Conduct Act 2013 and the NZX Listing Rules.
These audited consolidated financial statements
have been approved for issue by the Board
of Directors on 26 September 2017.
1.2 Summary of significant
accounting policies
These financial statements have been prepared in accordance
with Generally Accepted Accounting Practice. They comply
with the New Zealand Equivalents to International Financial
Reporting Standards (NZ IFRS) and other applicable
Financial Reporting Standards, as appropriate for profit-
oriented entities. The financial statements also comply
with International Financial Reporting Standards (IFRS).
The financial statements are presented in New
Zealand dollars, which is the Company’s functional
currency and Group’s presentation currency.
1.2.1 Basis of preparation
The principal accounting policies adopted in the
preparation of the financial statements are set out
below. These policies have been consistently applied
to all periods presented, unless otherwise stated.
Entities reporting
The financial statements reported are for the consolidated
“Group” which is the economic entity comprising
Kathmandu Holdings Limited and its subsidiaries.
The Group is designated as a for profit entity
for financial reporting purposes.
Principles of consolidation
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and
has the ability to affect those returns through its power
over the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealised
gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated. When
necessary, amounts reported by subsidiaries have been
adjusted to conform with the Group’s accounting policies.
Historical cost convention
These financial statements have been prepared
under the historical cost convention, as modified
by the revaluation of certain assets as identified
in specific accounting policies below.
BASIS OF
PREPARATION
NOTES TO THE FINANCIAL STATEMENTS

37KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
Critical accounting estimates
The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. 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 discussed below.
Estimates and judgements are continually evaluated
and are based on historical experience as adjusted
for current market conditions and other factors,
including expectations of future events that are
believed to be reasonable under the circumstances.
Further explanation as to estimates and assumptions
made by the Group can be found in the following
notes to the financial statements:
Area of Estimation Section
Goodwill
– assumptions underlying recoverable value 3.3
Inventory
- estimates of obsolescence 3.1.1
Fair value of derivatives
– assumptions underlying fair value 4.2
Foreign currency translation
The results and financial position of all the Group entities
(none of which has the currency of a hyper-inflationary
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 that
balance sheet;
Income and expenses for each statement of comprehensive
income are translated at average exchange rates (unless this
average 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 rate on
the dates of the transactions); and
All resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign operations, and
of borrowings and other currency instruments designated as
hedges of such investments, are taken to shareholders’ equity.
1.3 Restatement of prior year
In October 2006, on acquisition of the Kathmandu business,
the Group recognised an indefinite life brand with a fair
value of $160.3m. No deferred tax was recognised in
relation to the asset at the time of acquisition. This was
based on the assumption that because an indefinite
life brand is not amortised, its carrying amount is not
expected to be consumed, rather, its carrying amount
is expected to be recovered entirely through sale.
In November 2016, the IFRS Interpretations Committee (IFRS
IC) issued an agenda decision regarding the determination
of the expected manner of recovery of intangible assets
with indefinite useful life for the purposes of measuring
deferred tax, in accordance with IAS 12 Income Taxes. This
provided additional guidance on how an entity recovers
the carrying value of such assets and the consequences
for the measurement and recognition of deferred tax.
Following this additional guidance, the Group has
reviewed the expected manner of recovery of the
carrying amount of indefinite life Kathmandu brand and
concluded that its carrying amount is expected to be
recovered through use of the brand within its business.
As a result, the Group has recognised additional goodwill,
deferred tax liability and retained earnings as follows:
NZ$'000
Goodwill4 7, 4 2 9
Deferred tax liability44,879
Retained earnings2,550
At the date of acquisition the tax rates in New Zealand and
Australia were 33% and 30% respectively. As the New Zealand
tax rate has reduced from 33% to 28% over the period the
deferred tax liability has been measured at the new tax
rate. This has resulted in a release of the liability through
the income tax expense and ultimately increased retained
earnings in the period of the change in tax rate.
Comparatives for goodwill (note 3.3), deferred tax liability
(note 2.3) and retained earnings at 31 July 2016 and 1 August
2015 have been restated. This adjustment has no impact on
profit in the reported periods.
As the restatement amount only affects three line-items in the
balance sheet as described above, an opening comparative
balance sheet has not been provided.

38KATHMANDU ANNUAL REPORT 2017
SECTION 2 RESULTS FOR THE YEAR
IN THIS SECTION
This section focuses on the results and performance of the Group. On the following pages you will
find disclosures explaining the Group’s results for the year, segmental information, taxation and
earnings per share.
2.1 Segment information
An operating segment is a component of an entity that engages in business activities which earns revenue and incurs expenses
and where the chief decision maker reviews the operating results on a regular basis and makes decisions on resource allocation.
The Group is organised into three operating segments, depicting the three geographical regions the Group operates in. The
New Zealand segment has been represented to exclude holding company balances. Other represents holding companies and
consolidation eliminations.
The Group operates in three geographical areas: New Zealand, Australia and International.
31 JULY 2017AUSTRALIA
NZ$’000
NEW ZEALAND
NZ$’000
INTERNATIONAL
NZ$’000
OTHER
NZ$’000
TOTAL
NZ$’000
Total segment sales298,013146,7793,338-448,130
Inter-segment sales(1,581)(407)(794)-(2,782)
Sales from external customers296,432146,3722,544-445,348
EBITDA39,31736,001(713)(3,775)70,830
Depreciation and software amortisation7,7836,0393113,826
EBIT31,53429,962(716)(3,776)57,004
Income tax expense8,7928,595(225)(227)16,935
Total segment assets233,082235,834849(30,698)439,067
Total assets includes:
Non-current assets171,27325,5291143,237340,040
Additions to non-current assets9,6623,614--13,276
Total segment liabilities150,20922,09712,356(72,695)111,967
31 JULY 2016AUSTRALIA
NZ$’000
NEW ZEALAND
NZ$’000
INTERNATIONAL
NZ$’000
OTHER
NZ$’000
TOTAL
NZ$’000
Total segment sales279,704142,1667,813-429,683
Inter-segment sales(1,276)(484)(2,330)-(4,090)
Sales from external customers278,428141,6825,483-425,593
EBITDA32,86835,134(541)(2,663)64,798
Depreciation and software amortisation7,1216,581214113,917
EBIT25,74728,553(755)(2,664)50,881
Income tax expense6,2548,090-(540)13,804
Total segment assets235,781221,9191,657(10,307)449,050
Total assets includes:
Non-current assets170,03428,4165143,237341,692
Additions to non-current assets15,5457,6501-23,196
Total segment liabilities148,04430,46113,460(54,598)137,367

39KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
EBITDA represents earnings before income taxes (a non-
GAAP measure), excluding interest income, interest expense,
depreciation and amortisation, as reported in the financial
statements. EBIT represents EBITDA less depreciation and
amortisation. EBITDA and EBIT are key measurement criteria
on which operating segments are reviewed by the Chief
Operating Decision Maker (the Executive Management Team).
The Group operates in one industry being outdoor clothing
and equipment.
Revenue is allocated based on the country in which the
customer is located. The Group has no reliance on any single
major customer.
Costs recharged between Group companies are calculated on
an arms-length basis. The default basis of allocation is % of
revenue with other bases being used where appropriate.
Assets / liabilities are allocated based on where the assets /
liabilities are located.
2.2 Profit before tax
Accounting policies
Revenue recognition
Revenue comprises the fair value of the consideration
received or receivable for the sale of goods and services,
excluding Goods and Services Tax, rebates and discounts
and after eliminating sales within the Group. Revenue is
recognised as follows:
(i) Sale of goods
Sale of goods are recognised at point of sale for retail
customers and when product is dispatched to the customer
for online sales. Retail sales are usually in cash or by credit
card. The recorded revenue is the gross amount of the sale
(excluding GST).
Operating expenses
Employee entitlements
2017
NZ$’000
2016
NZ$’000
Wages, salaries and other
short term benefits
82,93582,476
Employee share based
remuneration
1,139692
The number of full-time equivalent employees (excluding
short-term contractors), as at 31 July was:
20172016
Australia762754
New Zealand506488
United Kingdom55
(i) Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary
benefits and annual leave expected to be settled within 12
months of the reporting date are recognised in other payables
in respect of employees’ services up to the reporting date
and are measured at the amounts expected to be paid when
the liabilities are settled. Liabilities for non-accumulating sick
leave are recognised when the leave is taken and measured
at the rates paid or payable. The liability for employee
entitlements is carried at the present value of the estimated
future cash flows.
Rental and operating leases
The Group is a Lessee. Leases in which a significant portion
of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made
under operating leases (net of any incentives received from
the lessor) are charged to the statement of comprehensive
income on a straight-line basis over the period of the lease.
2017
NZ$’000
2016
NZ$’000
Rental and operating lease expenses62,20558,252
Rent expenses reported in these financial statements relate to
non-cancellable operating leases. The future commitments on
these leases are as follows:
2017
NZ$’000
2016
NZ$’000
Due within 1 year55,08952,120
Due within 1-2 years46,82740,905
Due within 2-5 years81,08870,970
Due after 5 years41,19232,112
224,196196,107
Some of the existing lease agreements have right of renewal
options for varying terms. The Group leases various properties
under non-cancellable lease agreements. These leases are
generally between 1 – 10 years.

40KATHMANDU ANNUAL REPORT 2017
2.3 Taxation
KEEPING IT SIMPLE
This section lays out the tax accounting policies, the current and deferred tax charges or credits in
the year (which together make up the total tax charge or credit in the statement of comprehensive
income), a reconciliation of profit before tax to the tax charge and the movements in deferred tax
assets and liabilities.
Accounting policies
Current and deferred income tax
The tax expense for the period comprises current and deferred
tax. Tax is recognised in the statement of comprehensive
income, 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.
The current income tax charge is calculated on the basis of
the tax laws enacted or substantively enacted at the balance
sheet date in the countries where the Company’s subsidiaries
operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where
appropriate on the basis of amounts expected to be paid to
the tax authorities.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between tax bases
of assets and liabilities and their carrying amounts in the
consolidated financial statements. However, the deferred
income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the balance sheet
date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability
is settled.
Deferred income tax assets are recognised to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences
arising on investments in subsidiaries and associates, except
where the timing of the reversal of the temporary difference is
controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when
there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income
taxes assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or
different taxable entities where there is an intention to settle
the balances on a net basis.
Goods and Services Tax (GST)
The statement of comprehensive income and the cash flow
statement have been prepared so that all components are
stated exclusive of GST. All items in the balance sheet are
stated net of GST, with the exception of receivables and
payables, which include GST invoiced.
Taxation – Statement of comprehensive income
The total taxation charge in the income statement is analysed
as follows:
2017
NZ$’000
2016
NZ$’000
Current income tax charge16,82914,996
Deferred income tax charge
/ (credit)
106(1,192)
Income tax charge
reported in statement of
comprehensive income
16,93513,804
In order to understand how, in the statement of
comprehensive income, a tax charge of $16,934,513 (2016:
$13,804,426) arises on profit before income tax of $54,973,991
(2016: $47,324,681), the taxation charge that would arise at
the standard rate of New Zealand corporate tax is reconciled
to the actual tax charge as follows:

41KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
2017
NZ$’000
2016
NZ$’000
Profit before income tax54,974)47,325)
Income tax calculated at 28%15,393)13,251)
Adjustments to taxation:
Adjustments due to different rate in different jurisdictions578)550)
Non-taxable income(16)(25)
Expenses not deductible for tax purposes1,064)1,492)
Tax expense transferred to foreign currency translation reserve(164)(1,462)
Adjustments in respect of prior years80)(2)
Income tax charge reported in statement of comprehensive income16,935)13,804)
Adjustments for prior periods primarily arise where an outcome is obtained on certain tax matters which differs from
expectations held when the related provision was made. Where the outcome is more favourable than the provision made,
the difference is released, lowering the current year tax charge. Where the outcome is less favourable than the provision, an
additional charge to the current year tax will occur.
The tax charge / (credit) relating to components of other comprehensive income is as follows:
2017
NZ$’000
2016
NZ$’000
Movement in cash flow hedge reserve before tax837(21,230)
Tax impact relating to cash flow hedge reserve(628)5,339
Movement in cash flow hedge reserve after tax209(15,891)
Foreign currency translation reserve before tax91(8,990)
Tax credit / (charge) relating to foreign currency translation reserve1182,606
Movement in foreign currency translation reserve after tax209(6,384)
Total other comprehensive income before tax928(30,220)
Total tax credit / (charge) on other comprehensive income(510)7,945
Total other comprehensive income after tax418(22,275)
Current tax1641,462
Deferred tax(674)6,483
Total tax credit / (charge) on other comprehensive income(510)7,945
Unrecognised tax losses
The Group has estimated tax losses to carry forward from Kathmandu (U.K.) Limited of £11,177,874 (NZ$19,854,128) (2016:
£11,163,169 (NZ$24,427,066)) which can be carried forward to be offset against future profits generated within the UK.
No benefit has been recognised in respect to these losses.

42KATHMANDU ANNUAL REPORT 2017
Imputation credits
2017
NZ$’000
2016
NZ$’000
Imputation credits available for use in subsequent reporting periods based
on a tax rate of 28%
3,6024,934
The above amounts represent the balance of the imputation account as at the end of July 2017, adjusted for:
• Imputation credits that will arise from the payment of the amount of the provision for income tax;
• Imputation debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
• Imputation credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The balance of Australian franking credits able to be used by the Group in subsequent periods as at 31 July 2017 is A$4,501,155
(2016: A$4,093,795).
Taxation – Balance sheet
The following are the major deferred taxation liabilities and assets recognised by the Group and movements thereon during the
current and prior year:
TA X
DEPRECIATION
NZ$’000
EMPLOYEE
OBLIGATIONS
NZ$’000
BRAND
NZ$’000
FOREIGN
EXCHANGE
NZ$’000
OTHER TIMING
DIFFERENCES
NZ$’000
RESERVES
NZ$’000
TOTAL
NZ$’000
As at 31 July 2015
(Note 1.3)
1751,164(44,879)1,5833,989(2,954)(40,922)
Recognised in
the statement of
comprehensive income
(336)257-(797)2,068-1,192
Recognised in other
comprehensive income
-(51)1,361(37)(129)5,3396,483
As at 31 July 2016(161)1,370(43,518)7495,9282,385(33,247)
Recognised in
the statement of
comprehensive income
209349-(931)267-(106)
Recognised in other
comprehensive income
-3(62)(3)16(628)(674)
As at 31 July 2017481,722(43,580)(185)6,2111,757(34,027)
The deferred tax balance relates to:
• Property, plant and equipment temporary differences arising on differences in accounting and tax depreciation rates
• Employee benefits accruals
• Kathmandu brand (refer Note 1.3)
• Unrealised foreign exchange on intercompany loan (Kathmandu Pty Ltd)
• Realised gain/loss on foreign exchange contracts not yet charged in the statement of comprehensive income
• Inventory provisioning
• Temporary differences arising from landlord contributions and rent free periods
• Temporary differences on the unrealised gain/loss in hedge reserve
• Other temporary differences on miscellaneous items

43KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
2.4 Earnings per share
KEEPING IT SIMPLE
Earnings per share (‘EPS’) is the amount of post-tax profit attributable to each share.
Basic EPS is calculated by dividing the profit after tax attributable to equity holders of the Company
of $38,039,478 (2016: $33,520,955) by the weighted average number of ordinary shares in issue during
the year of 201,488,773 (2016: 201,484,583).
Diluted EPS reflects any commitments the Group has to issue shares in the future that would
decrease EPS. In 2017, these are in the form of share options / performance rights. To calculate the
impact it is assumed that all share options are exercised / performance rights taken, and therefore,
adjusting the weighted average number of shares.
2017
’000
2016
’000
Weighted average number of shares in issue201,489201,484
Adjustment for:
-Share options / performance rights
1,835955
203,324202,439

44KATHMANDU ANNUAL REPORT 2017
SECTION 3
OPERATING ASSETS
AND LIABILITIES
IN THIS SECTION
This section shows the assets used to generate the Group’s trading performance and the liabilities
incurred as a result. Liabilities relating to the Group’s financing activities are addressed in Section 4.
Deferred tax assets and liabilities are shown in note 2.3.
KEEPING IT SIMPLE
Working capital represents the assets and liabilities the Group generates through its trading activity.
The Group therefore defines working capital as inventory, cash, trade and other receivables and trade
and other payables.
3.1 Working capital
3.1.1 Inventor y
Accounting policies
Inventories are stated at the lower of cost and net realisable
value. Cost is determined on a weighted average cost method
and includes expenditure incurred in acquiring the inventories
and bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the
ordinary course of business, less applicable variable selling
expenses. Inventory is considered in transit when the risk and
rewards of ownership have transferred to the Group.
The Group assesses the likely residual value of inventory. Stock
provisions are recognised for inventory which is expected to
sell for less than cost and also for the value of inventory likely
to have been lost to the business through shrinkage between
the date of the last applicable stocktake and balance date. In
recognising the provision for inventory, judgement has been
applied by considering a range of factors including historical
results, stock shrinkage trends and product lifecycle.
Inventory is broken down into trading stock and goods in
transit below:
2017
NZ$’000
2016
NZ$’000
Trading stock76,67881,922
Goods in transit12,52813,514
89,20695,436
Inventory has been reviewed for obsolescence and a provision
of $337,970 (2016: $396,259) has been made.
3.1.2 Cash and cash equivalents
2017
NZ$’000
2016
NZ$’000
Cash on hand172171
Cash at bank3,3526,707
Short term deposits1313
3,5376,891
The carrying amount of the Group's cash and cash equivalents
are denominated in the following currencies:
NZD9962,085
AUD2,0963,239
GBP205644
USD163921
EUR772
3,5376,891
3.1.3 Trade and other receivables
Accounting policies
Trade receivables are recognised initially at the value of
the invoice sent to the customer and subsequently at the
amounts considered recoverable (amortised cost). The
collectability of trade receivables is reviewed on an on-going
basis. Debts, which are known to be uncollectible, are written
off. A provision for doubtful receivables is established when
there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms
of receivables.

45KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
2017
NZ$’000
2016
NZ$’000
Trade receivables240133
Other assets and prepayments6,0444,898
6,2845,031
Other assets include balances in relation to landlord
incentives and takeover bid costs recoverable from
Briscoe Group Limited.
The carrying amount of the Group’s trade and other
receivables are denominated in the following currencies:
NZD3,1763,335
AUD2,9331,608
GBP17588
6,2845,031
3.1.4 Trade and other payables due within one year
Accounting policies
Trade payables are recognised at the value of the invoice
received from a supplier. The carrying value of trade payables
is considered to approximate fair value as amounts are
unsecured and are usually paid by the 30th of the month
following recognition.
A provision is recognised if, as a result of a past event, the
Group has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation.
2017
NZ$’000
2016
NZ$’000
Trade payables14,40212,533
Employee entitlements10,3159,793
Sundry creditors and accruals31,40127,618
Provisions6171,140
56,73551,084
The carrying amount of the Group's trade and other payables
are denominated in the following currencies:
NZD11,12911,292
AUD38,96835,602
GBP624903
EUR541
USD6,0093,246
56,73551,084
Provisions primarily relate to the restoration of leased
properties. These provisions are expected to be fully utilised
within the next 12 months.
3.1.5 Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to
meet its contractual obligations.
RISK
EXPOSURE
ARISING FROMMONITORINGMANAGEMENT
Credit
risk
Cash and cash
equivalents
Trade
and other
receivables
Aging analysisCredit is generally
only given to
government
or local
council backed
organisations
The nature of the customer base is such that there is no
individual customer concentration of credit risk.
Exposure to credit risk
The below balances are recorded at their carrying amount
after any provision for loss on these financial instruments.
The maximum exposure to credit risk at reporting date was
(carrying amount):
2017
NZ$’000
2016
NZ$’000
Cash and cash equivalents3,5376,891
Trade receivables240133
Sundry debtors3,0982,317
6,8759,341
As at balance date the carrying amount is also considered to
approximate fair value for each of the financial instruments.
There are no past due or impaired balances.

46KATHMANDU ANNUAL REPORT 2017
The credit quality of cash and cash equivalents can be assessed by reference to external credit ratings (if available) or to
historical information about counterparty default rates:
2017
NZ$’000
2016
NZ$’000
Cash and cash equivalents:
Standard & Poors - AA-3,2726,267
Standard & Poors - BBB+265624
Total cash and cash equivalents3,5376,891
3.2 Property, plant and equipment
KEEPING IT SIMPLE
The following section shows the physical assets used by the Group to operate the business,
generating revenues and profits. These assets include store and office fit-out, as well as equipment
used in sales and support activities.
Assets are recognised 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.
Accounting policies
Property, plant and equipment
All property, plant and equipment are stated at historical cost less depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/
losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
The assets’ residual value and useful lives are reviewed and adjusted if appropriate at each balance sheet date.
Capital work in progress is not depreciated until available for use.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Depreciation
Depreciation of property, plant and equipment is calculated using straight line and diminishing value methods so as to expense
the cost of the assets over their useful lives. The rates are as follows:
Leasehold improvements 10 – 50 %
Office, plant and equipment 8 – 50 %
Furniture and fittings 10 – 50 %
Computer equipment 10 – 60 %
Impairment of assets
Property, plant and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

47KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
Property, plant and equipment can be analysed as follows:
LEASEHOLD
IMPROVEMENT
$’000
OFFICE, PLANT &
EQUIPMENT
$’000
FURNITURE &
FITTINGS
$’000
COMPUTER
EQUIPMENT
$’000
TOTAL
$’000
Year ended 31 July 2016
Opening net book value32,4232,06517,6331,97254,093
Additions15,4171144,38881020,729
Disposals(270)(16)(158)(8)(452)
Depreciation charge(5,354)(358)(3,780)(527)(10,019)
Asset impairment(1,094)---(1,094)
Exchange differences(1,009)(30)(587)(22)(1,648)
Closing net book value40,1131,77517,4962,22561,609
As at 31 July 2016
Cost 70,4235,39132,8348,316116,964
Accumulated depreciation(30,310)(3,616)(15,338)(6,091)(55,355)
Closing net book value40,1131,77517,4962,22561,609
Year ended 31 July 2017
Opening net book value40,1131,77517,4962,22561,609
Additions7,139473,70053311,419
Disposals(962)(12)(486)(6)(1,466)
Depreciation charge(6,350)(278)(3,347)(655)(10,630)
Asset impairment-----
Exchange differences63129194
Closing net book value40,0031,53317,3922,09861,026
As at 31 July 2017
Cost 73,7945,41834,3858,580122,177
Accumulated depreciation(33,791)(3,885)(16,993)(6,482)(61,151)
Closing net book value40,0031,53317,3922,09861,026
In the previous year an impairment loss of $1,093,945 was
recognised for leasehold improvements in relation to the
closure of the United Kingdom store network.
Depreciation
2017
NZ$’000
2016
NZ$’000
Leasehold improvements6,3505,354
Office, plant and equipment278358
Furniture and fittings3,3473,780
Computer equipment655527
Total depreciation10,63010,019
Sale of property, plant and equipment
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in the
statement of comprehensive income.
2017
NZ$’000
2016
NZ$’000
Loss/(gain) on sale of property,
plant and equipment
1,465466
Capital commitments
Capital commitments contracted for at balance date
include property, plant and equipment of $2,093,450
(2016: $2,8 81,7 7 1).
Depreciation expenditure is excluded from administration and
general expenses in the statement of comprehensive income.

48KATHMANDU ANNUAL REPORT 2017
3.3 Intangible assets
KEEPING IT SIMPLE
The following section shows the non-physical assets used by the Group to operate the business,
generating revenues and profits. These assets include brands, licenses, software development
and goodwill.
This section explains the accounting policies applied and the specific judgements and estimates
made by the Directors in arriving at the net book value of these assets.
Accounting policies
Goodwill
Goodwill arises on the acquisition of subsidiaries. Goodwill represents the excess of the cost of the acquisition over the Group’s
interest in the net fair value of the assets and liabilities of the acquiree. Separately recognised goodwill is tested annually for
impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arose.
Brand
Acquired brands are carried at original cost based on independent valuation obtained at the date of acquisition. The brand
represents the price paid to acquire the rights to use the Kathmandu brand. The brand is not amortised. Instead the brand is
tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and
is carried at cost less accumulated impairment losses.
Software costs
Software costs have a finite useful life. Software costs are capitalised and written off over the useful economic life.
Costs associated with developing or maintaining computer software programs are recognised as an expense when incurred.
Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and
that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs
include the costs of software development employees.
Software is amortised using straight line and diminishing value methods at rates of 20-67%.
Impairment
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. Intangible assets that have an indefinite useful life, including goodwill, are not subject to amortisation and
are tested annually for impairment irrespective of whether any circumstances identifying a possible impairment have been
identified. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows e.g. cash generating units.

49KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
Intangible assets
GOODWILL
NZ$’000
BRAND
NZ$’000
SOFTWARE
NZ$’000
TOTAL
NZ$’000
Year ended 31 July 2016
Opening net book value (Note 1.3)122,835152,99511,632287,462
Additions--2,4672,467
Disposals--(14)(14)
Amortisation--(3,898)(3,898)
Exchange differences(1,361)(4,538)(35)(5,934)
Closing net book value121,474148,45710,152280,083
As at 31 July 2016
Cost 122,745148,45724,709295,911
Accumulated amortisation/impairment(1,271)-(14,557)(15,828)
Closing net book value121,474148,45710,152280,083
Year ended 31 July 2017
Opening net book value121,474148,45710,152280,083
Additions--1,8571,857
Disposals----
Amortisation--(3,196)(3,196)
Exchange differences622071270
Closing net book value121,536148,6648,814279,014
As at 31 July 2017
Cost 122,807148,66426,573298,044
Accumulated amortisation/impairment(1,271)-(17,759)(19,030)
Closing net book value121,536148,6648,814279,014
Impairment tests for goodwill and brand
The aggregate carrying amounts of goodwill and brand allocated to each unit are as follows:
GROUPGOODWILLBRAND
2017
NZ$’000
2016
NZ$’000
2017
NZ$’000
2016
NZ$’000
New Zealand45,48445,48451,00051,000
Australia76,05275,99097,66497,457
121,536121,474148,664148,457
For the purposes of goodwill and brand impairment testing, the Group operates as two cash generating units,
New Zealand and Australia. The recoverable amount of the cash generating units has been determined based
on value in use.

50KATHMANDU ANNUAL REPORT 2017
The discounted cash flow valuations were calculated using
projected five year future cash flows based on Board approved
business plans. Business plans are modelled assuming like for
like sales growth based on historical performance taking into
account changing market conditions and the continuation of
the store rollout programme. The key assumptions used for
the value in use calculation are as follows:
20172016
Terminal growth rate1.0%1.0%
New Zealand CGU pre-tax discount rate12.5%12.8%
Australia CGU pre-tax discount rate12.1%13.0%
The terminal growth rate assumption is based on a
conservative estimate considering the current inflationary
environment. Pre-tax discount rates are calculated based
on the current capital structure and cost of debt to derive a
weighted average cost of capital.
The calculations confirmed that there was no impairment
of goodwill and brand during the year (2016: nil). The Board
believes that any reasonably possible change in the key
assumptions used in the calculations would not cause the
carrying amount to exceed its recoverable amount.
The expected continued promotion and marketing of the
Kathmandu brand support the assumption that the brand has
an indefinite life.
Capital commitments
Capital commitments contracted for at balance date include
intangible assets of $850,000 (2016: $1,410,000).

51KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
SECTION 4
CAPITAL STRUCTURE AND
FINANCING COSTS
IN THIS SECTION
This section outlines how the Group manages its capital structure and related financing costs,
including its balance sheet liquidity and access to capital markets.
Capital structure is how a company finances its overall operations and growth by using
different sources of funds. The Directors determine and monitor the appropriate capital structure
of Kathmandu, specifically how much is raised from shareholders (equity) and how much is
borrowed from financial institutions (debt) in order to finance the Group’s activities both now
and in the future.
The Directors consider the Group’s capital structure and dividend policy at least twice a year ahead
of announcing results and do so in the context of its ability to continue as a going concern, to
execute strategy and to deliver its business plan.
4.1 Interest bearing liabilities
Accounting policies
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in the statement of comprehensive
income over the period of the borrowings using the effective
interest method.
Borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability
for at least 12 months after the balance sheet date.
The table below separates borrowings into current and non-
current liabilities:
2017
NZ$’000
2016
NZ$’000
Current portion--
Non-current portion10,43143,691
Total term loans10,43143,691
The Group has a multi option facility agreement with
Commonwealth Bank of Australia and ASB Bank Limited,
repayable in full on 30 June 2019, and a facility agreement
with Bank of New Zealand and National Bank of Australia,
repayable in full on 23 March 2018.
Interest is payable based on the BKBM rate (NZD borrowings),
the BBSY rate (AUD borrowings), or the applicable short term
rate for interest periods less than 30 days, plus a margin of up
to 1.30%. There are no assets pledged as security in relation to
the unsecured debt in the 2017 financial year (2016: nil).
The covenants entered into by the Group require specified
calculations of Group earnings before interest, tax,
depreciation and amortisation (EBITDA) plus lease rental costs
to exceed total fixed charges (net interest expense and lease
rental costs) at the end of each half during the financial year.
Similarly EBITDA must be no less than a specified proportion
of total net debt at the end of each six month interim period.
The calculations of these covenants are specified in the bank
facility agreements of 19 December 2011 and have been
complied with at 31 July 2017.
The current interest rates, prior to hedging, on the term loans
ranged between 2.24% - 2.52% (2016: 2.56% - 3.13%).

52KATHMANDU ANNUAL REPORT 2017
2017
NZ$’000
2016
NZ$’000
The principal of interest bearing liabilities is:
Payable within 1 year--
Payable 1 to 2 years10,43143,691
Payable 2 to 3 years--
Payable 3 to 4 years--
10,43143,691
4.1.1 Finance costs
2017
NZ$’000
2016
NZ$’000
Interest income(28)(26)
Interest expense1,8872,665
Other finance costs360344
Net exchange loss/(gain) on foreign currency borrowings(189)573
2,0303,556
Other finance costs relates to facility fees on banking arrangements.
4.1.2 Cash flow and fair value interest rate risk
Interest rate risk is the risk that fluctuations in interest rates impact the Group’s financial performance.
RISKEXPOSURE ARISING FROMMONITORINGMANAGEMENT
Interest rate riskInterest bearing liabilities at
floating rates
Cash flow forecasting
Sensitivity analysis
Interest rate swaps
Refer to section 4.2 for notional principal amounts and valuations of interest rate swaps outstanding at balance date.
A sensitivity analysis of interest rate risk on the Group’s financial assets and liabilities is provided in the table below.
At the reporting date the interest rate profile of the Group's banking facilities was (carrying amount):
2017
NZ$’000
2016
NZ$’000
Total secured loans10,43143,691
less Principal covered by interest rate swaps(37,724)(47,017)
Net Principal subject to floating interest rates
1
(27,293)(3,326)
1
Debt levels fluctuate throughout the year and as at 31 July, are at a cyclical low. Forecast debt levels are expected to remain in excess of the interest rate
swaps for a significant majority of the year.
Interest rate swaps have the economic effect of converting borrowings from floating to fixed rates. The cash flow hedge (gain)/
loss on interest rate swaps at balance date was $330,041 (2016: $697,687).

53KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
Summarised sensitivity analysis
The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to interest rate risk.
A sensitivity of 1% (2016: 1%) has been selected for interest rate risk. The 1% is based on reasonably possible changes over a
financial year, using the observed range of historical data for the preceding five year period.
Amounts are shown net of income tax. All variables other than applicable interest rates are held constant. The impact on equity
is presented exclusive of the impact on retained earnings.
-1%+1%
31 JULY 2017
CARRYING AMOUNT
$’000
PROFIT
$’000
EQUITY
$’000
PROFIT
$’000
EQUITY
$’000
Derivative financial instruments (asset) / liability7,299(377)497377(479)
Financial assets
Cash3,537(25)-25-
(25)-25-
Financial liabilities
Borrowings10,431104-(104)-
104-(104)-
Total increase / (decrease)(298)497298(479)
-1%+1%
31 JULY 2016
CARRYING AMOUNT
$’000
PROFIT
$’000
EQUITY
$’000
PROFIT
$’000
EQUITY
$’000
Derivative financial instruments (asset) / liability8,133(470)777470(750)
Financial assets
Cash6,891(50)-50-
(50)-50-
Financial liabilities
Borrowings43,691437-(437)-
437-(437)-
Total increase / (decrease)(83)77783(750)
4.1.3 Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
RISKEXPOSURE ARISING FROMMONITORINGMANAGEMENT
Liquidity riskInterest bearing and
other liabilities
Forecast and actual
cash flows
Active working capital
management and flexibility in
funding arrangements
The Group has borrowing facilities of $116,772,823 / $110,000,000 AUD (2016: $116,525,424 / $110,000,000 AUD) and
operates well within this facility. This includes short term bank overdraft requirements, and at balance date no bank accounts
were in overdraft.

54KATHMANDU ANNUAL REPORT 2017
KEEPING IT SIMPLE
The table below analyses the Group’s financial liabilities and net-settled derivative financial
liabilities into relevant maturity groupings based on the remaining period at the balance date to the
contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash
flows, so will not always reconcile with the amounts disclosed on the balance sheet.
LESS THAN
1 YEAR
NZ$’000
BETWEEN
1 AND 2 YEARS
NZ$’000
BETWEEN
2 AND 5 YEARS
NZ$’000
OVER
5 YEARS
NZ$’000
Group 2017
Trade and other payables56,735---
Borrowings24210,653--
56,97710,653--
Group 2016
Trade and other payables51,084---
Borrowings1,22244,477--
52,30644,477--
The Group enters into forward exchange contracts to manage the risks associated with the purchase of foreign currency
denominated products.
The table below analyses the Group’s derivative financial instruments that will be settled on a gross basis into relevant maturity
groupings based on the remaining period at the balance date to the contractual maturity date. The amounts disclosed in the
table are the contractual undiscounted cash flows. They are expected to occur and affect the profit or loss at various dates
between balance date and the following five years.
LESS THAN
1 YEAR
NZ$’000
BETWEEN
1 AND 2 YEARS
NZ$’000
BETWEEN
2 AND 5 YEARS
NZ$’000
At 31 July 2017
Forward foreign exchange contracts
-Inflow123,172--
-Outflow(130,141)--
Net Inflow / (Outflow)(6,969)--
Net settled derivatives – interest rate swaps
Net Inflow / (Outflow)(248)(99)(24)
At 31 July 2016
Forward foreign exchange contracts
- Inflow114,330--
- Outflow(121,765)--
Net Inflow / (Outflow)(7,435)--
Net settled derivatives – interest rate swaps
Net Inflow / (Outflow)(215)(124)(44)

55KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
KEEPING IT SIMPLE
A derivative is a type of financial instrument typically used to manage risk. A derivative’s value
changes over time in response to underlying variables such as exchange rates or interest rates
and is entered into for a fixed period. A hedge is where a derivative is used to manage an
underlying exposure.
The Group is exposed to changes in interest rates on its borrowings and to changes in foreign
exchange rates on its foreign currency (largely USD) purchases. The Group uses derivatives to hedge
these underlying exposures.
Derivative financial instruments are initially included in the balance sheet at their fair value, either as
assets or liabilities, and are subsequently re-measured at fair value at each reporting date.
An interest rate swap is an instrument to exchange a fixed rate of interest for a floating rate, or vice
versa, or one type of floating rate for another.
4.2 Derivative financial instruments
Accounting policies
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-
measured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as
hedges of highly probable forecast transactions (cash flow hedges).
The Group documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as
well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its
assessment, both at hedge inception and on an on-going basis, of whether the derivatives that are used in hedging transactions
have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised
in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the statement of
comprehensive income. Amounts accumulated in equity are recycled in the statement of comprehensive income in the periods
when the hedged item will affect profit or loss. However, when the forecast transaction that is hedged results in the recognition
of a non-financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are
transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is
ultimately recognised in the statement of comprehensive income. When a forecast transaction is no longer expected to occur,
the cumulative gain or loss that was reported in equity is immediately transferred to the statement of comprehensive income.
Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement
of comprehensive income, except when deferred in other comprehensive income. Translation differences on monetary financial
assets and liabilities are reported as part of the fair value gain or loss.

56KATHMANDU ANNUAL REPORT 2017
Derivative financial instruments
2017
NZ$’000
2016
NZ$’000
Foreign exchange contracts
Current asset--
Current liability(6,969)(7,435)
Net foreign change contracts – cash flow hedge (asset / (liability))(6,969)(7,435)
Interest rate swaps
Non-current asset--
Current liability(65)(94)
Non-current liability(265)(604)
Net interest rate swaps – cash flow hedge (asset / (liability))(330)(698)
Total derivative financial instruments(7,299)(8,133)
The above table shows the Group’s financial derivative holdings at year end.
Interest rate swaps - cash flow hedge
Interest rate swaps are to exchange a floating rate of interest for a fixed rate of interest. The objective of the transaction is to
hedge the core floating rate borrowings of the business to minimise the impact of interest rate volatility within acceptable levels
of risk thereby limiting the volatility on the Group's financial results. The notional amount of interest rate swaps at balance date
was $37,723,992 (2016: $47,016,949). The fixed interest rates range between 2.13% and 3.52% (2016: 2.13% and 4.13%). Refer section
4.1.3 for timing of contractual cash flows relating to interest rate swaps.
Foreign exchange contracts - cash flow hedge
The objective of these contracts is to hedge highly probable anticipated foreign currency purchases against
currency fluctuations. These contracts are timed to mature when import purchases are scheduled for payment.
The notional amount of foreign exchange contracts amount to US$92,450,000, NZ$130,140,594 (2016: US$81,700,000,
NZ $121,765, 202).
No material hedge ineffectiveness for interest rate swaps or foreign exchange contracts exists as at balance date (2016: nil).
Refer to section 4.2.1 for a sensitivity analysis of foreign exchange risk associated with derivative financial instruments.
4.2.1 Foreign exchange risk
Foreign exchange risk is the risk that fluctuations in exchange rates will impact the Group’s financial performance. The Group
operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to
the AUD, USD and the GBP.
RISKEXPOSURE ARISING FROMMONITORINGMANAGEMENT
Foreign exchange riskForeign currency purchases – over
90% of purchases are in USD
Forecast purchases
Reviewing exchange rate movements
USD foreign exchange
derivatives
The Group is exposed to currency risk on any cash remitted between Australia and the United Kingdom and New Zealand. The
Group does not hedge for such remittances. Interest on borrowings is denominated in either New Zealand dollars or Australian
dollars, and is paid for out of surplus operating cashflows generated in New Zealand or Australia.

57KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
Summarised sensitivity analysis
The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to foreign exchange risk.
A sensitivity of -10% / +10% (2016: -10% / +10%) for foreign exchange risk has been selected. While it is unlikely that an equal
movement of the New Zealand dollar would be observed against all currencies, an overall sensitivity of -10% / +10% (2016: -10% /
+10%) is reasonable given the exchange rate volatility observed on a historic basis for the preceding five year period and market
expectation for potential future movements.
Amounts are shown net of income tax. All variables other than applicable exchange rates are held constant. The impact on
equity is presented exclusive of the impact on retained earnings.
-10%+10%
31 JULY 2017
CARRYING
AMOUNT
$’000
PROFIT
$’000
EQUITY
$’000
PROFIT
$’000
EQUITY
$’000
Derivative financial instruments (asset) / liability7,299-(13,549)-11,086
Financial assets
Cash3,537203-(166)-
Trade receivables and sundry debtors3,338(129)-105-
74-(61)-
Financial liabilities
Trade payables56,735(3,648)-2,985-
Borrowings10,431-(594)-486
(3,648)(594)2,985486
Total increase / (decrease)(3,574)(14,143)2,92411,572
-10%+10%
31 JULY 2016
CARRYING
AMOUNT
$’000
PROFIT
$’000
EQUITY
$’000
PROFIT
$’000
EQUITY
$’000
Derivative financial instruments (asset) / liability8,133-(12,704)-10,394
Financial assets
Cash6,891384-(315)-
Trade receivables and sundry debtors2,450(30)-25-
354-(290)-
Financial liabilities
Trade payables51,084(3,183)-2,605-
Borrowings43,691-(2,415)-1,976
(3,183)(2,415)2,6051,976
Total increase / (decrease)(2,829)(15,119)2,31512,370

58KATHMANDU ANNUAL REPORT 2017
4.3 Equity
KEEPING IT SIMPLE
This section explains material movements recorded in shareholders’ equity that are not explained
elsewhere in the financial statements. The movements in equity and the balance at 31 July 2017 are
presented in the statement of changes in equity.
Accounting policies
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as
a deduction, net of tax, from the proceeds.
Dividends
Dividends are recognised through equity on the earlier of their approval by the Company’s shareholders or their payment.
4.3.1 Contributed equity - ordinary shares
2017
NZ$’000
2016
NZ$’000
Ordinary shares fully paid ($)200,209200,191
Balance at beginning of year200,191200,191
Issue of shares under Executive and Senior Management Long Term Incentive Plan18-
Balance at end of year200,209200,191
Number of issued shares
2017
NZ$’000
2016
NZ$’000
Ordinary shares issued at beginning of the year201,484201,484
Shares issued under Executive and Senior Management Long Term Incentive Plan13-
Ordinary shares issued at end of the year201,497201,484
As at 31 July 2017 there were 201,497,120 ordinary issued shares in Kathmandu Holdings Limited and these are classified as equity.
12,537 (2016: nil) were issued under the “Executive and Senior Management Long Term Incentive Plan 24 November 2010” and no
shares (2016: nil) were issued under the “Executive Share Option Plan 16 October 2009” during the year.
All ordinary shares carry equal rights in respect of voting and the receipt of dividends. Ordinary shares do not have a par value.
Refer to section 5.4 for Employee share based remuneration plans.
4.3.2 Reserves and retained earnings
Cash flow hedging reserve
The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly in
other comprehensive income, as described in the accounting policy in section 4.2. The amounts are recognised in profit and loss
when the associated hedged transaction affects profit and loss.
Foreign currency translation reserve
The FCTR is used to record foreign currency translation differences arising on the translation of the Group entities results and
financial position. The amounts are accumulated in other comprehensive income and recognised in profit and loss when the
foreign operation is partially disposed of or sold.

59KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
Share based payments reserve
The share based payments reserve is used to recognise the fair value of share options and performance rights granted but not
exercised or lapsed. Amounts are transferred to share capital when vested options are exercised by the employee or performance
rights are granted.
Reserves
2017
NZ$’000
2016
NZ$’000
(i) Cash flow hedging reserve
Opening balance(5,531)10,360
Revaluation - gross8,142(4,470)
Deferred taxation on revaluation2.3(628)5,339
Transfer to hedged asset(7,171)(16,782)
Transfer to net profit - gross(134)22
Closing balance(5,322)(5,531)
(ii) Foreign currency translation reserve
Opening balance(19,702)(13,318)
Currency translation differences – Gross91(8,990)
Currency translation differences – Taxation2.31182,606
Closing balance(19,493)(19,702)
(iii) Share based payments reserve
Opening balance69224
Current year amortisation1,139692
Transfer to Share Capital on vesting of shares to Employees(18)-
Share Options / Performance Rights lapsed-(24)
Closing balance1,813692
Total Reserves(23,002)(24,541)
4.3.3 Dividends
2017
NZ$’000
2016
NZ$’000
Prior year final dividend paid16,11910,075
Current year interim dividend paid8,0606,044
Dividends paid ($0.12 per share (2016: $0.08))24,17916,119
4.3.4 Capital risk management
The Group’s capital includes contributed equity, reserves and retained earnings.
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the
cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt or draw down more debt.

60KATHMANDU ANNUAL REPORT 2017
SECTION 5

OTHER NOTES
5.1 Related parties
SUBSIDIARIESEQUITY HOLDING
20172016
Milford Group Holdings Limited100%100%
Kathmandu Limited100%100%
Kathmandu Pty Limited100%100%
Kathmandu (U.K.) Limited100%100%
All subsidiary entities have a balance date of 31 July. Kathmandu Pty Limited and Kathmandu (U.K.) Limited are incorporated in
Australia and the United Kingdom, respectively. All other subsidiary entities are incorporated in New Zealand.
The principal activities of the subsidiaries are:
COUNTRY OF REGISTRATIONPRINCIPAL ACTIVITY
Milford Group Holdings LimitedNew ZealandHolding company
Kathmandu LimitedNew ZealandOutdoor retailer
Kathmandu Pty LimitedAustraliaOutdoor retailer
Kathmandu (U.K.) LimitedUnited KingdomOutdoor retailer
5.1.1 Related party disclosures
Parent and Ultimate Controlling Party
Kathmandu Holdings Limited is the immediate parent,
ultimate parent and controlling party.
During the year, legal fees of $666,413 (2016: $223,681)
were paid to Chapman Tripp for services provided to the
Group (primarily related to takeover defence activity and
property leases). John Holland is a Director of Kathmandu
Holdings Limited, and during the period was a Consultant
of Chapman Tripp. John Holland ceased to be a consultant
on 30 November 2016. As at 31 July 2017, the Group owed
outstanding legal fees of $126,591 (2016: $2,652).
During the year, operating lease costs of $223,258 (2016:
$240,478) were paid to Chalmers Properties Limited, a
subsidiary of Port Otago Limited. John Harvey is a Director of
both of these companies.
During the year the Company advanced and repaid loans
to its subsidiaries by way of an internal current account. In
presenting the financial statements of the Group, the effect
of transactions and balances between fellow subsidiaries and
those with the parent have been eliminated. All transactions
with related parties were in the normal course of business and
provided on commercial terms.
Key Management Personnel
2017
NZ$’000
2016
NZ$’000
Salaries2,8823,549
Other short-term
employee benefits
9871,327
Employee performance rights675218
4,5445,094

61KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
Key management personnel include the following employees:
Executive Directors:
• Chief Executive Officer
Other Key Management Personnel:
• Chief Financial Officer
• General Manager, Product
• General Manager, Marketing, Online and International
• General Manager, Supply Chain
• General Manager, Human Resources
• Chief Information Officer
• General Manager, Retail Stores and Operations
Remuneration Detail – refer to section 5.3.
5.2 Fair values
The following methods and assumptions were used to
estimate the fair values for each class of financial instrument:
Trade debtors, trade creditors and bank balances
The carrying value of these items is equivalent to their
fair value.
Term liabilities
The fair value of the Group's term liabilities is estimated based
on current market rates available to the Group for debt of
similar maturity. The fair value of term liabilities equates to
their current carrying value.
Foreign exchange contracts and interest rate swaps
The fair value of these instruments is determined by using
valuation techniques (as they are not traded in an active
market). These valuation techniques maximise the use of
observable market data where it is available and rely as little
as possible on entity specific estimates.
Specific valuation techniques used to value financial
instruments include the fair value of interest rate swaps
calculated as the present value of the estimated future cash
flows based on observable yield curves and the fair value of
forward foreign exchange contracts determined using forward
exchange rates at the balance sheet date, with the resulting
value discounted back to present value.
These derivatives have all been determined to be within level
2 (for the purposes of NZ IFRS 13) of the fair value hierarchy
as all significant inputs required to ascertain the fair value of
these derivatives are observable.
Guarantees and overdraft facilities
The fair value of these instruments is estimated on the basis
that management do not expect settlement at face value to
arise. The carrying value and fair value of these instruments
are approximately nil. All guarantees are payable on demand.

62KATHMANDU ANNUAL REPORT 2017
5.3 Remuneration Detail
2017SHORT-TERM BENEFITS
P OST-
EMPLOYMENT
BENEFITSSHARE BASED PAYMENTS
NAME
CASH
SALARY
AND FEES
$
CASH
BONUS
$
NON-
MONETARY
BENEFITS
$
SUPER-
ANNUATION
$
PERFORMANCE
RIGHTS
1

$
EQUITY
RELATED
%
TOTAL
$
PERFORMANCE
RELATED
%
Non-Executive Directors
David Kirk236,428----0.0%236,4280.0%
John Harvey123,687----0.0%123,6870.0%
John Holland123,687----0.0%123,6870.0%
Sandra McPhee123,687----0.0%123,6870.0%
Christine Cross123,687----0.0%123,6870.0%
731,176----0.0%731,1760.0%
Executive Directors
Xavier Simonet 821,965446,891-21,170203,86613.6%1,493,89229.9%
821,965446,891-21,170203,86613.6%1,493,89229.9%
Other Key Management Personnel
Reuben Casey 366,651116,0333,12311,000121,99219.7%618,79918.8%
Other Management 1,589,914411,5209,03171,879349,28114.4%2,431,62516.9%
Total3,509,706974,44412,154104,049675,13912.8%5,275,49218.5%
1
No performance rights were vested and issued to key management personnel during 2017, this represents the accounting expense of amortising the value
of performance rights from grant date to vesting date (refer to note 5.4).
2016SHORT-TERM BENEFITS
P OST-
EMPLOYMENT
BENEFITSSHARE BASED PAYMENTS
NAME
CASH
SALARY
AND FEES
$
CASH
BONUS
$
NON-
MONETARY
BENEFITS
$
SUPER-
ANNUATION
$
PERFORMANCE
RIGHTS
1

$
EQUITY
RELATED
%
TOTAL
$
PERFORMANCE
RELATED
%
Non-Executive Directors
David Kirk241,553----0.0%241,5530.0%
John Harvey126,368----0.0%126,3680.0%
John Holland126,368----0.0%126,3680.0%
Sandra McPhee126,368----0.0%126,3680.0%
Christine Cross126,368----0.0%126,3680.0%
747,025----0.0%747,0250.0%
Executive Directors
Xavier Simonet
2
814,531556,745-20,70791,6796.2%1,483,66237.5%
Mark Todd
3
345,668-1,86710,370-0.0%357,9050.0%
1,160,199556,7451,86731,07791,6795.0%1,841,56730.2%
Other Key Management Personnel
Reuben Casey 355,00099,4002,91110,65032,8166.6%500,77719.8%
Other Management 1,914,591658,4968,42178,06393,8253.4%2,753,39623.9%
Total4,176,8151,314,64113,199119,790 218,3203.7%5,842,76522.5%
1
No performance rights were vested and issued to key management personnel during 2017, this represents the accounting expense of amortising the
value of performance rights from grant date to vesting date (refer to note 5.4).
2
Cash bonus includes payments related to sign on bonus and short term
incentives;
3
Resigned as Executive Director on 24 August 2015.

63KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
5.4 Employee Share Based Remuneration
Accounting policy
(ii) Equity settled long term incentive plan
The Executive and Senior Management Long Term Incentive plan grants Group employees performance rights subject to
performance hurdles being met. The fair value of rights granted is recognised as an employee expense in the Statement of
comprehensive income with a corresponding increase in the employee share based payments reserve. The fair value is measured
at grant date and amortised over the vesting periods. The fair value of the rights granted is measured using the Kathmandu
Holdings Limited share price as at the grant date less the present value of the dividends forecast to be paid prior to the each
vesting date. When performance rights vest, the amount in the share based payments reserve relating to those rights are
transferred to share capital. When any vested performance rights lapse upon employee termination, the amount in the share
based payments reserve relating to those rights is transferred to retained earnings.
Executive and Senior Management Long Term Incentive Plan
On 20 November 2013, shareholders approved at the Annual General Meeting the continuation of an Employee Long Term
Incentive Plan (LTI) (previously established 24 November 2010) to grant performance rights to Executive Directors, Key
Management Personnel and other Senior Management. Performance rights will vest subject to the satisfaction of
performance conditions which will be different for Executive Directors as compared with the Key Management Personnel
and Senior Management.
Executive Directors
Performance rights granted to Executive Directors are summarised below:
GRANT DATEBALANCE AT
START OF YEAR
NUMBER
GRANTED DURING
THE YEAR
NUMBER
VESTED DURING
THE YEAR
NUMBER
LAPSED DURING
THE YEAR
NUMBER
BALANCE AT THE
END OF YEAR
NUMBER
19 Dec 2016-293,078--293,078
16 Dec 2015407,463---407,463
407,463293,078--700,541
The performance rights granted on 19 December 2015 are Long Term Incentive components only.
Long Term Incentive performance rights vest in equal tranches. In each tranche the rights are subject to a combination of a
relative Total Shareholder Return (TSR) hurdle and/or an EPS growth hurdle. The relative weighting and number of tranches for
each grant date are shown in the table below:
GRANT DATETRANCHESEPS WEIGHTINGTSR WEIGHTING
19 Dec 2016150%50%
16 Dec 2015150%50%

64KATHMANDU ANNUAL REPORT 2017
The proportion of rights subject to the relative TSR hurdle
is dependent on Kathmandu Holdings Limited’s TSR
performance relative to a defined comparable group of
companies in New Zealand and Australia listed on either
the ASX or NZX. The percentage of TSR related rights vest
according to the following performance criteria:
KATHMANDU HOLDINGS LIMITED
RELATIVE TSR RANKING
% VESTING
Below the 50th percentile0%
50th percentile50%
51st – 74th percentile50% + 2% for each
percentile above
the 50th
75th percentile or above100%
The TSR performance is calculated for the following
performance periods:
TRANCHE20172016
Tranche 136 months to 1
December 2019
36 months to 1
December 2018
The fair value of the TSR rights have been valued under a
Monte Carlo simulation approach predicting Kathmandu
Holdings Limited’s TSR relative to the comparable group of
companies at the respective vesting dates for each tranche.
The fair value of TSR rights, along with the assumptions used
to simulate the future share prices using a random-walk
process are shown below:
20172016
Fair value of TSR rights$167,054$189,470
Current price at grant date$1.96$1.44
Risk free interest rate2.40%2.76%
Expected life (years)33
Expected share volatility44.3%45.7%
The estimated fair value for each tranche of rights issued is
amortised over the vesting period from the grant date.
The proportion of rights subject to the EPS growth hurdle
is dependent on the compound average annual growth in
Kathmandu Holdings Limited’s EPS relative to the year ending
31 July 2016. The applicable performance periods are:
TRANCHE2017
PERFORMANCE
PERIOD
2016
PERFORMANCE
PERIOD
Tranche 1FY19 EPS relative
to FY16 EPS
FY18 EPS relative
to FY15 EPS
The percentage of the 2017 EPS growth related rights scales
according to the compound average annual EPS growth
achieved as follows:
EPS
GROWTH
2017 %
RIGHTS
VESTING
EPS
GROWTH
2016 %
RIGHTS
VESTING
< 10%0%< 17.5%0%
>=10%, < 11%50%>=17.5%, < 18.5%50%
>=11%, < 12%60%>=18.5%, < 19.5%60%
>=12%, < 13%70%>=19.5%, < 20.5%70%
>=13%, < 14%80%>=20.5%, < 21.5%80%
>=14%, < 15%90%>=21.5%, < 22.5%90%
>=15%100%>=22.5%100%
The fair value of the EPS rights have been assessed as the
Kathmandu Holdings Limited share price as at the grant date
less the present value of the dividends forecast to be paid
prior to each vesting date. The estimated fair value for each
tranche of options issued is amortised over the vesting period
from the grant date.

65KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
Key Management Personnel and Senior Management
Performance rights granted to Key Management Personnel and Senior Management, all Short Term Incentives under the
shareholder approved Employee Long Term Incentive Plan are summarised below:
1
Remaining performance rights on vesting date 31 July 2017, which were subsequently issued on 22 August 2017.
Short Term Incentive performance rights vest:
• upon the Company achieving non-market performance hurdles; and
• the employee remaining in employment with the Company until the vesting date.
The performance period and vesting dates are summarised below:
20172016
Grant Date7 Dec 2016 18 Dec 2015
Performance period (year ending)31 Jul 201731 Jul 2016
Vesting Date – Key Management Personnel and Senior Management31 Jul 201831 Jul 2017
The fair value of the rights were assessed as the Kathmandu Holdings Limited share price as at the grant date less the present
value of the dividends forecast to be paid prior to the vesting date. The fair value of each right has been calculated to be NZ$1.71
per right (2016: NZ$1.45)
The non-market performance hurdles set for the year ending 31 July 2017 were met and accordingly an expense has been
recognised in the Statement of Comprehensive Income.
Expenses arising from equity settled share based payments transactions
2017
NZ$’000
2016
NZ$’000
Executive Directors20492
Key Management Personnel and Senior Management935600
1,139692
5.5 Contingent liabilities
KEEPING IT SIMPLE
A contingent liability is a liability that is not sufficiently certain to qualify for recognition as a
provision where uncertainty may exist regarding the outcome of future events.
2017
NZ$’000
2016
NZ$’000
Liabilities outstanding under letters of credit-159
GRANT DATE
BALANCE AT
START OF YEAR
NUMBER
GRANTED DURING
THE YEAR
NUMBER
VESTED DURING
THE YEAR
NUMBER
LAPSED DURING
THE YEAR
NUMBER
BALANCE AT THE
END OF YEAR
NUMBER
07 Dec 2016-648,954-(138,632)510,322
18 Dec 2015703,183-(12,537)(20,977) 669,669
1

66KATHMANDU ANNUAL REPORT 2017
5.6 Contingent assets
There are no contingent assets in 2017 (2016: nil).
5.7 Events occurring after
the balance date
There are no events after balance date which materially
affect the information within the financial statements.
5.8 Supplementary Information
Directors fees
2017
NZ$’000
2016
NZ$’000
Directors' fees731747
Directors fees for the Parent company were paid to
the following:
• David Kirk (Chairman)
• Sandra McPhee
• John Harvey
• John Holland
• Christine Cross
2017
NZ$’000
2016
NZ$’000
Audit services - PricewaterhouseCoopers
Statutory audit133130
Half year review3230
Other assurance services*1937
Total remuneration for audit services184197
* Other assurance services relate the preparation of revenue certificates
and a treasury review in the previous year.
Audit fees
During the year the following fees were paid or payable for
services provided by the auditor of the parent entity, its
related practices and other network audit firms:

67KATHMANDU ANNUAL REPORT 2017FINANCIAL STATEMENTS
5.9 New Accounting Standards
New standards first applied in the year
There are no standards or amendments adopted by the Group since 1 August 2017 that have a significant impact on the Group.
Standards, interpretations and amendments to published standards that are not yet effective
NEW ACCOUNTING
STANDARD
EFFECTIVE DATE
APPLICABLE TO THE
GROUP
SUMMARY OF
CHANGES
GROUP
IMPACT
NZ IFRS 9
Financial
Instruments
1 August 2018Addresses the classification,
measurement and de-recognition
of financial assets and financial
liabilities and new rules for
hedge accounting.
It is not expected that the adoption of
NZ IFRS 9 will have a significant impact
on the Group’s financial statements.
In the coming year we will do a full
assessment to quantify any impact.
NZ IFRS 15
Revenue from
Contracts with
Customers
1 August 2018Establishes the reporting principles
relating to the nature, amount,
timing and uncertainty of revenue
and cash flows arising from a
contract with a customer.
It is not expected that the adoption of
NZ IFRS 15 will have a significant impact
on the Group’s financial statements.
In the coming year we will do a full
assessment to quantify any impact.
NZ IFRS 16
Leases
1 August 2019Introduces a single lessee accounting
model requiring a lessee to recognise
assets and liabilities for all leases
with a term of more than 12 months
where they are not considered low
value. A right-of-use asset will be
recognised representing the right
to use the underlying leased asset
and a lease liability representing
the obligations to make lease
payments. As a consequence, a
lessee recognises depreciation of the
right-of-use asset and interest on the
lease liability.
This standard will materially impact
the Group’s financial statements at
transition and in future years, as the
group’s operating leases (primarily in
relation to store, distribution centre
and office leases) are recognised
on balance sheet. Rental expense
currently recognised in the statement
of comprehensive income will be
replaced with depreciation and interest.
Initial assessment activities have been
undertaken on the Group’s current
leases, however the impact of the
standard will depend on the leases in
place on transition. Detailed review of
lease contracts will continue over the
next year to determine the full impact
on adoption of NZ IFRS 16.