Super Retail Group Limited
(Formerly Super Cheap Auto Group Limited)
ANNUAL REPORT 2011
CONTENTS
Chairman and Managing Director’s Report
Corporate Governance Statement
Annual Report
Directors’ Report
Comprehensive Income Statement
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
Shareholder Information
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14
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WEBSITE
www.superretailgroup.com
THE ANNUAL GENERAL MEETING
The Annual General Meeting of the
Shareholders of Super Retail Group
Limited will be held at the Kedron
Wavell Services Club, Long Tan Room,
375 Hamilton Road, Chermside South,
Queensland on Wednesday, 26 October
2011 at 11.30 am.
BANKERS
Australia and New Zealand Banking
Group Limited
HSBC
Commonwealth Bank of Australia
AUDITORS
PricewaterhouseCoopers
SOLICITORS
Redmond Van De Graaff
Mallesons Stephen Jaques
STOCK EXCHANGE LISTING
Super Retail Group Limited shares
are quoted on the Australian Stock
Exchange.
NAME OF ENTITY
SUPER RETAIL GROUP LIMITED
(Formerly Super Cheap Auto Group Limited)
ABN OR EQUIVALENT COMPANY
REFERENCE
ABN 81 108 676 204
REGISTERED OFFICE
751 Gympie Road
LAWNTON QLD 4501
Telephone (07) 3482 7500
Facsimile (07) 3205 8522
SHARE REGISTRY
Link Market Services
Level 12, 680 George Street
SYDNEY NSW 2000
1 ANNUAL REPORT 2011
Super Retail Group Limited 828.8
715.4
624.8
525.9
1092.0
938.0
S
A
L
E
S
(
$
m
)
87.5
65.8
55.1
E
B
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T
(
$
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*
45.7
38.1
28.9
June
06
June
07
June
08
June
09
June
10
June
11
June
06
June
07
June
08
June
09
June
10
June
11
*excludes goodwill impairment charge in 2010
43.1
34.0
30.2
E
P
S
(
¢
)
15.5
20.9
24.2
13.9
14.1
15.6
17.5
16.8
11.7
June
06
June
07
June
08
June
09
June
10
June
11
June
06
June
07
June
08
June
09
June
10
June
11
117.8 114.7
93.5
80.9
78.8
73.5
29.0
21.5
18.0
13.0
10.5
8.0
N
E
T
D
E
B
T
(
$
m
)
June
06
June
07
June
08
June
09
June
10
June
11
June
06
June
07
June
08
June
09
June
10
June
11
ANNUAL REPORT 2011
2
P
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T
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A
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R
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C
%
(
)
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V
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Super Retail Group Limited
CHAIRMAN AND MANAGING DIRECTOR’S REPORT
We are very pleased to be able to report on another successful year for our Company. Despite the widespread slowing in the growth of
retail spending, we have been able to deliver a strong increase in both sales and profit across the Group.
Sales grew by 16.4% while profit after tax grew by 46.1%. These results have been achieved through a combination of the continued
strong performance of the Supercheap Auto and BCF Boating Camping Fishing businesses and the full year contribution of the Ray’s
Outdoors business, which was acquired on 31 May 2010.
New stores, solid like for like sales growth and strong improvement in gross margins are the major drivers of the results. This has
been delivered through a continued focus on new product introduction, sourcing and supply chain initiatives and the development of
business capabilities.
The results are particularly creditable given that the 2010/11 financial year was a 52 week period whilst the 2009/10 financial year
was a 53 week period, with the extra week contributing an additional $18 million in sales and $800,000 in profit after tax to the prior
year’s results.
We have continued to invest in future growth with $48.3 million in new and refurbished stores across the Group and $7.1 million in
IT and supply chain projects. Despite this investment, net debt was reduced by $5.3 million with a further reduction in net working
capital per store a key factor.
Underpinning our performance has been the passion and commitment of our team members. We have continued to improve team
member retention which has increased from 68% to 70% over the year. On behalf of all shareholders we would like to thank all of our
team members for their hard work and contribution throughout the year.
The Board has declared a fully franked final dividend of 17.5 cents per share. As a result, the dividends for the full year are 29 cents
per share, an increase of 35% (7.5 cents per share) over the prior year. The dividends are fully franked. The current dividend policy
enables the Group to continue to gradually pay down debt and to invest in new stores and other growth initiatives whilst also delivering
ongoing growth in dividend to shareholders.
Auto and Cycle Retailing
Divisional sales at $708.2 million were 3.4% higher than the prior period or 6% after adjusting for the extra week sales in the prior
period. EBIT at $63.6 million was a very pleasing 32% higher than the prior comparative period.
Supercheap Auto continued to perform extremely well with strong like for like sales growth of 4.8% maintaining the rate of growth
delivered over the last four years. Like for like growth in both customer numbers and average number of items per transaction were
the major drivers of sales growth.
The business has continued to focus on new product introduction, with 20% of the product range renewed during the year, and
in delivering further improvement in in-store stock presence and merchandising standards. The business also continued its store
refurbishment program with a further 34 stores refurbished or relocated during the year, including three stores reconfigured as
Superstores.
The business completed the rollout of the extended range of tools and garage storage solutions which required a significant relay
in many stores. This contributed to particularly strong like for like sales growth in the Tools and Storage categories. The Car Exterior,
Carcare and Car Audio/Visual categories also performed particularly well.
Gross margin improved by a further 1.7% points over the prior year and has now increased by 3.6% points over the last 3 years.
There are many factors contributing to this exceptional result including direct sourcing of imported products, development of own
brand ranges, investment in product quality reducing returns, supply chain efficiencies, improvement in trading terms and the stronger
Australian dollar.
3 ANNUAL REPORT 2011
Super Retail Group Limited Nine new stores were opened and two stores were closed during the year which resulted in 274 stores across Australia and New
Zealand at the end of June 2011. Some disruption to trading was experienced during the Queensland and Victorian floods and the
Christchurch earthquakes with a number of short term store closures whilst one store in Sydney was closed for much of the year
following a fire. The business has identified the potential for around 320 stores over the medium term.
The business has continued to develop its on-line and trade customer offer and has experienced strong growth in both areas albeit
from a low base. Both areas represent opportunity for further significant growth in the future.
In June 2011, Supercheap Auto was recognised as the Oracle Retail World Australian Retailer of the Year.
Performance at Goldcross Cycles, which represents 2% of the Group’s revenue, has continued to fall below expectations. Like for like
sales declined by 14% during the year which was in line with trends across the wider bicycle market. More adults are riding bicycles
but this has not led to an increase in spending across the domestic retail industry. Industry statistics indicate that approximately
16% of purchases made by Australian consumers in the bicycle market are from international websites – this figure was 7% only 18
months ago. In addition, fewer children are active cyclists.
The shortfall in like for like sales was offset by the contribution from two new stores opened during the year, control of operating
costs and improvement in gross margin. Overall gross margin increased by 3.0% points through the successful launch of own brand
bicycles and various supply chain initiatives, despite the impact of market wide discounting and stock clearance actions.
The Board has completed a review of the performance of the business and has determined that the most viable medium term value
creating strategy will be to maintain the focus on performance improvement across the existing network of stores. This will be
achieved through relocating underperforming stores to smaller lower cost locations, reducing stock holdings, developing a range of
own brand parts and accessories, driving supply chain efficiencies and adapting business processes to facilitate a greater focus on
customer service.
Leisure Retailing
The overall results of the division for the 2010/11 year include a full year’s contribution from the Ray’s Outdoors business, compared
to one month’s contribution in the prior comparative period.
The division performed well with sales at $384.1 million and EBIT at $32.0 million, both 50% higher than the prior comparative period.
The $2 million synergy benefits from the acquisition of Ray’s Outdoors, which had been forecast to be delivered in the 2011/12 year,
were fully realised in the 2010/11 year.
Ray’s Outdoors was completely integrated into the Group’s supply chain and IT systems by October 2010 and the Merchandising and
Marketing functions were integrated with BCF Boating Camping Fishing in January 2011. This has allowed both businesses to benefit
from the scale of the combined division.
The BCF Boating Camping Fishing business has continued to deliver strong sales growth with nine new stores opened during the year
and like for like sales growth in existing stores of 4.6%. Like for like sales growth was driven by an increase in both customer numbers
and in average item value.
All three major categories performed well with Boating benefitting from the introduction of new products in the 4WD and kayak ranges.
The business has continued to tailor the range at a store level to local market demand and to develop its range of own brand and
exclusive products.
Sales growth has been particularly strong in Victoria, South Australia and Western Australia and it was pleasing to see solid growth in
North and Central Queensland after the slowdown in this region in the prior year. Sales in Brisbane and the Gold Coast were impacted
by adverse weather conditions during the peak summer trading period.
Membership of the BCF club has increased to 740,000 with 16,000 members attending in-store club nights during the year. The
business has also successfully increased the amount of electronic direct marketing to club members. Visitor numbers to the BCF
website have increased by 86% during the year as the business has continued to develop its library of online video content.
ANNUAL REPORT 2011
4
Super Retail Group Limited The sales contribution from the Ray’s Outdoors business was below expectations. For much of the year, the business suffered from
high levels of out of stocks across key merchandise ranges through a loss of focus in the lead up to the acquisition in May of last year
and during the integration period post acquisition.
The management team have conducted an extensive review of product ranging and pricing policies to bring these into line with
customer expectations. New product ranges are being introduced into the business and there is a strong focus on improving product
quality. International and domestic branded product trade partners have been invited to have a greater presence in the stores.
A new customer value proposition has been developed along with a new marketing campaign and this will be launched in the early
part of the 2011/12 year.
Good progress has been made in developing the network of Ray’s Outdoors stores across Australia with 12 new stores opened during
the year. A key challenge in the coming year will be to build brand awareness in Queensland, New South Wales and Western Australia
to match the level in the business’ home state of Victoria.
Overall gross margin across the division increased by a very pleasing 2.0% points through the contribution of the higher margin Ray’s
Outdoors business and the work undertaken in BCF Boating Camping Fishing to increase the volume of directly sourced product, to
improve supply chain processes and to secure improved trading terms. Gross margin in the Ray’s Outdoors business was ahead of
expectations at the time of the acquisition which partly offset the sales shortfall.
Overall operating costs to sales increased by 2.1% of sales which reflected the impact of the higher cost structures in the Ray’s
Outdoors business to support sales of footwear, BBQs and outdoor furniture and the increase in the number of smaller format BCF
Boating Camping Fishing stores.
During the year, the division developed a third business concept to trade under the name FCO Fishing Camping Outdoors. This new
business, which takes elements from both the BCF Boating Camping Fishing and the Ray’s Outdoors businesses, has been designed
specifically for the New Zealand market.
The business is being developed to provide a destination offer across a full range of outdoor leisure categories (Fishing, Camping,
Boating, Kayaks, Outdoor Apparel and Footwear, BBQs) which is a gap in the current New Zealand retail market.
Plans are in progress to launch the business in November 2011 with 10 stores across the North Island and a further two stores in
the post Christmas period. This will require a net capital investment of circa $12 million. The Board will monitor performance over the
initial 12 month period before committing further capital.
At the end of June, the division had 78 BCF Boating Camping Fishing stores and 50 Ray’s Outdoors stores trading across Australia.
There is the potential for around 185 stores across Australia and New Zealand through the ongoing growth of the existing businesses
and the development of the FCO business.
Group Costs
Group Costs include $1.9 million of integration costs associated with the Ray’s Outdoors business, $0.9 million of non recurring
corporate development costs, $0.7 million of multi channel development program costs, $2.1 million of costs associated with
unutilised distribution centre, support office and store space (mainly arising from the integration of Ray’s Outdoors) and $2.5 million
public company costs.
5 ANNUAL REPORT 2011
Super Retail Group Limited Group Logistics and Sourcing
The foundations established by the Company during the last four years have served the Group well during the year. The Ray’s Outdoors
business was integrated into the Group’s supply chain operations within three months of acquisition. The Group’s five distribution
centres are capable of operating as ‘multi-user’ facilities supporting all of the Group’s businesses. The New Zealand distribution centre
site will be relocated to a larger facility in the coming year to support the development of the FCO Fishing Camping Outdoors business.
In addition to the increase in units flowing through the distribution centres as a result of the growth of the Group’s businesses, the BCF
Boating Camping Fishing business was able to achieve gross profit improvements through directing more products through distribution
centres rather than direct from trade partners to stores.
The value of product sourced by the Group Sourcing Team based in China increased by 150% to more than $70 million. This growth
has been a major factor underpinning the increase in gross margins across the Group’s businesses over the last four years.
Some additional off-site storage was required during the lead up to peak sales periods and this remains an opportunity for further
efficiency savings in coming years as the Group improves its inventory planning capabilities. The Group has continued to improve in
stock position across its existing businesses and to reduce average stock holdings.
Review of Financial Condition
Cash flow from operations was $70.9 million which was $18.3 million higher than the prior period. Underlying cash flow from
operations pre investment in new store inventory and set up costs was $95.3 million which was $25.3 million higher than the prior
period. This reflected the continued strong control of working capital across the Supercheap Auto and BCF Boating Camping Fishing
businesses. The Ray’s Outdoors business has invested in introducing new product ranges which has resulted in a consequential
increase in inventory per store.
Group capital expenditure was $36.5 million which included $12.9 million in new store fit-out, $10.9 million in store refurbishments,
$6.7 million in information technology projects and $5.9 million in general capital projects.
The Group fully funded all growth investment and continued to reduce net debt which stood at $73.5 million at the end of June. This
represented a decrease of $5.3 million compared to the prior comparative period. The Group has operated comfortably within debt
facility limits and with significant head room against all facility covenants throughout the year.
Corporate Social Responsibility
The Group has continued to support the Sids and Kids, Canteen and Heart Foundation charities. The Group is particularly proud of the
work that has been done to support BrAshA-T Ataxia Telangiectasia Limited, a charity raising funds to direct towards research into an
extremely rare but very serious degenerative condition. The Group’s sourcing team has developed a range of products which are sold
through the Group’s stores with all monies raised donated to the BrAshA-T charity. The Group also supported the Queensland and
Victorian flood recovery funds and the Christchurch earthquake recovery fund as well as raising funds for a number of team members
affected by these disasters.
Supercheap Auto continues to support and market safe driving campaigns, BCF Boating Camping Fishing raises funds for the
Coastguard and Ray’s Outdoors has developed a relationship with the Cancer Council to raise funds for and awareness of skin cancer.
The Group has now appointed a Sustainability Manager to drive the Group’s environmental initiatives including the reduction of
packaging, power consumption and plastic bag usage and the development of recycling arrangements.
Further details on the Group’s initiatives are provided in the Group’s Corporate Review which can be found on the Group’s website:
superretailgroup.com.au.
Team Members
The Group now employs close to 6,200 team members at 430 sites across Australia, New Zealand and China. As highlighted earlier in
this report, we are particularly pleased that our team member retention has continued to increase. Over the last five years, retention of
all team members, inclusive of our casual team members, has increased from 59% to 70% and is now strongly ahead of the average
achieved across the retail industry.
ANNUAL REPORT 2011
6
Super Retail Group Limited The safety performance across the Group continues to be strong with injury rates below retail industry averages. The safety record
across the distribution centres is particularly pleasing given the large increase in the volume of product being handled by the Group
Logistics team. Our retail teams have increased their focus on safe working practices during the year and safety incidents have fallen
as a proportion of total team members. We are reviewing our stock handling practices to ensure that these allow us to safely handle
stock throughout the supply chain, particularly given the increase in the weight and size of product being sold in our stores.
We continue to invest in improving our learning and development programs and have introduced a number of new management
development and product training programs during the year. All store teams across the Group now have a monthly evening training
meeting.
We would like to acknowledge the team for continuing to demonstrate tremendous levels of passion and commitment. We would also
like to particularly recognise the efforts of those team members both in the stores and in the set up teams who were impacted by the
natural disasters during the year. There is nothing more discouraging than seeing a store that you have worked hard to present to a
high standard being destroyed by flood or earthquake – particularly when this happens more than once. Our team have shown great
resilience to bounce back quickly.
Looking Forward
We have demonstrated over the last two years, during a period of a downturn in the growth in retail spending, that we can continue to
deliver strong growth in both revenue and profitability. Although wider economic conditions mean that the short term outlook for retail
spending remains uncertain, we are confident of our ability to grow our store network, deliver like for like sales growth and improve
gross margins. We also expect to continue to deliver working capital efficiencies across the Group.
In the coming year, we plan to open five new stores, convert two stores to Superstores and refurbish another 30 stores in our
Supercheap Auto business and to open 20 to 25 stores across the Leisure Retailing division.
We will continue to invest in developing our multi channel and customer relationship management capabilities. We plan to be able to
offer our customers options to order on-line with either pick up in store or home delivery and we expect to launch a loyalty scheme in
the Supercheap Auto business in the coming year.
We will also continue to explore opportunities to extend our retail operations into adjacent retail categories through either acquisition or
organic development.
Thank you for your ongoing support of our company, we look forward to reporting to you on our progress in the coming year.
R Wright
Chairman
P A Birtles
Managing Director and Chief Executive Officer
ANNUAL REPORT 2011
7
Super Retail Group Limited CORPORATE GOVERNANCE STATEMENT
Super Retail Group Limited (formerly Super Cheap Auto Group Limited) (“the Company”) and the Board are committed to achieving and
demonstrating high standards of corporate governance. The Directors of Super Retail Group Limited are accountable to shareholders
for the proper management of the business and affairs of the Company.
A description of the Company’s main corporate governance practices is set out below. All these practices unless otherwise stated were
in place for the reported period. They comply with the ASX Corporate Governance Principles and Recommendations (including 2010
Amendments). The Company has adopted policies relating to diversity, securities trading and briefing of analysts, these are available
from the Company website www.superretailgroup.com. The revision and transition of our governance frameworks has commenced
and details of our diversity policy are contained in pages 27 to 28 of the report. Other changes in relation to the financial year 3 July
2011 to 30 June 2012 will be disclosed in the next annual report.
As at 2 July 2011, and to the date of the signing of this report, the position of the Company is as follows:
Principle 1: Lay solid foundations for management and oversight
The Board of Directors
The Board of Directors, working with senior management, is responsible to shareholders for the overall management of the Company’s
business and affairs. The Directors’ overriding objective is to increase shareholder value within an appropriate framework which
protects the rights and interests of company shareholders and ensures the Company and its controlled entities are properly managed.
The Board delegates responsibility for day-to-day management of the Company to the Managing Director.
Principle 2: Structure the Board to add value
Composition of the Board
The constitution of the Company provides that the number of Directors is to be not less than three nor more than eight. The Board is
currently comprised of five directors, four of whom (including the Chairman) hold their positions in a non-executive capacity.
The Board operates in accordance with the broad principles set out in its charter which is available from the Corporate Governance
information section of the Company website at www.superretailgroup.com.
The Chairman is responsible for leading the Board, ensuring Directors are properly briefed in all matters relevant to their role and
responsibilities, facilitating board discussions and managing the Board’s relationship with the Company’s senior executives.
The Managing Director is responsible for implementing Group strategies and policies.
The composition of the Board is reviewed annually by the Board Nomination Committee to ensure that it has available an appropriate
mix of skills and experience to ensure the interests of shareholders are served.
Details of the members of the Board, their experience, expertise, qualifications and independent status are profiled in the Directors’
Report on pages 14 to 28.
Responsibilities
The responsibilities of the Board include:
•
•
•
•
•
approving the Company’s goals and strategic direction;
monitoring financial performance, including adopting annual budgets and approving the Group’s financial statements;
ensuring that adequate systems of internal control exist and are appropriately monitored for compliance;
selecting the Managing Director and reviewing the performance of senior management; and
ensuring significant business risks are identified and appropriately managed.
ANNUAL REPORT 2011
8
Super Retail Group Limited Directors’ Independence
As stated there are five Directors, three of whom are Independent Non-Executive Directors (including the Chairman). The
predominance of Independent Non-Executive Directors clearly separates the Board from the Company’s executive management
and enshrines board independence. The structure also provides the Company with the benefit of a diverse range of experience,
qualifications and professional skills.
The Board has adopted the independence definition suggested by the ASX Corporate Governance Council and as such three of
the Company’s Directors (namely Mr Robert Wright, Ms Sally Pitkin and Mr R John Skippen) are considered to be independent by
reference to that definition.
Independent Professional Advice
The Board (and each individual Director) is entitled to seek independent professional advice consistent with Corporate Governance
Practices at the Company’s expense (subject to the reasonableness of the costs and Board consent) in the conduct of its duties for the
Company.
Performance Assessment
The Board undertakes an annual performance evaluation of itself that compares the performance of the Board with the requirements
of the Board Charter, sets the goals and objectives of the Board for the upcoming year and effects any improvements to the Board
Charter that are necessary or desirable.
This evaluation is conducted by the Board and includes consideration of the annual assessment of the effectiveness of the Board.
This assessment was undertaken during June 2011.
Financial Reporting
The Board is provided with monthly reports from management on the financial performance of the Company. The monthly reports
include details of all key financial measures reported against budgets approved by the Board. The Company’s financial report
preparation and approval process for each financial year involves both the Managing Director and the Chief Financial Officer making
the following certifications to the Board that:
•
•
•
the Company’s financial reports and accompanying notes represent a true and fair view in all material respects of the
Company’s financial condition and operational results and are in accordance with relevant accounting standards;
the above statement is founded on a sound system of risk management and internal compliance and control which
implements the policies adopted by the Board; and
the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all
material respects.
Board Committees
The Board has established three committees to assist it in carrying out its responsibilities, the Board Nomination Committee, the
Human Resources and Remuneration Committee and the Audit and Risk Committee.
Each Committee has its own written charter setting out its role and responsibilities, composition, structure, membership requirements
and the manner in which the Committee is to operate. All matters determined by Committees are submitted to the full Board as
recommendations for Board decision.
Minutes of committee meetings are tabled at the subsequent Board meeting. Additional requirements for specific reporting by the
committees to the Board are addressed in the charter of the individual committees.
Principle 3: Promote ethical and responsible decision making
Code of Conduct
The Company has developed a statement of values and a Code of Conduct (“the Code”) which has been fully endorsed by the Board
and applies to all Directors and team members. The Code is reviewed and updated as necessary to ensure it reflects the highest
standards of behaviour and professionalism and the practices necessary to maintain confidence in the Company’s integrity.
In summary, the Code requires that at all times all company personnel act with the utmost integrity, objectivity and in compliance with
the letter and the spirit of the law and company policies. This is supported by the Company’s integrity policy and system of reporting
activity suspected of breaching the Code to the Company Secretary.
9 ANNUAL REPORT 2011
Super Retail Group Limited A copy of the Code is available on the Company’s website.
Dealing in Shares
The Company has a formal written policy for Directors and officers with respect to trading in the Company’s securities (“Trading
Policy”). Directors and senior management (and their associates) are prohibited from engaging in short-term trading of Company
securities.
The policy also restricts the selling of Company securities to three “window” periods (between 24 hours and 30 working days following
the release of the annual results, the release of the half-yearly results and the close of the annual general meeting) and such other
times as the Board permits. In addition, Directors must notify the Chairman before they buy or sell Company securities and confirm
once the transaction is complete.
In all instances, buying or selling Company shares is not permitted at any time by any person who possesses price sensitive
information not available to the market.
A copy of the Trading Policy is available on the Company’s website.
Ethical Sourcing Policy
The Company has developed an Ethical Sourcing Policy that applies to all its businesses and brands.
The policy incorporates both environmental and socioeconomic criteria for all imported products sourced directly or through agents.
The policy encourages trade partners and agents to improve their social and environmental practices, and protect our corporate
reputation and that of our individual businesses and brands.
Principle 4: Safeguard integrity in financial reporting
Audit and Risk Committee
The existence of the Audit and Risk Committee is considered by the Company to be a key element of its corporate governance
program and part of the Company’s commitment to best practice in the area of corporate governance.
The Audit and Risk Committee consists of the following Independent Non-Executive Directors:
R J Skippen (Chairman)
R J Wright
S A Pitkin
D D McDonough (resigned 31 August 2010)
All members of the Audit and Risk Committee are financially literate and have the requisite financial expertise. Some members have
an in-depth understanding of the industry in which the Company operates.
Details of these Directors’ qualifications and attendance at Audit and Risk Committee meetings are set out in the Director’s Report on
pages 14 to 28.
The Audit and Risk Committee operates in accordance with a charter which is available on the Company’s website.
The Audit and Risk Committee supports the full Board and essentially acts in a review and advisory capacity. The Committee is
considered to be a more efficient forum than the full Board for focusing on particular issues relevant to:
•
•
•
verifying and safeguarding the integrity of the Company’s financial reporting including the review, assessment and approval
of the half-year financial report, the annual report and all other financial information published by the Company or released to
the market;
establishing a sound system of risk oversight and management, and internal control; and
establishing a sound system of compliance with laws and regulations, internal compliance guidelines, policies, procedures
and control systems and prescribed internal standards of behaviour.
ANNUAL REPORT 2011
10
Super Retail Group Limited
This Committee provides ongoing assurance in the areas of:
•
•
•
financial administration and reporting;
audit control and independence; and
accounting policies and standards.
External Auditors
The Company’s Audit and Risk Committee’s policy is to appoint external auditors who demonstrate quality and independence.
The Audit and Risk Committee:
•
•
•
•
•
•
recommends to the Board the appointment of External Auditors and their fee;
reviews the performance of the External Auditors;
establishes processes to ensure the independence and competence of the External Auditors’ Audit Managers;
oversees and appraises the quality of audits conducted by the External Auditors;
approves External Audit yearly audit plans for the Company and its subsidiaries and oversees the scope of audits to be
conducted; and
ensures that no management restrictions are placed upon access to relevant information or personnel by External Auditors.
The performance of the External Auditor is reviewed annually.
An analysis of fees paid to the External Auditors, including a break-down of fees for non-audit services is provided in Note 28 to the
financial statements. It is the policy of the External Auditors to provide an annual declaration of their independence to the Audit and
Risk Committee.
The External Auditor is requested to attend the annual general meeting and be available to answer shareholder questions about the
conduct of the audit and the preparation and content of the audit report.
Principle 5 and 6: Make timely and balanced disclosures and respects the rights of shareholders
Continuous Disclosure and Shareholder Communication
The Company has written policies and procedures on information disclosure that focus on continuous disclosure of any information
concerning the Company and its controlled entities that a reasonable person would expect to have a material effect on the price
of the Company’s securities. These policies and procedures also include the arrangements the Company has in place to promote
communication with shareholders and encourage effective participation at general meetings. A summary of these policies and
procedures is available on the Company’s website.
The Company Secretary is the person responsible for communications with the Australian Stock Exchange (ASX).
Principle 7: Recognise and manage risk
The Audit and Risk Committee provides oversight and direction to the Company’s risk management, compliance and internal control
systems, including:
•
•
•
legal compliance;
internal controls; and
risk oversight and management.
Risk Management
The Managing Director and senior management team are instructed and empowered by the Board to implement risk management
strategies, report to the Board and the Audit and Risk Committee on developments related to risk, and suggest to the Board new and
revised strategies for mitigating risk.
The General Manager – Risk Management is a senior role with responsibility for providing counsel and direction in risk management
across the Group. This includes counsel on the refinement, implementation and monitoring of a comprehensive and integrated
risk management framework based on unit manager ownership of risk with independent monitoring. The General Manager – Risk
Management reports directly to the Group’s Chief Financial Officer with an indirect reporting line to the Chairman of the Audit and Risk
Committee.
11 ANNUAL REPORT 2011
Super Retail Group Limited Internal Audit
The role of Internal Audit as part of the Group’s risk management framework is to understand the key risks of the organisation and to
examine and evaluate the adequacy and effectiveness of the system of risk management and internal controls used by management.
Internal Audit carries out regular systematic monitoring of control activities and reports to both relevant business unit management and
the Audit and Risk Committee.
Typically, the audit methodology includes performing risk assessments of the area under review, undertaking audit tests, including
selecting and testing audit samples, reviewing progress made on previously reported audit findings and discussing internal control or
compliance issues with line management, and reaching agreement on the actions to be taken.
Health and Safety
The Company aims to provide and maintain a safe and healthy work environment. The Company acts to meet this commitment by
implementing work practices and procedures throughout the Group that comply with the relevant regulations governing the workplace.
Team Members are expected to take all practical measures to ensure a safe and healthy working environment in keeping with their
defined responsibilities and applicable law.
Principle 8: Remunerate fairly and responsibly
Human Resources and Remuneration Committee
The Human Resources and Remuneration Committee is comprised of the non-executive directors.
The Committee operates in accordance with its charter which is available on the Company’s website, and described in the
Remuneration and Diversity report.
The Board has charged the Human Resources and Remuneration Committee with corporate governance and oversight responsibilities
in relation to the Company’s people strategy including remuneration components, performance measurements and accountability
frameworks, recruitment, retention, talent management and succession planning.
This Committee was established by the Board in May 2011. Prior to this time, matters of remuneration were the addressed by the
Board’s Nomination and Remuneration Committee.
Each member of the senior executive team signs a formal employment contract at the time of their appointment covering a range of
matters including their duties, rights, responsibilities and any entitlements on termination. The standard contract refers to a specific
formal job description.
Further information on directors’ and executives’ remuneration is set out in the Directors’ Report under the heading ‘Remuneration and
Diversity report’. In accordance with Company policy, participants in equity-based remuneration plans are not permitted to enter into
any transactions that would limit the economic risk of options or other unvested entitlements. Details of this policy can be found on the
Company’s website.
Employee Share Plans
The Company considers share plans to be an effective ownership, long-term performance and team retention vehicle. It encourages all
Team Members to participate in its schemes, which offer the ability to acquire shares via:
•
•
an externally administered tax exempt plan which makes on market purchases; and
an internally administered rights (including options) plan offered to select executives.
At the time of this report, approximately 500 team members participated in one or both plans.
ANNUAL REPORT 2011
12
Super Retail Group Limited ANNUAL REPORT
Super Retail Group Limited
(Formerly Super Cheap Auto Group Limited)
FOR THE PERIOD ENDED
2 JULY 2011
`
ANNUAL REPORT 2011
13
Super Retail Group Limited
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Directors’ Report
Your Directors present their report on the consolidated entity consisting of Super Retail Group Limited (formerly Super
Cheap Auto Group Limited) and the entities it controlled at the end of, or during, the period ended 2 July 2011.
Directors
The following persons were Directors of Super Retail Group Limited during the period and up to the date of this report.
R A Rowe
R J Wright
P A Birtles
R J Skippen
S A M Pitkin
D D McDonough (resigned 31 August 2010)
Information on qualifications and experience of Directors is included on pages 15 to 17.
Principal activities
During the period, the principal continuing activities of the Group consisted of:
•
•
•
retailing of auto parts and accessories, tools and equipment
retailing of boating, camping, outdoor entertainment and fishing equipment and apparel
wholesale, retail and distribution of bicycles and bicycle accessories
Dividends – Super Retail Group Limited
The Directors declared a fully franked dividend of 17.5 cents per share be paid on 26 September 2011 (total dividend, fully
franked - $22,753,279). The following fully franked dividends of the parent entity have also been paid, declared or
recommended since the end of the preceding period:
Dividend
Payment Date
$
2010 interim fully franked dividend (13.0¢ per share)
2011 interim fully franked dividend (11.5¢ per share)
1 October 2010
5 April 2011
16,618,245
14,843,901
31,462,146
Review of operations
Revenue from trading operations for the year was $1,093,398,000 (2010: $938,602,000). During the period, the
consolidated entity opened nine new Supercheap Auto stores, of which eight were in Australia and one in New Zealand, and
closed one store in each of Australia and New Zealand. This resulted in Supercheap Auto trading with 274 stores at the end
of the period. BCF opened nine stores during the period taking total trading stores to 78. Goldcross Cycles opened a
further two stores during the period taking total trading stores to 20 at the end of the period. During the period Ray’s
Outdoors opened 12 stores taking the total trading stores to 50. At the end of the financial year, the Group was trading from
422 stores.
The net profit of the Group (consisting of Super Retail Group Limited and the entities it controlled at the end of, or during, the
period) for the period ended 2 July 2011, after providing for income tax, amounted to $55,599,000 (2010: $38,053,000).
A review of the operations for the 52 weeks to 2 July 2011 is set out in pages 3 to 7 of this report.
Significant changes in the state of affairs
Contributed equity increased by $12,383,000 as the result of dividend reinvestment plan and share options plan. Details of
the changes in contributed equity are disclosed in note 24 to the financial statements.
On 1 December 2010 the company changed its name to Super Retail Group Limited from Super Cheap Auto Group Limited.
Matters subsequent to the end of the financial year
Since 2 July 2011 Super Retail Group Limited does not have any matters subsequent to the end of the financial year to be
disclosed.
Page 14
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Likely developments and expected results of operations
Information on likely developments in the operations of the Group and the expected results of operations have not been
included in this annual financial report because the directors believe it would be likely to result in unreasonable prejudice to
the Group.
Environmental regulation
The Group’s environmental obligations are regulated under State, Territory and Federal Law. The Group has a policy of
complying with its environmental performance obligations. All environmental performance obligations are monitored by the
Board. No environmental breaches have been notified to the consolidated entity during the period ended 2 July 2011.
Directors and Directors’ interests
The Directors of Super Retail Group Limited in office at the date of this report are listed below together with details of their
relevant interest in the securities of the Company at that date.
R J Wright, BCom, FCPA, MAICD. Independent Chairman Non-Executive. Age 62
Experience and expertise
Appointed Chairman on 28 October 2009 and has been an Independent Non-Executive Director for 7 years 3 months.
Director of a number of major Retail companies over the last 20 years.
Other current directorships
Chairman and Non-executive director of RCL Group (formerly Babcock & Brown Residential Land Partners Group) (director
since 2006). Chairman and Non-executive director of SAI Global Limited (director since 2003). Chairman and Non–
executive director of APA Ethane Limited (director since 2008) which is the responsible entity of the registered investment
schemes that comprise Ethane Pipeline Income Fund, the securities in which are quoted on the ASX. Non–executive
director of Australian Pipeline Limited since 2000.
Former directorships in the last 3 years
Chairman and non-executive director of Dexion Limited.
Special responsibilities
Chairman of the Board
Chairman of the Nomination Committee*
Member of the Audit and Risk Committee
Member of the Human Resources and Remuneration Committee*
Interest in shares and options
46,048 ordinary shares in Super Retail Group Limited
P A Birtles. BSc, ACA Managing Director and Chief Executive Officer. Age 47
Experience and expertise
Managing Director and Chief Executive Officer for 5 years and 8 months. Previously Chief Financial Officer for 4 years 8
months and Company Secretary for 1 year 5 months.
Other current directorships
Non-executive director of GWA Group Limited
Former directorships in the last 3 years
None
Special responsibilities
Managing Director and Chief Executive Officer
Member of the Nomination Committee*
Interests in shares and options
1,692,596 ordinary shares in Super Retail Group Limited
200,000 options over ordinary shares in Super Retail Group Limited
200,000 performance rights over ordinary shares in Super Retail Group Limited
Page 15
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
R A Rowe. Non-Executive Director. Age 67
Experience and expertise
Founder of the business in 1972. Non-executive director for 7 years 4 months. Previously 8 years as Chairman and 24
years as Managing Director.
Other current directorships
Director of a number of private family companies.
Former directorships in the last 3 years
None.
Special responsibilities
Member of the Nomination Committee.*
Member of the Human Resources and Remuneration Committee*
Interests in shares and options
53,671,326 ordinary shares in Super Retail Group Limited.
R J Skippen, ACA Independent Non-Executive Director. Age 63
Experience and expertise
Independent Non-Executive Director for 2 years 9 months. John was the former Finance Director of Harvey Norman
Holdings Ltd for 12 years and has over 30 years' experience as a chartered accountant.
Other current directorships
Non-Executive Director of Briscoe Group Limited (NZ), Flexigroup Limited, Slater & Gordon Limited and Emerging Leaders
Investment Limited.
Former directorships in the last 3 years
Non-Executive Director of Mint Wireless Limited.
Special responsibilities
Chairman of the Audit Committee
Member of the Nomination Committee*
Member of the Human Resources and Remuneration Committee*
Interest in shares and options
Nil.
S A Pitkin, LLM, LLB FAICD Independent Non-Executive Director. Age 52
Experience and expertise
Independent Non-Executive Director for 1 year. Sally is a lawyer and a former partner of Clayton Utz.
Other current directorships
Former directorships in the last 3 years
Aristocrat Limited
Chandler Macleod Limited
Special responsibilities
Chair of the Human Resources and Remuneration Committee*
Member of the Audit Committee
Member of the Nomination Committee*
Interest in shares and options
10,000 ordinary shares in Super Retail Group Limited
Page 16
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
D D McDonough, BBus (Acty), LLB (Hons), SJD, FCPA, FAICD. Independent Non-Executive Director. Age 59
Experience and expertise. Resigned 31 August 2010
Independent Non-Executive Director for 6 years 3 months. Partner of a major legal firm.
Other current directorships
Non-executive director of GWA Group Limited.
Former directorships in the last 3 years
None.
Special responsibilities
Member of the Audit and Risk Committee.
Member of the Nomination and Remuneration Committee*.
Interests in shares and options
62,083 ordinary shares in Super Retail Group Limited
Company Secretary
The Company Secretary is Mr D J Kelley, B.Ec., Grad. Dip. AppCorpGov, MBA, MIIA, ACIS. Mr Kelley commenced with
Super Retail Group Limited as the Business Audit & Compliance Manager in February 2005 and was appointed Company
Secretary in January 2006.
Meetings of directors
The number of meetings of the Company’s Board of Directors and each Board Committee held during the period ended 2
July 2011 is set out below:
Meetings of Committees
Full meetings
directors
B
11
11
11
2
A
11
11
10
2
11
11
11
11
Audit & Risk
A
3
n/a
n/a
1
3
3
B
3
n/a
n/a
1
3
3
Nomination &
Remuneration*
B
2
2
2
1
A
2
2
2
1
2
2
2
2
Human Resource &
Remuneration*
A
0
0
0
0
0
0
B
0
0
0
0
0
0
= Number of meetings attended
B = Number of meetings held during the time the Director held office
or was a member of the Committee during the year
R J Wright
P A Birtles
R A Rowe
D D McDonough
(resigned 31
August 2010)
R J Skippen
S A Pitkin
A
* The Human Resources and Remuneration Committee was established by the Board in May 2011. Prior to this time,
matters of remuneration were the addressed by the Board’s Nomination and Remuneration Committee.
Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for audit and non-audit services provided
during the year are set out below.
The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk
Committee is satisfied that the provision of the non-audit services is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by
the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for
the following reasons:
• all non-audit services have been reviewed by the Audit and Risk Committee to ensure they do not impact the impartiality
and objectivity of the auditor
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a
decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and
rewards.
Page 17
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
During the period the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
Assurance Services
PricewaterhouseCoopers Australian firm
Remuneration for audit services
Remuneration for other assurance services
Total remuneration for assurance services
Taxation Services
Total remuneration for taxation services
Advisory Services
Total remuneration for advisory services
Consolidated Entity
2010
2011
$
$
424,468
0
424,468
405,321
0
405,321
269,749
292,272
144,157
573,308
Loans to directors and executives
Information on loans to directors and executives are set out in note 31 to the financial statements.
Auditors Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 29.
Remuneration and Diversity report
Introduction
One of Super Retail Group’s core principles is that the attraction, development and retention of loyal and passionate team
members provide a competitive advantage which is fundamental to the long term success of the Group. The maintenance of
a workplace culture and the development of people practices that support this principle are strategic priorities for the Group.
The development of people practices covers a number of areas including attraction, diversity, learning and development,
engagement, workplace health and safety, talent and succession management and remuneration and benefits.
Remuneration and benefits practices are set in the context of an overall policy to provide market competitive remuneration
arrangements which support the attraction, development and retention of loyal and passionate team members and that are
aligned with the interests of shareholders.
Remuneration Policy
The Super Retail Group is committed to creating a high performance culture. Our philosophy is to provide flexible and
competitive market based total remuneration arrangements that are linked to the performance of the Group and its
businesses and support services.
The key elements of the policy are:
•
•
•
•
•
•
To provide competitive total remuneration arrangements that enables the Group to attract and retain high performing
team members and to reward them for their contribution to the success of the Group.
To align remuneration arrangements with the delivery of sustainable value to the Group’s shareholders.
To maintain a pay for performance environment through linking incentive pay opportunities to the achievement of
specific, measurable business goals.
To position our base salaries at or around the median and our performance incentives in the 2nd quartile of relevant
market remuneration levels.
To provide arrangements with the flexibility to recognise individuals based on performance, experience and
qualifications.
To provide equitable, fair and consistent pay arrangements across the Group through a systematic methodology
involving job value and market positioning.
Remuneration can include a number of different elements such as base pay, superannuation, short term incentives, long
term incentives, tools of trade, study and relocation assistance, share plans and novated lease arrangements. The elements
of the total remuneration package may vary according to the job role, team members experience and performance and
market practice.
Page 18
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
Role of the Human Resources and Remuneration Committee
The primary objective of the Committee is to assist the Board to fulfil its corporate governance and oversight responsibilities
in relation to the Group’s people strategy including remuneration components, performance measurements and
accountability frameworks, recruitment, retention, talent management and succession planning.
The Committee undertakes an annual review of the Group’s remuneration strategy and remuneration policy to facilitate
understanding of the overall approach to remuneration and to confirm alignment with the Group’s business strategy and
compliance with regulatory standards.
The Committee reviews and recommends to the Board for approval remuneration arrangements for the Chief Executive
Officer and other senior Executives. The Committee will review the arrangements on an annual basis, obtaining independent
external remuneration advice where appropriate.
The Committee undertakes an annual review of the Group’s performance management system to confirm the integrity of
systems and processes in making incentive based payments. The Committee will also verify compliance with vesting or
exercise requirements for equity based rewards.
The Committee establishes the policy for the remuneration arrangements for Non Executive Directors, reviewing
remuneration arrangements annually, obtaining independent external remuneration advice where appropriate.
The Committee reviews and recommends to the Board for approval the Remuneration Report and any other report required
to be produced for shareholders to meet regulatory requirements.
Non Executive Directors Remuneration Structure
Fees to Non Executive Directors reflect the demands which are made on, and the responsibilities of, the Directors. The level
of fees are reviewed annually by the Human Resources and Remuneration Committee and are based on the median of fees
paid for comparative Non Executive Director roles in similarly sized publicly listed companies operating in the retail and
consumer goods industry.
The Human Resources and Remuneration Committee engage the services of an independent remuneration consultant to
prepare the information for review and to advise on the appropriate amount of fees to ensure that they are market based and
fairly represent the responsibilities and time spent by the Directors on Company matters.
Additional fees are paid to the Chairs of the Audit and Risk and the Human Resources and Remuneration Committees. This
reflects the additional time commitment required by the Chairs of these committees.
Non Executive Director Fees are determined within an aggregate Directors’ fee pool approved by shareholders. The current
pool of $600,000 was approved on 26 October 2006.
Non Executive Directors’ fees are inclusive of superannuation contributions. Non Executive Directors do not receive
preference shares or share options as part of their remuneration. Non Executive Directors may opt each year to receive a
proportion of their remuneration in Super Retail Group Limited shares, which would be acquired on market.
Directors Fees
The Directors’ fees are inclusive of Committee fees. Fees for year to 2 July 2011 were approved on 29 July 2010, while fees
for the year to 1 July 2012 were approved on 17 August 2011.
The following fees apply:
Chairman
Other Non Executive Directors
Committee Chair
2011
$
140,000
82,500
8,500
2012
$
160,000
90,000
10,000
The Directors intend that the General Meeting of Shareholders on 26 October 2011 consider increasing the total aggregate
annual remuneration payable to non-Executive Directors of the Company by way of Directors’ fees from $600,000 per
annum to a maximum of $800,000.
Page 19
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
Executive Remuneration Structure
The Executive Remuneration Structure is reviewed annually by the Human Resources and Remuneration Committee. The
Committee ensure that the Remuneration Structure is consistent with market practice.
Executive Remuneration consists of 3 elements:
• Base Salary Package (inclusive of superannuation contributions, car allowance and other benefits)
• Short Term Incentive (STI)
Long Term Incentive (LTI)
•
The mix of remuneration between fixed and variable components is varied in line with the seniority of the role and the
relative responsibilities of the role for driving business performance and for developing and implementing business strategy.
For the year to 2 July 2011, the following mix of remuneration was applied.
Fixed
STI
LTI
Chief Executive Officer
Chief Operating Officers
Chief Financial Officer
General Manager Group Logistics
45%
50%
55%
55%
25%
25%
22%
22%
30%
25%
23%
23%
For the year to 30 June 2012, the following mix of remuneration will apply:
Fixed
STI
LTI
Chief Executive Officer
Chief Operating Officers
Chief Financial Officer
General Manager Group Logistics
40%
45%
50%
55%
28%
27%
25%
22%
32%
28%
25%
23%
The tables assume that a full STI is received and that the LTI fully vests – the actual reward is dependant on the
achievement of performance targets.
The LTI component is based on the notional monetary value at the time of grant. This notional valuation may differ from the
accounting valuation which considers probability of vesting and other factors.
Base Salary Package
The Group’s intent is to offer executives a base salary package that reflects the median market base salary package for a
comparable role in a similarly sized publicly listed company operating in the retail and consumer goods industry. The
Executive’s performance and experience are also considered in determining the base salary package.
The base salary package consists of base pay and superannuation and may include prescribed non-financial benefits at the
executives’ discretion on a salary sacrifice basis.
Base salary packages are reviewed annually. There is no guaranteed base salary increase in any senior executive’s service
contract.
Market information is sourced from market remuneration surveys and from a review of the annual reports of benchmark
listed companies.
All executive base salary proposals are reviewed and approved by the Human Resources and Remuneration Committee.
Short Term Incentive (STI)
Executives are invited to participate in a short term incentive scheme that rewards executives for the achievement of
performance targets that are consistent with the Group’s approved business plan and that are aligned to delivering
sustainable value to shareholders.
The Human Resources and Remuneration Committee set an annual profit before tax target. In setting this target, the
Committee considers the profit projections set out in the Group’s approved business plan and investor expectations.
Page 20
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
For the year to 2 July 2011, the profit before tax target was set at 28% higher than the profit before tax achieved in the
period to 3 July 2010. This target reflected the budgeted contribution of the Ray’s Outdoors business acquired on 31 May
2010. The target reflected an underlying increase in Group profit of circa 13%, which was determined to be an appropriately
demanding target in the context of the existing retail environment.
Should profit before tax exceed the profit target, an STI bonus pool is created to a value of 20% of the amount that company
profit exceeds the target.
Executives have the opportunity to share in the STI bonus pool up to the maximum value of between 40% and 70% of their
base salary in accordance with the Executive Remuneration Structure outlined above.
The level of participation is dependant on the achievement of 12 Key Performance Indicators (KPIs) relevant to their area of
responsibility. The 12 KPIs cover the achievement of financial and operational results and the successful implementation of
strategic and people development initiatives. The KPIs are consistent with the overall performance targets set out in the
Group’s business plan.
The Human Resources and Remuneration Committee is responsible for assessing whether the KPIs are achieved and for
approving short term incentive payments. The Committee receives reports from management to assist in the assessment.
Long Term Incentive (LTI)
The Group’s remuneration structure aims to align long term incentives for senior executives with the delivery of sustainable
value to shareholders. The alignment of interests is important in ensuring that senior executives are focused on delivering
sustainable returns to shareholders, whilst allowing the Group to attract and retain senior executives of a high calibre.
In October 2009, the Group’s shareholders approved the establishment of the Super Retail Group Limited Performance
Rights Plan (PRP).
The PRP links the long term remuneration of senior executives with the economic benefit derived by shareholders over a
three to five year period.
Participation in the PRP is by invitation only and only those senior executives invited by the Board are able to participate.
The PRP allows for the annual grant of Performance Rights to senior executives. The grant of Performance Rights entitles
the senior executive to be granted an equivalent number of shares upon vesting of those Performance Rights. The vesting of
Performance Rights is subject to the satisfaction of performance conditions.
The performance conditions will be satisfied if the Group achieves both certain earnings per share increases and return on
capital hurdles over a three year period as determined by the Board or its nominee.
The Board consider that the combination of earnings per share growth and maintenance of return on capital ensure that
executives maintain a focus on value creating growth which will deliver sustainable returns for shareholders.
The issues of Performance Rights in 2009, 2010 and 2011 are subject to the following performance conditions over the three
year period ending 30 June 2012, 30 June 2013 and 30 June 2014 respectively:
a) 10% cumulative earnings per share growth; and
b) Return on capital of more than 15%
If a Performance Right has not lapsed and the performance conditions have been satisfied, Performance Rights will vest in
accordance with the following schedule:
Time after grant of Performance Right % of Performance Rights that vest
3 years
4 years
5 years
50%
25%
25%
The notional value of Performance Rights granted to each senior executive is based on the share price of the Group at the
time of grant. The number of Performance Rights granted to each senior executive is determined in accordance with the
Executive Remuneration Structure outlined above and have a value of between 42% and 80% of their base salary. This
value of Performance Rights for grant purposes may differ from the accounting valuation which considers probability of
vesting and other factors.
Page 21
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
Relationship of Remuneration to Company Performance
The performance of the Group and remuneration paid to key management personnel over the last 6 years is summarised in
the following table:
Company Performance
2006
2007
2008
2009
2010
2011
Sales ($m)
525.9
624.8
715.4
828.8
938.0
1,092.3
Profit before tax ($m)
Post Tax ROC (%)
Earnings Per Share (¢)
Dividends Per Share (¢)
30 June Share Price ($)
23.4
11.7
15.5
8.0
1.55
31.3
13.9
20.9
10.5
4.20
Remuneration Paid to Key Management Personnel
Base Salary Package
Short Term Incentive
Long Term Incentive
Total
1.8
0.1
0.4
2.3
1.8
0.8
0.2
2.8
36.8
14.1
24.2
13.0
2.33
1.9
0.2
0.2
2.3
41.9
15.6
30.2
18.0
3.61
2.1
0.8
0.2
3.1
53.9
16.8
34.0
21.5
5.27
2.2
1.1
0.4
3.7
77.7
17.5
43.1
29.0
7.00
2.5
1.0
0.7
4.2
Over the last 5 years, earnings per share have increased by 178%, dividends per share have increased by 262% and the
share price has increased by 352%.
During the same period, total remuneration paid to key management personnel has increased by 83% whilst Base Salary
has increased by 39%. The major driver of increase in total remuneration has been incentive pay reflecting the strong
performance of the Group over the last five years.
Total remuneration paid to key management personnel as a proportion of profit before tax was 10% in 2006 and had
reduced to 5.4% in 2011.
Details of remuneration of the Group
Amounts of remuneration
Details of the remuneration of the directors and key management personnel of the Group (as defined in AASB 124 Related
Party Disclosures) and the five highest paid executives of Super Retail Group Limited are set out in the following tables.
The key management personnel of the Group includes the directors and the following executive officers, (being those who
are responsible for developing and implementing the Group’s strategy):
•
•
•
•
•
P A Birtles, Managing Director
D F Ajala, Chief Operating Officer, Auto & Cycle Retailing
S J Doyle, Chief Operating Officer, Leisure Retailing
G G Carroll, Chief Financial Officer
G L Chad, General Manager, Group Logistics
The highest paid executives for the period ended 2 July 2011 were as follows:
•
•
•
•
•
P A Birtles
D F Ajala
S J Doyle
G G Carroll
G L Chad
Page 22
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
2011
Name
Non-executive directors
R J Wright Chairman
R A Rowe
D D McDonough (resigned
31 August 2010)
R J Skippen
S A Pitkin
Sub-total non-executive
directors
Executive directors
P A Birtles
Other key management
personnel
D F Ajala
S J Doyle
G G Carroll
G L Chad
Totals
2010
Name
Non-executive directors
R J Wright Chairman
R D McIlwain Chairman
(resigned)
R A Rowe
D D McDonough
R J Skippen
S A Pitkin
Sub-total non-executive
directors
Executive directors
P A Birtles
Other key management
personnel
D F Ajala
S J Doyle
G G Carroll
G L Chad
Totals
Short-term benefits
Post-
employment
benefits
Share-based payment
Cash
salary and
fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Options
$
Performance
Rights
$
127,659
31,932
5,208
71,000
75,688
311,487
0
0
0
0
0
0
0
0
0
0
0
0
12,341
50,568
9,396
20,000
6,812
99,117
0
0
0
0
0
0
0
0
0
0
0
0
Total
$
140,000
82,500
14,604
91,000
82,500
410,604
794,886
416,625
2,415
27,699
21,532
307,167
1,570,324
392,947
359,846
307,801
292,007
2,458,974
195,500
179,400
119,510
135,975
1,047,010
5,104
14,954
0
27,893
50,366
26,949
15,199
15,199
47,600
231,763
3,992
3,992
8,096
3,010
40,622
115,187
105,413
73,917
83,784
685,468
739,679
678,804
524,523
590,269
4,514,203
Short-term benefits
Cash
salary and
fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Post-employ
ment benefits
Share-based payment
Super-
annuation
$
Options
$
Performance
Rights
$
89,871
30,051
25,000
40,479
32,083
0
217,484
0
0
0
0
0
0
0
0
0
0
0
0
0
0
18,462
3,282
50,000
31,521
45,834
0
149,099
0
0
0
0
0
0
0
0
0
0
0
0
0
0
727,262
426,250
2,508
45,230
56,356
143,771
1,401,377
342,935
334,416
295,538
280,426
2,198,062
200,000
182,500
124,000
140,000
1,072,750
30,104
16,123
0
25,189
73,924
26,961
14,461
14,461
44,384
294,597
12,187
12,187
17,220
5,383
103,333
55,833
50,948
36,190
40,860
327,602
668,020
610,635
487,410
536,242
4,070,267
Total
$
108,333
33,333
75,000
72,000
77,917
0
366,583
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
P A Birtles
D F Ajala
S J Doyle
G G Carroll
G L Chad
Fixed Remuneration
2010
2011
$
$
52.54%
57.46%
57.45%
61.58%
62.26%
55.30%
59.88%
59.77%
63.60%
65.27%
At Risk – STI
At Risk – LTI
2011
$
26.53%
26.43%
26.43%
22.78%
23.04%
2010
$
30.42%
29.94%
29.89%
25.44%
26.11%
2011
$
20.93%
16.11%
16.12%
15.64%
14.70%
2010
$
14.28%
10.18%
10.34%
10.96%
8.62%
Page 23
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
Service Agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Each
of these agreements provide for the provision of performance related cash bonuses, other benefits and when eligible,
participation in the Executive Option Plan.
All contracts with executives may be terminated early by either party with three months notice, subject to termination
payments as detailed below:-
P A Birtles, Managing Director
Term of Agreement – 2 years and 11 months commencing 27 January 2011
Base salary, inclusive of superannuation, for the period ended 2 July 2011 of $825,000 to be reviewed annually by the
Nomination and Remuneration Committee.
Payment of a termination benefit on early termination by the Company, other than for cause, equal to 12 months base salary
if the termination is effective more than 12 months before the expiry date or 9 months base salary if the termination is
effective within 12 months before the expiry date.
D F Ajala, Chief Operating Officer, Auto & Cycle Retailing
Term of Agreement - 3 years and 8 months commencing 27 January 2011
Base salary, inclusive of superannuation, for the period ended 2 July 2011 of $425,000 to be reviewed annually by the
Nomination and Remuneration Committee.
Payment of a termination benefit on early termination by the Company, other than for cause, equal to 6 months base salary
if the termination is effective more than 12 months before the expiry date or 3 months base salary if the termination is
effective within 12 months before the expiry date.
S J Doyle, Chief Operating Officer, Leisure Retailing
Term of Agreement - 4 years and 8 months commencing 27 January 2011
Base salary, inclusive of superannuation, for the period ended 2 July 2011 of $390,000 to be reviewed annually by the
Nomination and Remuneration Committee.
Payment of a termination benefit on early termination by the Company, other than for cause, equal to 6 months base salary
if the termination is effective more than 12 months before the expiry date or 3 months base salary if the termination is
effective within 12 months before the expiry date.
G G Carroll, Chief Financial Officer
Term of Agreement - 5 years and 5 months commencing 17 April 2011
Base salary, inclusive of superannuation, for the period ended 2 July 2011 of $323,000 to be reviewed annually by the
Nomination and Remuneration Committee.
Payment of a termination benefit on early termination by the Company, other than for cause, equal to 6 months base salary
if the termination is effective more than 12 months before the expiry date or 3 months base salary if the termination is
effective within 12 months before the expiry date.
G L Chad, General Manager Group Logistics
Base salary, inclusive of superannuation, for the period ended 2 July 2011 of $367,500 to be reviewed annually by the
Nomination and Remuneration Committee.
Payment of a termination benefit on early termination by the Company, other than for cause, equal to 3 months base salary.
Page 24
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
Details of remuneration: Short Term Incentives
Cash bonuses are dependent on the satisfaction of performance conditions as set out in the section headed “short term
incentives” above. For each cash bonus included in the above tables, the percentage of the available bonus that was paid
and the percentage that was forfeited because the person did not meet the performance criteria are set out below. No part
of the bonuses are payable in future years.
Name
P A Birtles
D F Ajala
S J Doyle
G G Carroll
G L Chad
Share based compensation
Short Term Incentives
Forfeited
%
8
8
8
7
7
Paid
%
92
92
92
93
93
Performance Rights
Performance rights vest progressively from 3 to 5 years after the date of grant. The exercise of performance rights is subject
to the achievement of the two qualifying hurdles. The first qualifying hurdle is a 10% cumulative growth in Earnings per
Share (pre amortisation) over the 3 year period ending 30 June 2012. The second qualifying hurdle is a Return of Capital of
greater than 15% over the 3 year period ending 30 June 2012.
The performance rights do not give the right to participate in any other share issue of the Company or any other entity.
The table below lists the performance rights provided as remuneration to each Director of Super Retail Group Limited and
each of the key management personnel of the Group. There were no lapsed performance rights in the period.
Name
Directors of Super
Retail Group Limited
R J Wright
R A Rowe
D D McDonough
(resigned 31 August
2010)
R J Skippen
S A Pitkin
P A Birtles
Other Key
Management
Personnel
D F Ajala
S J Doyle
G G Carroll
G L Chad
Number of Performance
Rights granted during the
period
2011
0
0
0
0
0
100,000
36,325
33,333
23,089
26,270
Value of Performance
Rights at Grant Date
2011
0
0
0
0
0
585,300
212,610
195,098
135,140
153,758
Number of Performance
Rights vested during the
period
2011
0
0
0
0
0
0
0
0
0
0
The above performance rights are valued using the share price at time of granting. The performance rights granted in the
current reporting period were valued using a share price of $5.85. The performance rights are expensed over a 5-year
period in-line with the vesting conditions of the rights. Plan participants may not enter into any transaction designed to
remove the “at risk” aspect of the performance rights before they vest.
Shares under option
Details of options over ordinary shares in the Company provided as remuneration to each Director of Super Retail Group
Limited and each of the key management personnel of the Group are set out below. There were no lapsed options during
the period.
Page 25
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
Name
Number of options granted during
the period
Number of options vested during
the period
Directors of Super Retail
Group Limited
R J Wright
R A Rowe
D D McDonough (resigned
31 August 2010)
R J Skippen
S A Pitkin
P A Birtles
Other Key Management
Personnel
D F Ajala
S J Doyle
G G Carroll
G L Chad
2011
0
0
0
0
0
0
0
0
0
0
2011
0
0
0
0
0
200,000
100,000
100,000
100,000
50,000
The amounts disclosed for emoluments relating to options above is the assessed fair value at grant date of options granted
to executive directors and other executives, allocated equally over the period from grant date to vesting date. Fair values at
grant date are independently determined using a Binomial option pricing model that takes into account the exercise price,
the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the
share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free
interest rate for the term of the option.
Shares provided on exercise of remuneration options
The table below lists the ordinary shares in the Company issued during the year as a result of the exercise of remuneration
options. No performance rights were exercisable during the year.
Name
P A Birtles
D F Ajala
D F Ajala
S J Doyle
G G Carroll
G L Chad
Date of Exercise of Options
Number of Ordinary Shares
Issued on Exercise of
Options During the Year
17/11/2010
03/09/2010
05/01/2011
28/10/2010
23/08/2010
06/10/2010
150,000
35,000
100,000
50,000
75,000
37,500
Market Value at Exercise
Date*
936,600
203,980
613,600
331,600
426,150
243,225
* The value at exercise date of options exercised during the period was determined using the 5-day average Group share
price.
Unissued shares under performance rights and options plans
Unissued ordinary shares of Super Retail Group Limited under the performance rights plan at the date of this report are as
follows:
Grant date
Vesting Date*
Value per Performance
Right at Grant Date
Number of Performance
Rights
1 September 2009
1 September 2010
*
*
$5.15
$5.85
356,738
363,427
720,165
* Performance rights vest progressively 3 to 5 years after grant date and have no expiry date.
Plan participants may not enter into any transaction designed to remove the “at risk” aspect of performance rights on share
options.
Page 26
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
Unissued ordinary shares of Super Retail Group Limited under option at the date of this report are as follows:
Grant date
Exercise date
Exercise Price
Value per option at
grant date
Number under
option
27 January 2006
27 January 2006
27 January 2006
17 April 2006
1 July 2006
26 October 2006
23 August 2007
1 August 2008
5 January 2009
5 January 2010
5 January 2011
17 April 2011
1 July 2011
1 February 2011
24 July 2010
1 August 2011
$2.44
$2.44
$2.44
$2.25
$2.25
$2.44
$4.37
$2.49
$0.29
$0.34
$0.38
$0.51
$0.30
$0.79
$0.93
$0.65
50,000
100,000
100,000
100,000
300,000
200,000
100,000
180,000
1,130,000
Shares issued on the exercise of options
The following ordinary shares of Super Retail Group Limited were issued during the year ended 2 July 2011 on the exercise
of options granted under the Super Retail Group Employee Option Plan. No further shares have been issued since that
date. No amounts are unpaid on any of the shares.
Date options granted
27 January 2006
17 April 2006
1 July 2006
26 October 2006
23 August 2007
Issue price of shares
Number of shares issued
$2.44
$2.25
$2.25
$2.44
$4.37
185,000
75,000
280,000
150,000
80,000
The exercise of the options is subject to the satisfaction of a qualifying hurdle. For the options granted prior to 23 August
2007, the qualifying hurdle requires cumulative annual growth of 10% in Earnings Per Share (pre amortisation) from the IPO
Prospectus forecast Earnings Per Share (pre amortisation) for the year ending 30 June 2005 (being 17.2 cents) through to
each of the years prior to the options being exercised. For the options granted in August 2007 and August 2008, the
relevant start dates for measurement of the 10% cumulative annual growth in Earnings Per Share are 30 June 2007 and 28
June 2008 respectively. Exercise of options is subject to being employed by the Group.
No option holder has any right under the options to participate in any other share issue of the Company or of any other
entity.
Insurance of officers
During the financial year, Super Retail Group Limited paid a premium of $76,250 to insure the directors and secretaries of
the Company and its controlled entities, and the general managers of each of the divisions of the Group.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a
wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for
themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between
amounts relating to the insurance against legal costs and those relating to other liabilities.
Diversity
Super Retail Group recognises its talented and diverse workforce as a key competitive advantage. Our business
performance is a reflection of the quality and skill of our people and behaviours that are aligned to our Group Values. We
are firmly committed to developing policies, practices and ways of working that support diversity. We strive to ensure strong
business growth and performance whilst providing an environment that makes the Super Retail Group a great place to work.
Central to achieving this goal is an inclusive work environment and culture that allows Team Members to contribute their full
potential, through recognising and supporting their diverse strengths and needs. We want to be known as a diversity
conscious employer recognising, appreciating, valuing and utilising the unique talents and contributions of all individuals.
Page 27
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
Directors' report
for the period ended 2 July 2011
Remuneration and Diversity report (continued)
The company has developed a diversity policy that links directly to the company’s corporate vision and strategies. The
objectives of the policy are:
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
(cid:131)
For our workforce to be representative of our customer base
To recognise, value and engage the diverse skills, cultural values and backgrounds of our Team Members
To enhance the opportunities for Team Members to participate and contribute to the work of the Super Retail Group
To maintain a focus on workplace health and safety by providing appropriate employment arrangements
To proactively prevent and eliminate harassment and unlawful discrimination in the workplace
To ensure that workplace structures, conditions, systems and procedures, foster diversity and allow Team Members to
manage work and personal life
To promote awareness of the value of diversity in the workplace
To enhance attraction, development and retention of Team Members
To be recognised as a great place to work and a preferred employer in the specialty retail sector and;
To provide suitable employment opportunities for disabled and disadvantaged Team Members
Gender Diversity
The nature of the products that are sold through the Group’s stores attracts a customer base that is significantly skewed
towards male customers. Across the Group around 80% of customers are males.
The company is proud that its culture and inclusive policies have created a workforce in which females represent 37% of the
workforce at 2 July 2011. 30% of middle and senior management positions and 22% of senior management positions are
held by females at 2 July 2011.
The company has set targets of 33% of middle and senior management positions and 30% of senior management and
Board positions to be held by females by June 2015.
To promote diversity, the company has implemented the following initiatives:
• Paid maternity leave
• Parental leave information packs
• Part time work opportunities
• Monitoring of remuneration for gender differences
• Appointment of females into senior non traditional roles – e.g., General Manager Retail Operations, Retail Operations
Manager, Distribution Centre Manager.
The following initiatives are being implemented in the coming year:
• Shortlisting of candidates for middle and senior management vacancies in line with 2015 diversity targets
• Participation in leadership development programs to be in line with 2015 diversity targets
•
• Development of childcare and aged-care information packs
• Quarterly reporting and review of diversity performance
•
Inclusion of diversity in induction and management development programs
Further development of flexible work practices
Rounding of amounts
The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments
Commission, relating to the “rounding off” of amounts in the Directors’ Report. Amounts in the Directors’ Report have been
rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of the Directors.
R Wright
Chairman
Brisbane
18 August 2011
P A Birtles
Director
Page 28
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
for the period ended 2 July 2011
Auditor’s Independence Declaration
As lead auditor for the audit of Super Retail Group Limited for the year ended 2 July 2011, I
declare that to the best of my knowledge and belief, there have been:
a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Super Retail Group Limited and the entities it controlled during the
period.
Cameron Henry
Partner
PricewaterhouseCoopers
Brisbane
18 August 2011
PricewaterhouseCoopers, ABN 52 780 433 757
Riverside Centre, 123 Eagle Street, GPO BOX 150, BRISBANE QLD 4001
DX 77 Brisbane, Australia
T +61 7 3257 5000, F +61 7 3257 5999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation
Page 29
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
ABN 81 108 676 204
Annual financial report - 2 July 2011
Contents
Financial report
Consolidated comprehensive income statement
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor’s report to the members
Page
31
32
33
34
35
84
85
These financial statements are the consolidated financial statements of the consolidated entity consisting of Super Retail Group
Limited and its subsidiaries. The financial report is presented in the Australian currency.
Super Retail Group Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
751 Gympie Road, Lawnton, Queensland, 4501
A description of the nature of the consolidated entity's operations and its principal activities is included in the directors’ report on
pages 14 to 28, which is not part of this financial report.
The financial report was authorised for issue by the directors on 18 August 2011. The company has the power to amend and
reissue the financial report.
Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available globally at
minimum cost to the company. All press releases, financial reports and other information are available at our Shareholders’
Centre on our website: www.superretailgroup.com.au.
Page 30
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
Consolidated
Revenue from continuing operations
Other income
Total revenues and other income
Cost of sales of goods
Other expenses from ordinary activities
- selling and distribution
- marketing
- occupancy
- administration
Finance costs expense
Total expenses
Profit before income tax
Income tax (expense)/benefit
Profit attributable to Members of Super Retail Group Limited
Other comprehensive income
Cash flow hedges
Exchange differences on translation of foreign operations
Income tax relating to components of other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Total comprehensive income for the year is attributable to:
Owners of Super Retail Group Limited
Notes
5
6
8
25
25
2011
$'000
1,093,398
1,359
1,094,757
(598,067)
(138,415)
(51,188)
(90,307)
(128,155)
(10,973)
(1,017,105)
77,652
(22,053)
55,599
(3,414)
(1,200)
0
(4,614)
50,985
2010
$'000
938,602
163
938,765
(535,825)
(112,502)
(43,462)
(74,716)
(107,903)
(10,477)
(884,885)
53,880
(15,827)
38,053
(1,274)
526
0
(748)
37,305
50,985
37,305
Cents
Cents
Earnings per share for profit attributable to the ordinary equity
holders of the company:
Basic earnings per share
Diluted earnings per share
37
37
43.1
42.5
34.0
33.0
The above consolidated comprehensive income statement should be read in conjunction with the accompanying notes.
Page 31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
As at 2 July 2011
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Property, plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained profits
Capital and reserves attributable to equity holders of Super Retail Group
Limited
Consolidated
Notes
2011
$'000
2010
$'000
9
10
11
12
13
14
15
16
17
18
19
20
22
23
24
25
25
25,697
22,160
292,874
340,731
109,277
10,789
111,251
231,317
30,200
22,195
253,101
305,496
105,309
7,611
103,830
216,750
572,048
522,246
122,373
32
11,013
12,286
145,704
15,538
99,143
0
7,983
122,664
99,563
10,096
7,694
11,781
129,134
13,217
98,912
0
10,426
122,555
268,368
251,689
303,680
270,557
194,541
(3,239)
112,378
303,680
182,158
158
88,241
270,557
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page 32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
Balance at 27 June 2009
84,627
42
71,685
156,354
Contributed
Equity
Reserves
Notes
$’000
$’000
Retained
Earnings
$’000
Total
$’000
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as
owners
Contributions of equity, net of transaction costs
Dividends provided for or paid
Employee share options and performance rights
Balance at 3 July 2010
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as
owners
Contributions of equity, net of transaction costs
Dividends provided for or paid
Employee share options and performance rights
24
26
25
24
26
25
0
0
0
0
(748)
(748)
38,053
0
38,053
38,053
(748)
37,305
97,531
0
0
97,531
182,158
0
0
864
864
158
0
(21,497)
0
(21,497)
97,531
(21,497)
864
76,898
88,241
270,557
0
0
0
0
(4,614)
(4,614)
55,599
0
55,599
55,599
(4,614)
50,985
12,383
0
0
12,383
0
0
1,217
1,217
0
(31,462)
0
(31,462)
12,383
(31,462)
1,217
(17,862)
Balance at 2 July 2011
194,541
(3,239)
112,378
303,680
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page 33
CONSOLIDATED STATEMENT OF CASH FLOWS
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
Consolidated
Notes
2011
$'000
2010
$'000
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services
tax)
1,207,864
1,040,615
(1,023,148)
(891,068)
Rental payments
- external
- related parties
Income taxes paid
Net cash (outflow) inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for purchase of subsidiary, net of cash acquired
Net cash (outflow) inflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Interest paid
Dividends paid to company’s shareholders
Proceeds from issue of shares
Net cash inflow (outflow) from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year
(82,519)
(10,384)
(20,911)
70,902
(37,647)
1,129
0
(36,518)
241,591
(251,667)
(9,894)
(20,797)
1,966
(38,801)
(4,417)
30,200
(86)
25,697
36
26
9
(72,736)
(10,346)
(13,905)
52,560
(27,136)
86
(52,943)
(79,993)
313,920
(336,358)
(10,714)
(14,395)
88,390
40,843
13,410
16,810
(20)
30,200
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Page 34
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SUPER RETAIL GROUP LIMITED
(Formerly Super Cheap Auto Group Limited)
FOR THE PERIOD ENDED
2 JULY 2011
Page 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
Contents of the notes to the consolidated financial statements
Summary of significant accounting policies .............................................................................................................................. 37
1
Financial risk management ....................................................................................................................................................... 46
2
Critical accounting estimates and judgements.......................................................................................................................... 50
3
Segment information................................................................................................................................................................. 51
4
Revenue ................................................................................................................................................................................... 53
5
Other Income ............................................................................................................................................................................ 53
6
Expenses .................................................................................................................................................................................. 53
7
Income tax expense.................................................................................................................................................................. 54
8
9
Current assets - Cash and cash equivalents ............................................................................................................................ 55
10 Current assets - Trade and other receivables........................................................................................................................... 55
11 Current assets – Inventories ..................................................................................................................................................... 56
12 Non-current assets – Property, plant and equipment................................................................................................................ 56
13 Non-current assets - Deferred tax assets ................................................................................................................................. 57
14 Non-current assets – Intangible assets..................................................................................................................................... 58
15 Current liabilities - Trade and other payables ........................................................................................................................... 60
16 Current liabilities – Borrowings ................................................................................................................................................. 60
17 Current liabilities – Current tax liabilities ................................................................................................................................... 60
18 Current liabilities – Provisions................................................................................................................................................... 61
19 Non-current liabilities – Trade and Other Payables .................................................................................................................. 61
20 Non-current liabilities – Borrowings .......................................................................................................................................... 61
21 Derivative Financial instruments ............................................................................................................................................... 62
22 Non-current liabilities - Deferred tax liabilities ........................................................................................................................... 65
23 Non-current liabilities – Provisions............................................................................................................................................ 65
24 Contributed equity..................................................................................................................................................................... 66
25 Reserves and retained profits ................................................................................................................................................... 68
26 Dividends .................................................................................................................................................................................. 69
27 Key management personnel disclosures .................................................................................................................................. 70
28 Remuneration of auditors.......................................................................................................................................................... 73
29 Contingencies ........................................................................................................................................................................... 73
30 Commitments............................................................................................................................................................................ 74
31 Related party transactions ........................................................................................................................................................ 75
32
Investments in controlled entities.............................................................................................................................................. 75
33 Business Combinations ............................................................................................................................................................ 76
34 Net tangible asset backing........................................................................................................................................................ 77
35 Deed of cross guarantee .......................................................................................................................................................... 77
36 Reconciliation of profit from ordinary activities after income tax to net cash inflow from operating activities ............................ 80
37 Earnings per share ................................................................................................................................................................... 80
38 Share-based payments............................................................................................................................................................. 81
39 Events occurring after balance date ......................................................................................................................................... 83
40 Parent entity financial information............................................................................................................................................. 83
Page 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
1 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the
consolidated entity consisting of Super Retail Group Limited and its subsidiaries.
(a)
Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative
pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act
2001.
Compliance with IFRS
Consolidated financial statements and notes of Super Retail Group Limited comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board.
Historical cost convention
These financial statements have been prepared under the historical cost convention, unless otherwise stated.
(b)
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Super Retail Group Limited
(the “Company” or “parent entity”) as at 2 July 2011 and the results of its controlled entities for the period then ended. Super Retail
Group Limited and its controlled entities comprise the “consolidated entity”. The effects of all transactions between entities in the
consolidated entity are fully eliminated.
Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial
and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect
of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls
another entity.
Where control of an entity is acquired during a financial period its results are included in the consolidated statement of financial
performance from the date on which control commences. Where control of an entity ceases during a financial year its results are
included for that part of the period during which control existed.
(c)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Officers, who
are responsible for allocating resources and assessing performance of the operating segments.
(d)
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are
recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The
relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred
tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a
liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arise in a transaction, other
than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Page 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
A deferred tax liability is recognised in relation to some of the Group’s indefinite life intangibles. The tax base assumed in
determining the amount of the deferred tax liability is the capital cost base of the assets. As the assets are indefinite life in nature it
was determined the assets would not be recovered through use but rather through sale.
Tax Consolidation Legislation
Super Retail Group Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as
of 1 July 2003.
The head entity, Super Retail Group Limited and the controlled entities in the tax consolidated group continue to account for their
own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues
to be a stand alone taxpayer in its own right.
Investment allowances
Companies within the Group may be entitled to claim special tax deductions for investments in qualifying assets (investment
allowances). The Group accounts for such allowances as tax credits, which means that the allowance reduces income tax payable
and current tax expense. A deferred tax asset is recognised for unclaimed tax credits that are carried forward.
(e)
Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in
Australian dollars, which is Super Retail Group Limited’s functional and presentation currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. 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 income
statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
Translation differences on non-monetary items such as equities held at fair value through profit or loss, are reported as part of the
fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial
assets, are included in the fair value reserve in equity.
(iii) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are translated into the presentation currency as follows:
•
•
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that
statement of financial position;
income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the dates of the transactions); and
•
all resulting exchange differences are recognised as a separate component of equity.
(f)
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances, duties and taxes paid. The Group recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the
Group’s activities as described below. The Group bases its estimates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement.
Revenue is recognised for the major business activities as follows:
(i)
Sale of goods – retail
Revenue from the sale of goods is recognised when a Group entity sells a product to the customer pursuant to sales orders and
when the associated risk and rewards have passed to the customer. Retail sales are usually by credit card or in cash.
Page 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
(ii)
Interest income
Interest income is recognised using the effective interest method. When a receivable is impaired, the Group reduces the carrying
amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the
instrument. Interest income on impaired loans is recognised using the original effective interest rate.
(g)
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful
debts. Trade receivables are due for settlement 30 days from the end of the month after sale. Collectibility of trade receivables is
reviewed on an ongoing 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. The amount of any
impairment loss is included within “Administration” in the income statement.
(h)
Inventories
Inventories are measured at the lower of cost and net realisable value. Costs comprise direct purchase costs and an appropriate
proportion of supply chain variable and fixed overhead expenditure. Costs are assigned to individual items of stock on the basis of
weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated
cost of completion and the estimated costs necessary to make the sale.
(i) Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation
and the amount has been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the statement of financial position date. The discount rate used to determine the present value reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of
time is recognised as interest expense.
(j)
Financial assets
Classification
The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss and loans
and receivables. The classification depends on the purpose for which the investments were acquired. Management determines the
classification of its investments at initial recognition and re-evaluates this designation at each reporting date.
Financial assets at fair value through profit or loss
(i)
This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss on
initial recognition. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if
so designated by management. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets
in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of
the statement of financial position date.
Loans and receivables
(ii)
Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the
receivable. They are included in current assets, except for those with maturities greater than 12 months after the statement of
financial position date which are classified as non-current assets. Loans and receivables are included in receivables in the
statement of financial position.
Recognition and derecognition
(iii)
Regular purchases and sales of financial assets are recognised on trade date – the date on which the Group commits to purchase
or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair
value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and
transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and
rewards of ownership.
Subsequent measurement
(iv)
Loans and receivables are carried at amortised cost using the effective interest method.
Page 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
Financial assets at fair value through profit and loss are subsequently carried at fair value. Gains or losses arising from changes in
the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the income statement within other
income or “Administration” in the period in which they arise.
(k)
Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured 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 either; (1) hedges of the fair
value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) 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 ongoing basis, of whether the derivatives that are used in hedging transactions have been and
will continue to be highly effective in offsetting changes in cash flows of hedged items.
Cash flow hedge
(i)
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 income statement.
Amounts accumulated in equity are recycled in the income statement in the income periods when the hedged item will affect profit
or loss (for instance when the forecast sale that is hedged takes place). 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 the time remains in equity and is recognised when the forecast transaction is
ultimately recognised in the income statement. 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 income statement.
Net investment hedges
(ii)
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity. The gain or loss
relating to the ineffective portion is recognised immediately in the income statement within other income or other expenses.
Gains and losses accumulated in equity are included in the income statement when the foreign operation is partially disposed of or
sold.
Derivatives that do not qualify for hedge accounting
(iii)
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does
not qualify for hedge accounting are recognised immediately in the income statement.
(l)
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined using valuation techniques. The fair value of interest rate swaps is calculated as the present value of the estimated
future cash flows. The fair value of forward exchange contracts is determined using forward exchange market rates at the
statement of financial position date.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at
the current market interest rate that is available to the Group for similar financial instruments.
(m) Property, plant & equipment
Each class of property, plant and equipment is carried at historical cost, less any accumulated depreciation or amortisation.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are
incurred.
Page 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
Depreciation and amortisation of property, plant and equipment
Depreciation and amortisation are calculated on a straight line or diminishing value basis to allocate the cost of an item of property,
plant and equipment net of residual values over the expected useful life of each asset to the consolidated entity. Estimates of
remaining useful lives and residual values are reviewed and adjusted, if appropriate, at each statement of financial position date.
The depreciation rates used for each class of assets are:
Plant and equipment
Capitalised leased plant and equipment
Motor vehicles
Computer systems
Depreciation rate
10% - 37.5%
10% – 37.5%
25%
25% – 37.5%
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.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income
statement. When revalued assets are sold, it is Group policy to transfer the amounts included in other reserves in respect of those
assets to retained earnings.
(n)
Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or
other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets
transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred also includes the fair
value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in
a business combination are, with limited exceptions, measured initially at their fair values as the acquisition date. On an acquisition-
by-acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling
interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair
value of any previous equity interest in the acquiree over the fair value of the group’s share of the net identifiable assets acquired is
recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the
measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or debt. Contingent payments classified as debt are subsequently
remeasured through profit or loss.
Acquisition-related costs are expensed as incurred.
(o)
Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are
subject to amortisation are 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. For the
purposes of goodwill, this is the cash generating unit level.
(p)
Leases
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as
finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the
present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other
long term payables. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on
the finance balance outstanding. The interest element of the finance cost is charged to the income statement over the lease period
so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant
and equipment acquired under finance leases is depreciated over the shorter of the asset’s useful life and the lease term.
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 income
statement on a straight-line basis over the period of the lease term.
Page 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
(q)
Intangible assets
Goodwill
(i)
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of
the acquired subsidiary or business at the date of the acquisition. Goodwill on acquisitions of subsidiaries is included in intangible
assets. Goodwill and intangibles acquired in business combinations are not amortised. Instead, they are tested for impairment
annually, or more frequently if events or changes in circumstances indicated that it might be impaired, and is carried at cost less
accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to
the entity sold.
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, identified according to operating segments.
Trademarks and licences
(ii)
Trademarks and licences have an indefinite useful life and are carried at cost less impairment losses.
Computer software
(iii)
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future
period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Costs
capitalised include external direct costs of materials and service and direct payroll and payroll related costs of employees’ time
spent on the project. Amortisation is calculated on a straight-line basis over periods generally ranging from 3 to 5 years.
Brand names
(iv)
Brand names that are acquired as part of a business combination are recognised separately from goodwill. These assets are
carried at their fair value at the date of acquisition less impairment losses. Brand names are valued using the relief from royalty
method. Amortisation is calculated based on the timing of projected cash flows of the assets over their estimated useful lives, which
is 20 years or indefinite.
Supplier Agreements
(v)
Supplier agreements are acquired as part of a business combination and are recognised separately from goodwill. These assets
are carried at their fair value at the date of acquisition less accumulated amortisation and impairment losses. Supplier agreements
have been valued using the multi-period excess earnings method. Amortisation is calculated based on timing of projected cash
flows of the assets over their estimated useful lives which is 20 years.
(vi) Other items of expenditure
Significant items of expenditure, such as costs incurred in store set-ups, are expensed in the financial period in which these costs
are incurred.
(r)
Trade and other payables
Trade and other creditors are payables for goods and services provided to the consolidated entity prior to the end of the financial
period and which are unpaid at that date. The amounts are unsecured and are normally paid within sixty days of recognition. Trade
and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date.
(s)
Borrowings
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
income statement over the period of the borrowings using the effective interest method.
(t)
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are
included in the cost of the acquisition as part of the purchase consideration.
(u)
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the
entity, on or before the end of the financial period but not distributed at balance date.
Page 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
(v)
Employee benefits
Wages and salaries, annual leave and sick leave
(i)
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 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.
Long service leave
(ii)
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit
credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on national government bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
(iii) Retirement benefit obligations
Contributions are made by the economic entity to an employee superannuation fund and are charged as expenses when incurred.
(iv) Share-based payments
Share-based compensation benefits are provided to certain employees via the Super Retail Group Executive Option Plan and
Super Retail Group Performance Rights Plan.
The fair value of options and performance rights granted under these plans are recognised as an employee benefit expense with a
corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the
employees become unconditionally entitled to the options.
For share options, the fair value at grant date is determined using a Binomial option pricing model that takes into account the
exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the
option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-
free interest rate for the term of the option.
The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales
growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to
become exercisable. At each statement of financial position date, the entity revises its estimate of the number of options that are
expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent
estimate.
Performance rights are valued using the 3 month weighted average share price as at the grant date.
Upon exercise of the options and performance rights, the balance of the share-based payments reserve relating to those options
remains in the share based reserve.
Profit-sharing and bonus plans
(v)
The Group recognises a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration the
profit attributable to the company’s shareholders after certain adjustments. The Group recognises a provision where contractually
obliged or where there is a past practice that has created a constructive obligation.
(w)
Finance costs
Finance costs are recognised in the period in which these are incurred and are expensed in the period to which the costs relate.
Generally costs such as discounts and premiums incurred in raising borrowings are amortised on an effective yield basis over the
period of the borrowing. Finance costs include:
- interest on bank overdrafts and short-term and long-term borrowings;
- amortisation of discounts or premiums relating to borrowings;
- amortisation of ancillary costs incurred in connection with the arrangement of borrowings; and
- finance lease charges;
(x)
Cash and cash equivalents
For the purposes of the cash flow statement, cash includes cash on hand, cash at bank and at call deposits with banks or financial
institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
(y)
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax, except where the amount of goods
and services tax incurred is not recoverable from the Australian Tax Office. In these circumstances the goods and services tax is
Page 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
recognised as part of the cost of acquisition of the asset or as part of the item of expense. Receivables and payables in the
consolidated statement of financial position are shown inclusive of goods and services tax.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which
are recoverable from, or payable to, the taxation authority, are presented as operating cash flow.
(z)
Make good requirements in relation to leased premises.
Make good costs arising from contractual obligations in lease agreements are recognised as provisions at the inception of the
agreement. A corresponding asset is taken up in property, plant and equipment at that time. Expected future payments are
discounted using appropriate market yields at reporting date.
(aa) Earnings per share
Basic earnings per share
(i)
Basic earnings per share is calculated by dividing:-
•
•
the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares;
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the year and excluding treasury shares (note 37).
Diluted earnings per share
(ii)
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
(ab) Rounding of amounts
The economic entity is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments
Commission, relating to the “rounding off” of amounts in the financial report. Amounts in the financial report have been rounded off
in accordance with that Class Order to the nearest thousand dollars.
(ac) Financial year
As allowed under Section 323D(2) of the Corporations Act 2001, the Directors have determined the financial year to be a fixed
period of 52 calendar or 53 calendar weeks. For the period to 2 July 2011, the Group is reporting on the 52 week period that began
4 July 2010 and ended 2 July 2011. For the period to 3 July 2010, the Group is reporting on the period commencing 27 June 2009
and ended 3 July 2010.
(ad) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for the 2 July 2011 reporting
period. The Group’s assessment of the impact of these new standards and interpretations is set out below.
AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB
2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective for annual reporting
periods beginning on or after 1 January 2013] AASB 9 Financial Instruments addresses the classification, measurement and
derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early
adoption.
There will be no impact on the group's accounting for financial liabilities, as the new requirements only affect the accounting for
financial liabilities that are designated as at fair value through profit or loss and the group does not have any such liabilities. The
derecognition rules have been transferred from AASB 139 Financial Instruments:
Recognition and Measurement and have not been changed. The group has notyet decided when to adopt AASB 9.
Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting Standards (effective for
annual reporting periods beginning on or after 1 January 2011) In December 2009 the AASB issued a revised AASB 124 Related
Party Disclosures. It is effective for accounting periods beginning on or after 1 January 2011 and must be applied retrospectively.
The amendment clarifies and simplifies the definition of a related party and removes the requirement for government related entities
to disclose details of all transactions with the government and other government related entities. The Group will apply the amended
standard from 3 Jul 2011. When the amendments are applied, the Group will need to disclose any transactions between its
subsidiaries and its associates. However, there will be no impact on any of the amounts recognised in the financial statements.
AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian Accounting
Standards arising from Reduced Disclosure Requirements (effective 1 July 2013) On 30 June 2010 the AASB officially introduced a
revised differential reporting framework in Australia. Under this framework, a two-tier differential reporting regime applies to all
entities that prepare general purpose financial statements. The Group is listed on the ASX and is therefore not eligible to adopt the
new Australian Accounting Standards – Reduced Disclosure Requirements. As a consequence, the two standards will have no
impact on the financial statements of the entity.
Page 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and revised IAS 27 Separate
Financial Statements and IAS 28 Investments in Associates and Joint Ventures (effective 1 January 2013) In May 2011, the IASB
issued a suite of five new and amended standards which address the accounting for joint arrangements, consolidated financial
statements and associated disclosures. The AASB is expected to issue equivalent Australian standards shortly.
IFRS 10 replaces all of the guidance on control and consolidation in IAS 27 Consolidated and Separate Financial Statements, and
SIC-12 Consolidation – Special Purpose Entities. The core principle that a consolidated entity presents a parent and its subsidiaries
as if they are a single economic entity remains unchanged, as do the mechanics of consolidation.,However the standard introduces
a single definition of control that applies to all entities. It focuses on the need to have both power and rights or exposure to variable
returns before control is present. Power is the current ability to direct the activities that significantly influence returns. Returns must
vary and can be positive, negative or both. There is also new guidance on participating and protective rights and on agent/principal
relationships. While the group does not expect the new standard to have a significant impact on its composition, it has yet to
perform a detailed analysis of the new guidance in the context of its various investees that may or may not be controlled under the
new rules.
IFRS 12 sets out the required disclosures for entities reporting under the two new standards, IFRS 10 and IFRS 11, and replaces
the disclosure requirements currently found in IAS 28. Application of this standard by the group will not affect any of the amounts
recognised in the financial statements, but will impact the type of information disclosed in relation to the group's investments.
IAS 27 is renamed Separate Financial Statements and is now a standard dealing solely with separate financial statements.
Application of this standard by the group will not affect any of the amounts recognised in the financial statements.
Amendments to IAS 28 provide clarification that an entity continues to apply the equity method and does not remeasure its retained
interest as part of ownership changes where a joint venture becomes an associate, and vice versa. The amendments also introduce
a “partial disposal” concept. The group is still assessing the impact of these amendments.
IFRS 13 Fair Value Measurement (effective 1 January 2013) IFRS 13 was released in May 2011. The AASB is expected to issue
an equivalent Australian standard shortly. IFRS 13 explains how to measure fair value and aims to enhance fair value disclosures.
The group has yet to determine which, if any, of its current measurement techniques will have to change as a result of the new
guidance. It is therefore not possible to state the impact, if any, of the new rules on any of the amounts recognised in the financial
statements.
Revised IAS 1 Presentation of Financial Statements (effective 1 July 2012) In June 2011, the IASB made an amendment to IAS 1
Presentation of Financial Statements. The AASB is expected to make equivalent changes to AASB 101 shortly. The amendment
requires entities to separate items presented in other comprehensive income into two groups, based on whether they may be
recycled to profit or loss in the future. It will not affect the measurement of any of the items recognised in the statement of financial
position or the profit or loss in the current period. The group intends to adopt the new standard from 1 July 2012.
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure
Requirements (effective 1 July 2013) In July 2011 the AASB decided to remove the individual key management personnel (KMP)
disclosure requirements from AASB 124 Related Party Disclosures, to achieve consistency with the international equivalent
standard and remove a duplication of the requirements with the Corporations Act 2001. While this will reduce the disclosures that
are currently required in the notes to the financial statements, it will not affect any of the amounts recognised in the financial
statements. The amendments apply from 1 July 2013 and cannot be adopted early. The Corporations Act requirements in relation
to remuneration reports will remain unchanged for now, but these requirements are currently subject to review and may also be
revised in the near future.
(ae) Parent entity financial information
The financial information for the parent entity, Super Retail Group Limited, disclosed in note 40 has been prepared on the same
basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries
(i)
Investments in subsidiaries are accounted for at cost in the financial statements of Super Retail Group Limited.
(ii) Tax consolidation legislation
Super Retail Group Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Super Retail Group Limited, and the controlled entities in the tax consolidated group account for their own current
and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand
alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Super Retail Group Limited also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the
tax consolidated group.
Page 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Super Retail
Group Limited for any current tax payable assumed and are compensated by Super Retail Group Limited for any current tax
receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Super Retail Group
Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the
wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity,
which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim
funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts
receivable from or payable to other entities in the group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised
as a contribution to (or distribution from) wholly-owned tax consolidated entities.
(iii) Financial guarantees
Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries for no compensation, the
fair values of these guarantees are accounted for as contributions and recognised as part of the cost of the investment.
2
Financial risk management
The Group's activities expose it to a variety of financial risks; market risk (including currency risk, fair value interest rate risk and
price risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's overall risk management program focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Group. The Group uses derivative financial instruments such as foreign exchange contracts and interest rate swaps to hedge
certain risk exposures.
Risk management is carried out by a central treasury department (Group Treasury) under policies approved by the Board of
Directors. Group Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating
units. The Board has approved written policies covering specific areas, such as mitigating foreign exchange, interest rate and
credit risks, use of derivative financial instruments and investing excess liquidity.
(a) Market risk
Foreign exchange risk
(i)
The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures to the United
States dollar and New Zealand dollar.
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a
currency that is not the entity’s functional currency.
The Group’s risk management policy is to hedge between 40% and 75% of anticipated US dollar purchases for the subsequent
4 months and up to 40% of anticipated US dollar purchases for the subsequent 5 to 12 month period.
Forward contracts and currency options are used to manage foreign exchange risk. The Group’s exposure to foreign currency
risk at the end of the reporting period is:
Trade receivables
Trade payables
Forward exchange contracts
- buy foreign currency (cash flow hedges)
Group sensitivity
2 July 2011
USD
$'000
3 July 2010
USD
$'000
779
9,763
64,000
508
5,541
8,000
Based on the financial instruments held at 2 July 2011, had the Australian dollar weakened/strengthened by 10% against other
currencies with all other variables held constant, the impact on the Group’s post-tax profit would have been nil, on the basis that the
financial instruments would have been designated as cash flow hedges and the impact upon the foreign exchange movements of
other financial assets and liabilities is negligible.
Page 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
2
Financial risk management (continued)
Equity would have been $2,951,000 lower/$3,606,000 higher (2010: $676,000 lower/$826,000 higher) had the Australian dollar
weakened/strengthened by 10% against other currencies, arising mainly from forward foreign exchange contracts designated as
cash flow hedges. The impact on other Group assets and liabilities as a result of movements in exchange rates are not material.
A sensitivity of 10% was selected following review of historic trends.
(ii) Cash flow and fair value interest rate risk
Group sensitivity
The Group’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to
cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During 2011 and
2010, the Group’s borrowings were at variable rates and were denominated in Australian dollars.
As at the reporting date, the Group had the following variable rate borrowings and interest rate swap contracts outstanding:
Bank overdrafts and bank loans
Interest rate swaps
An analysis by maturities is provided in (c) below.
2 July 2011
Balance
$'000
3 July 2010
Balance
$'000
100,000
40,000
110,000
80,000
The Group risk management policy is to maintain fixed interest rate hedges between 40% to 75% of anticipated debt levels over a 3
year period. The Group utilises interest rate swaps and swaptions to hedge its interest rate exposure on borrowings.
At 2 July 2011, if interest rates had changed by +/- 100 basis points from the year-end rates with all other variables held constant,
post-tax profit and equity for the year would have been $560,000 lower/higher (2010: $211,000 lower/higher), mainly as a result of
higher/lower interest expense on bank loans.
(b)
Credit risk
The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales of products and
services are made to customers with an appropriate credit history. Derivative counterparties and cash transactions are limited
to high credit quality financial institutions.
(c)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close-out market positions. Due to the dynamic
nature of the underlying businesses, the Group aims at maintaining flexibility in funding by keeping committed credit lines
available.
Financing arrangements
The Group entity had access to the following undrawn borrowing facilities at the reporting date. These funds can be drawn in
Australian dollars at any time subject to the continuing compliance with specified bank covenants.
Floating rate
- Cash advances (expiring within one year)
2011
$'000
90,000
Consolidated
2010
$'000
80,000
Page 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
2
Financial risk management (continued)
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities and gross settled derivative financial instruments into relevant maturity
groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows. For interest rate swaps the cash flows have been calculated using spot rates
applicable at the reporting date.
Group – at 2 July
2011
Less than 6
months
$’000
6-12 months Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Over 5
years
Non-derivatives
Trade & other
payables
Borrowings (excluding
finance leases)
Finance lease
liabilities
Total non-derivatives
Derivatives
Net settled (IRS)
Gross settled
- (inflow)
- outflow
Total derivatives
Group – at 3 July
2010
Non-derivatives
Trade & other
payables
Borrowings (excluding
finance leases)
Finance lease
liabilities
Total non-derivatives
Derivatives
Net settled (IRS)
Gross settled
- (inflow)
- outflow
Total derivatives
122,373
0
0
3,413
3,413
106,825
16
125,802
16
3,429
8
106,833
(78)
(61)
(44,298)
48,001
3,625
(15,388)
16,340
891
34
0
0
34
0
0
0
0
0
0
0
0
Less than 6
months
$’000
6-12 months Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Over 5
years
99,563
0
0
3,163
3,162
116,325
48
102,774
48
3,210
0
116,325
(623)
(9,470)
8,867
(1,226)
(623)
0
0
(623)
313
0
0
313
0
0
0
0
0
0
0
0
Total
contractual
cash flows
$’000
Carrying
amount
(assets) /
liabilities
122,373
122,373
113,651
100,000
40
236,064
40
222,413
(105)
(59,686)
64,341
4,550
(142)
0
0
(142)
Total
contractual
cash flows
$’000
Carrying
amount
(assets) /
liabilities
99,563
99,563
122,650
110,000
96
222,309
96
209,659
(933)
(9,470)
8,867
(1,536)
(282)
0
0
(282)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(d) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes.
The fair value of forward exchange contracts is determined using forward exchange market rates at the statement of financial
position date.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to
their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future
contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.
Page 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
2
Financial risk management (continued)
The following tables present the Group’s entity’s assets and liabilities measured and recognised at fair value at 2 July 2011.
Group – at 2 July 2011
Assets
Derivatives used for hedging
Total assets
Liabilities
Derivatives used for hedging
Total liabilities
Group – at 3 July 2010
Assets
Derivatives used for hedging
Total assets
Liabilities
Derivatives used for hedging
Total liabilities
Level 1
$'000
Level 2
$'000
Level 3
$'000
0
0
0
0
142
142
(4,115)
(4,115)
0
0
0
0
Level 1
$'000
Level 2
$'000
Level 3
$'000
0
0
0
0
904
904
0
0
0
0
0
0
Total
$'000
142
142
(4,115)
(4,115)
Total
$'000
904
904
0
0
The fair value of financial instruments traded in active markets such as publicly traded derivatives and trading and available-for-sale
securities is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets
held by the Group is the current bid price. These instruments are included in level 1.
The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is
determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market
conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used to
estimate fair value for long term debt for disclosure purposes. Other techniques, such as estimated discounted cash flows are used
to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as present value of
the estimated future cash flows. The fair value of forward exchange contracts is determined using forward exchange market rates
at the end of the reporting period. These instruments are included in level 2 and comprise debt investments and derivative financial
instruments. In the circumstances where a valuation technique for these instruments is based on significant observable inputs,
such instruments are included in level 3.
The carrying amounts of trade receivables and payables are assumed to approximate their fair values due to their short-term
nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at
the current market interest rate that is available to the Group for similar financial instruments. The fair value of the current
borrowings approximates the carrying amount, as the impact of discount is not significant.
(e)
Cash flow and fair value interest rate risk
As the Group has no significant interest-bearing assets, the Group’s income and operating cash flows are not materially
exposed to changes in market interest rates.
The Group's interest-rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash
flow interest-rate risk. Borrowings issued at fixed rates expose the Group to fair value interest-rate risk.
The Group manages its cash flow interest-rate risk by using floating-to-fixed interest rate swaps. Such interest rate swaps have
the economic effect of converting borrowings from floating rates to fixed rates. Generally, the Group raises long-term
borrowings at floating rates and swaps them into fixed rates that are lower than those available if the Group borrowed at fixed
rates directly. Under the interest-rate swaps, the Group agrees with other parties to exchange, at specified intervals (mainly
quarterly), the difference between fixed contract rates and floating-rate interest amounts calculated by reference to the agreed
notional principal amounts.
Page 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
2
Financial risk management (continued)
Carrying amounts and fair values of financial assets and
financial liabilities at statement of financial position date:
Financial assets
Cash and deposits
Receivables
Forward exchange contracts *
Interest rate swaps *
Non-traded financial assets
Financial liabilities
Trade and other payables
Commercial bill and other financing
Forward exchange contracts *
Non-traded financial liabilities
Consolidated entity
Carrying amount
Fair value
2011
$’000
2010
$’000
2011
$’000
2010
$’000
25,697
22,018
0
142
47,857
(133,386)
(99,175)
(4,115)
(236,676)
30,200
22,195
622
282
53,299
25,697
22,018
0
142
47,857
30,200
22,195
622
282
53,299
(107,257)
(109,008)
0
(216,265)
(133,386)
(99,175)
(4,115)
(236,676)
(107,257)
(109,008)
0
(216,265)
*These amounts are unrealised gains and losses which have been included in the carrying amount and fair value of the
on-statement of financial position financial assets and liabilities.
With the exception of the forward exchange contracts and interest rate swaps, none of the financial assets and liabilities
are readily traded on organised markets in the standardised form.
Where assets are carried at amounts above the fair value these amounts have not been written down as it is intended to
hold these assets to maturity.
Fair value is exclusive of costs that would be incurred on realisation of an asset and inclusive of costs that would be
incurred on settlement of a liability.
Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial
assets is the carrying amount, net of any provisions for doubtful debts of those assets, as disclosed in the statement of financial
position, and notes to the financial statements.
Credit risk for derivative financial instruments arises from the potential failure by counterparties to the contract to meet their
obligations. The credit risk exposure to forward exchange contracts and interest rate swaps is the fair value of these contracts.
3
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the
circumstances.
Critical accounting estimates and assumptions
(a)
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.
Estimated impairment of goodwill
(i)
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note
1(o). The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These
calculations require the use of assumptions. Refer to note 14 for details of these assumptions.
Estimated value of intangible assets relating to acquisitions
(ii)
The Group has allocated portions of the cost of acquisition to various intangible assets, such as brand names and supply
agreements. Brand names have been valued using the relief from royalty method. Supplier agreements have been valued
using the multi-period excess earnings method. The calculations require the use of assumptions. In addition, the value of
liability of put options granted as part of acquisitions has been estimated.
Estimated value of make good provision
(iii)
The Group has estimated the present value of the estimated expenditure required to remove any leasehold improvements and
return leasehold premises to their original state, in addition to the likelihood of this occurring. These costs have been capitalised
as part of the cost of the leasehold improvements. This provision was re-assessed during the year which resulted in a $3m
release.
Page 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
4
Segment information
(a)
Description of segments
Management has determined the operating segments based on the reports reviewed by the Chief Operating Officers that are used
to make strategic decisions.
The Chief Operating Officers consider the business from the following business segments:
Auto & Cycle Retailing: Retail and distribution of motor vehicle spare parts and bicycle accessories, tools and equipment.
Leisure Retailing: Retail and distribution of boating, camping, fishing, outdoor equipment and apparel.
(b)
Segment information provided to the Chief Operating Officers
The segment information provided to the Chief Operating Officers for the reportable segments for the year ended 2 July 2011 is as
follows:
Auto & Cycle
Retailing
$’000
Leisure
Retailing
$’000
Total
continuing
operations
$’000
Inter-segment
eliminations/
unallocated
$’000
Consolidated
$’000
2011
Segment Revenue
Sales to external customers
713,332
384,368
1,097,700
Inter segment sales
Total sales revenue
Other revenue/income
(5,099)
1,772
(280)
391
(5,379)
2,163
0
0
273
1,097,700
(5,379)
1,092,321
2,436
1,094,757
63,611
32,042
96,653
(7,028)
88,625
(10,973)
0
77,652
(22,053)
55,599
Total revenue and other
income
Segment result (pre-borrowing
costs and impairment)
Finance costs
Impairment of goodwill
Profit before income tax
Income tax expense
Profit for the period
Segment Assets & Liabilities
Segment assets
366,253
171,597
537,850
34,198
572,048
Unallocated assets
Total assets
0
0
572,048
Segment liabilities
(206,162)
(115,187)
(321,349)
160,587
(160,762)
Unallocated liabilities
Total liabilities
Acquisitions of property, plant
and equipment and other non-
current segment assets
Depreciation and amortisation
expense
Goodwill impairment
Other non-cash expenses
(107,606)
(107,606)
(268,368)
13,673
13,067
26,740
11,889
38,629
(15,797)
(6,860)
(22,657)
(145)
(22,802)
0
1,222
Page 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
The segment information provided to the Chief Operating Officers for the reportable segments for the year ended 3 July 2010
is as follows:
Auto & Cycle
Retailing
$’000
Leisure
Retailing
$’000
Total
continuing
operations
$’000
Inter-segment
eliminations/
unallocated
$’000
Consolidated
$’000
2010
Segment Revenue
Sales to external customers
687,856
254,005
941,861
Inter segment sales
Total sales revenue
Other revenue/income
(3,061)
284
(792)
130
(3,853)
414
0
0
343
941,861
(3,853)
938,008
757
938,765
48,180
21,290
69,470
(3,113)
66,357
(2,000)
0
(2,000)
(10,477)
0
(10,477)
(2,000)
53,880
(15,827)
38,053
Total revenue and other
income
Segment result (pre-borrowing
costs and impairment)
Finance costs
Impairment of goodwill
Profit before income tax
Income tax expense
Profit for the period
Segment Assets & Liabilities
Segment assets
319,796
154,766
474,562
47,684
522,246
Unallocated assets
Total assets
0
0
522,246
Segment liabilities
(161,422)
(96,563)
(257,985)
115,208
(142,777)
Unallocated liabilities
Total liabilities
Acquisitions of property, plant
and equipment and other non-
current segment assets
Depreciation and amortisation
expense
(108,912)
(108,912)
(251,689)
16,605
48,809
65,414
5,420
70,834
(15,609)
(4,976)
(20,585)
(145)
(20,730)
Goodwill impairment
Other non-cash expenses
(2,000)
(c) Other information
The consolidated entity’s divisions are operated in two main geographical areas.
Australia
(2,000)
784
The home country of the parent entity. The two areas of operation are (i) automotive, bicycles and accessories (ii) boating,
camping, outdoor entertainment and fishing.
New Zealand
Supercheap Auto and FCO operate in New Zealand.
Page 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
5
Revenue
From continuing operations
Sales revenue
Sale of goods
Other revenue
Interest
6
Other Income
Other income
7
Expenses
Profit before income tax includes the following specific gains and
expenses:
Expenses
Net loss on disposal of property, plant and equipment
Depreciation
Computer systems
Plant and equipment
Motor vehicles
Total depreciation
Amortisation and Impairment
Computer software
Brand name
Goodwill
Supplier agreement
Finance costs
Interest and finance charges
Other finance costs (a)
Accretion of put option
Finance costs expensed
Employee benefits expense
Superannuation expense
Salaries and wages
Rental expense relating to operating leases
Lease expenses
Equipment hire
Total rental expense relating to operating leases
Foreign exchange gains and losses
Net foreign exchange (gains)/losses
2011
$'000
1,092,321
1,092,321
1,077
1,077
Consolidated
2010
$'000
938,008
938,008
594
594
1,093,398
938,602
2011
$'000
1,359
1,359
2011
$'000
294
5,306
13,864
30
19,200
3,457
125
0
20
3,602
10,859
0
114
10,973
12,273
192,436
204,709
90,879
4,907
95,786
Consolidated
Consolidated
2010
$'000
163
163
2010
$'000
516
5,402
12,275
35
17,712
2,873
125
2,000
20
5,018
12,564
(2,201)
114
10,477
10,749
158,895
169,644
71,832
4,174
76,006
(1,419)
2,323
Page 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
(a) Other finance costs
A market-to-market loss on a $60,000,000 swap was $2,201,000 as at 27 June 2009 and was included as a finance cost expense in
the 2009 year as the swap was deemed to be ineffective as a cash flow hedge for the period. The loss was reversed in the 2010
year due to the expiry of the swap, reducing finance cost expense by $2,201,000 in 2010.
8
Income tax expense
Income tax expense
(a)
Current tax
Deferred tax
Adjustments for current tax of prior period
Deferred income tax (revenue) expense included in income tax expense
comprises:
Decrease (increase) in deferred tax assets (note 13)
(Decrease) increase in deferred tax liabilities (note 22)
Numerical reconciliation of income tax expense to prima facie tax
(b)
payable
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2010 - 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Tax consolidation adjustments re NZ branch
Investment allowance
Goodwill impairment
R & D credits
Sundry items
Adjustments for current tax of prior periods
Income tax expense
Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not
recognised in net profit or loss but directly debited or credited to equity
Net deferred tax – debited/(credited) directly to equity (notes 13 and 22)
Tax expense (income) relating to items of other comprehensive income
Cash flow hedges
(c) Tax consolidation legislation
Consolidated
2011
$'000
23,975
(1,807)
(115)
22,053
(1,771)
(36)
(1,807)
77,652
23,296
(44)
0
0
(1,207)
123
22,168
(115)
22,053
(1,228)
(1,228)
(1,463)
(1,463)
2010
$'000
17,867
(1,652)
(388)
15,827
(1,614)
(38)
(1,652)
53,880
16,164
(39)
(199)
600
(434)
123
16,215
(388)
15,827
(1,137)
(1,137)
(548)
(548)
Super Retail Group Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as
of 1 July 2003. The accounting policy in relation to this legislation is set out in note 1(d).
On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement
which, in the opinion of the directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the
head entity, Super Retail Group Limited.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Super Retail
Group Limited for any current tax payable assumed and are compensated by Super Retail Group Limited for any current tax
receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Super Retail Group
Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the
wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity,
which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim
funding amounts to assist with its obligations to pay tax instalments.
Page 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
9
Current assets - Cash and cash equivalents
Cash at bank and in hand
10
Current assets - Trade and other receivables
Trade receivables
Provision for impairment of receivables (a)
Other receivables
Tax receivable
Prepayments
(a)
Impaired trade receivables
Consolidated
2011
$'000
2010
$'000
25,697
30,200
Consolidated
2011
$'000
13,176
(268)
12,908
3,777
1,818
3,657
22,160
2010
$'000
10,969
(210)
10,759
2,030
548
8,858
22,195
As at 2 July 2011 current trade receivables of the Group with a nominal value of $268,000 (2010: $210,000) were impaired.
The amount of the provision was $268,000 (2010: $210,000). The individually impaired receivables mainly relate to wholesalers
who are in unexpectedly difficult economic situations.
Movements in the provision for impairment of receivables are as follows:
As at 3 July 2010
Provision for impairment recognised during the year
Receivables written off during the year as uncollectible
Consolidated
2011
$'000
(210)
(236)
178
(268)
2010
$'000
(347)
(947)
1,084
(210)
The creation and release of the provision for impaired receivables has been included in “Administration” in the income statement.
Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.
(b) Past due but not impaired
As of 2 July 2011, trade receivables of $3,586,000 (2010: $3,009,000) were past due but not impaired. These relate to a number of
independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:
0 to 3 months
3 to 6 months
Over 6 months
Consolidated
2011
$'000
2,435
668
483
3,586
2010
$'000
1,588
333
1,088
3,009
Page 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
11
Current assets – Inventories
Finished goods
- at lower of cost or net realisable value
(a)
Inventory expense
Consolidated
2011
$'000
2010
$'000
292,874
253,101
Inventories recognised as expense during the year ended 2 July 2011 amounted to $583,164,000 (2010: $518,626,000).
Write-downs of inventories to net realisable value recognised as an expense/(benefit) during the year ended 2 July 2011
amounted to ($1,388,000) (2010: ($1,323,000)). The benefit has been included in ‘costs of sales of goods’ in the income
statement.
12
Non-current assets – Property, plant and equipment
Plant and equipment, at cost
Less accumulated depreciation
Net plant and equipment
Motor vehicles, at cost
Less accumulated depreciation
Net motor vehicles
Computer systems, at cost
Less accumulated depreciation
Net computer equipment
Consolidated
2011
$'000
160,141
(63,964)
96,177
266
(240)
26
45,805
(32,731)
13,074
2010
$'000
141,546
(51,581)
89,965
912
(251)
661
42,377
(27,694)
14,683
Total net property, plant and equipment
109,277
105,309
Assets pledged as security are detailed in Note 20
Reconciliations - consolidated entity
Carrying amounts at 4 July 2010
Additions
Disposals
Business acquisitions
Depreciation and amortisation
Foreign currency exchange differences
Carrying amounts at 2 July 2011
Reconciliations - consolidated entity
Carrying amounts at 28 June 2009
Additions
Disposals
Business acquisitions
Depreciation and amortisation
Foreign currency exchange differences
Carrying amounts at 3 July 2010
Plant and
equipment
$’000
Motor
vehicles
$’000
Computer
systems
$’000
661
0
(197)
(413)
(30)
5
26
70
0
(32)
658
(35)
0
661
14,683
4,522
(157)
(668)
(5,306)
0
13,074
14,678
4,467
(118)
1,079
(5,402)
(21)
14,683
89,965
23,084
(3,390)
185
(13,864)
197
96,177
73,200
18,643
(439)
10,965
(12,275)
(129)
89,965
Page 56
Total
$’000
105,309
27,606
(3,744)
(896)
(19,200)
202
109,277
87,948
23,110
(589)
12,702
(17,712)
(150)
105,309
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
13
Non-current assets - Deferred tax assets
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss
Doubtful debts
Employee benefits
Accruals
Inventories
Deferred make good provision
Straight line lease adjustment
Deferred income
Depreciation
Provision for warranties and legal costs
Amounts recognised directly in equity
Cash flow hedges
Share placement costs
Set off with deferred tax liabilities (note 22)
Net deferred tax assets
Movements:
Opening balance
Credited/(charged) to the income statement
Credited/(charged) to equity
Foreign exchange on translation of NZ subsidiary
Acquired in acquisition
Closing balance
Deferred tax assets to be recovered after more than 12 months
Deferred tax assets to be recovered within 12 months
Consolidated
2011
$'000
2010
$'000
85
5,779
312
2,137
257
4,662
127
2,512
13
15,884
1,235
354
17,473
(6,684)
10,789
14,559
1,771
1,000
0
143
17,473
14,543
2,930
17,473
63
4,569
103
2,100
1,175
3,965
107
1,875
13
13,970
0
589
14,559
(6,948)
7,611
11,206
1,614
589
0
1,150
14,559
12,013
2,546
14,559
Page 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
14
Non-current assets – Intangible assets
Consolidated
Goodwill at cost
Less accumulated impairment charge
Net goodwill
Trademarks, at cost
Less accumulated depreciation
Net trademarks
Computer software
Less accumulated amortisation
Net computer software
Brand names at cost
Less amortisation
Net brand names
Supplier agreement
Less amortisation
Net supplier agreement
Total net intangibles
2011
$’000
78,452
(2,000)
76,452
14
0
14
32,614
(20,294)
12,320
22,500
(375)
22,125
400
(60)
340
2010
$’000
76,701
(2,000)
74,701
14
0
14
23,356
(16,851)
6,505
22,500
(250)
22,250
400
(40)
360
Goodwill
$’000
Trademarks
$’000
Computer
Software
$’000
Brand
Name
$’000
Supplier
Agreement
$’000
Totals
$’000
111,251
103,830
Reconciliations – consolidated
entity – 2011
Carrying amounts at 4 July 2010
Additions
Disposals/Revision in provisional
accounting
Amortisation/Impairment charge
Foreign currency exchange
differences
Carrying amounts at 2 July 2011
74,701
0
1,751
0
0
76,452
14
0
0
0
0
14
6,505
9,455
(183)
(3,457)
0
12,320
22,250
0
0
(125)
0
22,125
360
0
0
(20)
0
340
103,830
9,455
1,568
(3,602)
0
111,251
Amortisation of $3,602,000 (2010: $5,018,000) is included in “Administration” in the consolidated income statement.
Goodwill
$’000
Trademarks
$’000
Computer
Software
$’000
Brand
Name
$’000
Supplier
Agreement
$’000
Totals
$’000
Reconciliations – consolidated
entity – 2010
Carrying amounts at 28 June 2009
Acquisitions
Additions
Disposals/Revision in provisional
accounting
Amortisation/Impairment charge
Foreign currency exchange
differences
Carrying amounts at 3 July 2010
67,280
9,421
0
0
(2,000)
0
74,701
(a)
Impairment tests for goodwill
14
0
0
0
0
0
14
5,358
0
4,033
(24)
(2,873)
11
6,505
2,375
20,000
0
0
(125)
0
22,250
380
0
0
0
(20)
0
360
75,407
29,421
4,033
(24)
(5,018)
11
103,830
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the group of assets based on
acquisition.
Page 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
14 Non-current assets – Intangible assets (continued)
A CGU level summary of the goodwill allocation is presented below:-
2011
Goodwill
2010
Goodwill
Supercheap
Auto
$’000
BCF
$’000
Goldcross
Cycles
$’000
Ray’s
Outdoors
$’000
Total
$’000
45,336
12,950
7,954
10,212
76,452
Supercheap
Auto
$’000
BCF
$’000
Goldcross
Cycles
$’000
Ray’s
Outdoors
$’000
Total
$’000
45,336
12,950
7,954
8,461
74,701
The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow
projections based on financial budgets approved by the Board of Directors covering a five-year period. Cash flows beyond the
five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term
average growth rate for the business in which the CGU operates.
Goodwill allocation presented for Goldcross Cycles includes goodwill for Victor Cycles and Riders Cycles.
(b) Key assumptions used for value-in-use calculations
The following assumptions have been used for the analysis of each CGU within the business segment. Management
determined budgeted gross margin based on past performance and its expectations for the future. The weighted average
growth rates used are consistent with forecasts included in industry reports. The discount rates used are pre-tax. The factors
used by each business segment is shown below.
Supercheap Auto
BCF
Goldcross Cycles
Ray’s Outdoors
Growth rate
Discount rate
2011
%
3.0
5.0
10.0
10.0
2010
%
3.0
5.0
7.5
-
2011
%
15
15
15
15
2010
%
15
15
15
-
The initial two year’s of a store operating growth rate is assumed to be 10% for Supercheap Auto, BCF, Ray’s Outdoors and
Goldcross Cycles.
(c)
Impairment charge
An impairment charge of $2,000,000 arose in the Goldcross Cycles CGU for the period ended 3 July 2010 following a review of
sales and gross margin performance against business plan expectations in December 2009. No class of asset other than
goodwill was impaired. This has been included in the Auto & Cycle Retailing segment in note 4.
(d) Useful life for brands
The Goldcross Cycles brand has been determined to have a 20 year life and is amortised over this period.
No amortisation is provided against the carrying value of the purchased Ray’s Outdoors brand on the basis that it is considered
to have an indefinite useful life.
Key factors taken into account in assessing the useful life of brands were:
•
•
the strong recognition of the Ray’s Outdoors brand; and
there are currently no legal, technical or commercial factors indicating that the life should be considered limited.
Page 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
15
Current liabilities - Trade and other payables
Trade payables
Other payables
Loans from related parties
16
Current liabilities – Borrowings
Secured
Finance leases
Cash advance
Total current liabilities – secured interest bearing liabilities
Unsecured
Related parties
Unsecured bank financing
Total current liabilities – unsecured interest bearing liabilities
Total current liabilities – interest bearing liabilities
Consolidated
2011
$'000
83,050
39,305
18
122,373
2010
$'000
70,459
29,084
20
99,563
Consolidated
2011
$'000
32
0
32
0
0
0
32
2010
$'000
96
10,000
10,096
0
0
0
10,096
(a) Cash Advances
Cash advances have been drawn as a source of short-term financing on a needs basis.
(b) Interest rate risk exposures
Details of the Group’s exposure to interest rate changes on borrowings are set out in note 21.
(c) Fair value disclosures
Details of the fair value of borrowings for the Group are set out in note 21.
(d)
Security
Details of the security relating to each of the secured liabilities and further information on the bank overdrafts and bank loans are
set out in note 20.
17
Current liabilities – Current tax liabilities
Income tax payable
Consolidated
2011
$'000
11,013
2010
$'000
7,694
Page 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
18
Current liabilities – Provisions
Put option provision(a)
Provision for warranties(b)
Make good provision(c)
Employee benefits(d)
(a) Put Option Provision
Consolidated
2011
$'000
871
44
460
10,911
12,286
2010
$'000
758
44
346
10,633
11,781
The put option relates to the acquisition of Oceania Bicycles Pty Ltd. As part of this acquisition, Super Retail Group Limited has
granted the vendor an option to sell the remaining 50% to the Group at an agreed EBITA multiple. This option can be exercised at
any time up to 10 years from acquisition.
(b) Provision for Warranties
Provision is made for the estimated warranty claims in respect of products sold which are still under warranty at balance date.
These claims are expected to be settled in the next financial year. Management estimates the provision based on historical
warranty claim information and any recent trends.
(c) Make good provision
Provision is made for costs arising from contractual obligations in lease agreements at the inception of the agreement. A provision
has been recognised for the present value of the estimated expenditure required to remove any leasehold improvements. These
costs have been capitalised as part of the cost of the leasehold improvements and are amortised over the shorter of the term of the
lease or the useful life of the assets.
(d) Employee benefits
The current provision for employee benefits includes accrued annual leave and long service leave. For long service leave it covers
all unconditional entitlements where employees have completed the required period of service.
19
Non-current liabilities – Trade and Other Payables
Straight line lease adjustment
20 Non-current liabilities – Borrowings
Secured
Finance lease
Cash advance
Less borrowing costs capitalised, net
Consolidated
2011
$'000
15,538
2010
$'000
13,217
Consolidated
2011
$'000
8
100,000
(865)
99,143
2010
$'000
0
100,000
(1,088)
98,912
The facilities are secured by first registered floating company charges over all the assets and undertakings of Super Retail Group
Limited and all its wholly-owned subsidiaries in favour of ANZ Banking Group Limited, HSBC and Commonwealth Bank of Australia
and by cross guarantees and indemnities between Super Retail Group Limited and all its wholly-owned subsidiaries in favour of
ANZ Banking Group Limited, HSBC and Commonwealth Bank of Australia. Financial covenants are provided by Super Retail
Group Limited with respect to leverage, gearing, fixed charges coverage and tangible net worth.
Page 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
20 Non-current liabilities – Borrowings (continued)
The carrying amount of assets pledged as security are equal to those shown in the consolidated statement of financial position.
Financing arrangements
Unrestricted access was available at balance date to the following lines of credit:
Total facilities
- Bank debt funding facility
- Multi-option facility (including indemnity/guarantee)
Totals
Facilities used at balance date
- Bank debt funding facility
- Multi-option facility (including indemnity/guarantee)
Totals
Unused balance of facilities at balance date
- Bank debt funding facility
- Multi-option facility (including indemnity/guarantee)
Totals
Consolidated
2011
$’000
2010
$’000
190,000
7,000
197,000
100,000
3,030
103,030
90,000
3,970
93,970
190,000
7,000
197,000
110,096
2,689
112,785
79,904
4,311
84,215
In addition, the Company has access to a $132 million (2010: $122 million) transactional facility for clean credit and foreign
currency dealings.
The current interest rates on the financing arrangements
are:
- Bank debt funding facility
3.97%- 5.08% (2010: 3.97%-7.09%)
Fair Value
Refer to Note 2 for the carrying amounts and fair values of borrowings at the end of reporting period.
Risk exposures
Information about the group’s exposure to interest rate and foreign currency changes is provided in Note 2.
21 Derivative Financial instruments
Derivative financial instruments
The Group is party to derivative financial instruments in the normal course of business in order to hedge exposures to foreign
exchange and interest rate changes.
Foreign exchange contracts
The economic entity retails products including some that have been imported from South East Asia. In order to protect against
exchange rate movements, the economic entity has entered into forward exchange rate contracts to purchase United States
Dollars. The contracts are timed to mature in line with forecasted payments for imports and cover forecast purchases for the
coming four months on a rolling basis.
Page 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
21
Derivative Financial instruments (continued)
At balance date the following amounts were committed on foreign currency forward exchange contracts:
Buy United States dollars and sell Australian dollars with maturity
- 0 to 6 months
- 7 to 12 months
Consolidated entity
2011
$000
47,500
16,500
2010
$000
8,000
0
The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly in
equity. When the cash flows occur, the Group adjusts the initial measurement of the component recognised in the statement
of financial position by the related amount deferred in equity. In the year ended 2 July 2011, no hedges were designated as
ineffective (2010: nil).
Gains and losses arising from hedging contracts terminated prior to maturity are also carried forward until the designated
hedged transaction occurs.
The following gains, losses and costs have been deferred as at the balance date:
- unrealised gains/(losses) on foreign exchange contracts (a)
- unrealised gains/(losses) on interest rate swaps (b)
- total gains/(losses)
- realised losses and costs
- unrealised losses and costs on interest rate swaps
- total losses and costs
Net gains/(losses and costs)
(a)
(b)
Included in other payables under note 15
Included in other receivables under note 10
(4,115)
142
(3,973)
0
0
(3,973)
622
282
904
0
0
904
Interest rate swap contracts
Bank loans of the economic entity currently bear an average variable interest rate of 6.83% (2010: 7.28%). It is policy to protect
part of the loans from exposure to increasing interest rates. Accordingly, the economic entity has entered into interest rate swap
contracts, under which it is obliged to receive interest at variable rates and to pay interest at fixed rates. The contracts are settled
on a net basis and the net amount receivable or payable at the reporting date is included in other debtors or other creditors.
During the year the Group was a party to two interest rate swaps for a total nominal value of $80,000,000 (2010: $80,000,000) of
which $60,000,000 expired on 30 May 2011 and $20,000,000 will be expiring on 16 January 2012. The Group also entered into a
$20,000,000 one year interest swap with a start date of 31 January 2012. This swap is for a fixed interest rate of 4.92%. The
Group has also entered into a $20,000,000 two year interest rate swap with a start date of 31 October 2011. This swap is for a
fixed interest rate of 4.64%.
The contracts require settlement of net interest receivable or payable each 90 days. The settlement dates coincide with the dates
on which interest is payable on the underlying debt. Swaps currently in place cover approximately 20% (2010: 73%) of the loan
principal outstanding. The average fixed interest rate is 3.97% (2010: 6.31%).
Page 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
21
Derivative Financial instruments (continued)
Interest rate risk exposures
The economic entity’s exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in
the following table:
Floating
interest
rate
$’000
24,743
0
24,743
4.28%
0
79,135
0
79,135
Floating
interest
rate
$’000
21,360
0
21,360
2.7%
0
29,008
0
29,008
Notes
9
10
15, 17
16, 20
18, 23
Notes
9
10
15, 17
16, 20
18, 23
2011
Financial assets
Cash and deposits
Receivables
Total financial assets
Weighted average rate of
interest
Financial liabilities
Trade and other payables
Commercial bill/cash advance
Employee entitlements
Total financial liabilities
Weighted average rate of
interest
Net financial assets/ (liabilities)
2010
Financial assets
Cash and deposits
Receivables
Total financial assets
Weighted average rate of
interest
Financial liabilities
Trade and other payables
Commercial bill/cash advance
Employee entitlements
Total financial liabilities
Weighted average rate of
interest
Net financial assets/ (liabilities)
Fixed interest maturing in
1 year or
less
$’000
Over 1 to
5 years
$’000
More than
5 years
$000
Non-
interest
bearing
$’000
Total
$’000
0
0
0
0
20,032
0
20,032
0
0
0
0
8
0
8
0
0
0
0
0
0
0
0
954
22,160
23,114
25,697
22,160
47,857
133,386
0
13,863
147,249
133,386
99,175
13,863
246,424
(124,135)
(198,567)
5.0%
3.97%
12.37%
(54,392)
(20,032)
(8)
Fixed interest maturing in
1 year or
less
$’000
Over 1 to
5 years
$’000
More than
5 years
$000
Non-
interest
bearing
$’000
Total
$’000
0
0
0
0
0
0
0
0
8,840
22,195
31,035
30,200
22,195
52,395
107,257
0
12,840
120,097
107,257
109,008
12,840
229,105
(89,062)
(176,710)
0
0
0
0
0
0
0
60,000
0
60,000
0
20,000
0
20,000
7.3%
7.09%
3.97%
(7,648)
(60,000)
(20,000)
Page 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
22
Non-current liabilities - Deferred tax liabilities
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss
Prepayments
Brand values
Amounts recognised directly in equity
Foreign exchange revaluation reserve
Cash flow hedges
Consolidated
2011
$'000
2010
$'000
3
6,638
6,641
0
43
6,684
2
6,675
6,677
0
271
6,948
Set-off of deferred tax liabilities of parent entity pursuant to set-off provisions
Net deferred tax liabilities
(6,684)
0
(6,948)
0
Movements:
Opening balance
Charged/(credited) to the income statement
Charged/(credited) to equity
Foreign exchange on translation of NZ subsidiary
Acquired in acquisition
Closing balance
Deferred tax liabilities to be settled after more than 12 months
Deferred tax liabilities to be settled within 12 months
23
Non-current liabilities – Provisions
Make good provision
Employee benefits
Provision for Oceania future dividend (a)
6,948
(36)
(228)
0
0
6,684
6,681
3
6,684
1,534
(38)
(548)
0
6,000
6,948
6,946
2
6,948
Consolidated
2011
$'000
4,899
2,952
132
7,983
2010
$'000
8,087
2,207
132
10,426
(a) Provision for Oceania future dividend
A provision has been recognised for the present value of the estimated cost of the future dividend required to be paid with respect
to Oceania.
(b) Movements in provisions (consolidated entity) (notes 18 & 23)
Opening balance as at 4 July 2010
Additional provisions recognised
Indexing of provisions
Provision released
Acquisitions
Closing balance as at 2 July 2011
Put option
$’000
758
0
113
0
0
871
Warranties
$’000
44
0
0
0
0
44
Make good
$'000
8,433
0
0
(3,074)
0
5,359
Oceania future
dividend
$’000
132
0
0
0
0
132
Total
$’000
9,367
0
113
(3,074)
0
6,406
Page 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
24
Contributed equity
(a) Share Capital
Ordinary shares fully paid
Movement in ordinary share capital
(b)
Issue of shares on incorporation (8 April 2004)
Issue of shares on 23 April 2004
Share split on 19 May 2004
Issue of shares on 8 March 2008
Dividend reinvestment plan issue on 14 October 2009
Dividend reinvestment plan issue on 17 March 2010
Issue of shares on 4 May 2010
Shares issue under share option
Share placement plan on 27 May 2010
Shares issue under share option
Shares issued on 31 May 2010 as consideration for Ray’s
Outdoors Pty Ltd
Dividend reinvestment plan issue on 1 October 2010
Dividend reinvestment plan issue on 5 April 2011
Shares issue under share option
Less transaction costs on share issue
Deferred tax credit recognised directly in equity
Closing balance 2 July 2011
Parent Entity
2011
$'000
2010
$'000
194,541
182,158
Issue Price
$’000
1.00
1.69
0
1.97
5.35
4.96
4.80
2.36
4.80
2.42
5.16
5.98
6.40
2.55
0
84,233
0
394
3,821
3,279
76,320
1,346
12,143
448
1,548
4,637
6,028
1,966
196,163
(1,976)
354
194,541
Number of
Shares
1
49,697,150
56,732,471
200,000
714,234
661,137
15,900,000
612,500
2,529,809
185,000
300,000
775,040
941,397
770,000
130,018,739
The purpose of the issue on 27 April 2010 was to finance the acquisition of Ray’s Outdoors and provide additional funds to
meet capital expenditure and working capital requirements associated with growing the Ray’s Outdoors store network.
Dividend reinvestment plan
The company has established a dividend reinvestment plan under which holders of ordinary shares may elect to have all or
part of their dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash. Shares
issued under the plan at a 2.5% discount to the market price.
The ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the parent entity in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present, in person or by proxy, at a meeting of shareholders of the
parent entity is entitled to one vote and, upon a poll, each share is entitled to one vote.
Options over nil (2010: nil) ordinary shares were issued during the period, with 770,000 (2010: 797,500) options being
exercised during the period. Performance rights over 363,427 (2010: 375,165) ordinary shares were issued during the
period. Nil performance rights were exercised during the period. Information relating to options outstanding at the end of the
financial period are set out in Note 38.
(c) Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can
continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
The Group monitors overall capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by total
capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as ‘equity’ as
shown in the statement of financial position (including minority interest) plus net debt.
During 2011 the Group’s strategy, which was unchanged from 2010, was to ensure that the gearing ratio remained below
50%. This target ratio range excludes the short-term impact of acquisitions. The gearing ratios at 2 July 2011 and 3 July
2010 were as follows:
Page 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
24
Contributed equity (continued)
Total borrowings
Less: Cash & cash equivalents
Net Debt
Total Equity
Total Capital
Gearing Ratio
Consolidated
2011
$'000
99,175
(25,697)
73,478
303,680
377,158
19.5%
2010
$'000
109,008
(30,200)
78,808
270,557
349,365
22.6%
The decrease in the gearing ratio was due to dividend reinvestment plan in place for shareholders as well as a small reduction in
debt levels. The Group now has significant capacity to fund its growth plans, including continued expansion of the store network.
The Group monitors ongoing capital on the basis of the fixed charge cover ratio. The ratio is calculated as earnings before finance
costs, tax, depreciation, amortisation and store and DC rental expense divided by fixed charge obligations (being finance costs and
store and DC rental expenses). Rental expenses are calculated net of straight line lease adjustments, while finance costs exclude
non-cash mark-to-market losses or gains on interest rate swaps.
During 2011 the Group’s strategy, which was unchanged from 2010, was to maintain a fixed charge cover ratio of around 2.0 times.
The fixed charge cover ratios at 2 July 2011 and 3 July 2010 were as follows:
Earnings
Add: Taxation expense
Finance costs
Depreciation and amortisation
Rental expense
EBITDAR
Finance costs (excluding MTM adjustment)
Rental expense
Fixed charges
Fixed charge cover ratio
Consolidated
2011
$’000
55,599
22,053
10,973
22,802
84,486
195,913
10,973
84,486
95,459
2.05
2010
$’000
38,053
15,827
10,477
22,730
69,833
156,920
12,678
69,833
82,511
1.90
The improvement in the fixed charge cover ratio was due to the increased profitability of the Group.
Page 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
25
Reserves and retained profits
Consolidated
Reserves
Foreign currency translation reserve
Share based payments reserve
Hedging reserve
Movements
Foreign currency translation reserve
Balance at the beginning of the financial period
Net exchange difference on translation of foreign controlled Entity
Balance at the end of the financial period
Share based payments reserve
Balance at beginning of the financial period
Options lapsed
Options and performance rights expense
Balance at the end of the financial period
Hedging reserve
Balance of beginning of the financial period
Revaluation – gross
Deferred tax
Balance at the end of the financial period
2011
$'000
(3,607)
3,149
(2,781)
(3,239)
(2,407)
(1,200)
(3,607)
1,932
0
1,217
3,149
633
(4,877)
1,463
(2,781)
2010
$'000
(2,407)
1,932
633
158
(2,933)
526
(2,407)
1,068
0
864
1,932
1,907
(1,822)
548
633
Retained earnings
Balance at the beginning of the financial period
Net profit/(loss) for the financial period attributable to shareholders of Super Retail
Group Limited
Dividends provided for or paid
Retained profits/(losses) at the end of the financial period
88,241
71,685
55,599
(31,462)
112,378
38,053
(21,497)
88,241
Nature and purpose of reserves
(i) Hedging reserve - cash flow hedges
The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly
in equity, as described in note 1(k). Amounts are recognised in profit and loss when the associated hedged transaction affects
profit and loss.
(ii) Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options and performance rights issued but not
exercised.
(iii) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve,
as described in note 1(e). The reserve is recognised in profit and loss when the net investment is disposed of.
Page 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
26 Dividends
Parent Entity
2011
$’000
2010
$’000
Ordinary shares
Dividends paid by Super Retail Group Limited during the reporting period were as
follows:
Interim dividend for the period ended 1 January 2011 of 11.5 cents (2010: 8.5 cents
per share) paid on 5 April 2011. Fully franked based on tax paid @ 30%
14,844
9,182
Final dividend for the period ended 3 July 2010 of 13.0 cents per share (2010: 11.5
cents per share) paid on 1 October 2010. Fully franked based on tax paid @ 30%
Total dividends provided and paid
16,618
31,462
12,315
21,497
Dividends paid in cash or satisfied by the issue of shares under the dividend
reinvestment plan were as follows:
Paid in cash
Satisfied by issue of shares
Dividends not recognised at year end
Subsequent to year end, the Directors have declared the payment of a final dividend
of 17.5 cents per ordinary share (2010: 13.0 cents per ordinary share), fully franked
based on tax paid at 30%.
20,797
10,665
31,462
14,395
7,102
21,497
The aggregate amount of the dividend expected to be paid on 26 September 2011,
out of retained profits at 2 July 2011, but not recognised as a liability at year end, is
22,753
16,579
Franking credits
The franked portions of dividends paid after 2 July 2011 will be franked out of existing
franking credits and out of franking credits arising from the payments of income tax in
the years ending after 2 July 2011.
Franking credits remaining at balance date available for dividends declared after the
current balance date based on a tax rate of 30%
52,124
47,147
The above amounts represent the balance of the franking account as at the end of the financial period, adjusted for:
- franking credits that will arise from the payment of the current tax liability; and,
- franking debits that will arise from the payment of the dividend as a liability at the reporting date.
The amount recorded above as the franking credit amount is based on the amount of Australian income tax paid or to be paid
in respect of the liability for income tax at the balance date.
The impact on the franking account of the dividend recommended by the directors since year end, but not recognised as a liability
at year end, will be a reduction in the franking account of $9,751,405 (2010: $7,105,371).
Page 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
27
Key management personnel disclosures
(a)
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2011
$
2010
$
3,556,350
231,763
726,090
4,514,203
3,344,736
294,597
430,935
4,070,268
The key management personnel remuneration in some instances has been paid by a subsidiary.
(b)
Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and
conditions of the options, can be found in the Remuneration and Diversity Report on pages 18 to 28.
(ii) Performance Rights
Details of performance rights provided as remuneration and shares issued on the exercise of such performance rights, together
with terms and conditions of the performance rights, can be found in the Remuneration and Diversity Report on pages 18 to 28.
The number of performance rights over ordinary shares in the Company held during the financial year by each Director of Super
Retail Group Limited and other key management personnel of the Group, including their personally related parties, are set out
below.
2011
Balance at the
start of the year
Granted during
the year as
compensation
0
0
0
0
Name
Directors of Super Retail Group
R J Wright
R A Rowe
D D McDonough (resigned
31 August 2010)
R J Skippen
S A Pitkin
P A Birtles
Other key management personnel of the Group
D F Ajala
S J Doyle
G G Carroll
G L Chad
0
0
0
100,000
38,835
35,437
25,172
28,420
0
0
0
100,000
36,325
33,333
23,089
26,270
Exercised
during the year
Other changes
during the year
Balance at the
end of the year
Vested and
exercisable at
the end of the
year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
200,000
75,160
68,770
48,261
54,690
0
0
0
0
0
0
0
0
0
0
Page 70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
27 Key management personnel disclosures (continued)
(iii) Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each Director of Super Retail
Group Limited and other key management personnel of the Group, including their personally related parties, are set out below.
2011
0
0
Balance at the
start of the year
Name
Directors of Super Retail Group Limited
R J Wright
R A Rowe
D D McDonough (resigned
31 August 2010)
R J Skippen
S A Pitkin
P A Birtles
Other key management personnel of the Group
D F Ajala
S J Doyle
G G Carroll
G L Chad
0
0
0
350,000
135,000
300,000
175,000
87,500
Granted during
the year as
compensation
Exercised
during the year
Other changes
during the year
Balance at the
end of the year
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
150,000
135,000
50,000
75,000
37,500
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
200,000
0
250,000
100,000
50,000
No options are vested and unexercisable at the end of the year.
2010
Granted during
the year as
compensation
Exercised
during the year
Other changes
during the year
Balance at the
end of the year
0
0
Balance at the
start of the year
Name
Directors of Super Retail Group Limited
R J Wright
R A Rowe
D D McDonough (resigned
31 August 2010)
R J Skippen
P A Birtles
Other key management personnel of the Group
D F Ajala
S J Doyle
G G Carroll
G L Chad
400,000
400,000
250,000
125,000
0
0
500,000
0
0
0
0
0
0
0
0
0
0
0
0
0
150,000
265,000
100,000
75,000
37,500
0
0
0
0
0
0
0
0
0
0
0
0
0
350,000
135,000
300,000
175,000
87,500
Vested and
exercisable at
the end of the
year
0
0
0
0
0
200,000
0
250,000
100,000
50,000
Vested and
exercisable at
the end of the
year
0
0
0
0
150,000
35,000
200,000
75,000
37,500
No options are vested and unexercisable at the end of the year.
Share holdings
(iii)
The numbers of shares in the Company held during the financial year by each director of Super Retail Group Limited and other key
management personnel of the Group, including their personally related parties, are set out below. There were no shares granted
during the reporting period as compensation.
Page 71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
27
Key management personnel disclosures (continued)
2011
Name
Directors of Super Retail Group Limited
Ordinary shares
R J Wright
R A Rowe
D D McDonough (resigned 31 August 2010)
R J Skippen
S A Pitkin
P A Birtles
Other key management personnel of the Group
Ordinary shares
D F Ajala
S J Doyle
G G Carroll
G L Chad
2010
Name
Directors of Super Retail Group Limited
Ordinary shares
R J Wright
R A Rowe
D D McDonough (resigned 31 August 2010)
R J Skippen
P A Birtles
Other key management personnel of the Group
Ordinary shares
D F Ajala
S J Doyle
G G Carroll
G L Chad
Loans to key management personnel
There were no loans to individuals at any time.
Balance at the
start of the year
Received during
the year on the
exercise of
options
Other changes
during the year
Balance at
the end of the
year
44,274
53,028,254
62,083
0
0
1,542,596
0
0
0
0
0
150,000
1,774
643,072
0
0
10,000
0
46,048
53,671,326
62,083
0
10,000
1,692,596
165,136
23,411
0
37,500
135,000
50,000
75,000
37,500
(191,700)
(50,000)
(75,000)
0
108,436
23,411
0
75,000
Balance at the
start of the year
Received during
the year on the
exercise of
options
Other changes
during the year
Balance at
the end of the
year
40,609
52,402,159
60,000
0
1,392,596
0
0
0
0
150,000
3,665
626,095
2,083
0
0
44,274
53,028,254
62,083
0
1,542,596
281
143,411
0
50,000
265,000
100,000
75,000
37,500
(100,145)
(220,000)
(75,000)
(50,000)
165,136
23,411
0
37,500
Other transactions with key management personnel
Aggregate amounts of each of the above types of other transactions with key management personnel of Super Retail Group
Limited:
Amounts paid to key management personnel as shareholders
Dividends
2011
$000
2010
$000
13,510
10,891
Page 72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
28
Remuneration of auditors
During the period the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms.
(a)
Assurance services
Audit services
PricewaterhouseCoopers Australian firm
Audit and review of financial reports and other audit work under the Corporations
Act 2001
Total remuneration for audit services
Total remuneration for assurance services
(b)
Taxation services
PricewaterhouseCoopers Australian firm
Tax compliance services, including review of company income tax returns
Customs Advice
Total remuneration for taxation services
(c)
Advisory services
PricewaterhouseCoopers Australian firm
Business Consulting
Total remuneration for advisory services
Consolidated
2011
$
2010
$
424,468
424,468
424,468
257,749
12,000
269,749
405,321
405,321
405,321
213,272
79,000
292,272
144,157
144,157
573,308
573,308
It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where
PricewaterhouseCoopers’ expertise and experience with the Group are important. These assignments are principally tax advice
and due diligence reporting on acquisitions, or where PricewaterhouseCoopers is awarded assignments on a competitive basis.
It is the Group’s policy to seek competitive tenders for all major consulting projects.
29
Contingencies
Consolidated
Parent
2011
$000
2010
$000
2011
$000
2010
$000
Guarantees
Guarantees issued by the bankers of the Group in support
of various rental arrangements for certain retail outlets.
The maximum future rental payments guaranteed amount
to:
3,030
2,689
1,469
1,392
Page 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
30
Commitments
Capital commitments
Commitments for the acquisition of plant and equipment contracted for at the reporting
date but not recognised as liabilities payable:
Within one year
Later than one year but not later than five years
Later than five years
Total capital commitments
Lease commitments
Commitments in relation to operating lease payments under non-cancellable
operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Less lease straight lining adjustment (note 19)
Total lease commitments
Future minimum lease payments expected to be received in relation to non-
cancellable sub-leases of operating leases
The Group leases various offices, warehouses and retail stores under non-cancellable
operating leases. The leases have varying terms, escalation clauses and renewal
rights. On renewal the terms of the leases are renegotiated.
Remuneration commitments
Commitments for the payment of salaries and other remuneration under long-term
employment contracts in existence at the reporting date but not recognised as
liabilities, payable:
Within one year
Later than one year and not later than five years
Later than five years
Consolidated
2011
$000
2010
$000
854
0
0
854
81,370
226,318
72,291
(15,538)
364,441
487
0
0
487
76,045
211,782
76,250
(13,217)
350,860
1,861
1,194
2,270
6,056
444
8,770
2,120
1,374
0
3,494
Amounts disclosed as remuneration commitments include commitments arising from the service contracts of key management
personnel referred to in the Remuneration and Diversity Report on pages 18 to 28 that are not recognised as liabilities and are not
included in the key management personnel compensation.
Finance leases
The Group leases various plant and equipment with a carrying amount of $199,000 (2010: $605,000) under finance leases expiring
within three to five years.
Commitments in relation to finance leases are payable as follows:
Within one year
Later than one year but not later than five years
Minimum lease payments
Future finance charges
Total lease liabilities
Representing lease liabilities:
Current (note 16)
Non-current
Consolidated
2011
$000
2010
$000
34
8
42
(2)
40
32
8
40
104
0
104
(8)
96
96
0
96
Page 74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
31
Related party transactions
Transactions with related parties are at arm’s length unless otherwise stated.
(a) Parent entities
The parent entity within the Group is Super Retail Group Limited, which is the ultimate Australian parent.
(b) Subsidiaries
Interests in subsidiaries are set out in note 32.
(c) Key Management Personnel
Disclosures relating to key management personnel are set out in note 27.
(d) Directors
The names of the persons who were Directors of Super Retail Group Limited during the financial period are R J Wright, R A
Rowe, D D McDonough (resigned 31 August 2010), R J Skippen, S A M Pitkin and P A Birtles.
(e) Amounts due from related parties
Amounts due from Directors of the consolidated entity and their director-related entities are shown below in note 31(g)
Transactions with related parties
(f)
Aggregate amounts included in the determination of profit from ordinary activities before income tax that resulted from
transactions with related parties:
Consolidated
2011
$
2010
$
9,439,979
1,980,928
9,405,863
1,767,960
Other Transactions
- store lease payments – R A Rowe related property entities
- remuneration paid to directors of the ultimate Australian parent entity
Rent payable on R A Rowe related properties at year-end was $18,168 (2010: $19,617)
(g) Loans to/(from) Related Parties
Loans to/(from) Directors
There are no loans to or from related parties at 2 July 2011 (2010 :$nil)
32
Investments in controlled entities
Name of Entity
Super Cheap Auto Pty Ltd(a)
Super Cheap Auto (New Zealand) Pty Ltd(b)
Super Retail Group Services Pty Ltd(a)
SRG Leisure Retail Pty Ltd (formerly BCF
Australia Pty Ltd(a))
SCA Equity Plan Pty Ltd(b)
Goldcross Cycles Pty Ltd(a)
Oceania Bicycles Pty Ltd
Ray’s Outdoors Pty Ltd(a)
Super Retail Group Trading (Shanghai) Ltd
FCO New Zealand Limited
SRGS Pty Ltd(a)
Country of
Incorporation
Class of
Shares
2011
%
2010
%
Equity Holding
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
China
New Zealand
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
50
100
0
0
0
(a) These controlled entities have been granted relief from the necessity to prepare financial reports in accordance with Class
Order 98/1418 issued by the Australian Securities and Investments Commission.
(b)
Investment is held directly by Super Cheap Auto Pty Ltd.
Page 75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
33 Business Combinations
(a)
Ray’s Outdoors (prior period)
(i)
Summary of acquisition
On 31 May 2010, the parent entity acquired 100% of the issued share capital of Ray’s Outdoors Pty Ltd.
Details of the fair value of the assets and liabilities acquired and goodwill are as follows:
$'000
Purchase consideration
Cash paid
Consideration in shares
Total purchase consideration (referred to (ii) below)
Less: Provisional allocation of fair value of net identifiable assets acquired (see below)
Goodwill recognised on acquisition
(ii) Purchase considerations
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash
Other Receivables
Inventory (net of provisions)
Plant & Equipment
Brand name
Deferred make good
Tax Assets
Trade Payables
Provision for Employee Entitlements
Make-good provision
Other Payables
Deferred tax liability
Net Identifiable Assets Acquired
Outflow of cash to acquire subsidiary, net of cash acquired
Total purchase consideration
Less: Consideration in shares
Less: Balances acquired
Cash
Outflow of cash
51,685
1,548
53,233
(43,021)
10,212
Fair Value
$’000
70
346
26,874
11,104
20,000
702
1,503
(7,500)
(1,864)
(1,389)
(614)
(6,211)
43,021
Consolidated
2010
$’000
53,233
(1,548)
(70)
(1,618)
51,615
The Ray’s Outdoor acquisition was disclosed provisionally in the financial report for the year ended 3 July 2010. Since this date,
the completion statement has been reviewed and adjustments were made to inventory (decrease of $266,000), provisions for
employee entitlements (increase of $217,000), plant and equipment (decrease of $896,000), a corresponding increase to tax assets
of $143,000 and gift voucher liability increase of $515,000.
A corresponding increase has been recognised in goodwill of $1,751,000.
The goodwill is attributable to Ray’s Outdoors strong position and profitability in the outdoor and leisure market and the synergies
expected to arise from the acquisition.
Page 76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
33 Business Combinations (continued)
(b) Explore Outdoors (prior period)
Acquisition by controlled entity
On 27 October 2009, BCF Australia Pty Ltd acquired certain assets and assumed certain liabilities of the Explore
Outdoors Dubbo business from an entity external to the Group.
Net assets acquired are as follows:
Purchase consideration
Cash Paid
Total purchase consideration
Less: Provisional allocation of fair value of net identifiable assets acquired (refer below)
Goodwill recognised on acquisition
The goodwill is attributable to Explore Outdoors Dubbo strong position and profitability in the leisure market and
synergies expected to arise after the company’s acquisition
Fair value of identifiable net assets acquired
Inventory (net of provisions)
Gift voucher liability
Employee entitlements
Other creditors
Net identifiable assets acquired
$’000
1,331
1,331
371
960
$’000
387
(6)
(8)
(2)
371
The amounts recognised by the vendor immediately before acquisition for each class of asset and liability are not
significantly different from the fair values included in the table above.
34
Net tangible asset backing
Net tangible asset per ordinary share
35
Deed of cross guarantee
Consolidated Entity
2011
Cents
$1.40
2010
Cents
$1.28
Super Retail Group Limited, Super Cheap Auto Pty Ltd, SRG Leisure Retail Pty Ltd (formerly BCF Australia Pty Ltd), Super Retail
Group Services Pty Ltd, Goldcross Cycles Pty Ltd, Ray’s Outdoors Pty Ltd, SRGS Pty Ltd and SCA Equity Plan Pty Ltd are parties
to a Deed of Cross Guarantee under which each company guarantees the debts of the others. This Deed of Cross Guarantee was
amended on 8 June 2010 to include Ray’s Outdoors Pty Ltd. By entering into the Deed, the wholly owned entities have been
relieved from the requirement to prepare a financial report and directors’ report under Class Order 98/1418 (as amended by Class
Orders 98/2017, 00/0321, 01/1087, 02/0248 and 02/1017) issued by the Australian Securities and Investments Commission.
(a)
Consolidated Income Statement, Statement of Comprehensive Income and a summary of movements in
consolidated retained earnings
The above companies represent a ‘Closed Group’ for the purposes of the Class Order, and as there are no other parties to the
Deed of Cross Guarantee that are controlled by Super Retail Group Limited, they also represent the ‘Extended Closed Group’.
Set out below is a consolidated income statement and a summary of movements in consolidated retained profits for the period
ended 2 July 2011 of the Closed Group consisting of Super Retail Group Limited, Super Cheap Auto Pty Ltd, SRG Leisure Retail
Pty Ltd (formerly BCF Australia Pty Ltd), Super Retail Group Services Pty Ltd, Goldcross Cycles Pty Ltd, Ray’s Outdoors Pty Ltd
and SCA Equity Plan Pty Ltd.
Page 77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
35 Deed of cross guarantee (continued)
Income Statement
Revenue from continuing operations
Other income
Total revenues and other income
Cost of sales of goods
Other expenses from ordinary activities
- selling and distribution
- marketing
- occupancy
- administration
Borrowing costs expense
Total expenses
Profit before income tax
Income tax (expense)/benefit
Profit for the period
Statement of comprehensive income
Profit for the year
Other comprehensive income
Cash flow hedgings
Income tax relating to components of other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Summary of movements in consolidated retained earnings
Retained profits at the beginning of the financial year
Profit for the period
Dividends provided for or paid
Consolidated
2011
$'000
2010
$'000
1,020,152
1,343
1,021,495
862,697
149
862,846
(547,326)
(484,194)
(130,895)
(49,136)
(84,189)
(120,780)
(8,712)
(941,038)
80,457
(22,574)
(104,255)
(41,402)
(68,241)
(103,231)
(8,689)
(810,012)
52,834
(15,531)
57,883
37,303
57,883
(3,414)
0
(3,414)
54,469
37,303
(1,274)
0
(1,274)
36,029
82,890
57,883
(31,462)
67,084
37,303
(21,497)
Retained profits at the end of the financial year
109,311
82,890
Page 78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
35 Deed of cross guarantee (continued)
(b) Statement of Financial Position
Set out below is a consolidated statement of financial position as at 2 July 2011 of the Closed Group consisting of Super Retail
Group Limited, Super Cheap Auto Pty Ltd, SRG Leisure Retail Pty Ltd (formerly BCF Australia Pty Ltd), Super Retail Group
Services Pty Ltd, Goldcross Cycles Pty Ltd, Ray’s Outdoors Pty Ltd, SRGS Pty Ltd and SCA Equity Plan Pty Ltd.
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Other financial assets
Property, plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained profits
Total equity
Consolidated
2011
$'000
2010
$'000
23,521
18,916
267,963
310,400
401
101,117
10,546
111,242
223,306
533,706
89,551
0
11,013
11,051
111,615
15,538
99,135
0
7,983
122,656
234,271
299,435
194,541
(4,417)
109,311
299,435
29,106
17,075
227,910
274,091
401
98,043
7,293
103,781
209,518
483,609
66,335
8,912
7,989
9,979
93,215
13,217
100,000
0
10,426
123,643
216,858
266,751
182,158
1,703
82,890
266,751
Page 79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
36
Reconciliation of profit from ordinary activities after income tax to net cash inflow from
operating activities
Consolidated
Profit from ordinary activities after related income tax
Depreciation and amortisation
Net (gain)/loss on sale of non-current assets
Non-cash employee benefits expense/share based payments
Finance costs
Other non cash items
Change in operating assets and liabilities, net of effects from the purchase
of controlled entities and the sale of the service entity
- (increase) /decrease in receivables
- (increase) in inventories
- (decrease)/increase in payables
- (decrease)/increase in provisions
- (decrease) in deferred tax
Net cash inflow from operating activities
37
Earnings per share
Basic earnings per share
Diluted earnings per share
Weighted average number of shares used as the denominator
Weighted average number of shares used as the denominator in calculating
basic earnings per share
Adjustments for calculation of diluted earnings per share options
Weighted average potential ordinary shares used as the denominator in
calculating diluted earnings per share
Reconciliations of earnings used in calculating earnings per share
Basic earnings per share
- earnings used in calculating basic earnings per share – net profit after tax
Diluted earnings per share
- earnings used in calculating diluted earnings per share – net profit after
tax
(a)
Information concerning the classification of securities
2011
$000
55,599
22,802
294
1,222
10,973
0
(675)
(40,138)
24,914
(2,268)
(1,821)
70,902
2010
$000
38,053
22,730
516
784
10,477
96
1,128
(2,756)
(18,226)
2,664
(2,906)
52,560
Consolidated Entity
2011
Cents
43.1
42.5
2010
Cents
34.0
33.0
Consolidated Entity
2011
Number
2010
Number
128,987,743
1,792,920
111,859,967
2,303,494
130,780,663
114,163,461
2011
$’000
2010
$000
55,599
38,053
55,599
38,053
(i) Options and Performance Rights
Options and performance rights granted are considered to be potential ordinary shares and have been included in the determination
of diluted earnings per share to the extent to which they are dilutive.
Page 80
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
38
Share-based payments
(a) Executive Performance Rights
The Company has established the Super Retail Group Executive Performance Rights Plan (“Performance Rights”) to assist in
the retention and motivation of executives of Super Retail Group (“Participants”).
It is intended that the Performance Rights will enable the Company to retain and attract skilled and experienced executives
and provide them with the motivation to enhance the success of the Company.
Under the Performance Rights, rights may be offered to Participants selected by the Board. Unless otherwise determined by
the Board, no payment is required for the grant of rights under the Rights Plan.
Subject to any adjustment in the event of a bonus issue, each right is an option to subscribe for one Share. Upon the
exercise of a right by a Participant, each Share issued will rank equally with other Shares of the Company.
Performance Rights issued under the plan may not be transferred unless approved by the Board. The table below
summarises rights granted under the plan.
Number of Rights Issued
Grant Date
Consolidated – 2011
1 September 2009
1 September 2010
(b) Executive Option Plan
Balance
at start of
the year
(Number)
Granted
during
the year
(Number)
Exercised
during
the year
(Number)
Forfeited
during
the year
(Number)
Balance
at the end
of the
year
(Number)
Unvested
at the end
of the
year
(Number)
375,165
0
375,165
0
374,823
374,823
0
0
0
18,427
11,396
29,823
356,738
363,427
720,165
356,738
363,427
720,165
The Company has established the Super Retail Group Executive Share Option Plan (“Option Plan”). The Company had
established the Option Plan to assist in the retention and motivation of executives of Super Cheap Auto (“Participants”). It is
intended that the Option Plan will enable the Company to retain and attract skilled and experienced executives and provide them
with the motivation to enhance the success of the Company.
Under the Option Plan, options may be offered to Participants selected by the Board. Unless otherwise determined by the Board,
no payment is required for the grant of options under the Option Plan.
Subject to any adjustment in the event of a bonus issue, each option is an option to subscribe for one Share. Upon the exercise
of an option by a Participant, each Share issued will rank equally with other Shares of the Company.
Options issued under the Option Plan may not be transferred unless the Board determines otherwise. The Company has no
obligation to apply for quotation of the options on ASX. However, the Company must apply to ASX for official quotation of Shares
issued on the exercise of the options.
At any one time, the total number of options on issue under the Option Plan that have neither been exercised nor lapsed will not
exceed 5.0% of the total number of shares in the capital of the Company on issue.
Page 81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
38 Share-based payments (continued)
Set out below are summaries of options granted under the plan:
Grant Date Exercise date Exercise price
Balance at start
of the year
Number
Consolidated – 2011
27 Jan 2006
27 Jan 2006
27 Jan 2006
17 April 2006
17 April 2006
1 July 2006
1 July 2006
1 July 2006
26 Oct 2006
26 Oct 2006
23 Aug 2007
5 Jan 2009
5 Jan 2010
5 Jan 2011
17 April 2010
17 April 2011
1 July 2009
1 July 2010
1 July 2011
1 Feb 2010
1 Feb 2011
24 Jul 2010
1 August 2008 1 August 2011
Total
$2.44
$2.44
$2.44
$2.25
$2.25
$2.25
$2.25
$2.25
$2.44
$2.44
$4.37
$2.49
100,000
135,000
200,000
75,000
100,000
55,000
225,000
300,000
150,000
200,000
180,000
220,000
1,940,000
Granted
during the
year
Exercised
during the
year
Number Number Number
Forfeited
during the
year
Balance at
end of the
year
Number
Unvested at
end of the
year
Number
0
50,000
35,000
0
0 100,000
75,000
0
0
0
0
55,000
0 225,000
0
0
0 150,000
0
0
80,000
0
0
0
770,000
0
50,000
0
100,000
0
100,000
0
0
0
100,000
0
0
0
0
0
300,000
0
0
0
200,000
0
100,000
0
40,000
180,000
40,000 1,130,000
0
0
0
0
0
0
0
0
0
0
0
180,000
180,000
Weighted average exercise price
$2.55
Nil
$2.55
$2.55
$2.49
Consolidated – 2010
27 Jan 2006
27 Jan 2006
27 Jan 2006
17 April 2006
17 April 2006
17 April 2006
1 July 2006
1 July 2006
1 July 2006
26 Oct 2006
26 Oct 2006
26 Oct 2006
23 Aug 2007
5 Jan 2009
5 Jan 2010
5 Jan 2011
17 April 2009
17 April 2010
17 April 2011
1 July 2009
1 July 2010
1 July 2011
1 Feb 2009
1 Feb 2010
1 Feb 2011
24 Jul 2010
1 August 2008 1 August 2011
Total
$2.44
$2.44
$2.44
$2.25
$2.25
$2.25
$2.25
$2.25
$2.25
$2.44
$2.44
$2.44
$4.37
$2.49
400,000
200,000
200,000
75,000
75,000
100,000
262,500
262,500
350,000
150,000
150,000
200,000
180,000
220,000
2,825,000
300,000
0
65,000
0
0
0
75,000
0
0
0
0
0
0 207,500
0
0
0
0
0 150,000
0
0
0
0
0
0
0
0
797,500
0
0
0
0
0
0
0
0
37,500
50,000
0
0
0
0
0
100,000
0
135,000
0
200,000
200,000
0
0
75,000
0
100,000
100,000
55,000
0
225,000
0
300,000
300,000
0
0
150,000
0
200,000
200,000
180,000
180,000
220,000
220,000
87,500 1,940,000 1,200,000
Weighted average exercise price
$2.32
Nil
$2.38
$2.55
$2.66
Fair value of options granted
The fair value at grant date is independently determined using a Binomial option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
No options have been granted in the past two financial years.
The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any
expected changes to future volatility due to publicly available information.
Expenses arising from share based payments transactions:
Executive Performance Rights
Executive Option Plan
2011
$000
1,107
115
1,222
2010
$000
539
245
784
Page 82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
39 Events occurring after balance date
No matter or circumstance has arisen since 2 July 2011 that has significantly affected, or may significantly affect:
(a)
(b)
(c)
the Group’s operations in future financial years; or
the results of those operations in future financial years; or
the Group’s state of affairs in future financial years.
40 Parent entity financial information
Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Statement of Financial Position
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
Share-based payments
Cash flow hedges
Retained earnings
Profit or loss for the year
Total comprehensive income
Consolidated
2011
$’000
199,109
346,862
13,569
2010
$’000
178,818
326,295
15,461
112,859
115,616
194,541
3,149
100
36,213
234,003
41,284
41,284
182,158
1,932
198
26,391
210,679
32,551
32,551
Page 83
DIRECTORS’ DECLARATION
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
In the directors’ opinion:
(a)
(b)
(c)
the financial statements and notes set out on pages 30 to 83 are in accordance with the Corporations Act 2001,
including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
giving a true and fair view of the consolidated entity's financial position as at 2 July 2011 and of its
performance for the financial period ended on that date; and
(ii)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed
Group identified in note 35 will be able to meet any obligations or liabilities to which they are, or may become,
subject by virtue of the deed of cross guarantee described in note 35.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
The directors have been given the declarations by the managing director and chief financial officer required by section 295A
of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
R Wright
Director
P A Birtles
Director
Brisbane
18 August 2011
Page 84
AUDIT REPORT
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period 2 July 2011
(continued)
Independent auditor’s report to the members of
Super Retail Group Limited
Report on the financial report
We have audited the accompanying financial report of Super Retail Group Limited (the company),
which comprises the balance sheet as at 2 July 2011 and the income statement, the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year
ended on that date, a summary of significant accounting policies, other explanatory notes and the
directors’ declaration for the Super Retail Group Limited (the consolidated entity). The consolidated
entity comprises the company and the entities it controlled at the period’s end or from time to time
during the financial period.
Directors’ responsibility for the financial report
The directors of the company are responsible for the preparation and fair presentation of the financial
report in accordance with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Act 2001. This responsibility includes establishing and
maintaining internal controls relevant to the preparation and fair presentation of the financial report
that is free from material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International Financial
Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the
audit to obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial report in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
Our procedures include reading the other information in the Annual Report to determine whether it
contains any material inconsistencies with the financial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or
management.
PricewaterhouseCoopers, ABN 52 780 433 757
Riverside Centre, 123 Eagle Street, GPO BOX 150, BRISBANE QLD 4001
DX 77 Brisbane, Australia
T +61 7 3257 5000, F +61 7 3257 5999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation
Page 85
AUDIT REPORT
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period 2 July 2011
(continued)
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Auditor’s opinion
In our opinion:
(a)
the financial report of Super Retail Group Limited is in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 2 July
2011 and of its performance for the period ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
(b)
the financial report and notes also comply with International Financial Reporting Standards as
disclosed in Note 1.
Report on the Remuneration and Diversity Report
We have audited the remuneration and diversity report included in pages 18 to 28 of the directors’
report for the year ended 2 July 2011. The directors of the company are responsible for the
preparation and presentation of the remuneration and diversity report in accordance with section 300A
of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration and
diversity report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the remuneration and diversity report of Super Retail Group Limited for the year ended
2 July 2011, complies with section 300A of the Corporations Act 2001.
PricewaterhouseCoopers
Cameron Henry
Partner
Brisbane
18 August 2011
Page 86
SHAREHOLDER INFORMATION
Super Retail Group Limited (formerly Super Cheap Auto Group Limited)
For the period ended 2 July 2011
The shareholder information set out below was applicable as at 18 August 2011.
A. Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1-1000
1,001-5,000
5,001-10,000
10,001-50,000
50,001-100,000
100,001 and over
Ordinary Shareholders
Option holders
1,482
1,408
267
182
27
42
11
8
3
1
There were 246 holders of less than a marketable parcel of ordinary shares.
B. Equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
SCA FT PTY LTD
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
COGENT NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
COGENT NOMINEES PTY LIMITED
SUNCORP CUSTODIAN SERVICES PTYLIMITED & SUNCORP CUSTODIAN SERVICES PTY
LIMITED
MR PETER ALAN BIRTLES
GEOMAR SUPERANNUATION PTY LTD
MR ROBERT EDWARD THORN
AMP LIFE LIMITED
GRAHGER CAPITAL SECURITIES PTY LTD
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
JP MORGAN NOMINEES AUSTRALIA LIMITED
UBS NOMINEES PTY LTD
RBC DEXIA INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
Ordinary shares
Number held
Percentage of
issued shares
53,671,326
14,129,240
13,029,724
11,149,057
6,487,572
4,646,729
1,752,021
1,369,970
1,240,000
1,170,000
723,368
567,904
560,000
548,220
543,931
543,931
535,391
528,151
493,978
467,900
453,915
41.16%
10.84%
9.99%
8.55%
4.98%
3.56%
1.34%
1.05%
0.95%
0.90%
0.55%
0.44%
0.43%
0.42%
0.42%
0.42%
0.41%
0.41%
0.38%
0.36%
0.35%
114,612,328
87.89%
Super Retail Group Limited wishes to confirm that, in accordance with ASX Listing Rule 4.10.4, the substantial holders in the
company as at 18 August 2011 were:-
Name
SCA FT PTY LTD
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
C. Voting rights
The voting rights relating to each class of equity securities is as follows:
a) Ordinary Shares
Ordinary shares
Number held
Percentage of
issued shares
53,671,326
14,129,240
13,029,724
11,149,057
41.16%
10.84%
9.99%
8.55%
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
b) Options and Performance Rights
No voting rights.
Page 87
STORE LISTING
SUPERCHEAP AUTO
AUSTRALIAN CAPITAL TERRITORY
BELCONNEN (02) 6253 5660
FYSHWICK (02) 6239 2333
GUNGAHLIN (02) 6241 0387
TUGGERANONG (02) 6293 2233
NEW SOUTH WALES
ALBURY (02) 6041 1866
ARMIDALE (02) 6771 1955
AUBURN (02) 9648 5722
BALLINA (02) 6681 4755
BANKSTOWN (02) 9709 6500
BATHURST (02) 6331 7122
BELLA VISTA (02) 8814 6335
BENNETTS GREEN (02) 4947 4088
BLACKTOWN (02) 9676 1444
BONDI JUNCTION (02) 9389 3968
BROOKVALE (02) 9905 5666
CAMPBELLTOWN (02) 4625 9000
CESSNOCK (02) 4990 1037
COFFS HARBOUR (02) 6651 8550
DAPTO (02) 4260 9120
DUBBO (02) 6882 0611
ERINA (02) 4367 4850
FAIRY MEADOW (02) 4225 2366
GLENDALE (02) 4954 6066
GOULBURN (02) 4822 9190
GRAFTON (02) 6642 7222
GRIFFITH (02) 6962 9566
INVERELL (02) 6722 5466
KEMPSEY (02) 6562 1996
KOTARA (02) 4965 5488
LAKE HAVEN (02) 4392 7077
LAKE ROAD (02) 6581 5778
LAKEMBA (02) 9740 9999
LISMORE (02) 6622 7797
LIVERPOOL (02) 9600 7100
MAITLAND (02) 4933 5133
MCGRATHS HILL (02) 4577 8822
MENAI (02) 9543 3577
MITTAGONG (02) 4872 3820
MOREE (02) 6752 4755
MT DRUITT (02) 9677 1400
MUDGEE (02) 6372 7055
NARELLAN (02) 4647 4533
NEWCASTLE (02) 4968 9833
NORTH PARRAMATTA (02) 9683 4188
NOWRA (02) 4422 9700
ORANGE (02) 6369 1066
PENRITH (02) 4733 3322
PORT MACQUARIE (02) 6583 2099
QUEANBEYAN (02) 6299 4099
ROCKDALE (02) 9567 0966
SHELLHARBOUR (02) 4297 6899
SINGLETON (02) 6571 5955
TAMWORTH (02) 6762 4433
TAREE (02) 6551 6211
TUGGERAH (02) 4355 4055
TWEED HEADS (07) 5524 8911
ULLADULLA (02) 4455 3488
VILLAWOOD (02) 9632 0877
WAGGA WAGGA (02) 6921 6922
WARWICK FARM (02) 9822 7299
WENTWORTHVILLE (02) 9896 0166
WEST GOSFORD (02) 4323 2044
WETHERILL PARK (02) 9604 9622
NORTHERN TERRITORY
ALICE SPRINGS (08) 8952 7455
BERRIMAH (08) 8932 9866
DARWIN (08) 8985 4898
QUEENSLAND
ACACIA RIDGE (07) 3274 6311
AIRLIE BEACH (07) 4948 3644
ASHMORE (07) 5539 2033
AYR (07) 4783 7377
BEENLEIGH (07) 3287 2777
BILOELA (07) 4992 5299
89 ANNUAL REPORT 2011
BOOVAL (07) 3282 6356
BOWEN (07) 4786 4543
BROWNS PLAINS (07) 3806 8177
BUNDABERG (07) 4151 1111
BURLEIGH (07) 5576 6000
BURPENGARY (07) 3888 9366
CABOOLTURE (07) 5499 0488
CAIRNS (Earlville) (07) 4033 0600
CANNON HILL (07) 3395 8622
CAPALABA (07) 3823 1677
CARSELDINE (07) 3261 4777
CHERMSIDE (07) 3359 4930
CLEVELAND (07) 3286 5777
CURRIMUNDI (07) 5437 7400
DALBY (07) 4662 2933
DECEPTION BAY (07) 3204 8100
EMERALD (07) 4982 0088
ENOGGERA (07) 3855 3188
GATTON (07) 5462 4398
GLADSTONE (07) 4976 9133
GOODNA (07) 3818 0722
GYMPIE (07) 5482 7566
HERMIT PARK (07) 4721 6488
HERVEY BAY (Pialba) (07) 4124 1211
INGHAM (07) 4776 1635
INNISFAIL (07) 4061 4788
IPSWICH (07) 3812 2366
KALLANGUR (07) 3204 4922
KAWANA WATERS (07) 5478 3555
KEPERRA (07) 3851 3611
KINGAROY (07) 4162 5733
LABRADOR (07) 5537 7977
LAWNTON (07) 3881 2800
LOGANHOLME (07) 3209 9322
LOGANLEA (07) 3805 2688
MACGREGOR (07) 3849 6822
MACKAY (07) 4942 2344
MACKAY CITY (07) 4951 0944
MANUNDA (07) 4053 6912
MAROOCHYDORE (07) 5479 4844
MARYBOROUGH (07) 4121 3332
MERMAID BEACH (07) 5554 6233
MOOROOKA (07) 3892 2565
MT ISA (07) 4749 3785
NERANG (07) 5527 3988
NOOSA (07) 5455 5444
NUNDAH (07) 3256 7600
OXENFORD (07) 5573 4422
OXLEY (07) 3379 4066
REDCLIFFE (07) 3284 2055
ROBINA (07) 5578 8477
ROCKHAMPTON (07) 4922 5433
SMITHFIELD (Cairns) (07) 4038 1588
SOUTHPORT (07) 5527 0666
STONES CORNER (07) 3394 4844
TAIGUM (07) 3265 7211
TARINGA (07) 3871 3808
THE PINES (07) 5534 5633
THURINGOWA (07) 4773 9000
TOOWOOMBA CITY (07) 4632 0799
TOOWOOMBA SOUTH (07) 4635 7577
TOWNSVILLE (Garbutt) (07) 4725 6866
UNDERWOOD (07) 3841 3400
VICTORIA POINT (07) 3207 9262
WARWICK (07) 4661 7633
WINDSOR (07) 3857 0677
WYNNUM (07) 3348 2044
YAMANTO (07) 3294 1033
YEPPOON (07) 4930 2166
SOUTH AUSTRALIA
BLAIR ATHOL (08) 8269 7122
DARLINGTON (08) 8358 3566
ELIZABETH (08) 8287 6533
HECTORVILLE (08) 8165 0813
KILKENNY (08) 8347 2214
MARION (08) 8296 2210
MELROSE PARK (08) 8177 0048
MUNNO PARA (08) 8254 7999
NOARLUNGA (08) 8384 2833
PARA HILLS (08) 8258 2760
PORT ADELAIDE (08) 8447 6088
PORT PIRIE (08) 8633 1197
SALISBURY (08) 8258 4811
THEBARTON (08) 8354 0666
WHYALLA (08) 8645 5159
TASMANIA
BURNIE (03) 6432 4855
CAMBRIDGE (03) 6248 4655
DEVONPORT (03) 6424 3244
GLENORCHY (03) 6272 9200
LAUNCESTON (03) 6333 0511
VICTORIA
BAIRNSDALE (03) 5153 2799
BALLARAT (03) 5339 9455
BENDIGO (03) 5442 7877
BLACKBURN (03) 9894 7377
BRIMBANK (03) 8390 2611
BROADMEADOWS (03) 9309 2799
CARRUM DOWNS (03) 9782 8305
COLAC (03) 5231 4099
CRANBOURNE (03) 5995 7299
DANDENONG (03) 9706 7788
ECHUCA (03) 5480 6788
EPPING (03) 9408 4288
ESSENDON (03) 9379 3600
FRANKSTON (03) 9781 2288
GLEN WAVERLEY (03) 9803 5298
HOPPERS CROSSING (03) 9748 7277
HORSHAM (03) 5382 5000
KANGAROO FLAT (03) 5447 9144
KEYSBOROUGH (03) 9798 8466
KNOX CITY (03) 9800 4722
MARIBYRNONG (03) 9318 8444
MELTON (03) 8746 2302
MENTONE (03) 9585 0399
MILDURA (03) 5022 2588
MOE (03) 5126 1755
MORNINGTON (03) 5976 4611
NARRE WARREN (03) 9705 9199
NORTH GEELONG (03) 5272 3277
PAKENHAM (03) 5940 8120
PRESTON (03) 9484 6006
RINGWOOD (03) 9847 0055
ROWVILLE (03) 9764 1677
ROXBURGH PARK (03) 8339 0765
SALE (03) 5144 3466
SHEPPARTON (03) 5831 3944
SUNBURY (03) 9746 3610
SUNSHINE (03) 9310 2488
THOMASTOWN (03) 9466 3699
TRARALGON (03) 5174 9755
WANGARATTA (03) 5722 3244
WARRAGUL (03) 5623 5699
WARRNAMBOOL (03) 5561 7660
WATERGARDENS (03) 9390 9699
WAURN PONDS (03) 5241 8947
WERRIBEE (03) 9748 0055
WODONGA (02) 6024 3733
YARRAVILLE (03) 9318 9928
WESTERN AUSTRALIA
ALBANY (08) 9842 5400
BALCATTA (08) 9240 1566
BELMONT (08) 9477 5699
BUNBURY (08) 9721 9977
BUSSELTON (08) 9751 1611
CANNING VALE (08) 9455 3411
CANNINGTON HOMETOWN (08) 9258 7294
CLARKSON (08) 9407 9533
GERALDTON (08) 9921 8244
GOSNELLS (08) 9398 4822
JOONDALUP (08) 9300 0744
KALGOORLIE (08) 9021 7145
MANDURAH (08) 9581 8588
MIDLAND (08) 9274 5422
MIRRABOOKA (08) 9344 3255
MORLEY (08) 9375 6933
MYAREE (08) 9317 7699
O’CONNOR (08) 9314 3822
Super Retail Group Limited OSBORNE PARK (08) 9443 3711
ROCKINGHAM (08) 9592 7999
SPEARWOOD (08) 9494 2144
VICTORIA PARK (08) 9361 8422
WHITFORD (08) 9403 0444
NEW ZEALAND
ALBANY 0011 64 9 448 2461
ALICETOWN 0011 64 4 569 1576
ASHBURTON 0011 64 3 307 2960
BLENHEIM 0011 64 3 579 3480
BOTANY 0011 64 9 273 8160
CAMBRIDGE 0011 64 7 823 7618
DUNEDIN 0011 64 3 477 2590
EASTGATE 0011 64 3 389 1249
GISBORNE 0011 64 6 868 3760
HAMILTON 0011 64 7 834 3586
HASTINGS 0011 64 6 870 4521
HAWERA 0011 64 6 278 3641
HENDERSON 0011 64 9 984 9001
INVERCARGILL 0011 64 3 214 4385
KELSTON 0011 64 9 813 2091
LEVIN 0011 64 6 368 3195
LYALL BAY 0011 64 4 387 1092
MANUKAU 0011 64 9 250 4392
MASTERTON 0011 64 6 370 3308
MT MAUNGANUI 0011 64 7 574 1593
MT WELLINGTON 0011 64 9 574 6435
NAPIER 0011 64 6 842 1461
NEW PLYMOUTH 0011 64 6 758 3882
ONEHUNGA 0011 64 9 634 1267
PALMERSTON NORTH 0011 64 6 354 1743
PAPANUI 0011 64 3 354 8123
PARAPARAUMU 0011 64 4 298 1523
PORIRUA 0011 64 4 238 2641
PUKEKOHE 0011 64 9 239 2073
RICCARTON 0011 64 3 341 5087
ROTORUA 0011 64 7 348 5275
STOKE 0011 64 3 547 8394
TAKANINI 0011 64 9 299 8615
TAUPO 0011 64 7 376 5023
TAURANGA 0011 64 7 579 5436
TE RAPA 0011 64 7 848 1270
TIMARU 0011 64 3 686 9068
UPPER HUTT 0011 64 4 528 0278
WAIRAU PARK 0011 64 9 442 1905
WANGANUI 0011 64 6 348 9407
WESTGATE 0011 64 9 832 1830
WHAKATANE 0011 64 7 308 9072
WHANGAREI 0011 64 9 459 6440
BCF
AUSTRALIAN CAPITAL TERRITORY
FYSHWICK (02) 6280 8888
TUGGERANONG (02) 6293 1855
NEW SOUTH WALES
ALBURY (02) 6023 6877
AUBURN (02) 9648 4366
BANKSTOWN (02) 9707 1699
BATHURST (02) 6331 4188
BENNETTS GREEN (02) 4947 4066
CAMPBELLTOWN (02) 4620 4855
CASTLE HILL (02) 9680 7833
COFFS HARBOUR (02) 6651 6500
DUBBO (02) 6882 0233
MCGRATHS HILL (02) 4587 9870
NOWRA (02) 4421 2668
PENRITH (02) 4733 0110
PORT MACQUARIE (02) 6583 2455
RUTHERFORD (02) 4931 9346
TAMWORTH (02) 6762 0133
TAREN POINT (02) 9525 0346
TUGGERAH (02) 4351 7655
TWEED HEADS (07) 5513 1244
WAGGA WAGGA (02) 6921 2155
WARRAWONG (02) 4274 1955
WEST GOSFORD (02) 4322 5833
NORTHERN TERRITORY
DARWIN (08) 8948 0099
QUEENSLAND
BROWNS PLAINS (07) 3800 1733
BUNDABERG (07) 4151 6566
BURLEIGH (07) 5593 8600
CAIRNS (07) 4051 8155
CALOUNDRA (07) 5438 9400
CANNON HILL (07) 3890 2744
CAPALABA (07) 3245 2220
GLADSTONE (07) 4978 0611
HERVEY BAY (07) 4194 1366
IPSWICH (07) 3202 4455
KEPERRA (07) 3851 4625
LABRADOR (07) 5500 5700
LAWNTON (07) 3889 2911
LOGANHOLME (07) 3801 3900
MACKAY (07) 4942 3499
MAROOCHYDORE (07) 5479 2390
MORAYFIELD (07) 5433 0499
MT ISA (07) 4743 0212
NOOSA (07) 5440 5866
PIALBA (07) 4194 1366
ROCKHAMPTON (07) 4926 5055
TOOWOOMBA (07) 4638 7511
TOWNSVILLE (07) 4775 6300
UNDERWOOD (07) 3808 2405
VIRGINIA (07) 3216 5077
SOUTH AUSTRALIA
GEPPS CROSS (08) 8260 3716
NOARLUNGA (08) 8186 5754
RICHMOND (08) 8352 3533
VICTORIA
BALLARAT (03) 5339 8011
BAYSWATER (03) 9729 2175
BENDIGO (03) 5447 3751
BRAESIDE (03) 9701 8200
COBURG (03) 9350 1177
CORIO (03) 5275 0238
EPPING (03) 9408 9323
GEELONG (03) 5275 0238
LAVERTON (03) 9360 9433
MILDURA (03) 5023 2107
MORNINGTON (03) 5976 8424
SHEPPARTON (03) 5822 4963
TAYLORS LAKES 03 8361 6559
TRARALGON (03) 5176 5211
WARRNAMBOOL (03) 5561 0405
WESTERN AUSTRALIA
ALBANY (08) 9841 2133
BALCATTA (08) 9240 1700
BUNBURY (08) 9791 5233
CAMPBELL’S PROTACKLE (08) 9444 3710
CANNINGTON (08) 9350 5888
GERALDTON (08) 9921 3144
JOONDALUP (08) 9301 4011
MANDURAH (08) 9581 6399
MIDLAND (08) 9250 2166
MYAREE (08) 9317 6011
OSBORNE PARK (08) 9204 1022
ROCKINGHAM (08) 9527 9005
GOLDCROSS CYCLES
QUEENSLAND
BRISBANE CITY (07) 3211 0111
BROWNS PLAINS (07) 3809 4056
BURLEIGH (07) 5576 3772
CANNON HILL (07) 3902 1663
FORTITUDE VALLEY (07) 3852 5808
LABRADOR (07) 5529 1500
LAWNTON (07) 3205 1096
MAROOCHYDORE (07) 5479 4200
RIDERS MACGREGOR (07) 3849 5333
VICTORIA
CAMBERWELL (03) 9882 0400
CHADSTONE (03) 9563 2322
CHIRNSIDE PARK (03) 9727 3110
CRANBOURNE (03) 5991 4550
EPPING (03) 9408 0011
FOUNTAIN GATE (03) 9705 3333
HOPPERS CROSSING (03) 9369 9556
KNOX CITY (03) 9887 0833
MOONEE PONDS (03) 9370 7033
RICHMOND (03) 9427 8844
WAURN PONDS (03) 5245 7222
RAY’S OUTDOORS
AUSTRALIAN CAPITAL TERRITORY
FYSHWICK (02) 6280 4066
NEW SOUTH WALES
ALBURY (02) 6041 5333
CAMPBELLTOWN (02) 4628 9299
CAMPERDOWN (02) 9557 9333
CARINGBAH (02) 9542 8988
CASTLE HILL (02) 8850 7544
ERINA (02) 4365 3688
KOTARA (02) 4957 2700
LAKE HAVEN (02) 4392 0788
LIDCOMBE (02) 9647 1488
PENRITH (02) 4733 5744
PROSPECT (02) 9636 9266
QUEENSLAND
BROWNS PLAINS (07) 3800 0016
BURLEIGH (07) 5525 5995
CAIRNS (07) 4041 0808
GREENSLOPES (07) 3324 0055
MACGREGOR (07) 3219 4553
MAROOCHYDORE (07) 5443 1551
ROTHWELL (07) 3204 9075
TOOWOOMBA (07) 4638 4015
SOUTH AUSTRALIA
ADELAIDE CITY (08) 8231 3633
ELIZABETH (08) 8252 0166
ENFIELD (08) 8359 5866
HARBOUR TOWN (08) 8355 4333
MODBURY (08) 8263 0611
VICTORIA
BALLARAT (03) 5331 1888
BENDIGO (03) 5442 1103
BRIGHTON (03) 9596 3816
DANDENONG (03) 9706 9050
FOUNTAIN GATE (03) 9704 1254
FRANKSTON (03) 9770 0012
GEELONG (03) 5229 3278
HOPPERS CROSSING (03) 9749 4129
MARIBYRNONG (03) 9318 4499
MELBOURNE CITY (03) 9347 7666
MENTONE (03) 9584 6644
MILDURA (03) 5021 0100
NORTH GEELONG (03) 5278 7633
NUNAWADING (03) 9877 8455
PRESTON (03) 9484 1422
SHEPPARTON (03) 5821 8900
SOUTH MORANG (03) 9404 1977
TAYLORS LAKES (03) 9449 4333
WARRNAMBOOL (03) 5562 9588
WAURN PONDS (03) 5241 8855
WESTERN AUSTRALIA
BALCATTA (08) 9204 3436
CANNINGTON (08) 9451 6044
KELMSCOTT (08) 9495 2851
MANDURAH (08) 9534 9267
MYAREE (08) 9317 8277
FCO
NEW ZEALAND
MANUKAU 0011 64 9 261 2682
NEW PLYMOUTH 0011 64 9 758 3786
WHANGAREI 0011 64 9 438 2350
ANNUAL REPORT 2011
90
Super Retail Group Limited Super Retail Group Limited
www.superretailgroup.com