2013
ANNUAL REPORT
COP712 Annual Report 2013.indd 2
5/09/13 10:56 AM
CONTENTS
CHAIRMAN AND MANAGING DIRECTOR’S REPORT ... 3
CORPORATE GOVERNANCE STATEMENT ..................... 5
ANNUAL REPORT ........................................................... 11
DIRECTORS’ REPORT ...................................................... 12
COMPREHENSIVE INCOME STATEMENT ...................... 34
STATEMENT OF FINANCIAL POSITION ......................... 35
STATEMENT OF CHANGES IN EQUITY .......................... 36
STATEMENT OF CASH FLOWS ....................................... 37
NOTES TO THE FINANCIAL STATEMENTS ..................... 38
DIRECTORS’ DECLARATION ........................................... 86
INDEPENDENT AUDIT REPORT ..................................... 87
SHAREHOLDER INFORMATION ..................................... 89
NAME OF ENTITY
Super Retail Group Limited
ABN OR EQUIVALENT COMPANY REFERENCE
ABN 81 108 676 204
REGISTERED OFFICE
751 Gympie Road
LAWNTON QLD 4501
Telephone (07) 3482 7900
Facsimile (07) 3205 8522
SHARE REGISTRY
Link Market Services
Level 12, 680 George Street
SYDNEY NSW 2000
BANKERS
Australia and New Zealand Banking Group Limited
Commonwealth Bank of Australia
HSBC
National Australia Bank
AUDITORS
PricewaterhouseCoopers
SOLICITORS
Mallesons Stephen Jaques
STOCK EXCHANGE LISTING
Super Retail Group Limited shares are quoted on the
Australian Securities Exchange
WEBSITE
www.superretailgroup.com
THE ANNUAL GENERAL MEETING
The Annual General Meeting of the Shareholders of
Super Retail Group Limited will be held at Kedron
Wavell Services Club, Long Tan Room, 375 Hamilton
Road, Chermside South, Queensland on Wednesday,
23 October 2013 at 11.30 am.
COP712 Annual Report 2013.indd 3
5/09/13 12:30 PM
Super Retail Group Limited
ANNUAL REPORT 2013
PERFORMANCE TRENDS
.
0
0
2
0
2
1
.
4
5
6
1
JUN
12
JUN
13
1
.
8
3
JUN
07
.
7
5
4
JUN
08
.
8
4
2
6
JUN
07
.
4
5
1
7
JUN
08
.
0
8
3
9
.
8
8
2
8
.
3
2
9
0
1
JUN
09
JUN
10
SALES ($m)
JUN
11
.
3
2
7
7 1
0
4
1
.
JUN
12
JUN
13
.
5
7
8 8
5
6
.
1
.
5
5
JUN
09
JUN
10
EBIT ($m)*
JUN
11
.
3
2
4 5
6
4
.
*excludes goodwill impairment charge in 2010
.
9
3
1
1
.
4
1
.
4
5
1
.
8
6
1
.
3
7
1
.
9
5
1
.
6
2
1
.
9
0
1 4
2
3
.
1
.
8
6 2
2
2
.
.
5
9
1
JUN
07
JUN
08
JUN
09
JUN
10
EPS (¢)*
JUN
11
JUN
12
JUN
13
JUN
07
JUN
08
JUN
09
JUN
10
POST TAX ROC (%)*
JUN
11
JUN
12
JUN
13
* historical EPS adjusted to take into account the bonus element in the 2011
entitlement offer
* return calculation adjusted for goodwill impairment, acquisition costs and
restructuring provisions
0
.
1
4
3
.
3
9
2
3
.
7
4
1
1
.
8
8
7
.
5
3
7
JUN
JUN
JUN
11
10
09
NET DEBT ($m)
JUN
12
JUN
13
.
5
0
1
JUN
07
.
0
8
0 3
2
3
.
.
0
9
2
5
.
1
0 2
8
0 1
3
1
.
.
JUN
08
JUN
09
JUN
JUN
11
10
DIVIDEND (¢)
JUN
12
JUN
13
.
3
2
4
1
.
3
3
0
.
1
3
.
6
2
2
.
5
9
1
.
0
2
2
.
8
8
1
.
8
9
1
.
8
8
1
.
4
9
1
.
5
9
1
1
.
6
1
JUN
09
JUN
10
GEARING RATIO (%)
JUN
11
JUN
12
JUN
13
JUN
07
JUN
08
JUN
09
JUN
10
POST TAX ROE (%)*
JUN
11
JUN
12
JUN
13
.
8
7
1
1
JUN
08
.
7
6
4
.
5
3
9
JUN
07
.
3
3
4
JUN
07
JUN
08
2
Super Retail Group Limited
ANNUAL REPORT 2013
* return calculation adjusted for goodwill impairment, acquisition costs and
restructuring provisions
COP712 Annual Report 2013.indd 4
5/09/13 10:56 AM
CHAIRMAN & MANAGING DIRECTOR’S REPORT
Fellow Shareholders,
Operating and Financial
perFOrmance
channel retailers. During the year, the
Group invested circa $53.9 million in capital
expenditure and $4.1 million in operating
expenses on these programs.
We are pleased to be able to report on a
further year of growth and achievement
for our company. In a generally flat retail
environment, the Group’s focus on retailing
products that our customers predominantly
use as part of a leisure experience has
served us well. We believe that our
customers will continue to spend on their
passions deferring expenditure in other
areas.
The key drivers of performance continue to
be merchandise renewal and presentation,
private brand development, engaging
marketing, sourcing and supply chain
execution and the passion of our team
members.
Each of the Group’s larger businesses;
Supercheap Auto, BCF Boating Camping
Fishing, Rebel and Amart Sports performed
well, opening new stores, delivering strong
like for like sales growth and generating
improved profit.
We have completed a review of the
Ray’s Outdoors, FCO Fishing Camping
Outdoors and Goldcross Cycles businesses
and a number of business improvement
initiatives have commenced to grow
their sales and profit. Early results are
encouraging. Associated non-recurring
restructuring costs of $16.2 million have
been recognised.
Last year, the Group commenced a program
of initiatives to develop the capabilities
that our businesses will require to
successfully operate as integrated multi-
THE GROuP HAS
ALSO MAINTAINED ITS
FOCuS ON A NuMbER
OF ENvIRONMENTAL
INITIATIvES INCLuDING
REDuCING PACkAGING
AND POwER
CONSuMPTION AND
INCREASING RECyCLING.
THE GROuP wAS
RECENTLy RECOGNISED
by THE AuSTRALIAN
PACkAGING COvENANT
IN THEIR 2013 ANNuAL
REPORT RATINGS FOR
bEING THE HIGHEST
ACHIEvER IN THE RETAIL
INDuSTRy.
Progress to date is on track with notable
achievements during the year including
the launch of the Supercheap Auto loyalty
program in Australia, the implementation
of integrated real time information
systems across the Group’s functions,
the development of an integrated freight
solution for internet and trade customers
and the foundation for the integration of
the Sports businesses onto the Group’s
Information Technology systems. Traffic
to the Group’s websites increased by 50%
compared to the previous year as our
customers increasingly research potential
purchases before visiting stores.
A full review of the Group’s performance
and plans is included in the Operating and
Financial Review set out on pages 12 to 17
of this annual report. In summary, Group
sales grew by 22% to $2.02 billion and
Group earnings after tax grew by 23% to
$102.7 million while net debt was
$329.3 million at 29 June 2013 being
$11.7 million lower than the prior period.
The Directors have declared a fully franked
final dividend of 21.0 cents per share,
resulting in full year dividends of 38.0 cents
per share, an increase of 18.8% over the
prior year. The current policy of distributing
55% to 65% of underlying net profit after
tax in the form of dividends will enable the
Group to balance investment in growth
opportunities and building group capability,
gradually paying down debt and increasing
dividends to shareholders.
SuStainability
The Group has continued its support of a
number of charitable organisations during
the year. At the Group level, the focus is
on raising funds for children’s healthcare
charities while at a business level, support
is provided to organisations in areas related
to the activities serviced by the business’
products, for example safe driving at
Supercheap Auto and Coastguard at BCF
Boating Camping Fishing.
The Group has also maintained its focus
on a number of environmental initiatives
including reducing packaging and power
consumption and increasing recycling.
The Group was recently recognised by the
Australian Packaging Covenant in their 2013
annual report ratings for being the highest
achiever in the retail industry.
The key drivers of performance continue to be
merchandise renewal and presentation, private
brand development, engaging marketing, sourcing
and supply chain execution and the passion of our
team members.
COP712 Annual Report 2013.indd 5
5/09/13 10:56 AM
Super Retail Group Limited
ANNUAL REPORT 2013
3
Since the establishment of its international
sourcing operations in China in 2006, the
Group has been committed to ethical
sourcing. The Group undertakes audits of
all factories manufacturing products for
the Group to ensure compliance with the
Group’s ethical sourcing policy, a copy of
which is set out on the Group’s website.
The audits cover a number of factors
including workplace health and safety and
employment and payroll practices.
Further information on the Group’s
sustainability initiatives will be included in
the Group’s Corporate Review which will be
published on the Group’s website.
team memberS
There are now close to 12,000 team
members employed by the Group in over
600 locations across three countries.
Retention rates have continued to improve
and were at 72.7% at June 2013, an
increase of 1.2 percentage points over the
prior year.
Particularly encouraging was the
improvement in team member engagement
which was measured at 66% during the
year compared to 60% in the prior year
and compared to a retail industry average
of around 55%. It was especially pleasing
that team members of the Rebel and
Amart Sports businesses recorded an
engagement score of 60%, which was a
dramatic improvement on the score of
43% in a survey conducted for the previous
owners of the businesses some 18 months
previously.
The Group is reviewing the measures that
it uses to assess safety performance and to
ensure these are consistent with industry
best practice. A number of initiatives are
underway to improve safety performance
which was below industry averages during
the year, in particular, focusing on the safe
handling of stock in the retail environment.
The results and performance of the
Group are testament to the passion and
commitment of our team members and
we would like to thank all of them for their
contribution during the year.
bOard
During the year the size of the board was
increased with the appointment of
Rob Murray. The board was fortunate
to be able to gain access to Mr Murray’s
extensive experience. His presence on the
board will add a strong complementary skill
set to the existing board.
lOOking FOrward
The year ahead will be another year of
growth and development as we maintain
our focus on growing our existing
businesses and building our multi-channel
capabilities.
We will be investing in opening new stores
and refurbishing existing stores in all of our
businesses, with around 25 stores opening
across the Group. Although retail conditions
are forecast to remain patchy, we expect
to continue to deliver solid like for like
sales growth across our businesses and to
maintain or grow operating margins while
generating working capital improvement.
We will complete the development of two
new distribution centres at Brendale in
Queensland and Erskine Park in New South
Wales.
We will continue to enhance our
information technology platform with the
development of our customer relationship
marketing system, the further rollout of the
JDA forecasting and replenishment system
and the completion of the Group-wide SAP
integration amongst the major projects for
the year.
THE RESuLTS AND
PERFORMANCE OF THE
GROuP ARE TESTAMENT
TO THE PASSION AND
COMMITMENT OF OuR
TEAM MEMbERS AND wE
wOuLD LIkE TO THANk
ALL OF THEM FOR THEIR
CONTRIbuTION DuRING
THE yEAR.
We will relaunch a number of our loyalty
programs and increasingly use data
analytics to develop targeted marketing
campaigns. We will also continue to
develop our fledgling Auto Trade Direct and
Super Retail Commercial businesses.
We have a full agenda but our team are
excited by the challenge and committed to
maintaining the strong performance of the
Group. We look forward to reporting on our
progress in the year ahead.
p a birtles
Managing Director and
Chief Executive Officer
r J wright
Chairman
Super Retail Group Limited
4 ANNUAL REPORT 2013
COP712 Annual Report 2013.indd 6
5/09/13 10:56 AM
CORPORATE GOvERNANCE STATEMENT
intrOductiOn
the following statement sets out the
corporate governance framework, policies
and practices adopted by the board of
Super retail group limited (the company).
these practices, unless otherwise stated,
were in place over the past financial year
and are current as of the signing of this
report.
The Board of the Company is committed
to ensuring its policies and practices in the
critical area of corporate governance are
of the highest standards. The framework
is designed to assist the Board and
management effect the ethical conduct
of the Company’s business in a manner
to protect and enhance shareholder
interests and in a manner consistent
with the Company’s responsibility to all
stakeholders.
The Board has adopted a corporate
governance framework that is consistent
with the ASX Corporate Governance
Council’s Principles and Recommendations
with 2010 Amendments (2nd Edition) (ASX
Principles) and the Corporations Act 2001
(Cth).
The Company regularly reviews
developments in corporate governance
to ensure its policies and Charters remain
consistent with the Board’s objectives,
current laws and best practice. The
policies and Charters referred to in this
statement are available from the Corporate
Governance page in the Investor Centre
section of the Company’s website (www.
superretailgroup.com/investors-and-media/
corporate-governance/).
This statement is formatted with specific
reference to the ASX Principles.
principle 1: lay SOlid
FOundatiOnS FOr management
and OverSight
The Board delegates responsibility for day-
to-day management of the Company to the
Managing Director.
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 Group is properly managed.
The responsibilities of the Board include:
• contributing to and if considered
appropriate approving the Company’s
goals and strategic direction and monitor
implementation of those goals and
strategies;
• monitoring financial performance,
including adopting annual budgets
and approving the Company’s financial
statements;
• approving and monitoring the progress of
capital expenditure, capital management,
acquisitions and divestures;
• ensuring that adequate systems of
internal control and risk management
exist and are appropriately monitored to
mitigate material business risk;
• appointing and removing the Managing
Director / Chief Executive Officer
and Company Secretary, ratifying the
appointment of the Chief Financial Officer
and reviewing the performance of senior
management;
• ensuring accountability to shareholders
through effective shareholder
communication and encouraging
participation at general meetings; and
• establishing codes of conduct.
The Board operates in accordance with the
broad principles set out in its charter which
is available on the Company’s website.
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 GROuP IS
PROPERLy MANAGED.
Evaluation of senior executives
All senior executives complete a
performance and development review
every six months. The review process is
conducted by the Managing Director and
includes the following:
• assessment against a set of key
performance criteria, including both
financial and non-financial performance
measures;
• feedback on their performance over the
review period and a rating based on that
performance; and
• monitoring and revision as appropriate of
the executive’s development plan which
is tailored to support the executive’s
ongoing contribution to the Company.
The Board of the Company is committed to
ensuring its policies and practices in the critical
area of corporate governance are of the highest
standards.
COP712 Annual Report 2013.indd 7
5/09/13 10:56 AM
Super Retail Group Limited
ANNUAL REPORT 2013
5
relationship with the Company’s senior
executives.
Independent Professional Advice
The Managing Director provides a summary
of the performance evaluation of senior
executives to the Human Resources
and Remuneration Committee. The
performance evaluation in accordance with
the abovementioned process has taken
place during this reporting period.
The Managing Director is responsible for
implementing Group strategies and policies.
Board Nomination Committee
The performance evaluation of the
Managing Director was undertaken by the
Chairman, in consultation with the Board.
The Board Nomination Committee is
comprised of the full Board.
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.
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 six
directors, five of whom (including the
Chairman) hold their positions in a non-
executive capacity.
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
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. The Board Nomination Committee
Charter, which is available on the
Company’s website, includes the Company’s
policy and procedure for selection and
appointment of new directors.
Details of the members of the Board, their
experience, expertise, qualifications and
independent status are profiled in the
Directors’ Report on pages 12 to 31.
Directors’ Independence
As stated there are six Directors, four of
whom are Independent Non-Executive
Directors (including the Chair). The
predominance of Independent Non-
Executive Directors 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 four of the
Company’s Directors (namely Mr Robert
Wright, Dr Sally Pitkin, Mr R John Skippen
and Mr Rob Murray) are considered to be
independent by reference to that definition.
The Board (and each individual Director) is
entitled to seek independent professional
advice at the Company’s expense (subject
to the reasonableness of the costs and
Chair’s consent) in the conduct of its duties
for the Company.
Under their respective Charters, each
of the Board Committees is entitled to
obtain independent professional advice on
matters relevant to the powers, duties and
responsibilities of the Committee.
Company Secretary
The Company Secretary is responsible for
coordination of all Board business, including
agendas, minutes, communication with the
Australian Securities Exchange (ASX) and
statutory filings. All Directors have direct
access to the Company Secretary.
The Board has appointed Mr R Dawkins
as Company Secretary. Details of the
experience and qualifications of the
Company Secretary are set out in the
Directors’ Report on page 19.
Performance Assessment
The Board undertakes an annual
performance evaluation of the Board,
its Committees and individual Directors.
Each Director completes a questionnaire,
the responses are collated and the Board
meets to discuss and consider the results
and to determine any actions arising
from the review. Matters covered by
the review include the role, structure,
procedures, behaviours, performance,
Directors’ understanding of the strategy,
objectives and key risks to the business
and achievement of those objectives,
succession planning and the effectiveness
of the Chair. This assessment commenced
in June 2013 and was concluded in August
2013.
6
Super Retail Group Limited
ANNUAL REPORT 2013
COP712 Annual Report 2013.indd 8
5/09/13 10:56 AM
Induction and Education
Board Committees
New Directors receive a letter of
appointment which sets out the Company’s
expectations of the role, their duties, the
terms and conditions of their appointment
and their remuneration. All new Directors
receive an induction appropriate to their
experience, enabling them to participate
fully and actively as soon as possible,
including familiarisation with the operation
of the Board, the Board’s Committees
and the Company’s financial, strategic,
operational and risk management position.
The Nomination Committee is responsible
for ensuring an effective induction process
for new Directors.
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 / Chief
Executive Officer 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 effectively in all material
respects.
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.
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.
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
Whistleblowing Policy and system of
reporting activity suspected of breaching
the Code to the Company’s Integrity Officer.
The Company’s Integrity Officer is also the
Company Secretary.
A copy of the Code is available on the
Company’s website.
Dealing in Shares
The Company has established a policy for
Directors and team members with respect
to trading in the Company’s securities
(“Securities Trading Policy”). Directors,
senior executives and other designated
team members are subject to prohibitions
to the trading of Company securities.
Generally, this includes the restriction of
the trading 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 Chair 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.
COP712 Annual Report 2013.indd 9
5/09/13 10:56 AM
Super Retail Group Limited
ANNUAL REPORT 2013
7
A copy of the Securities Trading Policy is
available on the Company’s website.
Ethical Sourcing Policy
principle 4: SaFeguard
integrity in Financial
repOrting
Audit and Risk Committee
The Company has developed an Ethical
Sourcing Policy that applies to all its
businesses and brands.
THE bOARD RECOGNISES
THE MANy bENEFITS
THAT MAy bE DERIvED
by COMPANIES THAT
SuCCESSFuLLy FOSTER
A CuLTuRE OF DIvERSITy
AND IS COMMITTED
TO CREATING A FAIR
AND INCLuSIvE
ENvIRONMENT.
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.
Diversity Policy
The Board recognises the many benefits
that may be derived by companies that
successfully foster a culture of diversity and
is committed to creating a fair and inclusive
environment.
Information on diversity, including gender
diversity is set out in the Directors’ Report
under the heading ‘Remuneration and
Diversity report’.
A copy of the Diversity Policy is available on
the Company’s website.
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 consisted of
the following Independent Non-Executive
Directors over the past financial year:
R J Skippen (Chair)
R J Wright
S A Pitkin
Effective from 22 July 2013, R A Murray
replaced R J Wright as a member of the
Audit and Risk Committee.
All members of the Audit and Risk
Committee are financially literate and have
the requisite financial expertise.
Details of these Directors’ qualifications and
attendance at Audit and Risk Committee
meetings are set out in the Directors’
Report on pages 12 to 31.
The Audit and Risk Committee operates in
accordance with a Charter and in a manner
compliant with ASX Listing Rule 12.7. The
Charter 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.
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.
8
Super Retail Group Limited
ANNUAL REPORT 2013
COP712 Annual Report 2013.indd 10
5/09/13 10:56 AM
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 COMPANy’S
SHAREHOLDER
COMMuNICATIONS
POLICy OuTLINES THE
COMPANy’S APPROACH
TO COMMuNICATING
INFORMATION TO
SHAREHOLDERS AND
OTHER STAkEHOLDERS
THROuGH A RANGE
OF FORuMS AND
PubLICATIONS.
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 reSpect 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. The
Company’s policies and procedures have
been revised during the reporting period
to ensure continued alignment with ASX
Listing Rules and Guidance Notes.
The Company’s Shareholder
Communications Policy outlines the
Company’s approach to communicating
information to shareholders and other
stakeholders through a range of forums and
publications.
A summary of these policies and
procedures is available on the Company’s
website.
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.
unit manager ownership of risk with
independent monitoring. The Group Risk
Manager reports directly to the Group’s
Chief Financial Officer with an indirect
reporting line to the Chairman of the Audit
and Risk Committee.
Internal Audit
The role of Internal Audit as part of the
Group’s risk management framework is to
understand the key risks of the Company
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.
Risk Management
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.
The Managing Director and senior
executives 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 Group Risk Manager is responsible
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
COP712 Annual Report 2013.indd 11
5/09/13 10:56 AM
Super Retail Group Limited
ANNUAL REPORT 2013
9
plans are not permitted to enter into
any transactions that would limit the
economic risk of options or other unvested
entitlements. Details of this Securities
Trading 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
900 team members participated in one or
both plans.
principle 8: remunerate Fairly
and reSpOnSibly
Human Resources and Remuneration
Committee
The Human Resources and Remuneration
Committee consisted of the following
Independent Non-Executive Directors over
the past financial year:
S A Pitkin (Chair)
R J Wright
R J Skippen
R A Rowe
Effective from 22 July 2013, R A Murray
replaced R J Wright as a member of the
Human Resources and Remuneration
Committee.
The Committee operates in accordance
with its Charter which is available on the
Company’s website, and as 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.
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
10
Super Retail Group Limited
ANNUAL REPORT 2013
COP712 Annual Report 2013.indd 12
5/09/13 10:56 AM
ANNuAL REPORT
Super Retail Group Limited
for the period ended 29 June 2013
COP712 Annual Report 2013.indd 13
5/09/13 10:56 AM
Super Retail Group Limited
ANNUAL REPORT 2013
11
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Directors’ Report
Your Directors present their report on the consolidated entity consisting of Super Retail Group Limited and the entities it
controlled at the end of, or during, the period ended 29 June 2013.
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
R A Murray (appointed 22 April 2013)
Information on qualifications and experience of Directors is included on pages 17 to 19.
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 equipment and fishing equipment and apparel
retailing of sporting equipment, bicycles, bicycle accessories and apparel.
Dividends – Super Retail Group Limited
The Directors declared a fully franked dividend of 21.0 cents per share be paid on 2 October 2013 (total dividend, fully
franked - $41,259,290). This will take the total dividends paid and payable to 38.0 cents for the 2012 year which is a 6.0
cent per share increase on 2012.
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
$
2012 final fully franked dividend (19¢ per share)
2013 interim fully franked dividend (17¢ per share)
3 October 2012
3 April 2013
37,272,864
33,393,578
70,666,442
2013 Operating and Financial Review
Group Results
Group sales grew by 22% to $2.02 billion and profit after tax also grew by 23% to $102.7 million. This strong overall growth
reflected solid growth in the Auto and Leisure Retailing Divisions and a full year’s contribution from the Sports Retailing
Division (as compared to eight months contribution in the prior period).
Costs of $16.2 million relating to the restructuring of the Ray’s Outdoors and Goldcross Cycles businesses were expensed
during the year while costs of $11.7 million associated with the acquisition of the Sports Retailing businesses were expensed
in the prior period.
The Group’s larger businesses generated strong like for like sales growth, opened new stores and delivered improvements
in gross margins. This was achieved through a combination of new product introduction, private brand development and
marketing, sourcing and supply chain initiatives.
The Group has continued to invest in the development of the Group with $63.1 million capital expenditure and $4.1 million
operating costs associated with the Group’s multi-channel development projects and $43.6 million capital expenditure
associated with new and refurbished stores. Despite this investment, Group Net Debt at $329.3 million was $11.7 million
below the prior year reflecting the strong operating cash flow generated across the Group.
Page 12
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
2013 Operating and Financial Review (continued)
Auto Retailing
Divisional sales at $789 million were 7.8% higher than the prior comparative period with like for like sales growth being 5%.
Divisional EBIT at $87.1 million was 12.5% higher than the comparative period.
The Supercheap Auto business has continued to perform strongly with its strong like for like growth driven by increases in
transaction numbers, units sold and average unit value. EBIT margins reached the target of 11%, growing by 0.4 percentage
points over the prior comparative period. Further gross margin improvement driven by ranging and sourcing initiatives was
partially offset by increases in the cost of doing business as a result of increases in power costs and investment in the
development of business’ multi-channel capabilities.
The business launched its customer loyalty program Supercheap Auto Club Plus in Australia in October 2012 following the
successful trial of the program in New Zealand earlier in the year. Club membership had grown to over 500,000 by June
2013 and incremental club member spending contributed circa 1% sales growth. The business expects to grow membership
in excess of one million members over the next three years.
The business has continued to focus on store refurbishment, ranging initiatives, private brand development, partnering with
the world’s best automotive brands and team engagement as drivers of underlying consistent growth.
All the major product categories performed well during the year with particularly strong growth being achieved in the car
care, lubricants, electrical and power categories. Positive like for like growth was achieved across all states and territories of
Australia and in New Zealand. The Western Australian performance was particularly strong reflecting both a lift in team
member engagement and retention and the benefits of the increase in Sunday trading.
The business opened a further nine stores and closed two stores during the year while 25 stores were refurbished and
seven were converted to superstores. At the end of June there were 288 stores across Australia and New Zealand with the
business targeting an additional 30 stores over the next 4 years. The business expects to refurbish around 32 stores in the
coming year which will bring the current round of refurbishments to a close.
Towards the end of the year, the business refurbished two of its superstores on the north side of Brisbane as concept stores
to test a number of initiatives which are designed to create a more engaging interactive shopping experience for the
customer. The business also intends to test similar ideas in two mid-size stores and two small stores in the coming year
before determining which initiatives to rollout across the rest of the network.
The division commenced the trial of its new trade supply business, Auto Trade Direct in the North Island of New Zealand in
November 2012. The division is testing the opportunity to supply auto parts and accessories to auto mechanics from a
number of hub stores and directly from its distribution centre and from trade partners. Much of the supply chain capability
required to support this line of business is consistent with the capability required to service retail customers ordering
products for home delivery. Experience to date has highlighted areas in which the business model needs to be adapted and
further trials will be conducted in the coming year before a decision is made on further rollout.
Leisure Retailing
Divisional sales at $522.5 million were 14.5% higher than the comparative period with like for like sales growth across the
division of 3.1%.
Divisional EBIT at $33.2 million was 1.8% higher than the prior comparative period with growth impacted by costs of $6.0
million associated with restructuring the Ray’s Outdoors business. Excluding these non-recurring costs, divisional operating
EBIT grew by 20.2%. Underlying EBIT margin was 7.5% which was 0.4 percentage points higher than the prior comparative
period. This improvement was achieved through an increase in gross margin generated by sourcing and ranging initiatives
partly offset by an increase in power costs.
The BCF Boating Camping Fishing business had a solid year with like for like sales growth of circa 2% and improvement in
gross margin. Like for like customer transactions were in line with the prior year, units per transaction were lower while
average unit value increased. This reflected the performance of the fishing category as adverse fishing conditions during the
year resulted in flat sales growth. The Boating, Camping and Apparel categories all delivered solid growth.
The business opened 14 stores during the year taking total store numbers to 105. The business expects to reach 120 stores
in the next four years. One store on the north side of Brisbane has been refurbished as a trial store to test initiatives
designed to provide a more interactive and engaging experience for the customer.
A number of new ranges were introduced during the year including the initial testing of a boat, motor, trailer offer, which will
be rolled out across all stores in the new year. The business successfully trialled a new inventory demand planning and
replenishment system in the fishing category and this will be rolled out across the business in the coming year with
objectives of supporting improved ‘in stock’ position, reduced inventory and store space rationalisation.
Page 13
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
2013 Operating and Financial Review (continued)
The repositioning of the Ray’s Outdoors business continued during the year and following successful trials at two stores, it
was decided to focus the business on four core categories; camping, footwear, outdoor apparel and travel. As a result, it was
decided to commence a clearance program to exit the outdoor furniture category, reduce the range of BBQs and to
reposition the apparel and footwear offer. Costs associated with the restructure of $6.0 million have been recognised.
The repositioning of the business has generated positive momentum. Total like for like sales growth was circa 5% but after
adjusting for the decline in sales of BBQs and Outdoor Furniture underlying like for like sales growth was 8%. Particularly
strong growth was achieved in both the Apparel and Footwear categories. The business also delivered good growth in gross
margin through ranging initiatives and management focus.
Five new stores were opened and two stores were closed during the year resulting in 55 stores trading by the end of June. It
is anticipated that total store numbers will grow to around 75 over the next four years. Following the successful trial of a new
concept store at Frankston in Victoria, the business will commence a wider store refurbishment program in the new year.
The business has commenced a program of store right sizing to exit excess space across the store portfolio.
In New Zealand, the FCO Fishing Camping Outdoors business traded through its first full year following the launch of the
business in November 2011. 13 stores traded throughout the year. Although like for like sales growth was pleasing at circa
14%, average sales per store was below target, reflecting a shortfall in customer traffic.
A business review was conducted in the second half of the year which highlighted improvement opportunities including
adopting a more aggressive pricing and promotional strategy and changes to brand marketing. The review also identified
opportunities for the business to extend its range into adjacent areas. Consequential changes to the business are underway
and will continue into the new year targeted towards improving sales per store and lifting operating margins.
Sports Retailing
The Group benefited from a full year contribution from the Rebel and Amart Sports businesses as compared to eight months
contribution post acquisition in the prior comparative period. The Goldcross Cycles business was transferred into the Sports
Retailing Division at the start of the financial year.
Divisional sales at $703.5 million were 53% higher than the prior period and EBIT at $73.6 million (excluding Goldcross
restructure costs) was 49% higher than the prior period. The $78.8 million EBIT contribution from the Rebel and Amart
Sports businesses was strongly ahead of expectations at the time of the acquisition in October 2011.
Like for like sales growth across the division was 8% which was particularly pleasing given the significant contribution to
sales in the prior comparative period from clearance of aged inventory. Overall like for like sales growth was driven by a
solid increase in customer traffic, a strong increase in conversion and a modest increase in average transaction value.
Growth was strong in all the major categories in the Rebel and Amart Sports businesses with Sport Equipment and Fitness
Equipment particularly strong. New ranges, better inventory and promotion management, stronger relationships with trade
partners and a more engaged team continued to be the drivers of the strong performance.
Both the Rebel and Amart Sports brands were relaunched during the year and revised store designs completed. Nine Rebel
stores were refurbished, four stores were relocated and two new stores opened and one store closed during the year. The
Amart Sports brand was launched in Victoria with eight new stores open by the end of June, five of these stores being
former Goldcross Cycles stores. A further Amart Sports store was opened in Queensland and one store was closed. There
were nine Amart stores refurbished during the year. At the end of June there were 134 Rebel and Amart Sports stores with
a potential of 185 stores in the next 5 years.
Following a strategic review of the Goldcross Cycles business, it was decided to convert the business to a store within a
store concept inside an Amart Sports store. Five stores were converted into Amart Sports stores during the year and a
further two stores were converted into a Super Cheap Auto store and a BCF store. The remaining stores will be converted or
closed during the next financial year and $10.2 million costs associated with the restructuring of the business have been
recognised. Four new Goldcross Cycles store in store concepts have opened in other Amart Sports stores. The
performance of the Goldcross Cycles store in store concepts to date has been promising.
Group Costs
Group costs for the period were $11.4 million including $1.5 million in unutilised distribution centre and office space,
$4.5 million in public company costs, $0.4 million in Rebel integration costs and $0.9 million in costs associated with the
development of the Group’s commercial businesses. Group Costs also included $4.1 million of costs associated with the
Group’s multi-channel development programs. Further information on these programs is included in the section on Group
Strategy in this report.
Page 14
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
2013 Operating and Financial Review (continued)
Review of Financial Position
Cash flow from operations was $225.1 million, an increase of $89.8 million over the prior period, reflecting the growth in
operating profit, improvements in working capital efficiency, timing benefits (approximately $39 million relating to trade
payables) and a lower investment in new store opening costs. Progress has been made on increasing stock turns in the
Auto and Leisure Retailing Divisions but there remains scope for further significant improvement in the next five years. Total
inventory investment across the Group at the end of June was $452.6 million an increase of $35.9 million compared to the
prior comparative period.
Group capital expenditure was $106.7 million which included $43.6 million in new and refurbished store fit out, $6.0 million in
customer and channel development projects, $16.0 million in information technology projects, $19.6 million in supply chain
development projects, $12.3 million in the Sports Retailing SAP project and $9.2 million in general capital expenditure.
At the end of June, Group Net Debt was $329.3 million, which was $11.7 million lower than the prior comparative period and
was comfortably within the Group’s facility limits and associated banking covenants.
Group Strategy
The Group’s strategy is to develop and grow its portfolio of retail businesses providing solutions and engaging experiences
which enable its customers to make the most of their leisure time. Core components of the strategy are to:
provide an engaging and integrated experience for all customers across all channels
understand and communicate with customers at an individual level
develop excellence in sourcing, brand development and supply chain management
operate at least as efficiently as competitors
leverage common business systems across the Group
attract, engage and retain a passionate, capable and engaged team
The Group’s supporting strategic plan is built around 6 core programs which contain a number of projects:
1) The growth and development of the Group’s existing businesses
New store development
Refurbishing existing stores
Range development
Private Brand development
2) The development of capabilities required to provide an integrated and engaging experience for all customers across all
channels
Development of an engaging and interactive store experience
Development of customer loyalty programs
Development of informative and targeted marketing
Integration across all channels
3) The development of the Group’s supply chain capabilities
Development of new distribution centres in Brendale and Erskine Park
Development of off shore consolidation centres and the development of faster response supply methods
Implementation of demand planning, replenishment and assortment systems
Development of inventory management systems
4)
Increasing the efficiency and productivity of the Group’s operations
Right sizing of the store portfolio
Group procurement synergies
Productivity focus
Management systems
5) Engaging our team and developing their capabilities
Learning and development programs
Performance management and succession planning
Developing the team member value proposition
Safety focus
Page 15
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
2013 Operating and Financial Review (continued)
6) Opportunities for growth in Leisure retail categories through organic development or acquisition.
Trial of the Auto Trade Direct Model
Development of the Super Retail Commercial business
Trial of on-line micro sites
Assessment of acquisition opportunities
The Group anticipates a capital expenditure program amounting to circa $110 million and related operational expenses of
circa $10 million in the next financial year associated with the development programs across the Group.
Material business risks
The Group recognises that all of its businesses operate in an environment of change and uncertainty and is committed to
managing the potential risks associated with this uncertainty in a continuous, proactive and systematic way. The Group
regularly reviews the possible impact of these risks and seeks to minimise this impact through a commitment to its corporate
governance principles and its various risk management functions.
The material business risks faced by the Group that are likely to have an effect on the financial prospects of the Group and
how the Group manages these risks include:
Global Competition - The Retail market is becoming increasingly a global market place through the impact of on-line
shopping and overseas retailer’s inward investment into Australasia which expose the Group to a new higher class of
competition. Therefore the Group has to increasingly benchmark its customer offer and business model against
global on-line and physical retail businesses. The Group’s strategic change programs have been developed to build
the capabilities we require to be successful in the global market place. With competitors constantly seeking to enter
our market with improved designs, we see this risk increasing in the future.
Proliferation of sales and marketing channels - The proliferation and growth of new sales and marketing channels
will make it increasingly challenging to ‘stand out from the crowd’ and to develop customer loyalty. A continued focus
on target customers and their expectations is crucial which includes on-going review of price competitiveness against
internet and competitor models maximising efficiencies in supply chain (supply to customer) and the development of
multi-channel marketing initiatives. With competitors constantly seeking to enter our market with improved designs,
we see this risk increasing in the future.
The breakdown of traditional business models - The breakdown of traditional business models with retailers
becoming manufacturers and brand owners, while brand owners and manufacturers are becoming retailers is
increasing competition risk and cost pressures. The Group continues to develop its sourcing and product and brand
development capabilities. These risks are continuously monitored and mitigation strategies updated. Some of these
actions include an annual review of brand strategies, regular customer research, and external research of brand
perception. Targets are in place for private brand sales for each business. The Group is also discussing opportunities
to reduce the cost of supply chain with its major trade partners and to develop mutual business opportunities. We do
not expect any significant change in this risk over the next couple of years.
Changing customer expectations - Customer expectations has changed significantly over the last few years with
an increasing expectation of engaging experiences, solutions rather than products and “do it for me” rather than “do it
yourself”. The Group’s businesses are all considering opportunities to add the provision of information and services to
its customers as well as product. In addition the Group has added a focus on customer engagement to its strategic
programs. This will cover interaction with the customer across all channels – store, on-line, social media and
traditional media. We believe that this will remain a consistent risk in the retail market for years to come and if not
adequately managed will result in loss of sales to alternative suppliers.
Changing workforce demographics - Attraction, retention, engagement, safety and succession of Team Members
are key risks to be managed to maximise financial growth in the retail sector. We consider this is unlikely to have any
significant impact on our financial results in the next year, but could potentially be significant in future years if not
managed on an on-going basis. The Group's retention ratio has significantly increased and is currently tracking at 72
% up from below 60% in 2006. To manage this aspect of the business “Attracting and Engaging our Team” has been
included as one of the six strategic programmes within the Group.
Increase in regulatory controls - The increase in regulatory controls and compliance obligations and impact of
increased Corporate Social Responsibility expectations (direct and indirect) has a direct cost implication for the
Group. The Group has developed strong compliance processes and a clear focus on Corporate Social Responsibility.
On-going review of changes to regulation is required to assess the impact on the Group and develop appropriate
response strategies. We believe that this will remain a consistent risk in the retail market.
Page 16
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
2013 Operating and Financial Review (continued)
Financial risk - The Group’s activities expose it to a number of financial risks. The Group adopts a financial risk
management program which seeks to minimise the potential adverse impacts on financial performance of the Group.
Financial risks and specific risk management approaches are reported in more detail in note 2 of the Notes to the
Consolidated Financial Statements.
Significant changes in the state of affairs
There were no significant changes in affairs during the period.
Matters subsequent to the end of the financial year
Since 29 June 2013 Super Retail Group Limited does not have any matters subsequent to the end of the financial year to be
disclosed.
Likely developments and expected results of operations
Information on likely developments in the operations of the Group are included in this report under the section 2013
Operating Financial Review. Further information on the expected results of operations have not been included in this annual
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 29 June 2013.
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 64
Experience and expertise
Appointed Chairman on 28 October 2009 and has been an Independent Non-Executive Director for 9 years 3 months.
Robert has over 30 years financial management experience, having held a number of Chief Financial Officer positions,
including Finance Director of David Jones Limited and Director of a number of major Retail companies over the last 20
years.
Other current directorships
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 (March 2005 – August 2010) and RCL Group (formerly Babcock &
Brown Residential Land Partners Group) (May 2006 – February 2012).
Special responsibilities
Chairman of the Board
Chairman of the Board Nomination Committee
Interest in shares and options
73,865 ordinary shares in Super Retail Group Limited
P A Birtles, BSc, ACA. Managing Director and Chief Executive Officer. Age 49
Experience and expertise
Managing Director and Chief Executive Officer for 7 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
Page 17
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Special responsibilities
Managing Director and Chief Executive Officer
Member of the Board Nomination Committee
Interests in shares and options
1,442,596 ordinary shares in Super Retail Group Limited
580,000 performance rights over ordinary shares in Super Retail Group Limited
R A Rowe. Non-Executive Director. Age 69
Experience and expertise
Founder of the business in 1972. Non-Executive director for 9 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 Board Nomination Committee
Member of the Human Resources and Remuneration Committee
Interests in shares and options
56,954,670 ordinary shares in Super Retail Group Limited.
R J Skippen, ACA Independent Non-Executive Director. Age 65
Experience and expertise
Independent Non-Executive Director for 4 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 Flexigroup Limited and Emerging Leaders Investment Limited. Chairman and Non-Executive
Director of Slater & Gordon Limited.
Former directorships in the last 3 years
Non-Executive Director of Briscoe Group Limited (NZ) (March 2004 – September 2011).
Special responsibilities
Chairman of the Audit and Risk Committee
Member of the Board Nomination Committee
Member of the Human Resources and Remuneration Committee
Interest in shares and options
Nil.
S A Pitkin, LLB, LLM, PhD, FAICD. Independent Non-Executive Director. Age 54
Experience and expertise
Independent Non-Executive Director for 3 years. Sally is an experienced Non-Executive Director and lawyer and a former
partner of Clayton Utz.
Other current directorships
Non-Executive Director of Billabong International Limited and Committee for Economic Development of Australia.
Former directorships in the last 3 years
Aristocrat Limited (June 2005 – May 2011)
Special responsibilities
Chair of the Human Resources and Remuneration Committee
Member of the Audit and Risk Committee
Member of the Board Nomination Committee
Interest in shares and options
25,053 ordinary shares in Super Retail Group Limited
Page 18
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
R A Murray. Independent Non-Executive Director. Age 50
Experience and expertise
Independent Non-Executive Director for 4 months. Rob was the Chief Executive Officer and Executive Director of Lion
(formerly Lion Nathan & Lion Nathan National Foods) (April 2004 - September 2012)
Other current directorships
Non-Executive Director of Lion and Linfox and a member of Kirin’s International Advisory Board
Former directorships in the last 3 years
Chief Executive Officer and Executive Director of Lion (formerly Lion Nathan & Lion Nathan National Foods) (April 2004-
September 2012)
Special responsibilities
Member of the Board Nomination Committee
Member of the Audit and Risk Committee
Member of the Human Resources and Remuneration Committee
Interest in shares and options
Nil
Company Secretary
The Company Secretary is Mr R W Dawkins, B.Bus (Acct), Grad. Dip. AppCorpGov, ACIS, ACSA. Mr Dawkins commenced
with Super Retail Group Limited as the Property Services Manager in July 2001 and was appointed Company Secretary in
December 2010.
Meetings of directors
The number of meetings of the Company’s Board of Directors and each Board Committee held during the period ended
29 June 2013 is set out below:
Meetings of Committees
Full meetings
directors
Audit & Risk
A
10
10
10
10
10
2
B
10
10
10
10
10
2
A
4
n/a
n/a
4
4
n/a
B
4
n/a
n/a
4
4
n/a
Board
Nomination&
Remuneration
B
A
1
1
1
1
1
1
1
1
1
1
0
0
Human Resource
A
2
2
2
2
2
0
B
2
2
2
2
2
0
R J Wright
P A Birtles
R A Rowe
R J Skippen
S A Pitkin
R A Murray
A
= 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
Proceedings on behalf of the Company
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
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.
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 19
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
During the period the following fees were paid or payable for services provided by the auditor (PwC) of the parent entity, its
related practices and non-related audit firms:
Assurance Services
PricewaterhouseCoopers Australian firm
Remuneration for audit services
Total remuneration for assurance services
Taxation Services
Total remuneration for taxation services
Advisory Services
Total remuneration for advisory services
Auditors Independence Declaration
Consolidated Entity
2012
$
2013
$
467,500
467,500
568,314
568,314
214,987
236,005
-
-
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 32.
Loans to directors and executives
There are no loans to directors or executives as at 29 June 2013 and no loans were made during the period.
Remuneration and Diversity report
Introduction
One of Super Retail Group’s core principles is that the attraction, development, engagement and retention of 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, engagement and retention of passionate team members and that
are aligned with the interests of shareholders.
Remuneration Policy
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, subject to individual performance.
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 20
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
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, engagement, 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.
In 2013, the Human Resources and Remuneration Committee engaged the services of Ernst & Young as an independent
remuneration consultant to prepare comparative information for review to ensure that fees are market based and fairly
represent the responsibilities and time spent by the Directors on Company matters.
The Market comparative information provided by Ernst & Young disclosed that the level of fees being paid are substantially
below that paid to Non-Executive Directors in the comparator group. To address this issue it is proposed that directors fees
will be increased progressively over a three year period so that at the end of that period fees will be paid in accordance with
the Remuneration policy of paying fees at the median of fees paid to comparative companies.
Additional fees are paid to the Chairs and members of the Audit and Risk and the Human Resources and Remuneration
Committees. This reflects the additional time commitment required by the Chairs and members of these committees.
Non-Executive Director Fees are determined within an aggregate Directors’ fee pool approved by shareholders. The current
pool of $800,000 was approved on 26 October 2011. The Directors intend that the General Meeting of Shareholders on 23
October 2013 consider increasing the aggregate Directors’ fee pool to a maximum of $1,200,000. This increase will provide
the capacity to appoint additional directors to facilitate board succession and regeneration and to apply the Group’s
remuneration policy.
Non-Executive Directors’ fees are inclusive of superannuation contributions. Non-Executive Directors do not receive shares,
performance rights 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.
Page 21
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Remuneration and Diversity report (continued)
Directors’ Fees
The Directors’ fees are inclusive of Committee fees. Fees for year to 29 June 2013 were approved on 25 July 2012, while
fees for the year to 28 June 2014 were approved on 22 July 2013.
The following fees apply:
Chairman
Other Non Executive Directors
Chair of the Audit and Risk Committee
Chair of the Human Resources and Remuneration Committee
Committee Member *
* Committee fees are not paid to members of the Nomination Committee
Senior Executive Remuneration Structure
2013
$
200,000
105,000
10,000
10,000
n/a
2014
$
280,000
125,000
25,000
20,000
10,000
The Senior 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.
Senior 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 years to 29 June 2013 and 28 June 2014, the following mix of remuneration applies.
Chief Executive Officer
Divisional Managing Directors
Chief Financial Officer and GM Group Development
General Manager Group Logistics
Fixed
STI
LTI
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 dependent 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 senior 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
senior 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.
In 2013, the Company engaged the services of Ernst & Young Remuneration Consultants to provide benchmark market
information. The information provided by Ernst & Young disclosed that, the base salary packages paid to the Group’s senior
executives are substantially below those paid to equivalent senior executives in the comparator group. To address this issue
it is proposed that senior executive base salaries will be increased progressively over a three year period so that at the end
of that period base salaries will be paid in accordance with the Remuneration policy of paying base salaries at a market
median subject to individual performance.
Page 22
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Remuneration and Diversity report (continued)
All senior executive base salary proposals are reviewed and assessed by the Human Resources and Remuneration
Committee. Using this information the Human Resources and Remuneration Committee then make recommendations to the
Board.
Short Term Incentive (STI)
Senior 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 recommends to the Board 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.
For the year to 29 June 2013, the profit before tax target of $148.7 million was 24% higher than the profit before tax
achieved in the period to 30 June 2012. This target reflected the full year budgeted contribution of the Rebel Group which
was acquired on 30 October 2011. The target reflected an underlying increase in Group profit of circa 10%, 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.
Senior 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 Senior Executive Remuneration Structure outlined above.
The level of participation is dependent 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
and objectives set out in the Group’s business plan.
The 12 KPIs included in the Chief Executive Officer’s Performance Contract for the 2013 Financial Year included the
achievement of sales, profit and debt targets relative to budget, delivering initiatives agreed in the Group’s business plan in
relation to the Group’s businesses (such as store development, brand development, new business development) and the
Group’s multi-channel supply chain and customer offer development programs and in the achievement of improvement in
the areas of team retention, engagement and succession planning.
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.
Page 23
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Remuneration and Diversity report (continued)
The vesting of Performance Rights is subject to the following performance conditions over a three year period ending 30
June:
a) Cumulative compound annual growth in earnings per share of 10% or more; and
b) Return on capital of more than 15%
If the Company achieves these performance hurdles over the 3 year performance period, earnings per share will have
increased by 33% compared to expected market growth of 9% and the company will have generated a return on capital
approximately 4.5% greater than its cost of capital.
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.
The Board have decided to introduce graduated performance hurdles in the 2015 year. The granting of Performance Rights
to the Managing Director and Chief Executive Officer for the 2013 and 2014 year was approved by shareholders subject to
the existing performance conditions at the 2013 Annual General Meeting.
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
2008
2009
2010
2011
2012
2013
Sales ($m)
715.4
829.8
938.0
1,092.3
Profit before tax ($m)
Post Tax ROC (%)
Earnings Per Share (¢)
Dividends Per Share (¢)
30 June Share Price ($)
36.8
14.1
22.6
13.0
2.33
41.9
15.4
28.1
18.0
3.61
Remuneration Paid to Key Management Personnel
Base Salary Package
Short Term Incentive
Long Term Incentive
Total
2.2
0.3
0.2
2.7
2.5
0.8
0.2
3.5
53.9
16.8
32.1
21.5
5.27
2.5
1.2
0.4
4.1
77.7
17.3
40.9
29.0
7.00
2.7
1.1
0.7
4.5
1,654.1
120.1
15.9
46.4
32.0
7.19
3.1
1.1
1.1
5.3
2,020.0
146.8
12.6
52.3
38.0
11.97
3.9
1.5
1.5
6.9
Since 2008 earnings per share have increased by 131%, dividends per share have increased by 205% and the share price
has increased by 414%.
During the same period, total remuneration paid to key management personnel has increased by 156% whilst Base Salary
has increased by 77%. The major driver of increase in total remuneration has been incentive pay reflecting the strong
performance of the Group over the last five years and the addition of two key management personnel in the last two years.
Total remuneration paid to key management personnel as a proportion of profit before tax was 7.3% in 2008 and had
reduced to 4.7% in 2013.
Page 24
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Remuneration and Diversity report (continued)
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 seven highest paid executives of Super Retail Group Limited are set out in the following tables.
The key management personnel of the Group include 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 J Burns, Chief Financial Officer
D F Ajala, Managing Director – Auto & Cycle Retailing
S J Doyle, Managing Director – Leisure Retailing
E A Berchtold, Managing Director – Sports Retailing
G G Carroll, General Manager Group Development
G L Chad, General Manager Group Logistics
Chris Wilesmith has been appointed to the position of Supercheap Auto Managing Director on 1 July 2013. Chris will
continue to report to David Ajala Managing Director Auto and Commercial Retailing Division.
2013
Name
Non-executive directors
R J Wright Chairman
R A Rowe
R J Skippen
S A Pitkin
R A Murray (a)
Sub-total non-executive
directors
Executive directors
P A Birtles
Other key management
personnel
D J Burns (b)
D F Ajala
S J Doyle
E A Berchtold
G G Carroll
G L Chad
Totals
Short-term benefits
Cash
salary and fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Post-
employment
benefits
Share-based
payment
Super-
annuation
$
Performance
Rights
$
183,530
82,875
105,505
105,505
18,430
495,845
-
-
-
-
-
-
-
-
-
-
-
-
16,470
22,125
9,495
9,495
1,659
59,244
-
-
-
-
-
-
Total
$
200,000
105,000
115,000
115,000
20,089
555,089
976,115
487,550
2,415
16,470
635,324
2,117,874
198,224
450,730
407,023
409,530
403,530
377,251
3,718,248
58,200
232,750
169,650
223,440
151,200
116,000
1,438,790
-
-
11,507
30,000
-
-
43,922
9,068
24,270
16,470
16,470
16,470
22,749
181,211
-
242,529
222,645
79,208
163,280
151,034
1,494,020
265,492
950,279
827,295
758,648
734,480
667,034
6,876,191
(a) appointed 22 April 2013
(b) appointed 3 December 2012
Page 25
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Remuneration and Diversity report (continued)
2012
Name
Non-executive directors
R J Wright Chairman
R A Rowe
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
E A Berchtold
G G Carroll
G L Chad
Totals
Short-term benefits
Cash
salary and fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Post-
employment
benefits
Share-based
payment
Super-
annuation
$
Performance
Rights
$
146,789
35,881
91,743
91,743
366,156
-
-
-
-
-
-
-
-
-
-
13,211
54,119
8,257
8,257
83,844
-
-
-
-
-
Total
$
160,000
90,000
100,000
100,000
450,000
856,810
367,500
2,415
15,775
477,180
1,719,680
425,100
387,492
219,901
359,225
309,128
2,923,812
184,500
128,650
118,663
116,250
100,100
1,015,663
-
11,733
19,615
-
27,132
60,895
24,900
15,775
17,508
15,775
48,740
222,317
193,354
177,500
-
126,260
128,730
1,103,024
827,854
721,150
375,687
617,510
613,830
5,325,711
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
P A Birtles
D J Burns
D F Ajala
S J Doyle
E A Berchtold
G G Carroll
G L Chad
Fixed Remuneration
2013
2012
50.88%
47.02%
n/a
78.08%
54.36%
50.02%
57.55%
52.62%
68.41%
60.15%
60.73%
57.23%
62.72%
60.01%
At Risk – STI
At Risk – LTI
2013
23.00%
21.92%
24.47%
20.49%
29.42%
20.57%
17.37%
2012
21.37%
n/a
22.29%
17.84%
31.59%
18.83%
16.31%
2013
29.98%
0%
25.51%
26.89%
10.43%
22.20%
22.62%
2012
27.75%
n/a
23.35%
24.61%
-
20.44%
20.97%
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 Performance Rights and Option Plans.
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 29 June 2013 of $995,000 to be reviewed annually by the
Human Resource 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.
Page 26
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Remuneration and Diversity report (continued)
D J Burns, Chief Financial Officer
Term of Agreement – 5 years and 10 months commencing 3 December 2012
Base salary, inclusive of superannuation, for the period ended 29 June 2013 of $485,000 to be reviewed annually by the
Human Resource 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.
D F Ajala, Managing Director – Auto & Commercial Retailing
Term of Agreement – 2 years and 2 months commencing 1 August 2013
Base salary, inclusive of superannuation, for the period ended 29 June 2013 of $475,000 to be reviewed annually by the
Human Resource 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, Managing Director – Leisure Retailing
Term of Agreement – 4 years and 8 months commencing 27 January 2011
Base salary, inclusive of superannuation, for the period ended 29 June 2013 of $435,000 to be reviewed annually by the
Human Resource 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.
E A Berchtold, Managing Director – Sports Retailing
Term of Agreement – 4 years and 11 months commencing 5 November 2011
Base salary, inclusive of superannuation, for the period ended 29 June 2013 of $456,000 to be reviewed annually by the
Human Resource 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, General Manager Group Development
Term of Agreement – 5 years and 5 months commencing 17 April 2011
Base salary, inclusive of superannuation, for the period ended 29 June 2013 of $420,000 to be reviewed annually by the
Human Resource 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 29 June 2013 of $400,000 to be reviewed annually by the
Human Resource 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 27
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
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 J Burns
D F Ajala
S J Doyle
E A Berchtold
G G Carroll
G L Chad
Share based compensation
Paid
%
70
72
82
65
82
72
73
Short Term Incentives
Forfeited
%
30
28
18
35
18
28
27
Performance Rights
Performance rights vest progressively from 3 to 5 years after the date of grant. The issues of Performance Rights are
subject to achieving two performance conditions over a three year period ending 30 June (i) 10% cumulative earnings per
share growth and (ii) return on capital of more than 15%.
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
R J Skippen
S A Pitkin
R A Murray
P A Birtles
Other Key
Management
Personnel
D J Burns
D F Ajala
S J Doyle
E A Berchtold
G G Carroll
G L Chad
Number of Performance
Rights granted during the
period
2013
Value of Performance
Rights at Grant Date
$
2013
Number of Performance
Rights vested during the
period
2013
-
-
-
-
-
110,000
-
37,200
34,068
35,712
26,432
21,054
-
-
-
-
-
873,950
-
295,554
270,670
283,732
210,002
167,274
-
-
-
-
-
50,000
-
19,417
17,718
-
12,586
14,210
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 7.95. 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
No options were granted or vested during the period.
Page 28
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Remuneration and Diversity report (continued)
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 and performance rights.
Name
Incentive Scheme
Date of Exercise of
Share plan
P A Birtles
D F Ajala
S J Doyle
S J Doyle
G G Carroll
G L Chad
Performance Rights
Performance Rights
Performance Rights
Share Options
Performance Rights
Performance Rights
1 Sept 2012
1 Sept 2012
1 Sept 2012
21 Feb 2013
1 Sept 2012
1 Sept 2012
Number of Ordinary
Shares Issued on
Exercise of Share Plans
During the Year
50,000
19,417
17,718
50,000
12,586
14,210
Market Value at Exercise
Date*
396,500
153,977
140,512
535,400
99,807
112,685
*The value at exercise date of options and performance rights 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
1 September 2011
1 September 2012
**
**
**
**
$5.15
$5.85
$6.09
$7.95
169,842
347,758
448,151
544,019
1,509,770
**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.
As at the date of this report there are no remaining unissued ordinary shares of Super Retail Group Limited under option.
Shares issued on the exercise of options
The following ordinary shares of Super Retail Group Limited were issued during the year ended 29 June 2013 on the
exercise of options granted under the Super Retail Group Employee Option Plan. No further shares have been issued since
that date. All shares issued under option have been paid in full.
Date options granted
27 January 2006
23 August 2007
1 August 2008
Issue price of shares
Number of shares issued
$2.44
$4.37
$2.49
50,000
60,000
40,000
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.
Page 29
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
Remuneration and Diversity report (continued)
Insurance of officers
During the financial year, Super Retail Group Limited paid a premium of $93,793 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
The Company 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.
The company has developed a diversity policy that links directly to the company’s corporate vision and strategies. The
objectives of the policy are:
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 company is proud that its culture and inclusive policies have created a workforce in which females represent 38% of the
workforce at 29 June 2013. Many of the Group’s business operate in retail sectors in which the majority of customers are
males and its competitors employ a significant majority of males. At Super Retail Group, 35% of middle and senior
management positions and 22% of senior management positions are held by females at 29 June 2013.
The company has set targets of 35% 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
Page 30
Super Retail Group Limited
Directors' report
for the period ended 29 June 2013
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 hundred thousand dollars, or in certain cases, to the nearest
thousand dollars.
This report is made in accordance with a resolution of the Directors.
R J Wright
Chairman
Brisbane
20 August 2013
P A Birtles
Director
Page 31
Super Retail Group Limited
for the period ended 29 June 2013
Auditor’s Independence Declaration
As lead auditor for the audit of Super Retail Group Limited for the period ended 29 June 2013, 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.
Matt Graham
Partner
PricewaterhouseCoopers
20 August 2013
PricewaterhouseCoopers, ABN 52 780 433 757
Riverside Centre, 123 Eagle Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
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 32
Super Retail Group Limited ABN 81 108 676 204
Annual financial report – 29 June 2013
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 consolidated financial statements
Directors’ declaration
Independent auditor’s report to the members
Page
34
35
36
37
38
86
87
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 12 to 31, which is not part of this financial report.
The financial report was authorised for issue by the directors on 20 August 2013. 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 33
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
Super Retail Group Limited
For the period ended 29 June 2013
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
Profit attributable to Members of Super Retail Group Limited
Other comprehensive income
Items that may be reclassified to profit or loss
Cash flow hedges
Exchange differences on translation of foreign operations
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
2013
$m
2,020.0
3.0
2,023.0
(1,121.9)
(261.7)
(88.0)
(165.5)
(213.6)
(25.5)
(1,876.2)
146.8
(44.1)
102.7
4.4
3.1
7.5
110.2
110.2
2012
$m
1,654.1
0.9
1,655.0
(929.5)
(208.2)
(76.9)
(124.6)
(175.1)
(20.6)
(1,534.9)
120.1
(36.6)
83.5
0.3
0.3
0.6
84.1
84.1
Earnings per share for profit attributable to the ordinary equity
holders of the company:
Basic earnings per share
Diluted earnings per share
Cents
Cents
38
38
52.3
51.9
46.4
46.0
The above consolidated comprehensive income statement should be read in conjunction with the accompanying notes.
Page 34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Super Retail Group Limited
As at 29 June 2013
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Property, plant and equipment
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 attributable to equity holders of Super Retail Group Limited
Consolidated
Notes
2013
$m
2012
$m
9
10
11
12
14
15
16
17
18
19
20
22
23
24
25
25
22.3
42.3
452.6
517.2
192.6
769.7
962.3
47.0
28.6
416.7
492.3
172.6
720.5
893.1
1,479.5
1,385.4
274.3
3.3
7.8
27.9
313.3
22.8
348.3
53.5
10.1
434.7
748.0
731.5
542.3
9.5
179.7
731.5
197.9
-
9.2
19.8
226.9
17.5
388.0
54.8
9.5
469.8
696.7
688.7
541.8
(0.8)
147.7
688.7
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Super Retail Group Limited
For the period ended 29 June 2013
Contributed
Equity
$m
Reserves
$m
Retained
Earnings
$m
Total
$m
Notes
Balance at 2 July 2011
194.5
(3.4)
112.4
303.5
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 30 June 2012
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 29 June 2013
24
26
25
24
26
25
-
-
-
347.3
-
-
347.3
541.8
-
-
-
0.5
-
-
0.5
542.3
-
0.7
0.7
-
-
1.9
1.9
83.5
-
83.5
-
(48.2)
-
(48.2)
83.5
0.7
84.2
347.3
(48.2)
1.9
(301.0)
(0.8)
147.7
688.7
-
7.5
7.5
-
-
2.8
2.8
9.5
102.7
-
102.7
102.7
7.5
110.2
-
(70.7)
-
(70.7)
0.5
(70.7)
2.8
(67.4)
179.7
731.5
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page 36
CONSOLIDATED STATEMENT OF CASH FLOWS
Super Retail Group Limited
For the period ended 29 June 2013
Consolidated
Notes
2013
$m
2012
$m
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)
2,217.6
1,825.6
(1,755.0)
(1,506.4)
Rental payments
- external
- related parties
Income taxes paid
Net cash inflow (outflow) from operating activities
Cash flows from investing activities
Payments for property, plant and equipment and computer software
Proceeds from sale of property, plant and equipment
Payment for purchase of subsidiary, net of cash acquired
Payments for purchase of joint arrangement, 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 (outflow) inflow from financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate charges on cash and cash equivalents
Cash and cash equivalents at end of year
37
26
9
(178.8)
(10.7)
(48.0)
225.1
(103.4)
-
-
(6.0)
(109.4)
578.9
(624.6)
(24.7)
(70.7)
0.6
(140.5)
(24.8)
47.0
0.1
22.3
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
(140.2)
(9.4)
(34.3)
135.3
(60.4)
0.2
(621.7)
-
(681.9)
998.4
(710.9)
(16.7)
(31.7)
328.8
567.9
21.3
25.7
-
47.0
Page 37
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
SUPER RETAIL GROUP LIMITED
FOR THE PERIOD ENDED
29 JUNE 2013
Page 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Super Retail Group Limited
For the period ended 29 June 2013
Contents of the notes to the consolidated financial statements
1
2
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
24
25
26
27
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Summary of significant accounting policies
Financial risk management
Financial risk management (continued)
Critical accounting estimates and judgements
Segment information
Revenue
Other Income
Expenses
Income tax expense
Current assets – Cash and cash equivalents
Current assets – Trade and other receivables
Current assets – Inventories
Non-current assets – Property, plant and equipment
Non-current assets – Deferred tax assets
Non-current assets – Intangible assets
Current liabilities – Trade and other payables
Current liabilities – Borrowings
Current liabilities – Current tax liabilities
Current liabilities – Provisions
Non-current liabilities – Trade and Other Payables
Non-current liabilities – Borrowings
Derivative Financial instruments
Non-current liabilities – Deferred tax liabilities
Non-current liabilities – Provisions
Contributed equity
Contributed equity (continued)
Reserves and retained profits
Dividends
Key management personnel disclosures
Key management personnel disclosures (continued)
Remuneration of auditors
Contingencies
Commitments
Related party transactions
Investments in controlled entities
Interests in Joint Arrangements
Business Combinations
Net tangible asset backing
Deed of cross guarantee
Reconciliation of profit from ordinary activities after income tax to net cash inflow from operating activities
Earnings per share
Share-based payments
Events occurring after balance date
Parent entity financial information
.............................................................................................................................. 40
....................................................................................................................................................... 49
.................................................................................................................................... 50
.......................................................................................................................... 54
................................................................................................................................................................. 55
................................................................................................................................................................................... 57
............................................................................................................................................................................ 57
.................................................................................................................................................................................. 57
.................................................................................................................................................................. 58
............................................................................................................................ 59
.......................................................................................................................... 59
..................................................................................................................................................... 60
................................................................................................................ 60
................................................................................................................................. 61
..................................................................................................................................... 62
........................................................................................................................... 63
................................................................................................................................................. 64
................................................................................................................................... 64
................................................................................................................................................... 64
.................................................................................................................. 65
.......................................................................................................................................... 65
............................................................................................................................................... 66
.......................................................................................................................... 68
............................................................................................................................................ 68
..................................................................................................................................................................... 69
.................................................................................................................................................. 70
................................................................................................................................................... 71
.................................................................................................................................................................................. 72
.................................................................................................................................. 73
............................................................................................................... 74
.......................................................................................................................................................... 76
........................................................................................................................................................................... 76
............................................................................................................................................................................ 77
........................................................................................................................................................ 78
.............................................................................................................................................. 78
................................................................................................................................................ 79
............................................................................................................................................................ 79
........................................................................................................................................................ 79
.......................................................................................................................................................... 80
............................ 82
................................................................................................................................................................... 82
............................................................................................................................................................. 83
......................................................................................................................................... 85
............................................................................................................................................. 85
Page 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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
Statement of compliance
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. Super Retail Group Limited is a for-profit entity for the purpose of preparing the financial statements.
The 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.
Basis of measurement
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 29 June 2013 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.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.
Subsidiaries
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.
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 at 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.
Page 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
Jointly Controlled Operation
A jointly controlled operation is a joint venture carried on by each venturer using its own assets in pursuit of the joint operations. The
consolidated financial statements include the assets that the Group controls and the liabilities that it incurs in the course of pursuing
the joint operation, and the expenses that the Group incurs and its share of the income that it earns from the joint operations.
(c)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Group Managing Director, who
is responsible for allocating resources and assessing performance of the operating segments. Unallocated items comprise mainly
of corporate assets (primarily the Support Office, Support Office expenses, and income tax assets and liabilities).
(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.
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.
Page 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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.
(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. Collectability of trade receivables is
reviewed on an ongoing basis. Debts which are known to be uncollectable 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 in bringing them to their existing location and condition. 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.
Page 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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.
(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. The Group’s loans and receivables comprise “trade and other
receivables” and “cash and cash equivalents” 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 subsequently carried at amortised cost using the effective interest method.
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 other expenses from ordinary activities - “Administration” in the period in which they arise.
(k)
Impairment of Financial Assets
Assets carried at amortised cost
(i)
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of
financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if
there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a
‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of
financial assets that can be reliably estimated.
Evidence of impairment may include indications that the receivable or a group of receivables is experiencing significant financial
difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial
reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as
changes in arrears or economic conditions that correlate with defaults.
For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and
the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the
financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is
recognised in the consolidated income statement.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously
recognised impairment loss is recognised in the consolidated income statement.
(l)
Derivative financial instruments and hedging activities
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
Page 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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 payment 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.
(m)
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.
(n)
Property, plant & equipment
Property, plant and equipment are stated at historical cost, less any accumulated depreciation or amortisation. Historical costs
include expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
Depreciation and amortisation of property, plant and equipment
Depreciation and amortisation are calculated on a straight line basis for accounting and on a diminishing value basis for tax.
Depreciation and amortisation allocates 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.
Page 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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.
(o)
Impairment of non-financial 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 assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash generating units).
(p)
Leases
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.
The Group leases certain property, plant and equipment. 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. Property, plant and equipment acquired under finance leases are depreciated
over the shorter of the asset’s useful life and the lease term.
(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 annually 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. Any impairment is recognised as an expense and is not subsequently reversed.
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)
Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business
combination are recognised at fair value at the acquisition date. Trademarks have an indefinite useful life and are carried at cost
less impairment losses.
Computer software and licences
(iii)
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. These costs are amortised over their estimated useful lives of three to ten years.
Costs associated with maintaining computer software programmes are recognised as an expense as incurred. 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
Page 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
external direct costs of materials and service and direct travel, payroll and payroll related costs of employees’ time spent on the
project. Other development expenditures that do not meet these criteria are recognised as an expense incurred. Amortisation is
calculated on a straight-line basis over periods generally ranging from three to ten years. Development previously recognised as an
expense are not recognised as an asset in a subsequent period.
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 60 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 value 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)
Dividend distribution
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.
(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.
Page 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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;
- finance lease charges; and
- interest revenue
(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. In these circumstances the goods and services tax is 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)
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 38).
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.
Page 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
(aa) 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 hundred thousand dollars.
(ab) 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 29 June 2013, the Group is reporting on the 52 week period that
began 1 July 2012 and ended 29 June 2013. For the period to 30 June 2012, the Group is reporting on the period commencing 3
July 2011 and ended 30 June 2012.
(ac) New accounting standards and interpretations
AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in other Entities,
revised AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and Joint Ventures and AASB 2011-
7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards and AASB
2012-10 Amendments to Australian Accounting Standards – Transition guidance and other Amendments (effective 1 January
2013)
In August 2011, the AASB issued a suite of five new and amended standards which address the accounting for joint
arrangements, consolidated financial statements and associated disclosures.
AASB 10 replaces all of the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial
Statements, and Interpretation 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. Power is the current ability to direct the activities that significantly influence
returns. Returns must vary and can be positive, negative or both. 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.
AASB 11 introduces a principles based approach to accounting for joint arrangements. The focus is no longer on the legal structure
of joint arrangements, but rather on how rights and obligations are shared by the parties to the joint arrangement. Based on the
assessment of rights and obligations, a joint arrangement will be classified as either a joint operation or joint venture. Joint ventures
are accounted for using the equity method, and the choice to proportionately consolidate will no longer be permitted. Parties to a
joint operation will account their share of revenues, expenses, assets and liabilities in much the same way as under the previous
standard. AASB 11 also provides guidance for parties that participate in joint arrangements but do not share joint control. The
Group does not expect the new standard to have a significant impact on its composition.
AASB 12 sets out the required disclosures for entities reporting under the two new standards, AASB 10 and AASB 11, and
replaces the disclosure requirements currently found in AASB 127 and AASB 128. 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.
AASB 127 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, but may impact
the type of information disclosed in relation to the parent's investments in the separate parent entity financial statements.
Amendments to AASB 128 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 and do not believe the
impact will be material.
The Group will adopt the new standards from their operative date. They will therefore be applied in the financial statements for
the annual reporting period ending 30 June 2014.
AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13
(effective 1 January 2013)
AASB 13 was released in September 2011. It 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. However, application of the new standard will impact the type of information disclosed in the notes to the financial
statements. The Group will adopt the new standard from its operative date, which means that it will be applied in the annual
reporting period ending 30 June 2014.
Page 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
AASB 2012-3 Amendments to Australian Accounting Standard - Offsetting Financial Assets and Financial Liabilities and AASB
2012-2 Disclosures -Offsetting Financial Assets and Financial Liabilities (effective 1 January 2014 and 1 January 2013
respectively)
AASB 2012-5 Amendments to Australian Accounting Standard arising from Annual Improvements 2009-2011 cycle (effective for
annual periods beginning on or after 1 January 2013)
In June 2012, the AASB approved a number of amendments to Australian Accounting Standards as a result of the 2009-2011
annual improvements project. The group will apply the amendments from 1 July 2013. The Group does not expect that any
adjustments will be necessary as the result of applying the revised rules.
There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future transactions
(ad) Parent entity financial information
The financial information for the parent entity, Super Retail Group Limited, disclosed in note 41 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.
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.
Page 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
2
Financial risk management (continued)
(a) Market risk
(i)
The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures to the United
States dollar, New Zealand dollar and Euro.
Foreign exchange risk
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)
In addition to the above, the Group also has a Euro 0.9 million foreign currency hedge.
Group sensitivity
29 June 2013
USD
$m
30 June 2012
USD
$m
1.3
11.9
55.7
0.9
10.7
60.0
Based on the financial instruments held at 29 June 2013, 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.
Equity would have been $5.9 million lower/$7.2 million higher (2012: $5.9 million lower/$7.2 million 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 2013 and
2012, 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.
29 June 2013
Balance
$m
30 June 2012
Balance
$m
344.5
140.0
390.0
140.0
The Group risk management policy is to maintain fixed interest rate hedges of approximately 40% of anticipated debt levels over a 3
year period. The Group utilises interest rate swaps to hedge its interest rate exposure on borrowings.
Page 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
2
Financial risk management (continued)
At 29 June 2013, 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 $1.4 million lower/higher (2012: $1.8 million 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
Maturities of financial liabilities
Consolidated
2013
$m
155.5
2012
$m
110.0
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 29 June
2013
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
Less than 6
months
$m
6-12 months
$m
Between 1
and 2 years
$m
Between 2
and 5 years
$m
Over 5
years
$m
274.3
8.4
1.6
284.3
(1.1)
(47.9)
43.6
(5.4)
-
8.4
1.7
10.1
(1.0)
(13.0)
11.8
(2.2)
-
249.1
2.7
251.8
(0.8)
-
-
(0.8)
-
87.3
2.3
89.6
-
-
-
-
-
-
-
-
-
-
-
-
Total
contractual
cash flows
$m
Carrying
amount
(assets) /
liabilities
$m
274.3
353.2
8.3
635.8
(2.9)
(60.9)
55.4
(8.4)
274.3
344.5
8.3
627.1
-
-
-
-
Page 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
2
Financial risk management (continued)
Group – at 30 June
2012
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
Less than 6
months
$m
6-12 months
$m
Between 1
and 2 years
$m
Between 2
and 5 years
$m
Over 5
years
$m
197.9
12.5
-
210.4
(0.8)
(39.4)
39.4
(0.8)
-
12.5
-
12.5
(0.8)
(19.7)
20.0
(0.5)
-
159.1
-
159.1
(1.2)
-
-
(1.2)
-
263.5
-
263.5
-
-
-
-
-
-
-
-
-
-
-
-
(d) Fair value measurements
Total
contractual
cash flows
$m
Carrying
amount
(assets) /
liabilities
$m
197.9
447.6
-
645.5
(2.8)
(59.1)
59.4
(2.5)
197.9
390.0
-
587.9
-
-
-
-
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.
The following tables present the Group’s entity’s assets and liabilities measured and recognised at fair value at 29 June 2013.
Group – at 29 June 2013
Assets
Derivatives used for hedging
Total assets
Liabilities
Derivatives used for hedging
Total liabilities
Group – at 30 June 2012
Assets
Derivatives used for hedging
Total assets
Liabilities
Derivatives used for hedging
Total liabilities
Level 1
$m
Level 2
$m
Level 3
$m
Total
$m
-
-
-
-
6.0
6.0
(3.1)
(3.1)
-
-
-
-
6.0
6.0
(3.1)
(3.1)
Level 1
$m
Level 2
$m
Level 3
$m
Total
$m
-
-
-
-
0.4
0.4
(3.9)
(3.9)
-
-
-
-
0.4
0.4
(3.9)
(3.9)
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.
Page 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
2
Financial risk management (continued)
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.
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 *
Non-traded financial assets
Financial liabilities
Trade and other payables
Commercial bill and other financing
Interest rate swaps *
Non-traded financial liabilities
Consolidated entity
Carrying amount
Fair value
2013
$m
2012
$m
2013
$m
2012
$m
22.3
36.3
6.0
64.6
(271.2)
(351.6)
(3.1)
(625.9)
47.0
28.2
0.4
75.6
(194.0)
(388.0)
(3.9)
(585.9)
22.3
36.3
6.0
64.6
(271.2)
(351.6)
(3.1)
(625.9)
47.0
28.2
0.4
75.6
(194.0)
(388.0)
(3.9)
(585.9)
*These amounts are unrealised gains and losses which have been included in the carrying amount and fair value in the
statement of financial position as 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.
Page 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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.
Page 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
4
Segment information
(a)
Description of segments
The Board has determined the operating segments based on the reports reviewed by the Group Managing Director that are used to
make strategic decisions.
This results in the following business segments:
Auto: Retail and distribution of motor vehicle spare parts, tools and equipment.
Leisure: Retail and distribution of boating, camping, fishing, outdoor equipment and apparel.
Sports: Retail and distribution of sporting equipment, bicycle accessories and apparel. From 1 July 2012, the cycling business
including Goldcross has moved from the Auto segment into Sports. Where relevant prior year comparatives have been restated.
(b)
Segment information provided to the Group Managing Director
The segment information provided to the Group Managing Director for the reportable segments for the year ended 29 June 2013 is
as follows:
2013
Auto
$m
Leisure
$m
Sports
$m
Total
continuing
operations
$m
Inter-segment
eliminations/
unallocated
$m
Consolidated
$m
Segment Revenue
Sales to external customers
Inter segment sales
Other revenue/income
Total sales revenue
789.0
-
1.8
790.8
522.5
-
-
522.5
703.5
-
1.2
2,015.0
-
3.0
704.7
2,018.0
7.2
(2.2)
-
5.0
2,022.2
(2.2)
3.0
2,023.0
Segment result (pre-borrowing
costs)
Finance costs
Profit before income tax
Income tax expense
Profit for the period
Segment Assets & Liabilities
87.1
33.2
63.4
183.7
(11.4)
172.3
(25.5)
146.8
(44.1)
102.7
Segment assets
515.2
259.3
281.5
1,056.0
423.5
1,479.5
Unallocated assets
Total assets
Segment liabilities
(349.6)
(202.4)
(245.8)
(797.8)
-
49.8
-
-
1,479.5
(748.0)
-
(748.0)
Unallocated liabilities
Total liabilities
Acquisitions of property, plant
and equipment and other non-
current segment assets
Depreciation and amortisation
expense
Other non-cash expenses
17.0
12.8
22.8
52.6
54.1
106.7
20.8
11.6
13.9
46.3
-
46.3
2.7
Page 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
The segment information provided to the Group Managing Director for the reportable segments for the year ended 30 June
2012 is as follows:
2012
Auto
$m
Leisure
$m
Sports
$m
Segment Revenue
Total
continuing
operations
$m
Inter-segment
eliminations/
unallocated
$m
Consolidated
$m
Sales to external customers
Inter segment sales
Other revenue/income
Total sales revenue
732.3
-
0.1
732.4
456.3
-
-
456.3
460.3
-
0.7
461.0
1,648.9
-
0.8
1,649.7
7.3
(2.1)
0.1
1,656.2
(2.1)
0.9
5.3
1,655.0
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
77.4
32.6
49.4
159.4
(18.6)
140.8
(20.6)
(0.1)
120.1
(36.6)
83.5
Segment assets
406.6
234.3
203.0
843.9
541.5
1,385.4
Unallocated assets
Total assets
-
-
1,385.4
Segment liabilities
(237.3)
(178.8)
(181.8)
(597.9)
98.7
(587.9)
Unallocated liabilities
Total liabilities
Acquisitions of property, plant
and equipment and other non-
current segment assets
Depreciation and amortisation
expense
Other non-cash expenses
(c) Other information
17.8
17.6
15.1
9.2
656.2
679.1
8.4
35.2
-
21.8
0.2
-
(587.9)
710.9
35.4
1.9
The consolidated entity’s divisions are operated in two main geographical areas.
Australia
The home country of the parent entity. The three areas of operation are:
(i)
(ii)
(iii)
motor vehicles, spare parts, tools and equipment
boating, camping, outdoor equipment and fishing
sporting equipment, bicycles, bicycle accessories and apparel.
New Zealand
Supercheap Auto and FCO operate in New Zealand.
Page 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
5
Revenue
From continuing operations
Sales revenue
Sale of goods
6
Other Income
Income for store closure
Insurance claims
Sundry 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
Plant and equipment
Motor vehicles
Computer systems
Total depreciation
Amortisation and Impairment
Computer software
Brand name
Goodwill
Total Amortisation and Impairment
Finance costs
Interest and finance charges
Accretion of put option
Interest revenue
Finance costs expensed
Employee benefits expense
Superannuation
Salaries and wages
Total employee benefits expense
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
Page 57
Consolidated
Consolidated
2013
$m
2,020.0
2,020.0
2013
$m
1.0
0.7
1.3
3.0
2012
$m
1,654.1
1,654.1
2012
$m
-
-
0.9
0.9
Consolidated
2013
$m
2012
$m
4.5
30.1
0.4
8.5
39.0
7.2
0.1
-
7.3
26.4
0.1
(1.0)
25.5
23.8
339.8
363.6
171.3
11.3
182.6
1.2
0.8
23.4
0.2
6.8
30.4
4.7
0.1
0.1
4.9
22.3
(0.3)
(1.4)
20.6
19.0
270.5
289.5
137.4
8.1
145.5
0.3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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)
Increase (decrease) in deferred tax liabilities (note 22)
(b)
Numerical reconciliation of income tax expense to prima facie tax
payable
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2012 - 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Tax consolidation adjustments regarding NZ branches
Business acquisition costs
R & D credits
Sundry items
Difference in overseas tax rates
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
2013
$m
2012
$m
46.4
(3.2)
0.9
44.1
(6.5)
3.3
(3.2)
146.8
44.0
1.0
-
(0.9)
(0.1)
44.0
(0.8)
0.9
44.1
1.9
1.9
1.9
1.9
35.1
1.5
-
36.6
-
1.9
1.9
120.1
36.0
(0.4)
3.4
(2.7)
0.1
36.4
0.2
-
36.6
(1.3)
(1.3)
-
-
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 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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
2013
$m
22.3
Consolidated
2013
$m
26.4
(0.2)
26.2
9.9
-
6.2
42.3
2012
$m
47.0
2012
$m
18.1
(0.2)
17.9
4.2
0.7
5.8
28.6
As of 29 June 2013 current trade receivables of the Group with a nominal value of $0.2 million (2012: $0.2 million) were impaired
and provided for. The individually impaired receivables mainly relate to wholesalers who the Group no longer trade with.
Movements in the provision for impairment of receivables is as follows:
As at 1 July 2012
Provision for impairment recognised during the year
Receivables written off during the year as uncollectable
Consolidated
2013
$m
2012
$m
(0.2)
(0.1)
0.1
(0.2)
(0.2)
(0.2)
0.2
(0.2)
The creation and release of the provision for the 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 cost.
(b) Past due but not impaired
As of 29 June 2013, trade receivables of $3.7 million (2012: $4.0 million) 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
2013
$m
2012
$m
1.6
0.7
1.4
3.7
3.2
0.3
0.5
4.0
Page 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
11
Current assets – Inventories
Finished goods
- at lower of cost or net realisable value
(a)
Inventory expense
Consolidated
2013
$m
2012
$m
452.6
416.7
Inventories recognised as expense during the year ended 29 June 2013 amounted to $1,079.2 million (2012: $897.9 million).
Write-downs of inventories to net realisable value recognised as an expense during the year ended 29 June 2013 amounted to
$9.1 million (2012: $2.5million). The expense 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
Total net property, plant and equipment
Assets pledged as security are detailed in Note 20
Reconciliations - consolidated entity
Carrying amounts at 1 July 2012
Additions
Reclassification of finance lease (a)
Disposals
Depreciation
Foreign currency exchange differences
Carrying amounts at 29 June 2013
Reconciliations - consolidated entity
Carrying amounts at 3 July 2011
Additions
Business acquisitions
Disposals
Depreciation
Foreign currency exchange differences
Carrying amounts at 30 June 2012
Consolidated
2013
$m
2012
$m
277.1
(106.4)
170.7
1.0
(0.5)
0.5
66.8
(45.4)
21.4
192.6
239.7
(85.4)
154.3
1.6
(0.4)
1.2
52.4
(35.3)
17.1
172.6
Plant and
equipment
$m
Motor
vehicles
$m
Computer
systems
$m
Total
$m
154.3
50.8
-
(5.3)
(30.1)
1.0
170.7
96.1
48.9
35.3
(2.7)
(23.4)
0.1
154.3
1.2
-
-
(0.3)
(0.4)
-
0.5
-
-
1.5
(0.1)
(0.2)
-
1.2
17.1
7.2
5.8
(0.2)
(8.5)
-
21.4
13.1
6.9
4.0
-
(6.9)
-
17.1
172.6
58.0
5.8
(5.8)
(39.0)
1.0
192.6
109.2
55.8
40.8
(2.8)
(30.5)
0.1
172.6
Page 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
12 Non-current assets – Property, plant and equipment (continued)
(a) Reclassification of finance lease
In the current year, existing computer equipment leases were reclassified from operating leases to finance leases.
13
Non-current assets – Deferred tax assets
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss
Employee benefits
Prepayments
Accruals
Inventories
Deferred make good provision
Straight line lease adjustment
Deferred income
Depreciation
Tax losses
Surplus leases
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
(Charged)/credited to equity
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
2013
$m
2012
$m
10.9
0.1
1.0
3.0
2.5
6.0
0.3
5.5
2.5
0.7
32.5
0.9
1.3
34.7
(34.7)
-
28.4
6.5
(0.2)
-
34.7
29.4
5.3
34.7
8.8
0.3
1.2
1.9
1.6
5.0
0.1
5.8
0.8
-
25.5
1.1
1.8
28.4
(28.4)
-
17.5
0.3
1.4
9.2
28.4
23.8
4.6
28.4
Page 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
14 Non-current assets – Intangible assets
Goodwill at cost
Less accumulated impairment charge
Net goodwill
Computer software
Less accumulated amortisation
Net computer software
Brand names at cost
Less amortisation
Net brand names
Supplier agreement
Less amortisation
Net Supplier agreements
Total net intangibles
Reconciliations – consolidated
entity – 2013
Carrying amounts at 1 July 2012
Additions
Business acquisitions
Reclassification of finance lease
Disposals/Revision in provisional
accounting
Amortisation/Impairment charge
Carrying amounts at 29 June 2013
Reconciliations – consolidated
entity – 2012
Carrying amounts at 3 July 2011
Additions
Business acquisitions
Disposals/Revision in provisional
accounting
Amortisation/Impairment charge
Carrying amounts at 30 June 2012
Consolidated
2013
$m
445.6
(2.1)
443.5
91.2
(32.2)
59.0
267.5
(0.6)
266.9
0.4
(0.1)
0.3
2012
$m
440.3
(2.1)
438.2
40.0
(25.0)
15.0
267.5
(0.5)
267.0
0.4
(0.1)
0.3
Goodwill
$m
Computer
Software
$m
Brand Name
$m
Supplier
Agreement
$m
Totals
$m
769.7
720.5
438.2
-
5.3
-
-
-
443.5
15.0
48.7
-
2.5
-
(7.2)
59.0
267.0
-
-
-
-
(0.1)
266.9
0.3
-
-
-
-
-
0.3
720.5
48.7
5.3
2.5
-
(7.3)
769.7
Goodwill
$m
Computer
Software
$m
Brand Name
$m
Supplier
Agreement
$m
Totals
$m
76.5
-
361.8
-
(0.1)
438.2
12.3
6.8
0.6
-
(4.7)
15.0
22.1
-
245.0
-
(0.1)
267.0
0.3
-
-
-
-
0.3
111.2
6.8
607.4
-
(4.9)
720.5
Amortisation of $7.3 million (2012: $4.9 million) is included in “Administration” in the consolidated income statement.
(a)
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash generating units (CGUs) identified according to the group of assets based on
acquisition. In the current year the Group has aligned its CGUs with its business segments of Auto, Leisure and Sports. A
value-in-use review was undertaken, prior to this alignment, which supported assets being fully recoverable under the prior
CGU hierarchy.
Page 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
14 Non-current assets – Intangible assets (continued)
A CGU level summary of the goodwill allocation is presented below:-
CGU
Auto
Leisure
Sports
Total
2013
$m
45.3
24.8
373.4
443.5
2012
$m
45.3
24.0
368.9
438.2
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.
(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.
Auto
Leisure
Sports
(c) Useful life for brands
Growth rate
Discount rate
2013
%
4
5
5
2012
%
3
5
5
2013
%
12
12
12
2012
%
12
12
12
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, Rebel Sport and Amart Sports brands
on the basis that they are 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, Rebel and Amart Sports brands; and
there are currently no legal, technical or commercial factors indicating that the life should be considered limited.
15
Current liabilities – Trade and other payables
Trade payables
Other payables
Consolidated
2013
$m
199.7
74.6
274.3
2012
$m
130.7
67.2
197.9
Page 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
16
Current liabilities – Borrowings
Secured
Finance leases
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
Security
Consolidated
2013
$m
2012
$m
3.3
3.3
-
-
-
3.3
-
-
-
-
-
-
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
18
Current liabilities – Provisions
Employee benefits(a)
Surplus leases(b)
Make good provision(c)
Put option provision(d)
(a) Employee benefits
Consolidated
2013
$m
2012
$m
7.8
9.2
Consolidated
2013
$m
23.9
2.4
1.1
0.5
27.9
2012
$m
19.3
-
0.1
0.4
19.8
The current provision for employee benefits includes accrued annual leave and long service leave.
(b) Surplus leases
The provision for surplus lease space (onerous contracts) represents the present value of the future lease payments that the Group
is obligated to make in respect of surplus lease space under non-cancellable operating lease agreements, less estimated future
sub-lease revenue.
(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) Put option provision
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.
Page 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
18
Current liabilities – Provisions (Continued)
(e) Movements in provisions
Refer to Note 23 for a consolidated movement in provisions analysis.
19
Non-current liabilities – Trade and Other Payables
Straight line lease adjustment
20
Non-current liabilities – Borrowings
Secured
Finance lease
Bank debt funding facility
Less borrowing costs capitalised, net
Consolidated
2013
$m
22.8
Consolidated
2013
$m
5.0
344.5
(1.2)
348.3
2012
$m
17.5
2012
$m
-
390.0
(2.0)
388.0
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, Commonwealth Bank of Australia and
National Australia Bank 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, Commonwealth Bank of Australia and National Australia Bank.
Financial covenants are provided by Super Retail Group Limited with respect to leverage, gearing, fixed charges coverage and
shareholder funds.
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
2013
$m
2012
$m
500.0
17.0
517.0
344.5
7.6
352.1
155.5
9.4
164.9
500.0
17.0
517.0
390.0
8.3
398.3
110.0
8.7
118.7
In addition, the Company has access to a $89.5 million (2012: $89.5 million) transactional facility for clean credit and foreign
currency dealings.
Current interest rates on bank loans of the economic entity are 4.52% - 5.01% (2012: 5.63% - 6.62%).
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.
Page 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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.
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
Buy Euro and sell Australian dollars with maturity 0 to 6 months
Consolidated entity
2013
$m
40.7
15.0
55.7
0.9
2012
$m
40.0
20.0
60.0
-
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 29 June 2013, no hedges were designated as
ineffective (2012: 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 receivables under note 10
Included in other payables under note 15
6.0
(3.1)
2.9
-
-
-
2.9
0.4
(3.9)
(3.5)
-
-
-
(3.5)
Interest rate swap contracts
Bank loans of the economic entity currently bear an average variable interest rate of 4.88% (2012: 6.40%). It is policy to protect
part of the forecasted debt 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 multiple interest rate swaps for a total nominal value of $140 million (2012: $160 million) of
which $20 million expired on 31 January 2013. The Group also entered into a $20 million three year interest swap with a start date
of 15 January 2013. This swap is for a fixed interest rate of 3.53%.
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 36% (2012: 36%) of the loan
principal outstanding. The average fixed interest rate is 4.43% (2012: 4.49%).
Page 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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:
Notes
9
10
15, 17
16, 20
18, 23
2013
Financial assets
Cash and deposits
Receivables
Total financial assets
Weighted average rate of
interest
Financial liabilities
Trade and other payables
Finance lease/bank debt
Employee entitlements
Total financial liabilities
Weighted average rate of
interest
Net financial assets/ (liabilities)
Notes
9
10
15, 17
16, 20
18, 23
2012
Financial assets
Cash and deposits
Receivables
Total financial assets
Weighted average rate of
interest
Financial liabilities
Trade and other payables
Finance lease/bank debt
Employee entitlements
Total financial liabilities
Weighted average rate of
interest
Net financial assets/ (liabilities)
Floating
interest
rate
$m
20.6
-
20.6
2.48%
-
343.3
-
343.3
4.88%
(322.7)
Floating
interest
rate
$m
45.4
-
45.4
3.17%
-
388.0
-
388.0
6.40%
(342.6)
Fixed interest maturing in
1 year or
less
$m
Over 1 to
5 years
$m
More than
5 years
$m
Non-
interest
bearing
$m
-
-
-
-
3.3
-
3.3
-
-
-
-
5.0
-
5.0
(3.3)
(5.0)
-
-
-
-
-
-
-
-
1.7
42.3
44.0
282.4
-
29.8
312.2
(268.2)
(599.2)
Fixed interest maturing in
1 year or
less
$m
Over 1 to
5 years
$m
More than
5 years
$m
Non-
interest
bearing
$m
Total
$m
22.3
42.3
64.6
282.4
351.6
29.8
663.8
Total
$m
47.0
28.6
75.6
207.1
388.0
24.3
619.4
1.6
28.6
30.2
207.1
-
24.3
231.4
(201.2)
(543.8)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Page 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
22
Non-current liabilities – Deferred tax liabilities
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss
Goodwill
Brand values
Other receivables
Depreciation
Amounts recognised directly in equity
Foreign exchange revaluation reserve
Consolidated
2013
$m
2012
$m
0.1
80.1
-
6.2
86.4
1.8
88.2
0.1
80.2
0.3
2.5
83.1
0.1
83.2
Set-off of deferred tax liabilities of parent entity pursuant to set-off provisions
Net deferred tax liabilities
(34.7)
53.5
(28.4)
54.8
Movements:
Opening balance
Charged/(credited) to the income statement
Charged/(credited) to equity
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)
(a) Provision for Oceania future dividend
83.2
3.3
1.7
-
88.2
86.4
1.8
88.2
Consolidated
2013
$m
4.1
5.9
0.1
10.1
6.7
1.9
0.1
74.5
83.2
82.8
0.4
83.2
2012
$m
4.5
4.9
0.1
9.5
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 1 July 2012
Additional provisions recognised
Indexing of provisions
Provision released
Acquisitions
Closing balance as at 29 June 2013
Surplus leases
$m
-
2.4
-
-
-
2.4
Make good
$m
4.6
1.8
(0.4)
(0.8)
-
5.2
Put option
$m
0.4
-
0.1
-
-
0.5
Oceania future
dividend
$m
0.1
-
-
-
-
0.1
Total
$m
5.1
4.2
(0.3)
(0.8)
-
8.2
Page 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
24
Contributed equity
(a) Share Capital
Ordinary shares fully paid
Parent Entity
2013
$m
2012
$m
542.3
541.8
Number of
Shares
Issue Price
(b) Movement in ordinary share capital
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
Dividend reinvestment plan issue on 26 September 2011
Institutional equity raising – 17 October 2011
Retail equity raising – 21 November 2011
Dividend reinvestment plan issue on 3 April 2012
Shares issued under share option
Shares issued under performance rights
Shares issued under share option
Less transaction costs on share issue
Deferred tax credit recognised directly in equity
Closing balance 29 June 2013
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
1,411,206
53,166,176
9,428,472
1,148,378
980,000
169,841
150,000
196,472,812
1.00
1.69
-
1.97
5.35
4.96
4.80
2.36
4.80
2.42
5.16
5.98
6.40
2.55
5.94
5.34
5.34
7.04
2.45
Nil
3.23
$m
-
84.0
-
0.4
3.8
3.3
76.3
1.4
12.1
0.4
1.5
4.6
6.0
2.0
8.4
283.9
50.3
8.1
2.4
-
0.5
(9.7)
2.6
542.3
The October 2011 and November 2011 institutional and retail equity raisings were done to finance the acquisition of Rebel
Group Limited.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
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 shares purchased on market rather than by being paid in cash.
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.
Ordinary shares were issued during the period due to 150,000 (2012: 980,000) options being exercised during the period.
Performance rights over 544,019 (2012: 453,151) ordinary shares were issued during the period with 169,840 performance
rights being exercised during the period. Information relating to options outstanding at the end of the financial period are set
out in Note 38.
Page 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
24
Contributed equity (continued)
(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 2013 the Group’s strategy, which was unchanged from 2012, 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 29 June 2013 and 30 June 2012
were as follows:
Total borrowings
Less: Cash & cash equivalents
Net Debt
Total Equity
Total Capital
Gearing Ratio
Consolidated
2013
$m
351.6
(22.3)
329.3
731.5
1,060.8
31.0%
2012
$m
388.0
(47.0)
341.0
688.7
1,029.7
33.1%
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 2013 the Group’s strategy, which was unchanged from 2012, was to maintain a fixed charge cover ratio of around 2.0 times.
The fixed charge cover ratios at 29 June 2013 and 30 June 2012 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
2013
$m
102.7
44.1
25.5
46.3
182.6
401.2
25.5
182.6
208.1
1.93
2012
$m
83.5
36.6
20.6
35.3
145.5
321.5
20.6
145.5
166.1
1.94
Page 70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
25
Reserves and retained profits
Reserves
Foreign currency translation reserve
Share based payments reserve
Hedging reserve
TOTAL
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 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
Consolidated
2013
$m
(0.2)
7.8
1.9
9.5
(3.3)
3.1
(0.2)
5.0
2.8
7.8
(2.5)
6.3
(1.9)
1.9
2012
$m
(3.3)
5.0
(2.5)
(0.8)
(3.6)
0.3
(3.3)
3.1
1.9
5.0
(2.8)
0.5
(0.2)
(2.5)
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
147.7
102.7
(70.7)
179.7
112.4
83.5
(48.2)
147.7
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(l). 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 71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
26
Dividends
Parent Entity
2013
$m
2012
$m
Ordinary shares
Dividends paid by Super Retail Group Limited during the reporting period were as
follows:
Interim dividend for the period ended 29 December 2012 of 17 cents (2012: 13 cents
per share) paid on 3 April 2013. Fully franked based on tax paid @ 30%
33.4
25.3
Final dividend for the period ended 30 June 2012 of 19 cents per share (2012: 17.5
cents per share) paid on 3 October 2012. Fully franked based on tax paid @ 30%
Total dividends provided and paid
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
Satisfied by issue of shares purchased on market
Dividends not recognised at year end
Subsequent to year end, the Directors have declared the payment of a final dividend
of 21.0 cents per ordinary share (2012: 19.0 cents per ordinary share), fully franked
based on tax paid at 30%.
37.3
70.7
68.6
-
2.1
70.7
22.8
48.1
31.7
16.4
-
48.1
The aggregate amount of the dividend expected to be paid on 2 October 2013, out of
retained profits at 29 June 2013, but not recognised as a liability at year end, is
41.2
37.3
Franking credits
The franked portions of dividends paid after 29 June 2013 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 29 June 2013.
Franking credits remaining at balance date available for dividends declared after the
current balance date based on a tax rate of 30%
89.8
58.0
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 $17,682,553 (2012: $15,972,456).
Page 72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
27
Key management personnel disclosures
(a)
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2013
$
2012
$
5,200,960
181,211
1,494,020
6,876,191
4,000,370
222,317
1,103,024
5,325,711
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 20 to 30.
(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 20 to 30.
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.
2013
Balance at the
start of the year
Granted during
the year as
compensation
-
-
-
-
-
Name
Directors of Super Retail Group
R J Wright
R A Rowe
R J Skippen
S A Pitkin
R A Murray (appointed 22
April 2013)
P A Birtles
Other key management personnel of the Group
D J Burns
D F Ajala
S J Doyle
E A Berchtold
G G Carroll
G L Chad
-
121,137
111,171
-
79,049
81,127
300,000
110,000
-
37,200
34,068
35,712
26,432
21,054
-
-
-
-
-
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
-
-
-
-
-
50,000
-
19,417
17,718
-
12,586
14,210
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
360,000
-
138,920
127,521
35,712
92,895
87,971
-
-
-
-
-
-
-
-
-
-
-
-
Page 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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.
2013
-
-
-
-
-
Balance at the
start of the year
Name
Directors of Super Retail Group Limited
R J Wright
R A Rowe
R J Skippen
S A Pitkin
R A Murray (appointed 22
April 2013)
P A Birtles
Other key management personnel of the Group
D J Burns
D F Ajala
S J Doyle
E A Berchtold
G G Carroll
G L Chad
-
-
50,000
-
-
-
-
Granted during
the year as
compensation
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
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
No options are vested and unexercisable at the end of the year.
2012
Granted during
the year as
compensation
Exercised
during the year
Other changes
during the year
Balance at the
end of the year
Balance at the
start of the year
Name
Directors of Super Retail Group Limited
R J Wright
R A Rowe
R J Skippen
S A Pitkin
P A Birtles
Other key management personnel of the Group
D F Ajala
S J Doyle
E A Berchtold
G G Carroll
G L Chad
-
250,000
-
100,000
50,000
-
-
-
-
200,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
-
200,000
-
100,000
50,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,000
-
-
-
Vested and
exercisable at
the end of the
year
-
-
-
-
-
-
50,000
-
-
-
No options are vested and unexercisable at the end of the year.
(iv) Share holdings
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 74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
27
Key management personnel disclosures (continued)
2013
Name
Directors of Super Retail Group Limited
Ordinary shares
R J Wright
R A Rowe
R J Skippen
S A Pitkin
R A Murray (appointed 22 April 2013)
P A Birtles
Other key management personnel of the Group
Ordinary shares
D J Burns
D F Ajala
S J Doyle
E A Berchtold
G G Carroll
G L Chad
2012
Name
Directors of Super Retail Group Limited
Ordinary shares
R J Wright
R A Rowe
R J Skippen
S A Pitkin
P A Birtles
Other key management personnel of the Group
Ordinary shares
D F Ajala
S J Doyle
E A Berchtold
G G Carroll
G L Chad
Loans to key management personnel
There were no loans to individuals at any time.
Received during
the year on the
exercise of
options or
performance
rights
Balance at the
start of the year
Other changes
during the year
Balance at
the end of the
year
71,149
56,954,670
-
25,053
-
1,892,596
-
47,190
34,501
-
90,000
125,000
-
-
-
-
-
50,000
-
19,417
67,719
-
12,586
14,210
2,716
-
-
-
-
(500,000)
73,865
56,954,670
-
25,053
-
1,442,596
-
(66,607)
(50,000)
-
(12,586)
(70,000)
-
-
52,219
-
90,000
69,210
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
46,048
53,671,326
-
10,000
1,692,596
108,436
23,411
-
-
75,000
-
-
-
-
200,000
25,101
3,283,244
-
15,053
-
71,149
56,954,670
-
25,053
1,892,596
-
200,000
-
100,000
50,000
(61,246)
(188,910)
-
(10,000)
-
47,190
34,501
-
90,000
125,000
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
2013
$m
2012
$m
21.1
17.5
Page 75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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
2013
$
2012
$
467,500
467,500
467,500
179,120
35,867
214,987
568,314
568,314
568,314
198,373
37,632
236,005
-
-
-
-
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
2013
$m
2012
$m
2013
$m
2012
$m
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:
5.4
8.1
2.3
2.3
Page 76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
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
2013
$m
2012
$m
7.5
-
-
7.5
162.2
462.5
94.2
(22.8)
696.1
1.2
3.0
6.9
0.4
10.3
2.3
-
-
2.3
150.9
424.7
96.7
(17.5)
654.8
1.5
2.8
6.4
0.6
9.8
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 20 to 30 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 $8.3m (2012: $0.0m) 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
2013
$m
2012
$m
3.9
5.5
9.4
(1.1)
8.3
3.3
5.0
8.3
-
-
-
-
-
-
-
-
Page 77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
31
Related party transactions
Transactions with related parties are at arm’s length unless otherwise stated.
Parent entities
(a)
The parent entity within the Group is Super Retail Group Limited, which is the ultimate Australian parent.
Subsidiaries
(b)
Interests in subsidiaries are set out in note 32.
Key Management Personnel
(c)
Disclosures relating to key management personnel are set out in note 27.
Directors
(d)
The names of the persons who were Directors of Super Retail Group Limited during the financial period are R J Wright, R A
Rowe, R J Skippen, S A M Pitkin, R A Murray and P A Birtles.
Amounts due from related parties
(e)
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
2013
$
2012
$
9,752,519
2,674,704
9,437,318
2,169,680
Other Transactions
- store lease payments – R A Rowe (Director) 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 $19,617 (2012: $17,560)
(g) Loans to/(from) Related Parties
Loans to/(from) Directors
There are no loans to or from related parties at 29 June 2013 (2012 :$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)
Super Retail Commercial Pty Ltd
Rebel Group Limited
Country of
Incorporation
Class of
Shares
2013
%
2012
%
Equity Holding
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
China
New Zealand
Australia
Australia
Australia
Ordinary
Ordinary
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
100
100
50
100
100
100
100
100
100
(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 78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
33
Interests in Joint Arrangements
Name of Entity
Country of
Incorporation
Class of
Shares
2013
%
2012
%
Interest
VBM Retail Pty Limited
Australia
Ordinary
50
n/a
34
Business Combinations
(a)
Rebel Group Limited
Effective from 30 October 2011, Super Retail Group Limited acquired 100% of the issued share capital of Rebel Group
Limited, a retailer of sporting equipment and apparel. Total consideration for the acquisition was $625.0 million,
comprising a $610.0 million purchase price, a $10.4 million working capital adjustment and $4.6 million net cash
acquired. The purchase price has been determined based on the final valuation of the fair value of net assets acquired.
The acquisition note is shown below.
Net assets acquired and goodwill are as follows:
Purchase consideration
Cash Paid
Direct costs relating to the acquisition
Total purchase consideration
Allocation of Fair value of net identifiable assets acquired (refer below)
Goodwill
The goodwill is attributable to Rebel Group Limited position and profitability in the sporting goods
market and synergies expected to arise after the Group’s acquisition
Cash
Other receivables
Prepayments
Inventory (net of provisions)
Plant and equipment
Computer software
Tax assets
Brand name
Trade payables
Other payables
Provisions
Deferred tax liability
$m
625.0
-
625.0
263.9
361.1
$m
4.5
0.4
1.7
102.1
38.9
2.4
10.0
245.0
(35.2)
(20.6)
(10.8)
(74.5)
263.9
Acquisition related costs of $11.1 million are included in Administration expenses in the income statement.
The acquired Group contributed revenues of $441.9 million for the period 30 October 2011 to 30 June 2012. If the
acquisition had occurred on 3 July 2011, the contribution to the group revenue would have been $619.0 million, while the
contribution to Group net profit after tax would have been $50.8 million in the prior year.
35
Net tangible asset backing
Net tangible asset per ordinary share
Page 79
Consolidated Entity
2013
Cents
$0.21
2012
Cents
$0.24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
36
Deed of cross guarantee
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, Super Retail Commercial Pty Ltd, Rebel
Group Limited 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 25 June 2012 to include Super Retail Commercial Pty Ltd and
Rebel Group Limited and its subsidiaries. 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 30 June 2012 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, Super Retail Commercial Pty Ltd, Rebel Group Limited and its subsidiaries and SCA Equity Plan Pty Ltd.
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
Retained profits at the end of the financial year
Page 80
Consolidated
2013
$m
2012
$m
1,918.1
2.6
1,920.7
1,570.4
0.9
1,571.3
(1,049.0)
(870.7)
(244.7)
(84.0)
(154.0)
(221.2)
(23.1)
(1,776.0)
144.7
(43.7)
101.0
101.0
4.4
3.1
7.5
108.5
147.9
101.0
(70.7)
178.2
(197.4)
(73.2)
(117.2)
(168.8)
(19.8)
(1,447.1)
124.2
(37.4)
86.8
86.8
0.7
-
0.7
87.5
109.3
86.8
(48.2)
147.9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
36
(b)
Deed of cross guarantee (continued)
Statement of Financial Position
Set out below is a consolidated statement of financial position as at 29 June 2013 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, Super Retail Commercial Pty Ltd, Rebel Group
Limited and its subsidiaries 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
2013
$m
2012
$m
19.4
54.4
410.4
484.2
2.8
173.8
-
767.9
944.5
43.2
46.8
377.9
467.9
0.4
155.2
-
722.3
877.9
1,428.7
1,345.8
228.5
2.8
7.8
26.3
265.4
21.9
348.3
55.7
10.0
435.9
701.3
727.4
541.7
7.5
178.2
727.4
160.0
-
10.1
18.8
188.9
16.5
388.0
55.8
9.1
469.4
658.3
687.5
541.7
(2.1)
147.9
687.5
Page 81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
37
Reconciliation of profit from ordinary activities after income tax to net cash inflow from
operating activities
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
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
- increase in payables
- increase/(decrease) in provisions
- (decrease)/increase in deferred tax
Net cash inflow from operating activities
38
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
Consolidated
2013
$m
2012
$m
102.7
46.3
4.5
2.7
25.5
(8.3)
(34.3)
80.3
8.7
(3.0)
225.1
83.5
35.4
0.8
1.9
20.6
(4.0)
(21.3)
17.7
(1.3)
2.0
135.3
Consolidated Entity
2013
Cents
52.3
51.9
2012
Cents
46.4
46.0
Consolidated Entity
2013
Number
2012
Number
196,372,758
1,509,769
181,120,668
1,285,592
197,882,528
181,406,259
2013
$m
102.7
102.7
2012
$m
83.5
83.5
(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 82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
39
(a)
Share-based payments
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 – 2012
1 September 2009
1 September 2010
1 September 2011
1 September 2012
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)
339,683
347,758
453,151
-
1,140,592
-
-
-
544,019
544,019
169,841
-
-
-
169,841
-
-
(5,000)
-
(5,000)
169,842
347,758
448,151
544,019
1,509,770
169,842
347,758
448,151
544,019
1,509,770
(b)
Executive Option Plan
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 83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
39
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
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
Consolidated – 2013
27 Jan 2006
23 Aug 2007
5 Jan 2011
24 Jul 2010
1 August 2008 1 August 2011
$2.44
$4.37
$2.49
Total
50,000
60,000
40,000
150,000
-
-
-
-
50,000
60,000
40,000
150,000
-
-
-
-
-
-
-
-
-
-
-
-
Weighted average exercise price
$2.55
Nil
$2.45
Nil
Nil
Nil
Consolidated – 2012
27 Jan 2006
27 Jan 2006
27 Jan 2006
17 April 2006
1 July 2006
26 Oct 2006
23 Aug 2007
5 Jan 2009
5 Jan 2010
5 Jan 2011
17 April 2011
1 July 2011
1 Feb 2011
24 Jul 2010
1 August 2008 1 August 2011
Total
$2.44
$2.44
$2.44
$2.25
$2.25
$2.44
$4.37
$2.49
50,000
100,000
100,000
100,000
300,000
200,000
100,000
180,000
1,130,000
-
50,000
- 100,000
-
50,000
- 100,000
- 300,000
- 200,000
-
40,000
- 140,000
980,000
-
-
-
-
-
-
-
-
-
-
-
-
50,000
-
-
-
60,000
40,000
150,000
-
-
-
-
-
-
-
-
-
Weighted average exercise price
$2.55
Nil
$2.45
Nil
$3.23
Nil
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
2013
$m
2.7
2012
$m
1.9
Page 84
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Super Retail Group Limited
For the period ended 29 June 2013
40
Events occurring after balance date
No matter or circumstance has arisen since 29 June 2013 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.
41
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
Parent entity contingencies are disclosed in Note 29.
2013
$m
290.9
1,068.4
128.9
470.6
542.4
7.8
(2.2)
49.8
597.8
84.2
84.2
2012
$m
284.3
1,056.0
83.0
475.5
541.8
5.0
(2.6)
36.3
580.5
48.2
48.2
Page 85
DIRECTORS’ DECLARATION
Super Retail Group Limited
For the period ended 29 June 2013
In the directors’ opinion:
(a)
(b)
(c)
the financial statements and notes set out on pages 33 to 85 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 29 June 2013 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 36 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 36.
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 J Wright
Director
P A Birtles
Director
Brisbane
20 August 2013
Page 86
AUDIT REPORT
Super Retail Group Limited
For the period 29 June 2013
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 statement of financial position as at 29 June 2013, the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the period
ended on that date, a summary of significant accounting policies, other explanatory notes and the
directors’ declaration for the Super Retail Group (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 of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that is free from material misstatement, whether due to fraud or error. 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 consolidated
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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
PricewaterhouseCoopers, ABN 52 780 433 757
Riverside Centre, 123 Eagle Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
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 87
AUDIT REPORT
Super Retail Group Limited
For the period 29 June 2013
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 29 June
2013 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 report included in pages 20 to 30 of the directors’ report for the
period ended 29 June 2013. The directors of the company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the remuneration report, based on our audit
conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the remuneration report of Super Retail Group Limited for the period ended 29 June
2013, complies with section 300A of the Corporations Act 2001.
PricewaterhouseCoopers
Matt Graham
Partner
Brisbane
20 August 2013
Page 88
SHAREHOLDER INFORMATION
Super Retail Group Limited
For the period ended 29 June 2013
The shareholder information set out below was applicable as at 20 August 2013.
A. Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Ordinary Shareholders
Performance Rights & Option holders
1-1000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
2,687
2,332
344
275
47
There were 370 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
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
BNP PARIBAS NOMS PTY LTD
CITICORP NOMINEES PTY LIMITED
JP MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
MR PETER ALAN BIRTLES
HSBC CUSTODY NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
AMP LIFE LIMITED
UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD
MR ROBERT EDWARD THORN
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
GRAHGER CAPITAL SECURITIES PTY LTD
2
9
1
12
1
Ordinary shares
Number held
Percentage of
issued shares
56,954,670
31,295,614
29,425,870
22,857,500
11,986,783
5,956,190
5,259,399
1,839,490
1,340,000
965,472
860,000
732,601
717,215
701,400
648,368
562,460
553,319
547,135
535,391
500,000
28.99%
15.93%
14.98%
11.63%
6.10%
3.03%
2.68%
0.94%
0.68%
0.49%
0.44%
0.37%
0.37%
0.36%
0.33%
0.29%
0.28%
0.28%
0.27%
0.25%
174,238,877
88.68%
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 20 August 2013 were:-
Name
SCA FT PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
BNP PARIBAS NOMS PTY LTD
Ordinary shares
Number held
Percentage of
issued shares
56,954,670
31,295,614
29,425,870
22,857,500
11,986,783
28.99%
15.93%
14.98%
11.63%
6.10%
C. Voting rights
The voting rights relating to each class of equity securities is as follows:
a)
b)
Ordinary Shares
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.
Options and Performance Rights
No voting rights.
Page 89
[This page has been left intentionally blank]
COP712 Annual Report 2013.indd 14
5/09/13 11:51 AM
[This page has been left intentionally blank]
COP712 Annual Report 2013.indd 15
5/09/13 11:51 AM
[This page has been left intentionally blank]
COP712 Annual Report 2013.indd 16
5/09/13 11:51 AM
COP712 Annual Report 2013.indd 17
5/09/13 11:51 AM
www.superretailgroup.com