urgent, dead line on Sunday night Financial statement analysis assignment. instructions attatched with 6 other materials you should use. i willing to pay over $100
urgent, dead line on Sunday night
Financial statement analysis assignment.
instructions attatched with 6 other materials you should use.
i willing to pay over $100 but why can't i put any money more than $8 here ?
let me know how to pay . please anyone can do thisquickly.
A WORLD OF OPPORTUNITY A N N UA L R E PORT 2015 FY15 PERFORMANCE HIGHLIGHTS Retail Food Group's unique business model, now encompassing meaningful international franchise and commercial operations, has delivered exceptional performance during FY15, demonstrating the Company's ability to concurrently reward shareholders whilst reinvesting in organic and acquisitive growth. (1) METRIC PCP CHANGE CAGR SINCE LISTING FY15 VALUE Revenue(2) $210.4m +$81.6m 63.4% Not applicable EBITDA $88.8m +$29.7m 50.2% 27.6% NPAT $55.1m +$18.2m 49.3% 28.2% EPS 35.6cps +9.1cps 34.3% 17.1% Dividends 23.25cps +1.25cps 5.7% 19.1% 2,446 +1,012 70.6% 24.8% Outlets % (1) Underlying Results (2) Reported revenue less revenue associated with marketing pursuits. \"RFG's performance, growth and revenue diversification since Listing is best demonstrated by the fact that those assets which generated 100% of FY06 earnings now represent circa 12% of the Company's underlying EBITDA.\" A.J. (Tony) Alford, Managing Director, Retail Food Group Limited RFG: A GLOBAL ENTERPRISE RFG's Brand Systems are now represented in 58 licensed territories. MAP KEY RFG territories RFG roasting facilities Short term opportunity Long term opportunity \"FY15 acquisitions have genuinely transformed RFG, providing it with a global footprint, a robust international franchise complement and new markets for wholesaling operations and growth opportunities.\" A.J. (Tony) Alford, Managing Director, Retail Food Group Limited The Group operates four state-of-the-art coffee roasting facilities across Australia, New Zealand and North America. \"FY15 proved a defining year for RFG, with major acquisitions positioning the Company as the steward of a suite of quality assets resplendent with activated global application, diverse revenue streams, and multiple levers for driving sustainable performance.\" CHAIRMAN'S LETTER Colin Archer | Chairman, Retail Food Group Limited During FY15, Retail Food Group (RFG) ascended from a leading Australian multi-food franchisor and significant wholesale coffee roaster into a genuine global organisation, with franchise operations across 12 Brand Systems in 58 licensed international territories, and four coffee roasting facilities supplying domestic and international markets. Demonstrating the Company's aptitude for seamlessly That platform, which will continue to support RFG's growth integrating acquired business operations and leveraging long into the future, is already being leveraged through projects scale to extract synergies, RFG delivered record underlying currently in train, including the launch of Di Bella Coffee into profit for the ninth consecutive year since Listing in 2006. the USA, the establishment of RFG's Brand Systems in Consistent with upgraded guidance, underlying Net Profit After Tax (NPAT) of $55.1m represented a 49.3% increase over FY14, and at a shareholder level, represented Earnings per Share (EPS) growth of 34.3%. These results enabled payment of a final FY15 fully franked dividend of 11.75 cents per share (cps), the Company's 18th consecutive biannual dividend increase, or in other words, an new international markets, and the commissioning of new international distribution hubs and coffee roasting facilities across the globe. Whilst the above projects represent encouraging news for shareholders, they are but a portent of the vast opportunities available to RFG in the coming years. Indeed, the proverbial 'blue sky' stretches well beyond the FY16 horizon. increase in every dividend period since Listing. When coupled The exceptional results achieved during FY15, together with with the Company's FY15 interim dividend, total dividends for the platforms laid for future growth, are a consequence of the the year were a record 23.25 cps, an increase of 5.7% on work performed by the Company's dedicated management FY14, and contributed to a Total Shareholder Return (TSR) for and staffing complement, who when added to RFG's fraternity the 12 months to 30 June 2015 of 26.9%. of committed franchisee and master franchise partners, The Company's record performance in FY15 was driven by organic growth across traditional business operations, represent a highly skilled and motivated human element steadfastly focused on driving success. supplemented by exemplary contributions from three On behalf of the Board, I would like to take this opportunity strategic acquisitions: Cafe2U (the World's leading mobile to thank each of them for their valuable contribution to RFG's coffee van franchise), Gloria Jean's Coffees Group (a leading success, and to also thank our valued shareholders for their global coffee franchise and roasting business) and Di Bella support and commitment to Retail Food Group. Coffee (Australia's leading specialty coffee brand). These acquisitions are indeed 'Company-defining', securing for RFG genuine presence in the global coffee and franchise market. Importantly, not only did these transactions provide RFG with additional earnings from acquired franchise networks and a significantly enlarged wholesale customer base, they delivered a platform for enhanced growth and additional expertise, systems, processes and networks. Colin Archer Chairman Retail Food Group Limited \"Exceptional results in FY15 have once again demonstrated that RFG remains a company in growth, resolutely focused on a strategy to both diversify and fortify revenue streams whilst simultaneously broadening those organic and acquisitive opportunities available for delivery of enhanced outcomes, thereby future proofing the investment of franchisees, shareholders and other stakeholders.\" MANAGING DIRECTOR'S REPORT A.J. (Tony) Alford | Managing Director, Retail Food Group Limited A GLOBAL VISION Listing on the ASX in 2006, the RFG Board and management \u0007In excess of threefold growth in coffee roasting capacity via team were determined to execute upon the opportunity two state-of-the-art coffee roasting facilities situated in to pioneer consolidation within the Australian franchising New South Wales and California, together with additional industry and in doing so to achieve the mantle of Australia's annualised coffee product throughput of circa 2.9m kilograms; leading multi-brand food franchise operator. Domestic and international packaging, warehousing and \u0007 Reflecting upon the Company's achievements in FY15, there is no doubt those objectives have been accomplished. distribution infrastructure and networks; \u0007An experienced management team and human resources Traversing every State and Territory in Australia, RFG's Brand complement including on-boarding of Nabi Saleh, the Systems are some of the most successful and well recognised architect of the Gloria Jean's Coffees Group's phenomenal in the country, offering high quality products, innovative store development; and designs and exceptional customer service. \u0007Access to the closed (patented) Caffitaly coffee capsule With a network population approaching 2,500 franchised delivery system and a robust foothold within the growing 'in outlets, RFG's presence is no longer confined within Australia. home' capsule market. Likewise, as a direct consequence of the acquisition activity RFG closed its FY15 M&A program in February 2015 with presided upon in FY15, the Company's vision now extends the acquisition of Australia's leading specialty coffee brand beyond domestic franchise penetration to new horizons wholesaler, Di Bella Coffee. including genuine global multi-brand retail food franchisor leadership and a comprehensive vertically integrated coffee business. Complementing RFG's existing coffee business activity, Di Bella Coffee introduces an established brand by which the Group can extend its market penetration within the maturing EXPEDITED GROWTH domestic coffee market, and as well, a valuable platform During FY15, RFG embarked upon its most ambitious M&A international markets. for leveraging emerging espresso coffee culture within program to date. Representing an initial investment that surpassed $200m, and In September 2014 RFG solidified its position in the mobile attended over a truncated eight month period, the transformative coffee market with the acquisition of Cafe2U, the World's program detailed above not only furnished the Company premiere mobile coffee van franchise. The transaction with elevated scale and leverage opportunity not previously propelled the Company to undisputed leadership in the coffee witnessed, but facilitated the establishment of immediate and van market, with a global presence of 341 units across The additional meaningful platforms for enhanced growth. Coffee Guy and Cafe2U Brand Systems at the close of FY15. Importantly, the acquired assets have not only achieved Within three months of settlement of the Cafe2U transaction, but exceeded the acquisition key performance indicators RFG completed the acquisition of globally recognised coffee established during the due diligence phase. house franchise and roasting business, the Gloria Jean's Coffees Group. This transaction delivered RFG: budget, contributing $19.8m to the Group's FY15 underlying \u0007Stewardship over a network of circa 800 outlets operating in some 45 countries; complement EBITDA, providing additional confidence of achieving FY16 guidance for acquisition assets of circa $35m in underlying \u0007The benefit of an established international master franchise partner Indeed, acquired businesses achieved an 8.2% increase over providing additional scope EBITDA. for These outcomes bear testimony to the aspirational mindset accelerated exploitation of RFG's remaining Brand Systems the Company has maintained since Listing, together with within foreign markets; RFG's historic resolve to elevate growth via acquisition activity. HARNESSING RECORD OUTCOMES Bolstered by the contribution from acquisition activity, underlying Group FY15 EBITDA grew 50.2% to a record $88.8m. This performance translated into underlying Net Profit After Tax (NPAT) of $55.1m, an increase of $18.2m over FY14. Consistent with revised guidance, this outcome represented a 49.3% increase on the prior period's result. Of note, it In terms of the Michel's Patisserie Brand System, accelerated rollout of the National Bakery Solution (NBS) has driven early positive results, having reversed negative SSS performance for the first time since FY11. Nowhere is this more pronounced than within the Queensland network which enjoyed SSS growth of circa 5% following NBS deployment in 1H15. Completion of the NBS rollout remains on track for 1H16. also marked a decade during which RFG has consistently Facilitated by 81 international new outlet commissionings, the delivered shareholders record annual underlying profit. Group also excelled in FY15 new outlet commissionings of The uninterrupted record of NPAT increments has revealed 200, a record result exceeding guidance by 25%. RFG as a company endowed with multiple growth drivers, RFG's strong organic outlet growth demonstrates the a motivated franchisee and staffing complement, and a continuing relevance of the Company's Brand Systems and dedicated Board and senior management team well able the innate advantage of possessing a multi-brand offer that to drive enhanced outcomes notwithstanding a challenging covers a significant portion of the retail food franchise market retail environment and the inherent distraction associated spectrum. with a demanding acquisitive agenda. OPERATIONAL SUCCESSES SHAREHOLDER REWARDS The record outcomes, expedited growth and operational With respect to Brand System performance, weighted Same successes accomplished in FY15 culminated in the delivery Store Sales (SSS) and Average Transaction Values (ATV) grew of exceptional value for RFG shareholders. 2.9% and 3.4% respectively. Underlying Earnings per Share (EPS) grew 34.3% to 35.6 Whereas each of the Group's Brand Systems enjoyed positive cents per share (FY14: 26.5cps), notwithstanding the dilutive SSS and ATV growth, the performance of both the Donut effect of the capital management initiatives employed during King and Michel's Patisserie Brand Systems was particularly the course of FY15 to fund the Company's acquisitive activity. encouraging given both are emerging from periods of Balancing shareholder rewards with increased investment significant transformation. in acquisitive and organic growth opportunity, the Company Being the first of RFG's Brand Systems to receive the Project paid an FY15 fully franked final dividend of 11.75cps on 9 EVO imprimatur, now represented in circa 34% of its outlet October 2015. network, the Donut King Brand System achieved SSS growth Representing RFG's 18th consecutive dividend increase, when of 3.9%, eclipsing ATV performance (3.7% growth) and evidencing positive customer patronage. The foregoing outcome has validated the strategic decision to embark upon the Project EVO journey, and provides considerable optimism for enhanced future performance as the Project EVO blueprint is further refined and applied throughout the remainder of the Company's traditional Brand System networks. coupled with the April 2015 interim dividend, the Company's full year dividends increased 5.7% to a record 23.25cps. These outcomes are representative of the Group's performance throughout its public company journey. Indeed, since Listing in 2006, the Company has delivered a Total Shareholder Return CAGR of 30.3%, demonstrating both the security and return offered by long term investment in its unique business model. A WORLD OF OPPORTUNITY During FY15 RFG capitalised on a platform to drive both \u0007 Leveraging the synergistic, structural and realignment immediate and longer term growth, not just within Australia, opportunities inherent in the RFG business model and its but internationally. acquired businesses to deliver upon a three year $16m An abridged summary of this platform, more particularly detailed in the Company's June 2015 market presentation, provides insight into the myriad initiatives, strategies and foundations which will drive RFG's accelerated performance in future periods: senior corporate management through Brand System and Divisional teams, bolstered by a growing reputation as an employer of choice and distinguished by a multi-faceted international business that attracts new talent; continued \u0007 Pursuit of further growth via domestic and international acquisition opportunity; and \u0007Execution on the organic growth platforms already built, or which are being developed, including Project EVO and the \u0007A strong human resources complement that extends from \u0007 Driving additional EBITDA opportunity; and exceptional Brand National Bakery Solution. Ultimately, during FY15 RFG embellished its business and growth prospects whilst delivering shareholders record outcomes. The Group has positioned itself to exploit the innumerable opportunities now inherent in its business model, System performance whilst consolidating subscale activities no longer material to Group outcomes; and is resolute in terms of realising further successes. Your Board and management team firmly believe that the Company's achievements, activities and unwavering focus \u0007Building a stronger Coffee & Allied Beverages business, supports both confidence and positivity regarding the future capitalising upon existing and acquired scale, infrastructure for RFG, its franchisees, master franchise partners, staff and and shareholders. distribution platforms both domestically and internationally; \u0007 Leveraging the growing global scale of the Company's business, including existing penetration to build a significant international business, which will deliver an increasing contribution to Group EBITDA; \u0007Alignment and prioritisation of physical, financial and human resources to maximise growth initiatives; A.J (Tony) Alford Managing Director Retail Food Group Limited GLORIA JEAN'S COFFEES LEADING WORLDWIDE COFFEE COMPANY RFG's ambitious FY15 M&A program was underscored by acquisition of the Gloria Jean's Coffees Group in December 2014. Having long been a prize sought by RFG, Gloria Jean's Coffees represents the largest acquisition yet undertaken by the Company, eclipsing all prior transactions in terms of value, network population, international penetration, coffee throughput and breadth of operations. With activities that closely mirror and complement those of RFG, the acquisition provided the Company with a strong international and domestic footprint of circa 800 outlets across the Gloria Jean's Coffees and It's A Grind Brand Systems. Incorporating a highly developed master franchisee partner complement represented in more than 40 international licensed territories, the Gloria Jean's Coffees Group provides immediate and meaningful access to global markets, a pathway into the World leading North American franchise market, and the opportunity to accelerate penetration of RFG's remaining Brand Systems internationally. RFG's 2015 joint venture for exploitation of the Gloria Jean's Coffees Brand System in China, which delivered significant initial fee revenue, foreshadows the global opportunity now available and being actively pursued by the Group. \"The acquisition of Gloria Jean's Coffees Group in December 2014 dwarfed all acquistive activity attended by RFG, before or since.\" A.J. (Tony) Alford, Managing Director, Retail Food Group Limited DI BELLA COFFEE NOT JUST A BAG OF BEANS Founded in Brisbane during 2002, Di Bella Coffee has rapidly (a ready-to-drink cold brew \"coffee in a can\" innovation) grown to become Australia's leading specialty coffee roaster, and Torq (an all-natural liquid coffee concentrate). establishing a well-earned reputation through rigid adherence to a commitment to delivering customers the 'ultimate coffee experience'. Di Bella Coffee affords the Group significant enlarged opportunity for growth coupled with enhanced coffee expertise, strengthened by the ongoing commitment Joining RFG's stable of high profile brands in February of renowned coffee entrepreneur and brand founder, 2015, Di Bella Coffee has complemented and extended Phillip Di Bella. the Company's existing wholesale market penetration by providing the Group with a reputable specialty coffee brand to grow scale amongst each of its Coffee & Allied Beverage distribution channels. The transaction has also provided access to innovative boutique coffee based products including Coffee Kick In FY16, Di Bella Coffee will build upon existing distribution channels in New Zealand, Asia and India by launching into new markets, including the lucrative North American market where an increasing appetite for espresso coffee provides elevated optimism. GLOBAL GATEWAY FOR EXPORT The Gloria Jean's Coffees and Di Bella Coffee Group hubs which will be further driven by the redeployment transactions delivered significant scale and leverage for RFG's of domestically surplus coffee roasting infrastructure. Coffee & Allied Beverage business, increasing annualised coffee and allied product throughput by some 4m kilograms. Additionally, as a direct consequence of the Gloria Jean's Coffees acquisition, RFG procured immediate access to the As well, the acquisitions increased the Group's roasting closed (patented) Caffitaly coffee capsule delivery system, capacity to circa 30m kilograms including state-of-the- and a robust foothold within the growing 'in home' capsule art roasting facilities in Brisbane, Sydney and Los Angeles. market, fortified by strategic supply and product branding Further, Gloria Jean's Coffees has facilitated the establishment relationships. of enhanced international distribution channels and supply DRIVING MOBILE PENETRATION The September 2014 acquisition of the Cafe2U Brand System additional 236 mobile units operating within five international complemented RFG's existing The Coffee Guy concept and territories. The transaction also provided the Group with cemented RFG's position as the World's leading mobile coffee enhanced experience and the expertise of the Cafe2U senior franchise operator. management team, who have seamlessly integrated within The award winning Cafe2U Brand System increased RFG coffee roasting throughput whilst delivering an the RFG management team and now preside over the entire Mobile Division. \"The performance of RFG's Mobile Division following the acquisition of Cafe2U in 2014, and The Coffee Guy in late 2012, has validated the Company's entry into the mobile segment.\" A.J. (Tony) Alford, Managing Director, Retail Food Group Limited TRADITIONAL BRAND SYSTEMS Now penetrating 27% of RFG's traditional Brand System network population, Project EVO traction across the Donut King, Michel's Patisserie and Brumby's Bakery networks is driving increased customer engagement and same store sales growth. 46 new outlets were established in FY15, demonstrating the continuing relevance of the Company's traditional Brand Systems and contributing to a record new outlet growth for the financial year of 200 across the Group. Each of RFG's traditional Brand Systems is focused on excelling within a challenged and structurally changing retail environment by driving customisation, consumer experience and product quality through innovative marketing, operational and digital projects. Whereas the Group's traditional Brand Systems are instantly recognisable and highly successful domestically, the acquisition program undertaken during FY15 has provided a conduit for their exportation and growth across international markets. QSR DIVISION Having resolved not to participate in the relentless price discounting practices evident within the industry, RFG's QSR Division performed strongly in FY15, growing both Same Store Sales and Average Transaction Values. A focus on digital marketing and electronic direct mail strategies continue to drive enhanced online sales results, allowing implementation of embellished targeted and segmented promotional activity that highlights the premium ingredients and unique flavour combinations offered by the Pizza Capers and Crust Gourmet Pizza Brand Systems. Customer engagement, product innovation, digital campaigns and local area marketing will continue to support QSR Brand System growth and RFG's leadership within the gourmet pizza segment. BUILDING A LEADING VERTICALLY INTEGRATED GLOBAL COFFEE ENTERPRISE RFG established its inaugural coffee roasting facility in 2008, Beverage pursuits attests to the recognition of an international laying the foundations for becoming one of Australia's largest market resplendent with untapped opportunity, and indeed coffee manufacturers. Today, coffee and coffee related recently emerging in many major consumer markets. pursuits now represent a fundamental revenue driver of the Group as well as an integral platform to drive growth. The Division's proven experience in leading the domestic espresso coffee market places RFG in a unique position to Coffee Wholesale, that portion of RFG's Coffee & Allied further leverage the growth of this commodity across the globe. Beverage operations undertaken to fulfill third party accounts Major initiatives to harness growth include consolidation and and customer orders, represented less than 1% of Group refinement of the Group's green bean origin and purchasing EBITDA in FY14. Through strategic acquisitive and organic platforms, the establishment of international distribution hubs growth undertaken throughout the past year, these operations and coffee roasting facilities, and further investment in the have grown to represent circa 9% of FY15 underlying Group growing coffee capsule category. EBITDA. Evidencing the developing dynamic nature of the Group's business model, coffee throughput has likewise grown rapidly, with annualised coffee and coffee product throughput totaling circa 6m kilograms by the close of FY15. The continued commitment to the growth of Coffee & Allied WANT TO KNOW MORE? CLICK HERE or scan with your QR code reader App to learn more about RFG's Coffee & Allied Beverage operations. CONTENTS SUMMARY FINANCIAL INFORMATION 2 CORPORATE DIRECTORY 3 DIRECTORS' REPORT 4 AUDITOR'S INDEPENDENCE DECLARATION 21 INDEPENDENT AUDITOR'S REPORT 22 DIRECTORS' DECLARATION 24 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 25 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 26 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 27 CONSOLIDATED STATEMENT OF CASH FLOWS 28 NOTES TO THE FINANCIAL STATEMENTS 29 ADDITIONAL STOCK EXCHANGE INFORMATION 81 SUMMARY SUMMARY REPORTED Item FY11 FY12 UNDERLYING OPERATIONS (1) FY13 FY14 FY15 FY14 FY15 Financial Underlying Revenue(2) $110.0m $101.9m $117.0m $128.8m $210.4m EBITDA $45.9m $48.4m $53.8m $59.1m $59.4m $59.1m $88.8m EBIT $45.1m $47.5m $52.8m $57.5m $55.7m $57.5m $85.3m NPAT $27.2m $28.5m $32.0m $36.9m $34.2m $36.9m $55.1m Basic EPS 25.4 cps 26.4 cps 26.0 cps 26.5 cps 22.1 cps 26.5 cps 35.6 cps Dividend 14.5 cps 17.5 cps 19.75 cps 22.00 cps 23.25 cps (7.3%) (7.4%) 14.8% 10.1% 63.4% EBITDA Growth 2.2% 5.4% 11.2% 9.8% 0.5% 9.8% 50.2% EBIT Growth 3.0% 5.3% 11.3% 8.9% (3.1%) 8.9% 48.3% NPAT Growth 4.6% 4.9% 12.1% 15.2% (7.2%) 15.2% 49.3% Basic EPS Growth 0.4% 3.9% (1.5%) 1.9% (16.6%) 1.9% 34.3% 1,148 1,251 1,374 1,434 2,446 Operating Performance Underlying Revenue Growth Outlets (1) EBIT results from 'Underlying Operations' exclude the pre-tax impact of the following amounts recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income: EBIT - REPORTED FY14 FY15 $57.5m $55.7m Acquisition and integration costs - $5.7m Outlet rationalisation and Brand System realignment - $11.4m Asset impairment and provision charges - $12.5m $57.5m $85.3m $36.9m $34.2m - $20.9m $36.9m $55.1m EBIT - UNDERLYING OPERATIONS NPAT results from 'Underlying Operations' NPAT - REPORTED Post- tax impact of non-underlying EBIT adjustments NPAT - UNDERLYING OPERATIONS (2) Underlying Revenue excludes revenue associated with marketing pursuits including: i. Revenue derived from marketing activities (FY15: $30.7m; FY14: $34.1m; FY13: $24.0m; FY12: $14.5m; FY11: $15.7m); and ii. Revenue derived from warehousing and distribution activities (FY15: $6.4m, FY14: $5.5m; FY13 and prior: $nil). 2Retail | RETAIL F OOD GRO-UP L IMIT E D A- NNUA L Year R E PO RT 330 0 June J U N E2015 2015 Food Group Limited Annual Report Financial Ended Page 2 CORPORATEDIRECTORY CORPORATEDIRECTORY Directors Mr Colin Cameron Archer Chairman & Independent Non-Executive Director Mr Anthony James Alford Managing Director Ms Jessica Buchanan Independent Non-Executive Director Mr Stephen Edward Lonie Independent Non-Executive Director Company Secretary Mr Anthony Mark Connors Registered Office RFG House 1 Olympic Circuit Southport QLD 4215 Principal Place Of Business RFG House 1 Olympic Circuit Southport QLD 4215 Share Register Computershare Investor Services Level 19, 307 Queen Street Brisbane QLD 4000 Solicitors McCullough Robertson Lawyers Level 11, 66 Eagle Street Brisbane QLD 4000 Auditors Deloitte Touche Tohmatsu Level 25, 123 Eagle Street Brisbane QLD 4000 Bankers National Australia Bank Limited Level 20, 100 Creek Street Brisbane QLD 4000 Stock Exchange Listings Retail Food Group Limited shares are listed on the Australian Securities Exchange (ASX: RFG). Website Address www.rfg.com.au Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 Page 3 RETAI L FO O D G RO U P L I M I T ED A N N UAL REP O RT 3 0 J U N E 2 0 1 5 | 3 DIRECTORS'REPORT DIRECTORS'REPORT Overview The Directors of Retail Food Group Limited (referred to hereafter as the Company) submit herewith the Annual Report of the Company for the financial year ended 30 June 2015 in accordance with the provisions of the Corporations Act 2001. Information about the Directors The names and particulars of the Directors of the Company during or since the end of the financial year are: Name Particulars Mr Colin Archer Independent non-executive Director and Chairman, Bachelor of Economics, Dip. Financial Planning, Chartered Accountant. Mr Archer joined the Board on 12 April 2006 and was appointed as Chairman of the Board on 30 April 2013. Mr Archer is a member of the Company's Audit and Risk Management Committee and Chairman of the Nominations and Remuneration Committees. Mr Archer was re-elected to the Board at the Company's AGM held on 25 November 2014, following retirement by rotations. Mr Anthony (Tony) Alford Managing Director, Bachelor of Business (Accountancy), CPA, CTA. Mr Alford joined the Board on 28 October 2003, having been a Chartered Accountant in public practice for in excess of 20 years. Mr Alford commenced his involvement with Retail Food Group Limited in 1994 in an advisory role, thereafter becoming the Group Financial Controller. In December 1999, he was appointed Managing Director of the Group. Ms Jessica Buchanan Independent non-executive Director. Ms Buchanan joined the Board on 29 May 2012. Ms Buchanan has over 13 years' experience in branding, marketing and advertising, having commenced her career in the advertising industry working with multi-national agencies such as Wunderman, Young & Rubicam Mattingly and EHS Brann (UK). Ms Buchanan also managed campaigns for various blue chip companies including Ericsson, Tabcorp, Du Pont, Cadbury Schweppes, The Australian Defence Force, British Gas and BMW. Ms Buchanan is a member of the Company's Nominations, Remuneration, and Audit and Risk Management Committees. Ms Buchanan was re-elected to the Board at the Company's AGM held on 29 November 2013, following retirement by rotations. Mr Stephen Lonie Independent non-executive Director, Bachelor of Commerce, MBA, FCA, FFin, FAICD, FIMCA. Mr Lonie joined the Board on 24 June 2013. Mr Lonie is a Chartered Accountant by profession and director of listed corporations, MyState Limited and Corporate Travel Management Limited. Mr Lonie is the Chairman of the Company's Audit and Risk Management Committee and a member the Nomination and Remuneration Committee. Mr Lonie was elected to the Board at the Company's AGM held on 29 November 2013, following retirement by rotations. Directorships of other listed companies Directorships of other listed companies held by Directors in the 3 years immediately before the end of the financial year are as follows: Name Mr Stephen Lonie Company Period Of Directorship Corporate Travel Management Limited 23 June 2010 to present MyState Limited 12 December 2011 to present Dart Energy Limited 26 November 2013 to 15 October 2014 CMI Limited 1 December 2012 to 28 February 2013 Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 4 | RETAIL F OOD GRO UP L IMIT E D A NNUA L R E PO RT 3 0 J U N E 2 0 1 5 Page 4 DIRECTORS'REPORT DIRECTORS'REPORT Directors' shareholdings The following table sets out each Director's relevant interest in shares and options in shares of the Company as at the date of this report: Directors Mr Anthony (Tony) Alford Fully paid ordinary shares Executive share options Number Number 21,110,875 - 361,410 - Mr Stephen Lonie 47,373 - Ms Jessica Buchanan 23,256 - Mr Colin Archer Remuneration of Directors and senior executive management Information about the remuneration of Directors and senior executive management is set out in the \"Remuneration Report\" of this Directors' Report. Share options granted to Directors and senior executive management During and since the end of the financial year, there were no share options granted to the Directors and senior executive management of the Company as part of their remuneration. Directors' meetings The following table sets out the number of Directors' meetings, including meetings of Committees of Directors, held during the financial year and the number of meetings attended by each Director, while they were a Director or Committee member. During the financial year, 14 Board meetings, 5 Audit and Risk Management Committee meetings, 3 Remuneration Committee meetings and 2 Nominations Committee meetings were held. Remuneration Committee Nominations Committee Board of Directors Audit Committee Held Attended Held Attended Held Attended Held Attended Mr Colin Archer 14 14 5 5 3 3 2 2 Mr Anthony (Tony) Alford 14 14 5 5 3 3 2 2 Ms Jessica Buchanan 14 12 5 5 3 3 2 2 Mr Stephen Lonie 14 12 5 5 3 3 2 2 Directors Company Secretary The Company Secretary is Mr Anthony Mark Connors. Mr Connors was appointed as Company Secretary on 26 April 2006, having prior to that time and until 2 June 2015 acted as the Company's Legal Counsel. Mr Connors is a Solicitor of the Supreme Court of Queensland. Mr Connors was appointed to the role of Chief Operating Officer, effective 2 June 2015. Corporate governance The Company is committed to achieving and demonstrating the highest standards of corporate governance. The Company has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council. The 2015 Corporate Governance Statement is dated as at 30 June 2015 and reflects the corporate governance practices in place throughout the 2015 financial year. The 2015 Corporate Governance Statement was approved by the Board on 27 August 2015. A description of the Group's current Corporate Governance Practices is set out in the Group's Corporate Governance Statement which can be viewed at www.rfg.com.au. Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 Page 5 RETAI L FO O D G RO U P L I M I T ED A N N UAL REP O RT 3 0 J U N E 2 0 1 5 | 5 DIRECTORS'REPORT DIRECTORS'REPORT Principal activities The Group's principal activities during the course of the financial year were: Intellectual property ownership of the Donut King, bb's caf, Brumby's Bakery, Michel's Patisserie, Esquires Coffee Houses (Australia & New Zealand), Pizza Capers Gourmet Kitchen, Crust Gourmet Pizza Bar, The Coffee Guy, Cafe2U, Gloria Jean's Coffees, It's A Grind and Di Bella Coffee Brand Systems; Development and management of the Donut King, bb's caf, Brumby's Bakery, Michel's Patisserie, Esquires Coffee Houses, Pizza Capers Gourmet Kitchen, Crust Gourmet Pizza Bar, The Coffee Guy, Cafe2U, Gloria Jean's Coffees, It's A Grind and Di Bella Coffee Brand Systems throughout the world, whether directly managed and/or as licensor for all Brand Systems excluding Esquires Coffee Houses; and Development and management of coffee roasting facilities and the wholesale supply of coffee and allied products to existing Brand Systems and third party accounts under the Evolution Coffee Roasters Group, Caffe Coffee, Roasted Addiqtion, Barista's Choice and Di Bella Coffee brands. Changes in state of affairs No significant changes in the nature of the Group's core business activities occurred during the financial year other than as detailed herein including the acquisition of: the Gloria Jean's Coffees, It's A Grind, Cafe2U and Di Bella Coffee Brand Systems; and Di Bella Coffee and Maranatha roasting and wholesale operations. Review of operations and financial condition Group Overview The following table summarises the Group's results for the financial years ending 30 June 2015 and 30 June 2014: Item Underlying Revenue (1) FY14 Change $210.4m $128.8m 63.4% EBITDA (Underlying) $88.8m $59.1m 50.2% EBITDA $59.4m $59.1m 0.5% NPAT (Underlying) $55.1m $36.9m 49.3% NPAT $34.2m $36.9m (7.2%) EPS (Underlying) 35.6 cps 26.5 cps 34.3% EPS 22.1 cps 26.5 cps (16.6%) 23.25 cps 22.0 cps 5.7% Dividend per Share (DPS) (1) FY15 Underlying Revenue excludes revenue derived from marketing activities (FY15: $37.1m; FY14: $39.6m). The results for the 2015 financial year reflect a continuation of the historic solid performance from the Group's Cash Generating Units (CGU's), contributions from the Caf2U, Gloria Jean's Coffees and Di Bella Coffee acquisitions during the year, and benefits from organisational restructuring activities undertaken as a consequence of acquisition completion. Underlying EBITDA and Underlying NPAT for FY15 excludes $29.6 million (pre-tax) in acquisition transaction and integration costs including corporate restructuring activities as a consequence of the Caf2U, Gloria Jean's Coffees and Di Bella Coffee acquisitions, more particularly detailed in the Company's Market Presentation of the 2nd June 2015. Underlying Revenue (excluding marketing related receipts) for FY15 was $210.4 million, representing a 63.4% increase (or $81.6 million) on FY14. The increase in underlying revenue is primarily attributable to the following factors: $94.4m contribution from acquisitions completed in FY15 (Caf2U, Gloria Jean's Coffees & Di Bella Coffee); offset by $11.3m decline in traditional Brand Systems (Donut King, Brumby's and Michel's) revenue predominantly due to reduction in Sales revenue from trading of corporate stores. The 50.2% EBITDA growth and 49.3% NPAT growth was attributable to positive contributions from FY15 acquisitions, organic new outlet growth and increased per outlet contributions from traditional Brand Systems, and scale benefits realised in the Group's coffee roasting activities. Underlying EPS of 35.6 cps represented a significant 34.3% increase on PCP, reflecting: the impact of acquisition transaction and integration costs on earnings; a 12.5% increase in shares on issue to approximately 162.9 million, whereby the Group issued 18.1 million shares during the year, including raising capital of $68.3 million (before costs); securing an additional $134.0 million under its senior debt facilities - to support the Gloria Jean's Coffees and Di Bella Coffee acquisitions. Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 6 | RETAIL F OOD GRO UP L IMIT E D A NNUA L R E PO RT 3 0 J U N E 2 0 1 5 Page 6 DIRECTORS'REPORT DIRECTORS'REPORT Review of operations and financial condition (cont.) Total Shareholder Return (TSR) for the 12 months to 30 June 2015 was 26.9% (pre-tax), representing TSR growth of 35.2% on PCP. Financial Position and Cash Flows Net Assets of $403.8 million have increased by $93.8 million (or 30.3%) from 30 June 2014, primarily as a result of the Group's FY15 acquisitions, associated debt and capital raising activities and positive operating cash flow. The acquisition note (note 26) to the accompanying financial statements presents the net assets acquired by the Group in respect of the Caf2U, Gloria Jean's Coffees and Di Bella Coffee acquisitions. Return on Investment (EBIT/Total Assets) decreased by 6.3% on PCP to 8.2% on reported earnings, primarily attributable to the less than 12 month EBIT contributions of FY15 acquisitions. On an underlying basis, Return on Investment decreased by 2.0% to 12.5%. Cash inflows from operating activities for FY15 remained strong at $34.7 million (FY14: $29.9 million), with the increase in net operating cash inflow attributable to the positive impact of acquisitions net of certain acquisition transaction and integration costs. The cash conversion to EBITDA ratio improved to 109.6% (FY14: 85.8%), again reflecting the positive cash generation of acquired businesses, and enhanced by the non-cash expense provisions and impairment charges arising from integration and restructuring costs. The Group received $68.3 million (before costs) in cash arising from the issue of shares via the October 2014 and April 2015 Share Placement and December 2014 Share Purchase Plan (SPP), and securing an additional $134 million of available funding under its corporate debt facilities, primarily to fund acquisitions. Debt Structure As at 30 June 2015, the Group's total gross debt increased to $206 million, primarily attributable to the funding of acquisition activity previously discussed. This amount is presented as $50 million in current borrowings and $156 million as non-current borrowings in the Statement of Financial Position. On 3 December 2014, coinciding with the settlement of the Gloria Jean's Coffees acquisition, the Group completed an amendment to its existing senior debt facility, increasing the total facility from $135 million to $278 million, including an increase in senior debt facilities to $219 million, with an extended maturity date to 30 September 2017, and an additional $50 million bridging facility, repayable by 31 October 2015. As at 30 June 2015, 24.3% ($50 million) of the Group's gross debt was subject to fixed interest rates, with the remaining 75.7% ($156 million) subject to variable interest rates. The Group's weighted average interest rate as at 30 June 2015 was 4.01%. At the conclusion of FY15, the Group's gross debt was $206 million, with cash reserves and facility headroom of $77.4 million. Operating Segment Review The Group is organised into seven major operating divisions. These divisions are the basis on which the Group reports its primary segment information. Donut King Brand System; Michel's Patisserie Brand System; Brumby's Bakery Brand System; QSR Systems (incorporating Crust Gourmet Pizza and Pizza Capers Brand Systems); Mobile Systems (incorporating Caf2U and The Coffee Guy Brand Systems); Coffee Retail Systems (incorporating Gloria Jeans Coffees and Esquires Brand Systems); Coffee and Allied Beverage (incorporates Wholesale Coffee operations and other un-allocable amounts). Brand System Operations All Brand System segments with the exception of Coffee and Allied Beverage are referred to collectively by management as Franchise Operations. Underlying Franchise Operations EBITDA for FY15 was $81.7 million (FY14: $59.2 million), representing growth of 37.8% (or $22.5 million), primarily attributable to acquisitions completed by the Group during the period (Caf2U and Gloria Jean's Coffees), organic new outlet growth of 200, and a decrease in operational costs arising from the reduced number of Corporate Stores under the Group's stewardship. $22.9 million of integration and corporate restructuring costs unallocated to individual Brand System segments are attributable to Franchise Operations. New outlet growth for FY15 increased 33.3% to 200 (FY14: 150) and was derived from growth in QSR Systems (32 outlets) and non-QSR Brand Systems (168 outlets). Net outlet growth for FY15 was 1,012, comprising 1,016 through Brand System acquisitions, 200 commissionings by organic growth and 204 closures of existing outlets - which included 84 outlet closures as a consequence of restructuring. Outlet population statistics are detailed in the Segment information note (note 1). Compared to FY14 and attributable to the operating activities previously discussed, the Group's Brand Systems exhibited weighted same store sales (SSS) growth of 2.9% and weighted average transaction value (ATV) growth of 3.4%. SSS by segment included Donut King 3.9%, Michel's 1.1%, Brumby's 1.9%, QSR 1.3%, and Coffee Retail 5.5%. Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 Page 7 RETAI L FO O D G RO U P L I M I T ED A N N UAL REP O RT 3 0 J U N E 2 0 1 5 | 7 DIRECTORS'REPORT DIRECTORS'REPORT Review of operations and financial condition (cont.) Coffee and Allied Beverage Underlying Coffee and Allied Beverage Operations EBITDA for FY15 was $7.7 million (FY14: $0.4 million), representing growth of $7.3 million, primarily attributable to acquisitions completed by the Group during the financial year (Roasting Australia Holdings - RAH - and Maranatha LLC, via the Gloria Jean's Coffees acquisition, and Di Bella Coffee). Coffee and Allied Beverage results represent the Group's wholesale product sales in the contract roasting, commercial and in-home market segments. The Group's primary roasting facility at Granville in NSW was decommissioned during the year, with roasting operations transferred to the RAH (Castle Hill, NSW) and Di Bella Coffee (Brisbane, Qld) operations. Acquisitions Acquisition of Caf2U On 28 August 2014, the Group announced its entry into an SPA, subject to normal contractual terms, for the acquisition of 100% of the issued share capital of Caf2U International Pty Ltd (and associated entities) for cash consideration of $15 million. Caf2U International Pty Ltd is the owner and franchisor of the Caf2U Brand System, consisting of 236 mobile coffee vans. Settlement was completed on 11 September 2014, with control of the business and intellectual property transferring to the Group at that time. Acquisition of Gloria Jean's Coffees Group On 24 October 2014, the Group announced that it had entered into a conditional SPA, subject to normal and customary contractual terms and customary terms to acquire Gloria Jean's Coffees Group for total consideration of $164.6 million, including cash and RFG shares, plus contingent consideration payable up to $15.7 million. Settlement was completed on 3 December 2014, with control of Gloria Jean's Coffees Group transferring to the Group at that time. Acquisition of Di Bella Coffee On 25 November 2014, the Group announced its entry into an SPA, subject to normal and customary contractual terms to acquire Di Bella Coffee for total consideration of $29.9 million, including cash and RFG shares, plus contingent consideration payable up to $ 17.3 million. Settlement was completed on 18 February 2015, with control of Di Bella Coffee transferring to the Group at that time. Future developments The Group will continue to pursue key organic growth platforms of its Brand Systems, advancing the Coffee & Allied Beverages strategy, and focus on integration and restructuring activities subsequent to the most recent acquisitions. The Group continues to investigate and evaluate potential retail food franchise systems and other complementary asset acquisitions. These acquisition targets include both competitor and complementary systems which provide system growth opportunities, synergies, increased scale benefits, intellectual property enhancement, and are EPS accretive. In this respect, the Company will keep the market informed in accordance with its reporting obligations. Disclosure of further information on likely developments in the operations of the Group and the expected results of operations have not been included in this report as the Directors consider that it would be likely to result in unreasonable prejudice to the Group. Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 8 | RETAIL F OOD GRO UP L IMIT E D A NNUA L R E PO RT 3 0 J U N E 2 0 1 5 Page 8 DIRECTORS'REPORT DIRECTORS'REPORT Significant events after the balance date There has not been any matter or circumstance occurring, other than that referred to in this Directors' Report, the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or in the reasonable opinion of the Directors, may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years, other than the following: Final Dividend On 27 August 2015, the Board of Directors declared a final dividend in respect of profits of the financial year ending 30 June 2015. The final dividend of 11.75 cents per share (based on 162,937,484 shares on issue at 27 August 2015), franked to 100% at 30% corporate income tax rate will be paid on 9 October 2015. The final dividend was approved by the Directors following the conclusion of FY15 and, therefore, was not provided for in the year-end financial report. It was resolved that the final FY15 dividend will constitute an eligible dividend for the purpose of the Company's Dividend Reinvestment Plan. Dividends Dividends paid or declared by the Company to members since the end of the previous financial year were: Company FY15 Cents Per Share FY14 Total $'000 Cents Per Share Total $'000 Declared and paid during the financial year Fully paid ordinary shares Final dividend - fully franked at 30% tax rate (1) 11.250 16,299 10.250 13,356 Interim dividend - fully franked at 30% tax rate (2) 11.500 18,437 10.750 15,485 22.750 34,736 21.000 28,841 11.250 16,299 Declared after the end of the financial year Fully paid ordinary shares Final dividend - fully franked at 30% tax rate (3) 11.750 19,145 (1) In respect of the financial year ended 30 June 2014, as detailed in the Directors' Report for that financial year, a final dividend of 11.25 cents per share, based on 144,878,508 shares on issue at 15 September 2014, franked to 100% at 30% corporate income tax rate, was paid on 10 October 2014. The final dividend was approved by the Directors following the conclusion of the 30 June 2014 financial year and, therefore, was not provided for in the Company's financial report. It was resolved that the FY14 final dividend would constitute an eligible dividend for the purpose of the Company's dividend reinvestment plan. The issue price of the shares was $4.66 per share. (2) In respect of profits of the financial year ended 30 June 2015, an interim dividend of 11.50 cents per share, based on 160,321,903 shares on issue at 23 March 2015, franked to 100% at 30% corporate income tax rate, was paid on 9 April 2015. The interim dividend was approved by the Directors on 25 February 2015 and it was resolved that the interim dividend would constitute an eligible dividend for the purpose of the Company's dividend reinvestment plan. The issue price of the shares was $7.05 per share. (3) In respect of profits of the financial year ended 30 June 2015, a final dividend of 11.75 cents per share, based on 162,937,484 shares on issue at 27 August 2015, franked to 100% at 30% corporate income tax rate, will be paid on 9 October 2015. The final dividend was approved by the Directors on 27 August 2015 and, therefore, was not provided for in the Company's financial report. It was resolved that the FY15 final dividend will constitute an eligible dividend for the purpose of the Company's dividend reinvestment plan. Shares under option or issued on exercise of options Details of shares or interests issued during or since the end of the financial year as a result of exercise of an option are: Issuing Entity Retail Food Group Limited No. Of Shares Under Option Class Of Shares Amount Paid For Shares Amount Unpaid On Shares 10,000 Ordinary $13,200 $nil There were nil unissued shares, or interests under option, as at the date of this report. Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 Page 9 RETAI L FO O D G RO U P L I M I T ED A N N UAL REP O RT 3 0 J U N E 2 0 1 5 | 9 DIRECTORS'REPORT DIRECTORS'REPORT Environmental regulations The Group, due to the nature of its operations, is not required to be environmentally licensed nor is it subject to any conditions which have been imposed by an environmental regulator specifically related to the Group or its operations. In circumstances where the nature of the Group's operations requires, the Group is committed to compliance with all prescribed environmental laws and regulations. Indemnification of Officers and Auditors During the financial year, the Company entered into a contract insuring the Directors of the Company, the Company Secretary, and all executive officers of the Company and of any related body corporate against a liability incurred as a Director, Secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has also entered into a Deed Poll indemnifying the Directors, officers and certain other parties in respect of certain claims that may be raised against them relative to the operations of the Company, its former and current subsidiaries. To the maximum permitted by the Corporations Act, the Deed Poll indemnifies those persons from liabilities incurred as a consequence of the acts of those persons, including the giving of personal guarantees on behalf of the Company and its former and current subsidiaries. The Company has not, otherwise, during or since the end of the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor. Non-audit services Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 32 to the financial statements. The Directors are satisfied that the provision of non-audit services, during the year, by the auditor, or by another person or firm on the auditor's behalf, is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are of the opinion that the services, as disclosed in note 32 to the financial statements, do not compromise the external auditor's independence, based on advice received from the Audit and Risk Committee, for the following reasons: All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and None of the services undermine the general principles relating to auditor independence, as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards. Auditor's independence declaration The auditor's independence declaration is included on page 21 of the financial report. Rounding off of amounts The Company is a company of the kind referred to in ASIC Class Order 98/100, dated 10 July 1998, and, in accordance with that Class Order, amounts in the Directors' Report and the Financial Report are rounded off to the nearest thousand dollars, unless otherwise indicated. Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 10 | RETAIL F OOD GR O UP L IMIT E D A NNUA L R E PO RT 3 0 J U N E 2 0 1 5 Page 10 DIRECTORS'REPORT DIRECTORS'REPORT Remuneration Report This Remuneration Report, which forms part of the Directors' Report, sets out information about the remuneration of Retail Food Group Limited's Directors and its senior executive management for the financial year ended 30 June 2015. The prescribed details for each person covered by this report are contained below under the following headings: Director and senior executive management details; Remuneration policy; Relationship between the remuneration policy and Group performance; Remuneration of Directors and senior executive management; Directors and senior executive management equity holdings; Key terms of employment contracts; Loans to Directors and senior executive management; and Other transactions with Directors and senior executive management. The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001. 1. Key management personnel The Company does not directly remunerate any of its Directors, key management personnel or specific executives. Rather, the Directors, key management personnel and specific executives are remunerated through subsidiaries of the Company. The Directors and other key management personnel of the consolidated entity during or since the end of the financial year were: Non-executive directors Mr Colin Archer Mr Anthony (Tony) Alford Ms Jessica Buchanan Mr Stephen Lonie Position Chairman and Independent Non-Executive Director Managing Director Independent Non-Executive Director Independent Non-Executive Director Senior executive management Mr Gary Alford Mr Andre Nell Mr Peter McGettigan Mr Anthony Mark Connors Ms Tracey Catterall Position Chief Executive Officer - Commercial Chief Executive Officer - Franchising Chief Financial Officer Chief Operating Officer and Company Secretary Director of Marketing & Innovation The term 'senior executive management' is used in this Remuneration Report to refer to these persons. The above named persons were senior executive management through the whole of the financial year and since the end of the financial year, however, certain roles were realigned within the Company as announced in the market release to the ASX on 2 June 2015. 2. Remuneration Policy The Board considers that it is critical to its long term success, and the building of shareholder value, that it attracts, retains and motivates appropriate personnel to lead, manage and serve the Group in an increasingly competitive marketplace for senior executive talent. The objectives of the Group's remuneration policy are to: Motivate executive and non-executive personnel to successfully lead and manage the Group, with a focus on driving long term growth and shareholder value; Drive successful performance and achievement of long and short term goals and otherwise reinforce the objectives of the Group; Deliver competitive remuneration packages necessary to attract and retain appropriate personnel; Ensure fair remuneration, having regard to duties, responsibilities and other demands; Ensure flexibility, to enable the Group to cope with planned or unforeseen threats and opportunities; Ensure compliance with relevant laws; and Ensure sustainable value for all stakeholders. Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 Page 11 RETAI L FO O D G RO U P L I M I T ED A N N UAL REP O RT 3 0 J U N E 2 0 1 5 | 1 1 DIRECTORS'REPORT DIRECTORS'REPORT Remuneration Report (cont.) 2. Remuneration Policy (cont.) When determining executive remuneration packages, the Board may have regard to: The need to attract, retain and motivate appropriate personnel; Market practices; Alternative benefits including incentive programs, fringe benefits and equity schemes; Assessment of individual performance against set goals and targets; and The scope of responsibility, duties and other demands. Executive remuneration shall generally take the form of a base salary plus superannuation, however, may comprise performance bonuses and other benefits or rewards in certain circumstances. When determining non-executive remuneration packages, the Board may have regard to: The need to attract, retain and motivate appropriately qualified and experienced Directors with diverse backgrounds and experiences to ensure the Board is comprised of a range of skills necessary to properly understand the business environment in which the Group operates; The scope and complexity of the responsibilities assumed by such Directors in connection with the oversight and leadership of the Group; Comparative market practices; and Alternative benefits, including equity schemes. Role of the Remuneration Committee The Board has a Remuneration Committee to assist the Board and report to it on remuneration and issues relevant to remuneration policies and practices, including those policies and practices for senior executive management and non-executive Directors. The functions performed by the Committee are to: Review and evaluate the market practices and trends on remuneration matters; Make recommendations to the Board in relation to the Group's remuneration policies and practices; Oversight of the performance of the Managing Director, Chief Executive Officers, Chief Operating Officer, Chief Financial Officer and other members of senior executive management and non-executive Directors; and Make recommendations to the Board in relation to the remuneration of senior executive management and non-executive Directors. The Remuneration Committee has adopted the following policies to which it will continue to have regard when determining the remuneration of executives and senior executive management members, being to: Annually review executive and senior executive management member packages by reference to Group performance, executive performance, comparable information from industry sectors and other listed companies; Reward performance which results in long-term growth in shareholder value; Link all bonuses, options and incentives to pre-determined performance criteria; and Reference any changes to measurable performance criteria. 3. Relationship between Remuneration Policy and Group Performance The following compensation structures are designed to attract suitably qualified executives, reward the achievement of strategic objectives, and to achieve the broader outcome of long-term success and the building of shareholder value. The compensation structures take into account: The capability and experience of the executive; The executive's ability to manage and deliver the Group's forecast results; The attainment of pre-determined KPIs developed specially for the executive's role; The Group's overall performance including: The Group's earnings; - The growth in earnings per share and return on shareholder wealth; and The relative size incentives within each executive's remuneration package. Remuneration packages include a mix of fixed and variable compensation and short-term and long-term performance-based incentives. The mix of these components is based on the role the individual performs. In addition to their salaries, the Group also provides non-cash benefits to its executives and contributes to a post-employment superannuation plan on their behalf, in accordance with its statutory obligations. Retail Food Group Limited - Annual Report - Financial Year Ended 30 June 2015 12 | RETAIL F OOD GR O UP L IMIT E D A NNUA L R E PO RT 3 0 J U N E 2 0 1 5 Page 12 DIRECTORS'REPORT DIRECTORS'REPORT Remuneration Report (cont.) 3. Relationship between Remuneration Policy and Group Performance (cont.) Fixed Compensation Fixed compensation consists of base compensation, which is calculated on a total cost basis and includes any fringe benefits tax (FBT) charges related to employee benefits including motor vehicles, as well as employer contributions to superannuation funds. Compensation levels are reviewed annually by the Remuneration Committee and the Managing Director, through a process that considers the individual responsibilities and the achievement of pre-determined KPIs, and the overall performance of the Group. An executive's remuneration is also reviewed on promotion. Executives receive a superannuation guarantee contribution required by the Government, which is currently 9.5% (FY14: 9.25%) and do not receive any other retirement benefits. Some individuals, however, have chosen to sacrifice a further part of their salary to increase payments towards superannuation. Performance-linked Compensation Performance-linked compensation includes both short-term and long-term incentives and is designed to reward executives for meeting or exceeding their financial and personal objectives. The short-term incentive (STI) is an 'at risk' bonus provided in the form of cash, while the long-term incentive (LTI) is provided as options over ordinary shares of the Company under the rules of the Executive Share Option Plan (ESOP). In respect of the options granted, there is no performance criteria required to be achieved in order for the option to vest. Rather, the decision to grant options to executives is based on past performance. Short-term Incentive Bonus Each year, the Remuneration Committee sets pre-determined key performance indicators (KPIs) for certain key executives. The KPIs generally include performance measures relating to the Group and the individual and include financial, people, customer, strategy and risk measures. The measures chosen directly align the individual's reward to the KPIs of the Group and to its strategy and performance. The Group undertakes a rigorous and detailed annual forecasting and budget process. The Board considers that the achievement of the annual forecast and budget is, therefore, the most relevant short-term performance condition. The financial performance objectives may include but not be limited to \"Net Profit\For personal use only COLLINS FOODS LIMITED FY16 FINANCIAL YEAR RESULTS 28 June 2016 For personal use only FY16: growth across all key financial metrics FY15 Underlying FY16 Statutory [1] FY16 Significant Items FY16 Underlying Change vs FY15 Underlying Underlying NPAT up 22.3% to $30.1m 574.3 0.5% Revenue up 0.5% to $574.3m excluding additional trading week in FY15, revenue was up 2.4% 0.2 74.6 10.7% Underlying EBITDA up 10.7% to $74.6m 50.8 1.6 52.4 16.0% ROCE up 2.0 points to 14.9% 24.6 29.1 0.9 30.1 22.3% 12.9% 14.9% 14.9% 2.0 pts 122.8 112.5 112.5 $10.3m Underlying EPS 32.3 cps 1.83 1.52 1.52 0.29 pts Net cash flow of $10.3m Net Cash Flow 4.9 10.3 10.3 $5.4m EPS Basic (cents) 26.4 31.3 32.3 22.3% DPS (cents) 11.5 14.0 14.0 21.7% $m [2] 571.6 574.3 EBITDA 67.4 74.3 EBIT 45.1 NPAT Revenue ROCE [3] Net Debt Net Leverage Ratio [1] EBIT adjusted to exclude Impairment of Sizzler brand $6.3m, Sizzler Goodwill $27.1m, Sizzler restaurants $4.1m and KFC restaurants $0.8m. FY15 includes an additio