Welcome to Adairs twenty twenty Virtual AGM. Good morning, ladies and gentlemen. My name is Michael Butler and I'm Chairman of the Board of Directors of Adairs Limited. In response to government restrictions and the potential health risks arising from the COVID-nineteen pandemic, the Board determined to hold this year's Annual General Meeting virtually. Although we are not able to meet in person this year, I am pleased that we can come together virtually to update you on your company, conduct formal business, listen to any comments you may have and answer your questions.
It is now 11AM, the appointed time for holding ADEARS twenty twenty Annual General Meeting. I am advised that the quorum is present and I therefore have pleasure in declaring this meeting open. Thank you for attending. Details about how shareholders can participate have been sent out in the notice of meeting and online virtual AGM guide which has been published on our Investor Relations website. Both documents are also available to view and download at the bottom of your screen.
I will go through the technical and procedural matters for the AGM shortly. Please, before proceeding with the formal business of the meeting, I would like to advise that I'm joined today by all of my fellow directors and also all of the senior leadership team, including Ashley Gardner, our Chief Finance Officer. They, like you, are participating virtually. From the board, we have in attendance Mark Ronan, an Executive Director, Managing Director and CEO Michael Cherubino, Executive Director, Property and Business Development Trent Peterson, Non Executive Director and Chair of our Remuneration Committee Kate Spargo, Non Executive Director and Chair of our Risk Committee Adam McClain, Non Executive Director, Gerard Grant, Non Executive Director, and Faye Hatsis, our Company Secretary. We also have Joanne Lonigan, our engagement partner with the company's auditor, Ernst and Young.
Joanne will be available to answer questions on the accounts at the appropriate time. We also welcome the team from the company's share registry, Link Market Services Limited. The agenda for today's meeting is that following my introductory remarks and review of the company's financial performance during FY20, Mark Ronan, the Managing Director and CEO, will present his report will include an update on year to date trading for FY21 as well as a presentation on the drivers of our future growth. We'll then proceed to the formal business of the meeting to receive and consider the financial report of the company and then vote on the resolutions. I'll now talk through the procedural matters for this meeting.
We're only taking questions from shareholders today or their representatives. The Ask a Question button is located at the top of your screen. You can submit questions at any time. You do not need to wait until the relevant item of business. We encourage you to submit your questions as soon as possible.
We'll then seek to address your questions during the discussion on the appropriate item of business. We'll endeavour to answer as many questions and shelves as we can. Questions sent via the online meeting platform will be moderated to avoid repetition, and if questions are particularly lengthy we may need to summarise them in the interest of time. I ask that all questions be directed to me as Chairman. Voting today will be conducted by way of a poll on all items of business.
In order to provide you with enough time to vote, polling on all items is open now. To vote, you simply click on the Get a Voting Card button at the top of your screen. This will bring up the list of resolutions and present you with voting options. Voting for all resolutions will remain open until five minutes after the meeting to provide eligible shareholders with sufficient time to cast their vote. The final outcome of each resolution will be released to the ASX and posted on our website later today once voting has closed and numbers tallied.
Any appointed proxy who has been given discretion on how to vote should vote in the same manner. Any appointed proxy that has been directed to vote in a certain manner and has no discretionary votes to cast does not need to vote as those votes will automatically be counted in accordance with those directions. If you experience any difficulties with the online platform, the helpline number is displayed at the top of your screen. As I wrote in the annual report, FY20 was something of a watershed year for Adairs. The strength and resilience of our business at an operational and financial level was tested and proven through one of the most challenging retailing periods on record.
I'd now like to remind shareholders of the timeline of events over the second half of FY20. Context in which the decisions were made and the impact COVID-nineteen had on our business are important in reviewing FY20 results. On twenty one February twenty twenty we released our first half FY20 results. These showed a commendable performance, total sales up 8.6% to 178,900,000 and like for like sales up 6.9% compared to the prior corresponding period. Notably online sales were up 31.6% and comprised 18% of total group sales.
The acquisition of MoCA had been completed, giving the company access to a profitable pure play online retailer in a logical adjacency. We also reported that the new DC strategy had been confirmed with a decision to use DHL as the operator and an expectation that it would commence operation in July 2021. We declared an intention to pay a 7¢ per share fully franked interim dividend. Internally, we felt the business was performing well and we were confident about the future. Almost all of our internal key performance indicators were being satisfied or exceeded.
We issued guidance that FY20 sales would be in the range of $385 to $400,000,000 and EBIT in the range of $48 to $52,000,000 excluding MoCA transaction costs and AASB 16 adjustments. On the March 19 we released a statement to the ASX updating on the rapidly emerging impact of COVID-nineteen on consumer sentiment and business outlook. We withdrew our FY20 sales and earnings guidance, cancelled the previously announced interim dividend and advised we were taking action to maintain a strong liquidity position to enable the company to endure the expected adverse impact of COVID-nineteen. All stores and online channels continued to trade. The world had changed for the worst and the outlook was most uncertain.
On the 03/27/2020, we announced to the ASX that all Australian stores would close from the 03/29/2020 and that all New Zealand stores in Mokka New Zealand had been required to close on the 03/24/2020. These actions were driven by health and safety concerns for both our team and customers and coincided with the Australian and New Zealand government's request for everyone to stay at home other than for essential needs. All store staff and the majority of our head office customer support team stood down. The online channels of Adairs and Mokka Australia continued to trade. Directors and all team members that were necessary to sustain the continuing operations volunteered to take significant remuneration and hours of employment reduction.
The focus was on preservation of cash and liquidity and operation of our online channel. Rent relief was sought from landlords and many inventory orders were either deferred or cancelled. On thirty March twenty twenty, the Australian Government announced the JobKeeper program and we were able to satisfy the program's eligibility conditions which provided wage support for the majority of our stood down team. Under the conditions of a JobKeeper programme, we received these payments through the September 2020. This was a welcome initiative and together with the New Zealand wage subsidy payment, ADEAS received $11,300,000 of government support in the period to thirty June twenty twenty.
On 04/2020 we released a trading update to the ASX and our plan for a staged reopening of stores. Frankly, online sales had exploded during the five week store closure period from twenty nine March through to 03/2020. Adair's online sales were up 220% over the prior corresponding period and MoCA Australia was up 151%. Notably around 30% of this online growth was from customers that were not Learn Lovers loyalty program members or had not previously shopped online at Adares. As importantly, gross margins were also strong.
We announced the staged reopening of stores from the May 7, commencing with our larger format homemaker stores. New in store safety protocols were also implemented which included hand sanitizers, customer number limits, contactless payments and social distancing measures. On nineteen June twenty twenty we released a further trading update for the period to fourteen June twenty twenty and issued group sales guidance for FY20. This confirmed the strong growth of both Adairs and MoCA's online channels, particularly in the second half of FY20, and established a group sales guidance for FY20 of $385,000,000 to £390,000,000 a remarkable achievement. Despite the closure of all Australia and New Zealand stores for between five and eight weeks, the team now expected group sales for the full year to be back within the guidance range issued pre COVID-nineteen in February 2020.
Online was the saviour, but the dedication and resilience of the store team to stand down and then reopen and perform strongly was wonderful. On the 08/10/2020 we released to the ASX our unaudited FY20 results. Headlines were group sales of 3 and 88,900,000.0, group online sales of 124,200,000.0 being now 31.9% of group sales, and underlying group EBIT pre market transaction costs and AASB 16 adjustments of $60,700,000 an outstanding result that comprehensively exceed the pre COVID-nineteen guidance of 48,000,000 to $52,000,000 issued in February 2020. Net debt on twenty eight June twenty twenty was only $1,000,000 notwithstanding incremental borrowings of $48,000,000 to fund the MoCA acquisition in December 2019. MoCA's performance is well ahead of our expectations, with sales and EBIT growth accelerating.
It should come as no surprise when you read the remuneration report contained in our 2020 annual report that the team received significant short term incentives for the period. In striking the level of these payouts, any benefit received by the company from JobKeeper or New Zealand wage subsidy at the acquisition of Wacker was excluded from the performance consideration. A final dividend of 11¢ per share fully franked was declared and paid. On the August 4, the Victorian Government made orders requiring closure of 43 stores in the Greater Melbourne area. They remain closed.
However, we anticipate them reopening on the November 2 and have been trialling a very successful call and collect offer from these stores which Mark will talk to. We've been fortunate. While COVID-nineteen has caused significant damage to many industries, some of which may take years to fully recover, it is clear that many people continue to shop online and the home category is front of mind in their shopping. As a leader in this category, one of the best online platforms of any retailer, we benefited significantly from this trend. We expect these benefits will be long lasting as many of our stores store only customers introduced to our online platform for the first time.
And of course we also saw significant numbers of new customers shop with us for the first time. In effect, COVID-nineteen has accelerated growth in two key areas of our business, but already a strategic focus for us: growth in online penetration and the acquisition of new customers. Mark will talk about the significance of both in his address. In light of the lower dividend payout ratio in FY20, a number of our shareholders have asked if our dividend policy has changed. I can confirm that our dividend policy is to pay out 65% to 80% of our net profit after tax each year has not changed.
I can also reassure you that recent changes in accounting standards have very little impact on our reported NPAT, so will not impact the levels of dividends going forward. In December, we announced the acquisition of MoCA, a highly efficient, vertically integrated, profitable, pure play online retailer of home and living products operating in Australia and New Zealand. MoCA has performed well since acquisition and during COVID-nineteen with FY20 sales and EBIT finishing above our expectation, despite low inventory levels during Q4. Mark will provide a further update on FY21 trading shortly. We also announced the appointment of DHL as our 3PL partner to operate a new purpose built national distribution centre in Melbourne.
The NDC is currently being built and we continue to plan to have it fully operational by about July 2021. We expect this project to deliver $3,500,000 in cost savings annually in FY22. Finally, as has already been communicated to shareholders, this will be my last AGM as a director, and I have decided to retire from the board after having served five years as its non executive chairman. I'm very proud of what we have achieved in that time, and while it's difficult to pick any single highlight by term, I'm particularly proud of the success we've been able to achieve in developing our online channel from a promising but fledgling business that delivered approximately $12,000,000 of sales in FY15 to one that produced sales of over $120,000,000 in FY20 across Abir's and MoCA. Without wanting to take anything away from our stores, which remain a critical and highly profitable element of our omnichannel strategy, it was our online business which allowed us to not just survive but flourish in FY20, a year in which COVID-nineteen saw our entire store network closed for between five and eight weeks in the second half.
The world is full of online retail, but many of them find achieving a strong earnings margin to be a challenge, and therein lies our real strength. Being vertically integrated means we have an exclusive product offering and full control over our supply chain and pricing. It also allows us to be agile and responsive to market changes. These characteristics are not widely shared amongst our competitors. The direct contribution from our online channel, which is after deducting all direct operating costs such as platform licences and content creation, bank fees, distribution costs, warehouse pick and pack, customer service wages and online marketing other than in store marketing has grown from $2,000,000 in FY15 to more than $42,000,000 in FY20 including marketing, and has continued to power on in FY21.
The slides you can see show the quarter by quarter growth on a last twelve months basis in online sales, online channel contribution, online channel margin and online sales as a percentage of total group sale. This data is unaudited but prepared from the Adairs management account. I've presented it on a quarterly basis as it shows the relentless rise of the acceptance of Adairs omni channel strategy. It is not the company's intention to provide such quarterly data on a regular basis. The magnitude of this achievement by the ADEAS team is laudable.
In the twelve months of thirty September twenty twenty, group online sales have grown by 252% and the online channel contribution for the same period has grown by 342%. Group online sales for the twelve months thirty September twenty twenty were 36.7 percent of total group sales compared to 17.5% for the twelve months ended thirty September twenty nineteen. As Mark will explain, we have a very large addressable market opportunity in home and home furnishings. There remains considerable scope for both Adeers and MoCA to continue to grow their share of this market, as we've done successfully and consistently over recent years. I remain this has the right strategy, team, product offering to continue to deliver growing returns for the benefit of all shareholders for many years to come.
In addition to my colleagues on the board, I'd like you, our shareholders, for the support you've provided to me. I'll now hand over to Mark Roden, Managing Director and CEO, to present his report. Thank you very much.
Thank you, Michael. Second half of twenty twenty, remembered as the most challenging period of COVID-nineteen impacted every sector of the economy and forcing businesses to adapt to an ever changing and evolving environment. Results of Deep Ideas and MoCA throughout through this period highlight the resilience of our business model, the hard work of our teams and the strength of our brands. Group sales finished 12.9% higher to a record $389,000,000 despite COVID-nineteen forcing the closure of the workforce in late June, with reopenings occurring progressively through May. While the store closures resulted in total store sales finishing down for the year, like for like store sales after adjusting for the closure period were up 24%.
The decline in store sales was more than offset by 110% increase in group online sales, highlighting our ongoing omni channel strategy enabled us to adapt to the changing circumstances. The improved sales result was accompanied by an improved final gross margin rate for a division that finished at 61.4% versus 59.1% in the year prior. This was as a result of the continuation of the sourcing work undertaken by the team in the first half, the deliberate decision to reduce the length and depth of Adair's promotions and supported by the strong customer sentiment towards their homes. Cost ratios were affected by the store closure period, significant store cost reductions in April and May offset partially by higher online variable costs and increased investment in digital. This culminated in the group delivering a record underlying EBIT of $60,700,000 and an NPAT of $35,300,000 which equates to earnings of $0.21 per share, 17.3% higher than FY 2019.
Our balance sheet finished in good shape as our strong cash flow meant that despite borrowing $48,000,000 to acquire Mokka in December, we closed the year with net debt of approximately $1,000,000 and comfortably complied with all of our banking covenants. I wanted to take a moment today to acknowledge and thank our suppliers, landlords and business partners who work closely with us to share the impact of COVID-nineteen. I would also like to acknowledge the Australian and New Zealand governments whose employment support packages enabled us to maintain the connection with and continue to pay our team members whilst they were stood down. With the 2020 financial year behind us, we find ourselves operating in a continually changing environment. However, 2020 highlighted the strength of our brands and the opportunity available for Adairs as we continue to focus on executing our underlying strategies.
The addressable market in Australia is large, and we are a very small player in that market today. As customer preferences change and evolve, our omnichannel business model provides us with the ability to address the entire market, and we have significant opportunities for growth across both channels. Whilst online continues to see new entrants each year, generally focusing on a specific niche or price point, we believe there will continue to be consolidation in the physical retail space. Our strategies are focused on enhancing our omnichannel model, bringing our stores and digital channels closer together, and combining this with our product category expansion to enable us to win new customers and increase share of spend from our existing customer. We have successfully achieved this over the past five years and have developed a platform that with additional investment will allow us to continue to grow into the future.
As we consider our future, we have highlighted five key drivers of our future growth: our proven and resilient business model, our profitable store formats, our digital transformation, the acquisition of Mocha, and our omnichannel supply chain strategy. If I start with first our business model, the strong brands we own, our vertical supply chain philosophy, and our direct to consumer store and digital channels allow us to develop and control the expansion of our product offering and customer base. This enables us to be more responsive to changing customer needs through the delivery of exclusive on trend products at higher margins. Further, our strong brands, combined with our large and loyal customer base enables a lower cost of customer acquisition and provides significant opportunity to enhance and build upon our relationships with our customers to deliver further incremental returns. Whilst omnichannel is important, it is the combination of omnichannel retail with loyalty that truly delivers growth and separates us from other retailers.
Adairs is focused on continuing to grow its market share, and the best way to do this is to both grow our customer base and increase our share of spend from our existing customers. Linen Lovers is the program through which we provide value to our members allowing us to achieve this. The Linen Lover program today accounts for more 75% of Adair's sales with members spending 1.5 times more per visit than non members. It is important to note that members pay for their membership, which implies an ongoing commitment to shop with Adairs again and highlights the benefit our customers see in the program. Further, the Linen Lover program allows Adairs the opportunity to enhance our knowledge of the customer and build a more personalized relationship.
This was a key asset in bringing customers back into stores through May as we could individually advise customers when their preferred store was going to reopen. As digital marketing and communication becomes the primary way in which we communicate with our customers, store closure period also provided us with the opportunity to introduce a lot of our store only customers to our website and shopping online with Adairs for the first time. Growing our omnichannel shoppers is a focus for the business as they historically shop more often and spend more with each purchase than those that only engage via one channel. Our proven and resilient business model is supported by our store network. We firmly believe that the home category is better with stores.
They provide our customers with the ability to engage with the product and the team in an environment that allows them to be inspired to create a look that is right for them. Whilst online should provide you with the ability to easily find what you want, it is harder to recreate the experience of discovery that exists as you walk through a physical store. Interacting with the product, our in store team enhance this experience through their product knowledge and ability to help customers achieve their vision, providing the opportunity for improved customer conversion, cross selling, and building loyalty to the brand. All of our stores are profitable, and our store formats deliver strong contribution margins. Whilst customer preferences and habits are changing, we have deliberately created a flexible store portfolio with 72% of store leases expiring within three years, with longer leases attributable to our larger homemaker more profitable stores.
This allows us to strategically manage our store portfolio through opening new stores, upsizing existing stores, obtaining more favorable terms on renewals, or closing stores that simply do not meet our return hurdles. We continue to focus on creating a portfolio of larger stores that allows us to showcase more products and categories, improve the customer experience, and drive increased store contribution. Our stores are well supported by our online channel. This was highlighted throughout our COVID nineteen experience and has seen us accelerate our digital transformation to further develop our digital capabilities to build a complete omnichannel model. This will see us invest in enhancing our digital platform and team deliver an improved customer experience, driving customer acquisition and increased customer conversion.
We are actively exploring and trialing a number of new technologies across our business, including in store devices to showcase range, customer traffic measurement and analytics, both in store and online, call and collect and call and same day delivery services, online chat, management systems, which provide a single view of inventory across the business, and augmented reality. Recently we've been trialing both a call and collect and a call and same day delivery service from a range of stores across Victoria, New South Wales and Queensland. We have seen a rapid adoption of these services and in the case of Greater Melbourne it allowed us to recover a good portion of our store sales. We know that technology plays a critical role in omnichannel retailing. We will continue to test and trial different technologies to ensure that any significant investment will deliver an enhanced customer experience.
As we have often explained, omnichannel customers are more valuable than customers who only shop one channel, and so investing in this rapidly evolving digital channel to support our omnichannel model is critical to our business. The addition of MoCA to the group increases our exposure to the fast growing online segment of the market with the significant benefits of vertical integration. Based on MoCA achieving the same penetration in Australia as it has in New Zealand, there is the potential for significant growth as typically an Australian business is five to six times the size of a New Zealand business simply based on population size. Mokka provides the group with greater exposure to the furniture segment and provides the opportunity to reach a different customer through design led value for money differentiated furniture. Mokka's passion for designing for design centric in house product development allows us to control the vertical supply chain and importantly, the pricing and promotion of our products in market, which delivers stronger gross margins and earnings.
Excitingly, Mokka has been able to take advantage of the opportunity presented by COVID nineteen to accelerate its brand recognition and growth rate in Australia. We will invest in product category expansion, customer acquisition and have moved to fast track infrastructure investment including warehousing facilities to support this accelerating growth. And finally, the strategic review of our supply chain completed in FY twenty twenty saw us appoint DHL as our 3PL partner to build and operate a new purpose built national distribution center for ADES. Partnering with DHL provides us access to a global leader in the design, implementation and operation of flexible warehousing and distribution solutions to support our omni channel approach. With the National Distribution Centre on track, we will continue to invest in our omni channel supply chain strategy through a number of initiatives that will enhance our inventory productivity and customer experience.
If I now move to our trading update for the first seventeen weeks of FY 2021, it remains a good news story. As we announced at the ASX this morning, Adairs online is up 134%, while store sales are up 17% on a like for like basis after adjusting for the Melbourne store closures. Mocha has also continued to grow strongly, being up 48% over the same period last year. Online sales now represent 41% of total sales, with Adairs online at 32 and Mokka at 9%. This compares to 17% for the same period last year, noting that we did not own Mokka at that time.
Our gross margin percentage has remained elevated over this period, and as we did last year, our focus remains on maximizing gross margin dollars. Inventory levels were well below ideal levels throughout this period due to the actions taken to manage the inventory and liquidity position in second half FY twenty twenty and the stronger than anticipated sales results in stores reopened in May 2020. Pleasingly, these are now returning to levels more in line with last year and will be in a good position support the key Christmas trading period. Our costs continue to be well controlled. The government wage subsidies concluded at the September, with ADEARS putting in place a program to continue to support team members stood down due to government mandated store closures.
Due to the closure of two smaller stores during the first quarter, we anticipate opening net two to four new stores and upsizing a further five to seven stores throughout FY 2021. This will be supported by ongoing investment in our digital capabilities. With the ongoing uncertainty created by COVID-nineteen, two thirds of the year remaining including several key sale periods, the Board are not able to provide FY 2021 guidance and investors are cautioned against projecting this growth in sales and margin across the balance of the year. To finish, I would like to offer thanks to a number of people. I'd like to start by thanking the Adairs and MoCA teams for their hard work and dedication across the year.
Our team are passionate about our business, and this has never been more evident than in FY '20. During the period stores were closed and websites unable to trade, the majority of our team were asked to stand down for the smaller group tasked with managing the online business. They did this with unwavering professionalism and understanding, ensuring that we successfully navigated the closure period and emerged well placed to manage and capitalize on the new and evolving retail environment. Shareholders should be confident and pleased that in Adairs and Mokka, they have teams who are committed to their customers and delivering ongoing profitable growth. Finally, would like to thank Michael Butler for his wonderful service to Adairs as our chairman over the last five years.
Since joining the board as its first independent nonexecutive chairman in 2015, Michael has overseen the company's listing on the ASX, a successful CEO transition, the acquisition of MoCA, and most recently the navigation of the business through the many challenges posed by the COVID-nineteen pandemic. I know I speak for everyone in saying we will miss his counsel and company. The search for a new chair is well advanced, and the Board is hopeful of being able to make an announcement in the near future. In the meantime, Trent Peterson has kindly agreed to act as Interim Chair for the intervening period, so we remain in good hands. That concludes my report.
If you could kindly hold any questions you have for now as there will be an opportunity to ask questions a little later on. I will now hand back to Michael for the formal part of the meeting.
Thank you, Mark. The notice of meeting was made available online to all shareholders in accordance with the company's constitution and I'll take the notice as read. In accordance with the requirements of the Corporation Act, the Register of Relevant Shareholders is available for inspection. Shareholders are asked to contact the share registry following the meeting if they wish to make an appointment to inspect the register. Ms Julie Stokes of Link Market Services Limited, our share registrar, will act as the returning officer.
We will now move to the first item of business. The financial statements and reports for the year ended twenty eight June twenty twenty, as required by the Corporations Act, have been circulated to shareholders as part of the 2020 Annual Report and are tabled here for discussion. I now open the meeting for any discussion on matters of particular relevance to the annual financial report for the company or the company's auditor, questions for Mark Ronan in regard to his presentation or any other questions you may have for the management team. Please note that we'll specifically focus on the remuneration report later in the meeting. Jamie, do we have any questions in relation to item one?
Mr. Chairman, at this time we have eight questions in relation to item one. The first three come from Mr Peter Cooper, who asks, first question being, can the Chairman please outline the progress of developing the new DC in Melbourne and whether it is on time and on budget?
Thank you. I think in my presentation I showed you a reasonably contemporary photo of the progress of construction of the NDC, you can see the scale of the facility and the fact that it's well out of the ground and it's currently having its roof installed. My understanding is there are some minor shortages of labour on the site due to the restrictions imposed by COVID-nineteen, but that generally we are operating, we're running the construction program within the contingencies that are allowed and we remain quite hopeful that we will open in July 2021. I think that we'd broadly say that it's on time and on budget. Are there any other questions, Jamie?
Thank you, Mr Chairman. Peter's second question is, Can the Chairman outline any developments planned or currently entrained in relation to overseas expansion?
I think the answer there, Peter, is that we have no present intentions to expand overseas, but we remain alert to any opportunities, and we would react to them if they presented.
Thank you, Mr. Chairman. Peter's third question is directed to the CEO, who we ask, Could he please advise what working capital benefit will result from the new DC in terms of higher stock terms, etcetera? He has a second part to his question, which is actually a statement, To the retiring Chairman, thank you for your service. As an investor, we're in good hands.
We hope you enjoy good health and a great retirement. And that's the end of your statement.
Thank you, Peter. I'll get Mark to, address the inventory issue.
I think in relation to the, question in relation to inventory and the benefits that flow from the new DHL facility, they will be realized over a period of time. So initially, we don't expect to see significant benefits in stock turn, over the short term. As we think about how that progresses though, we expect we will be able to improve customer experience in both stores and online. And with that, that should naturally flow back to an improved stock term position for the business. But I will note that the current inventory turns are pretty good and we, don't expect to see significant working capital benefits come out of that in relation to inventory.
The bigger benefit will be the customer experience that comes from the new DC, as I said, to both our stores and the online channel.
Thank you. The next question comes from John Whittington from the ASA. He also has a question for the CEO. He writes, COVID's been a great example of a black swan event and provides an opportunity for all companies to learn about how they manage unexpected events. What would you say has personally been the biggest lesson you've learnt regarding risk management during this crisis?
It's a good question. I think in relation to risk management and how we consider that going forward, what it has taught us is the business must continue to think about how we remain flexible and agile when considering what the economy and the trading environment looks like. And with that in mind, what we saw through this period was a good way of working, that we would look to implement again, should we have to go through something similar. We saw the management team come together. We also saw the underlying culture of ADEAS come to full fruition over that period of time.
The team, know that as a management group and as a board that we are there behind them 100% of the way and that they are a critical part of our business. And with that in mind, what we saw from them was the pure ability to step up when required and also to, you know, in relation to being stood down, we got amazing feedback and positivity from the team that they understood that was the right thing to be done at the time and they knew that we would get them back as soon as we possibly could. So I think in relation to how you consider a black swan event, what we've done through this process is ensured that we've learnt along the way and we've documented things like the, management meetings that we put in place, the crisis committees we put in place to make sure that as a group we all communicated with each other and that we were able to manage it and everyone knew what they needed to do. And I think in this regard, you know, one of the highlights was clearly our ability to maintain that strong liquidity position throughout that period.
And our culture as a business really enabled us to work closely with our suppliers, be they inventory, landlords, etcetera, to make sure that we were all in it together and they knew that we were coming from a position of let's work together to come out the other side as opposed to we need to win and you need to lose to get through this. So we, we've definitely documented some, new ways of working and we appreciate that, that will hold us in good stead should we need to work through something like this again.
Thank you. The next question also comes from the, ASA. It's a question in relation to the audit. When was the current audit company first appointed? When was the lead audit partner appointed?
And when was the last competitive audit tender held? In addition, would you please explain why the non audit work was so high this year and why someone other than the auditor was not chosen for this non audit work?
Well, in relation to the, auditor, they've been the auditor now for, I would suggest, nearly ten years. And we have already had one partner rotation in that period of time, and we're about to go through a second partner rotation over the next twelve to eighteen months. And at the time, we conducted a thorough market review, at this point in time before we, reengaged with our auditor So we believe we've considered those two elements. And sorry, Jamie, can you repeat the second part of the question for me?
Yes. Could you please explain why the non audit work was so high this year and why someone within the auditor was not chosen for this non audit work? Yeah.
So the non audit work comprised of due diligence, undertaken in relation to the MoCA acquisition. And as a board and a business, we felt that it was beneficial to make sure that our audits are, via a separate part of We continue to approach that with the same diligence and the same consideration of the way we adopt accounting standards and the like, within that, piece of work in relation to the due diligence. So we expect that to come back down subject to there not being any further transactions. And, in future, obviously, whenever we do that work, we do consider whether it's appropriate or not for the auditor to do it or whether it should be, provided to a separate firm.
Thank you. The next question Mr. Chairman comes from John Whittington from the ASA. We value Mr. MacLean's retail experience, but are concerned that currently the Board only has four independent directors on a Board of eight, which is not a majority.
In addition, three of the four board members with line retail expertise on the board are current or former Adairs executives. How can shareholders be sure that, as well as utilizing the valuable experience of these current and former ADEAS executives, it can truly draw an independent view of management?
I acknowledge the mathematics of the construction of the board, but I've never been particularly wedded to the accepted norms of the construction of board. I think in the case of ADEAS you need to be conscious of the history of the company. The fact that Michael Cherubino was a director of the company at the time of the IPO and pre IPO period. I'm actually very comfortable about the mix of skills and the way in which the board works together. I think it works very cohesively.
And in terms of the input of the independent directors, their view to be independent of management is very much respected by the balance of the Board. So I have no concerns about the construction of the Board at all. Jamie, do we have any other questions?
Yes. The ASA have one additional question in relation to the Board. Mr Chairman, I note that you are Chair of the Nomination Committee, and yet you've managed to keep the composition of the Board 75% male, which I suspect does not align with your staff profile or your customer base. Can you please explain why you've unsuccessful in creating a more diverse board better aligned to community expectations?
Yeah, I think we're conscious of the gender mix on the board. I'm actually more of a fan of diversity on a board rather than just slavishly following gender mix. I think in the composition of the current board we actually do have a very diverse range of skills and that would be the primary driver. Certainly if there was an opportunity to, within that overall constraint of seeking diversity of skills and views, to have a more reflective gender mix, we would take that opportunity. We tend to, I think, appoint directors with a view to their skills and I'm very pleased that some in the recent time we've appointed Keira Grant to our board.
She's doing a fine job.
Thank you, Mr Chairman. There are no further questions on item one.
Okay, thank you. Item two is the members are to consider and if thought fit, pass the following as an ordinary resolution: that Mr David McLean, being eligible, be re elected as a director of the company. The proxy results are shown on the screen. I'll now respond to any questions or comments that were received on this item. Jamie, do we have any questions in relation to item two?
Mr Chairman, there are no questions on item two.
Thank you. As there are no questions, I now move to the next item of business. The next resolution is the adoption of the Remuneration Report. Under the Corporations Act, an ASX listing entity is required to put to the vote a resolution that the Remuneration Report for the year ended twenty eight June twenty twenty be adopted. This remuneration report is included in the Director's Report section of the 2020 Annual Report on pages 24 to 36 inclusive.
It should be noted that the vote on this resolution is advisory only and does not bind the directors or the company. Key management personnel, details of whose remuneration are included in the report, are excluded from voting on this resolution. The proxy results are shown on the screen now. Jamie, do we have any questions in relation to item three?
Mr. Chairman, we have one question from John Whittington from the ASA. His question, he'd like to have directed to Mr. Peterson as chair of the Remuneration Committee. Mr.
Peterson, given that you haven't used external consultants, how has the Remuneration Committee ensured that the information that it's used to make its decisions with regard to the CEO and Executive Director is independent and has not been influenced by management?
Thanks Jamie. This may test the technology, but I think we have Trent on the line and he is prepared to answer such a question. Trent?
Can you hear me? Yes, we can.
Terrific. So thank you, John. Thanks very much for the question. The first thing I'd note is that the committee comprises a majority of non executive directors and that the data reviewed by that committee is not prepared by management and is reviewed in their absence. I should also note that we do garner data broadly and that I personally chair the remuneration committee of approximately four other specialty retailers.
So I have pretty good access to information without the use of independent consultants. In addition to that, I would note that the objectives and measures are set independently and we have the privilege of having the better part of a dozen other specialty retailers listed in Australia that give us good visibility on appropriate benchmarks for the remuneration levels of the key executives without the use of external consultants to guide us in that regard. So we feel pretty well informed.
Thanks Trent. Jamie, are there any other questions?
Mr Chairman, there were no further questions on item three.
Thank you. I'll move to the next item of business. The next resolution relates to the approval of the long term incentive grant options to Mark Ronan. The members are to consider, and if thought fit, to pass the following as an ordinary resolution: that approval be given for all purposes including ASX Rule 10.14 for the grant of options to mark Rohnen as his long term incentive for the year end of the 06/27/2021 on the terms described in the explanatory notes accompanying the notice of meeting. Mark Ronan and his associates will be excluded from voting on this resolution.
The proxy results are shown on the screen now. Jamie, do we have any questions in relation to item four?
Mr Chairman, we have no questions on item four.
Thank you. As there are no questions, I now move to the next item of business. The next resolution relates to the approval of the long term incentive grant of options to Michael Cherubino. The members are to consider and if thought fit, pass the following as an ordinary resolution. That approval be given for all purposes including ASX Rule 10.14 for the grant of options to Michael Cherubino as his long term incentive for the year ended 06/27/2021 on the terms described in the explanatory notes accompanying the notice of meeting.
Michael Cherubino and his associates will be excluded from voting on this resolution. The proxy results are shown on the screen. Jamie, do we have any questions in relation to item five?
There are no questions on item number five.
Thank you. As there are no questions, I now move to the next item of business. Item six is the next resolution to consider, and if thought fit, pass is the following as a special resolution, That for the purposes of section 260B two of the Corporations Act 2001 Commonwealth, approval is given for the financial assistance to be provided by MoCA products proprietarily, ACN 152,476,349, from time to time in connection with the acquisition as described in the explanatory notes accompanying the notice of meeting dated the 09/23/2020. The proxy results are shown on the screen. Jamie, do we have any questions in relation to item six?
Mr Chairman, there are no questions in relation to item number six.
Thank you. As there are no questions, I now move to the next item of business. The next resolution, item seven, the resolution to consider and if thought fit pass, is the following as a special resolution: that the proportional takeover provisions contained in Rule six of the company's constitution be inserted for a period of three years with effect from the date of the Annual General Meeting. The proxy results are shown on the screen. Jamie, do we have any questions in relation to item seven?
Mr. Chairman, there are no questions on item number seven.
Thank you. I now ask if there are any outstanding questions relating to any of the previous items or other business that shareholders might wish to raise.
Mr. Chairman, we have two further questions. The first is for Mr. McClain, who has not spoken to his election and has a question from John Whittington from the ASA. Mr.
McClain, can I ask what you personally have achieved over the past three years as a director of this company?
Thank you, John. I guess the last three years has obviously seen me transition out of the CEO role into a Ned role. I think that transition has worked exceptionally well for the business. I also have investments and non executive director roles in two other retail businesses, which are about to go public. And I think that exposure through those investments and NED roles allows me to bring different perspectives to the Board over the years.
Obviously, I have a great affinity for the business and are proud to continue in the non executive role. Thank you.
Jamie, do we have any further questions?
The final is a statement rather than a question, Mr. Chairman. It also comes from John Whittington from the ASA. John writes, Our thanks go to you, the Board, and all Adares employees for their commitment to the company in helping to bring about this fine result. There are no further questions.
Thank you, Jamie. Ladies and gentlemen, that concludes our discussion on the items of business. I declare that the poll will close in five minutes. The results of the poll will be released to the MSX and be available on our website this afternoon. I thank you all for your attendance today.
I declare the meeting closed. Thank you.